Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 FOSHAN HUAXIN PACKAGING CO., LTD.
ANNUAL REPORT 2016
March 2017
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Section I Important Statements, Contents and Definitions The board of directors (the “Board”), the supervisory board (the “Supervisory Board”), as well as the directors, supervisors and executive officers of Foshan Huaxin Packaging Co., Ltd. (the “Company”) hereby guarantee the factuality, accuracy and completeness of the contents of this Report, and shall be jointly and severally liable for any false representation, misleading statements or material omissions in this Report.
Huang Xin, head of the Company, Ji Xiangdong, accounting head for this Report, and Yang Chenglin, head of the accounting department (head of accounting), hereby guarantee that the Financial Report carried in this Report is factual, accurate and complete.
Except for the following Directors, other Directors attended the board meeting to review the annual report in person
|||||
|-|-|-|-|
|Name|Position|Reason|Proxy|
|Zhang Wenjing|Independent Director|Absent owning to business|Yang Zhenyu|

The Company has described in detail the risks it might face in “Performance Discussion and Analysis” in this Report, to which investors are kindly reminded to pay attention.
The Board has considered and approved the following proposal for profit distribution: Based on the total shares of 505,425,000, a cash dividend of RMB0.32 (tax inclusive) per 10 shares will be distributed to all shareholders of the Company. No bonus shares will be granted, nor will any capital reserve be converted into share capital.
This Report has been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese version shall prevail.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Table of Contents
Section I Important Statements, Contents and Definitions ............................................................ 2 Section II Corporate Profile and Financial Results ........................................................................ 5 Section III Business Profile ............................................................................................................... 9 Section IV Performance Discussion and Analysis ......................................................................... 13 Section V Significant Events ........................................................................................................... 29 Section VI Share Changes andShareholders’ Profile ................................................................... 45 Section VII Preference Shares......................................................................................................... 52 Section VIII Directors, Supervisors, Executive Officers and Staff .............................................. 53 Section IX Corporate Governance ................................................................................................. 61 Section X Corporate Bonds ............................................................................................................. 69 Section XI Financial Report ............................................................................................................ 73 Section XII Documents Available for Reference ......................................................................... 216
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Definitions
|||
|-|-|
|Term|Definition|
|Company, the Company, our||
||Foshan Huaxin Packaging Co., Ltd.|
|Company||
|China Paper|China Paper Corporation (the actual controller of the Company)|
|China Chengtong|China Chengtong Holdings Group Ltd. (the ultimate controller of the Company)|
|Hongta Renheng|Zhuhai Hongta Renheng Packaging Co., Ltd.|
|Zhuhai Huafeng|Zhuhai Huafeng Paper Co., Ltd.|
|Golden Pheasant Chemical|Zhuhai Golden Pheasant Chemical Co., Ltd.|
|Huaxin Color Printing|Huaxin (Foshan) Color Printing Co., Ltd.|
|Kunshan Focai|Kunshan Focai Packaging & Printing Co., Ltd.|
||Zhejiang Hongta Renheng Packaging Technology Co., Ltd. (formerly known as Pinghu Huaxin|
|Zhejiang Hongta||
||Packaging Materials Science & Technology Co., Ltd.)|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Section II Corporate Profile and Financial Results
I Corporate information
|||||
|-|-|-|-|
|Stock name|FSHXP B|Stock code|200986|
|Stock exchange|Shenzhen Stock Exchange|||
|Company name in Chinese|佛山华新包装股份有限公司|||
|Abbr.|华新包装|||
|Company name in English (if||||
||Foshan Huaxin Packaging Co.,Ltd|||
|any)||||
|Abbr. (if any)|FSHXP|||
|Legal representative|Huang Xin|||
|Registered address|19/F, Jinghua Building, No. 18, the 5th Jihua Road, Foshan, Guangdong Province, P.R.C.|||
|Zip code|528000|||
|Office address|19/F, Jinghua Building, No. 18, the 5th Jihua Road, Foshan, Guangdong Province, P.R.C.|||
|Zip code|528000|||
|Company website|http://www.fshxp.com|||
|Email|hxbz@chinapaper.com.cn|||

II Contact information
||||
|-|-|-|
||Board Secretary|Securities Representative|
|Name|Liu Hanwen|Shi Hui|
||20/F, Jinghua Building, No. 18, the 5th|19/F, Jinghua Building, No. 18, the 5th|
|Address|Jihua Road, Foshan, Guangdong Province,|Jihua Road, Foshan, Guangdong Province,|
||P.R.C.|P.R.C.|
|Tel.|0757-83992056|0757-83992056|
|Fax|0757-83992026|0757-83992026|
|E-mail|Liu_HanWen@htrh-paper.com|shih@htrh-paper.com|

III Information disclosure and place where this Report is kept
|||
|-|-|
|Newspapers designated by the Company for||
||Securities Times, Ta Kung Pao (HK)|
|information disclosure||
|Website designated by the China Securities||
||http://www.cninfo.com.cn|
|Regulatory Commission (CSRC) for the publication||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||
|-|-|
|of this Report||
|Place where this Report is kept|Office of the Board of Directors of the Company|

IV Company registration and alteration
|||
|-|-|
|Credibility code|914406007076822793|
|Changes in main business activities of the||
||No changes|
|Company after going public (if any)||
|Changes of controlling shareholder (if any)|N o changes|

V Other information
The CPAs firm hired by the Company
|||
|-|-|
|Name|Da Hua Certified Public Accountants (Special General Partnership)|
|Office address|1101 of the No. 7 Building, No. 16 Yard, Mid of West 4th Ring Road, Haidian District, Beijing|
|Accountants writing signatures|Chen Baohua, Zhou Lingzhi|

Sponsor engaged by the Company to continuously perform its supervisory function during this Reporting Period
□ Applicable√ Not applicable
Financial advisor engaged by the Company to continuously perform its supervisory function during this Reporting Period
□ Applicable√ Not applicable
VI Accounting and financial results
Indicate by tick mark whether the Company performed any retroactive adjustments to or restatement of its accounting data due to changes of accounting policies or correction of accounting errors
□ Yes√ No
||||||
|-|-|-|-|-|
||2016|2015|+/-%|2014|
|Operating revenues (RMB)|3,607,758,904.01|3,282,043,995.12|9.92%|3,552,698,716.17|
|Net profit attributable to|61,324,088.11|133,094,696.66|||
|shareholders of the Company|||-53.92%|83,284,859.23|
|(RMB)|||||
|Net profit attributable to|||||
|shareholders of the Company|27,820,866.82|11,175,961.64|148.93%|56,027,427.75|
|before exceptional profit and loss|||||
|(RMB)|||||
|Net cash flows from operating|409,111,111.08|613,491,329.76|||
||||-33.31%|479,890,329.98|
|activities (RMB)|||||
|Basic earnings per share|0.12|0.26|||
||||-53.85%|0.16|
|(RMB/share)|||||
|Diluted earnings per share|0.12|0.26|-53.85%|0.16|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||
|-|-|-|-|-|
|(RMB/share)|||||
|Weighted average return on equity|||||
||3.13%|7.10%|-3.97%|4.70%|
|(%)|||||
||December 31, 2016|December 31, 2015|+/-%|December 31, 2014|
|Total assets (RMB)|6,182,737,808.93|6,059,337,427.41|2.04%|6,434,127,025.51|
|Net assets attributable to|1,980,395,170.24|1,938,277,232.13|||
|shareholders of the Company|||2.17%|1,812,763,910.47|
|(RMB)|||||

VII Differences in accounting data under domestic and foreign accounting standards
1. Differences in the net profit and the net assets disclosed in the financial reports prepared under Chinese and international accounting standards
□ Applicable√ Not applicable
No such differences for this Reporting Period.
2. Differences in the net profit and the net assets disclosed in the financial reports prepared under Chinese and foreign accounting standards
□ Applicable√ Not applicable
No such differences for this Reporting Period.
VIII Financial results by quarter
Unit: RMB
||||||
|-|-|-|-|-|
||1Q|2Q|3Q|4Q|
|Operating revenues|723,227,621.79|769,629,805.93|950,329,815.06|1,164,571,661.23|
|Net profit attributable to|||||
||1,036,924.20|14,460,191.73|20,853,036.33|24,973,935.85|
|shareholders of the Company|||||
|Net profit attributable to|||||
||-1,204,937.23|11,116,103.57|19,161,280.33|-1,251,579.85|
|shareholders of the Company|||||
|before exceptional profit and loss|||||
|Net cash flows from operating|||||
||-409,574,834.54|71,211,365.99|241,820,211.03|505,654,368.60|
|activities|||||

Indicate by tick mark whether there are any material differences between the financial indicators above or their summations and those which have been disclosed in quarterly or semi-annual reports
□ Yes√ No
IX Exceptional profit/loss
√ Applicable□ Not applicable
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Unit: RMB
||||||
|-|-|-|-|-|
|Item|2016|2015|2014|Note|
|Profit/loss on disposal of non-current assets|-690,044.71||||
|(including offset asset impairment||114,279,468.16|24,546,653.22||
|provisions)|||||
|Government grants charged to the profit/loss|26,022,524.47||||
|for this Reporting Period (except for the|||||
|government grants closely related to the|||||
|||16,481,293.41|14,044,743.94||
|business of the Company and given at a|||||
|fixed quota or amount in accordance with|||||
|the State’s uniform standards)|||||
|Capital occupation charges on non-financial|22,334,467.56||||
|enterprises that are charged to the profit/loss|||||
|for this Reporting Period|||||
|Profit/loss on debt restructuring||2,288,256.01|||
|Profit/loss on fair value changes of|5,536,398.42||||
|transactional financial assets and liabilities|||||
|& investment income from disposal of|||||
|transactional financial assets and liabilities||-5,985,459.17|||
|as well as financial assets available for sale,|||||
|except for effective hedges related to routine|||||
|operations of the Company|||||
|Non-operating income and expense other|-263,588.90||||
|||2,386,314.75|4,027,332.47||
|than the above|||||
|Less: Corporate income tax|2,645,887.81|1,604,695.65|7,172,671.53||
|Minority interests (after tax)|16,790,647.74|5,926,442.49|8,188,626.62||
|Total|33,503,221.29|121,918,735.02|27,257,431.48|--|

Explanation of why the Company classified an item as exceptional profit/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Exceptional Profit and Loss, or reclassified any exceptional profit/loss item given as an example in the said explanatory announcement to recurrent profit/loss□ Applicable√ Not applicable
No such cases in this Reporting Period.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Section III Business Profile
I Main business scope for this Reporting Period
Is the Company subject to any disclosure requirements for special industries?
No.
The Company specializes in theR&D, production and sales of high-end coated ivory board, chemicals for paper making and color printing business. The businesses are described as follows:
1. High-end coated ivory board
The ivory board is a product of theCompany’s main business, which is an important source of the Company's major business income. TheR&D, production and sales of the ivory board is mainly undertaken by Zhuhai Hongta Renheng Packaging Co., Ltd. and Zhuhai Huafeng Paper Co., Ltd. The Company now has three coated ivory board production lines, and the annual production capacity around 600,000 tons. The coated ivory board, as a category of ivory board, is widely applied in various fields such as tobacco packaging, food packaging, medicine packaging, cosmetic packaging and living supplies packaging.
Hongta Renheng is the core high-end packaging board platform under Huaxin Packaging which is based in domestic and overseas high-end packaging markets of tobacco and food and provides "personalized" products and services for customers with "differentiation" business strategy. The Company's products can be divided into the following categories:
(1) Dominantproduct—coated ivory board for tobacco packaging, is widely used in the high-end tobacco packaging market. The coated ivory board for tobacco packaging produced by Hongta Renheng takes up a dominant position in the domestic tobacco packaging field. It represents the highest level of coated ivory board quality in China. It has won the golden award ofChina’s international paper& paper product brands, and the top award of the Chinese science and technologycommunity—the first-class State Science and Technology Advancement Award. The anti-counterfeit coated ivory board with color fiber and true-color fiberetc.—a technology that is independently developed by the Company and has been granted the national invention patent ofChina—has been successfully applied in the packaging of a series of tobaccos in the―HongtaGroup‖ and―Hongyun Honghe Group" brands to combat counterfeiting from the packaging materials, reaching the significant anti-counterfeit results of―easily identifiable but difficult tocopy‖.
(2) The ivory boards for liquid food packaging is an important development direction of the Company. The Hongta Renheng is the first to break the foreign technological monopoly, by independently developing the sterile paper for packaging of liquid milk, fruit juice, herbal tea and other drinks, effectively substituting imported products. The series of food packaging products such as anti-oil food grade coated board and high-end paper cup have been recognized by well-known catering groups such asMcDonald’s after they are put into the market. (3) The high-end social ivory board papers aim to meet the personalized demands of customers. They are widely applied in the segmented packaging market fields like the high-end medicine, cosmetics, and daily necessities. The anti-counterfeit coated ivory paper with personalized identification code independently developed by the Company and for which it has been granted the invention patent has been successfully applied in the anti-counterfeit packaging of the high-end products like high-end medicine and cosmetics, which does not only solve the difficulties posed by impact from counterfeit and shoddy products for customers at the source, but also effectively reduces thecustomer’s anti-counterfeit costs and fake product crackdown expanses and win high trust
from the market.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 2. Chemicals for paper making
Chemicals for paper making is business to extend the paper-making industry chain by the Company, theR&D, production and sales of which are mainly undertaken by Zhuhai Jinji Chemical Co., Ltd., a subsidiary of the Company. Jinji Chemical mainly supplies the carboxylic butadiene-styrene latex, styrene-acrylic latex and calcium carbonate as well as chemical additives for domestic paper-making enterprises. Committed to become a leading domestic paper making chemical enterprise, especially supplier of latexes for paper making, Jinji Chemical shall further intensify efforts to develop domestic market of latexes for paper making in the future and improve the market share of the Company's latexes for paper making.
3. Color printing business
Color printing business is an important industrial linkage supporting business of the Company, which covers designing and manufacturing packaging materials and providing packaging solutions for customers. This business is mainly undertaken by Huaxin (Foshan) Color Printing Co., Ltd. and Kunshan Focai Packaging& Printing Co., Ltd. The Company now owns the offset, flexo and intaglio printing workshop. Main products include color boxes, various labels (paper label, in-mold label and sticker), barcode printing, brochure, books and periodicals involved in wide terminal consumption industry.
II Significant changes in main assets
1. Significant changes in main assets
|||
|-|-|
|Main assets|Reason for any significant change|

2. Main assets overseas
□ Applicable√ Not applicable
III Core competitiveness analysis
Is the Company subject to any disclosure requirements for special industries?
No.
1. Central government-owned enterprise background and financial advantage
China Paper Investment Co., Ltd., the actual controller of the Company, is a large central government-owned enterprise which is approved by the State-owned Assets Supervision and Administration Commission of the State Council and takes the production, development and comprehensive utilization of forestry, pulp and paper as main business. Hongta Renheng, the subsidiary, is the core high-end packaging board platform under China Paper which is based in domestic and overseas high-end packaging markets of tobacco and food and provides "personalized" products and services for customers with "differentiation" business strategy.
2. Technological innovation advantage
The Company persists in taking "scientific and technological innovation" as the core power that drives enterprise development, invests heavily in the construction of technology research and development centre, asserts
prospectively mastering and studying market requirement and carries out scientific test on and strict control over
toxic and harmful substances such as VOCS in raw materials and ivory board so as to ensure the safety and
environmental protection and sanitation properties of the product. The Company has nearly 20 years of technical
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 experience in the production of high-end coated ivory board. Over the years, the Company has developed anti-counterfeit products such as the coated ivory board with color fiber and true-color fiber and formed strong anti-counterfeit product innovation capability. Meanwhile, the Company has personalized product technique innovation capability and has developed the "anti-counterfeit coated ivory paper with personalized identification code" which can attain anti-counterfeiting according to the customer's personalized demand and solve the difficulties posed by impact from counterfeit and shoddy products for customers at the source.
3. Scientific research innovation advantage
In 2016, the subsidiary Zhuhai Huafeng Paper Co., Ltd. successfully passed the recognition for "National High-tech Enterprise" with the certificate No. GR201644001293. The subsidiary Zhuhai Jinji Chemical Co., Ltd. passed the examination for "National High-tech Enterprise" with the certificate No. GR201644004219. So far, all main subsidiaries passed the recognition for "National High-tech Enterprise" and were granted the10% relief from income tax in three successive years.
In 2016, the "Nature Color Packaging Paper Project" of Hongta Renheng won second-class Science and Technology Advancement Award issued by China National Light Industry Council. Zhuhai Huafeng passed the recognition of Guangdong Zhuhai Huafeng Paper Engineering Technology Research Center for Guangdong Provincial Department of Science and Technology. Jinji Chemicals passed the recognition of Zhuhai Engineering Center.
In 2016, the subsidiary Hongta Renheng newly dominated or participated in the formulation of the national standard Coated Paper and Board-Coated Ivory Board and the industrial standard Quality Requirements and Test Methods for Intaglio Printed Matter.
In 2016, the Company (including Zhuhai Hongta Renheng, Zhuhai Huafeng Paper, Zhuhai Jinji Chemicals and Huaxin (Foshan) Color Printing) newly applied 7 invention patents; and acquired 7 authorized patents, which were "Directly Vacuum Aluminum Plated Base Ivory Board and Its Production Method", "An Adjustment Method for Coated Ivory Board Warping", "A Coated Ivory Board and Its Production Method", "A Liquid Packaging Paper with High Stiffness and Its Production Process", "A Oil Repellent Coated Ivory Board and Its Production Process", "A Ivory Board with Low Basis Weight and Its Production Process" and "A Ivory Board with High Basis Weight and Its Production Process" respectively.
By December 31, 2016, the Company had acquired 51 patents, of which 22 invention patents and 29 patents utility models. There are 25 pending patents, of which 24 innovation patents and 1 utility model.
4. Quality brand advantage
The high-end coated ivory board produced by Hongta Renheng has excellent printing performance. It is widely applied in various fields such as tobacco packaging, food packaging, medicine packaging, cosmetic packaging and living supplies packaging. Dominantproduct—coated ivory board for tobacco packaging, is widely used in the high-end tobacco packaging market, takes up a dominant position in high-end tobacco packaging field, accounts for about one third of the market of ivory board for tobacco in China. It represents the highest level of coated ivory board quality in China. It has the top award of the Chinese science and technologycommunity—the first-class State Science and Technology Advancement Award. "Hongta" coated ivory board takes up a leading position in domestic and overseas ivory board industry and leads the development of production and technology of domestic middle and top grade coated ivory board. "Hongta" coated ivory board represents the highest level of production, technology and product of coated ivory board in China and has becomes a world-famous brand. 5. Stable team advantage
The Company possesses a large number of stable and professional production and technology teams and a lot of excellent talents in technological innovation and operation and management. The Company forms enterprise cultures which are suitable for company development and has own characteristics during production and
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 management and gradually forms the team advantage of integration of enterprise culture and team.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Section IV Performance Discussion and Analysis
I Overview
In 2016, due to the severe macroeconomic environment both at home and abroad and the depressed condition of the industry of China, consumption demand in the paper making industry was low, causing imbalance in supply and demand, which was shown by the low operating rate. Affected by many factors, domestic tobacco sales dropped off dramatically and the demand for tobacco packaging board decreased simultaneously which significantly affected the demand for ivory board market in 2016. Affected by the situation, the production and operation of the Company was greatly affected in the first half of 2016.
In the face of the difficulties and challenges, under the guidance of China Paper, the actual controller, and the Board of Directors, the Company carried out lean production and strictly implemented the "improving quality and efficiency" and "reducing deposit reserve rate and interest" specific working measures based on the guiding ideology "reforming with new initiatives, managing with new methods, operating in new ideas and activating with new mechanisms" put forward by the chairman for operation management and based on the main line "increasing income and reducing expenditure" for operation management. The various work tasks in 2016 acquired remarkable effect. Through the efforts of the whole staff, the operation target of the Company was accomplished successfully. (I) Develop new customers and new orders and close production capacity gap of tobacco packaging board. In 2016, we implemented survey and follow-up on key customers and successfully developed many key new customers, new orders and new products so as to effectively close the production capacity gap of tobacco packaging board based on the requirements and general idea of "reforming with new initiatives, managing with new methods, operating in new ideas and activating with new mechanisms".
(II) Intensify lean management and consolidate quality and efficiency improving
In 2016, Hongta Renheng and Zhuhai Huafeng completed 13,131 proposals, which is that each person completed 11.79 proposals averagely. The plan was over fulfilled and the estimated benefit contribution reached RMB 18.867 million. In the year, total 11 "lean improvement weeks" and two result release conferences were held; 66 research topics, of which 49 settled topics, were carried out; the evaluated benefit reached RMB 26.6624 million.
In 2016, problems that arise on the production site were analyzed and tracked with the 5-Why analysis tool, and the experience and method used to solve the problem were solidified. Product quality was improved through more normative, ordered and controllable production process. Total 81 analyses were completed throughout the year. 707 TPM modules were carried forward. 1,344 "six sources" (pollution source, difficulty source, breakdown source, wasting source, defect source and danger source) were found out and 1,204 sources were settled. 636 trouble spots were found out and 579 trouble spots were settled.
(III) Implement technological innovation, strengthen purchasing control, improve quality and efficiency, and reduce cost
In 2016, the process cost was reduced by using new low-cost raw and auxiliary materials instead of original high-cost raw materials without compromising quality based on technical innovation, with respect to which, a remarkable result was achieved.
(IV) Strengthen controls over "deposit reserve rate and interest" and improve operation efficiency
In 2016, according to the requirements of China Paper, the actual controller, the Company set up " deposit reserve rate and interest reduction" workgroup to comprehensively develop specific " deposit reserve rate and interest reduction" measures and examination index for spares, raw materials, semi-finished products and finished products
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 as well as receivables. The " deposit reserve rate and interest reduction" action was led by the leadership of the Company and the responsibility was assigned to various departments and middle-level management so as to effectively reduce occupied funds and receivables.
(V) Integrate product quality standards and reduce cutting and production change-related loss
The integration shall focus on "personalized" standards and cutting, personalized inventory and the number of production changes shall be brought down so as to reduce production cost.
II Analysis of main business
1. Overview
See―IOverview‖ in―Performance Discussion andAnalysis‖.
2. Revenues and costs
(1) Breakdown of operating revenues
Unit: RMB
|||||||
|-|-|-|-|-|-|
||2016||2015|||
|||As a percentage of||As a percentage of||
||||||+/-%|
||Amount|operating revenues|Amount|operating revenues||
|||(%)||(%)||
|Operating revenues|3,607,758,904.01|100%|3,282,043,995.12|100%|9.92%|
|By business segment||||||
|Manufacture|3,063,791,535.10|84.92%|3,203,045,668.83|97.59%|-4.35%|
|Other|543,967,368.91|15.08%|78,998,326.29|2.41%|588.58%|
|By product||||||
|White cardboard|2,622,125,437.41|72.68%|2,820,881,163.79|85.95%|-7.05%|
|Presswork|262,692,818.33|7.28%|245,352,660.29|7.48%|7.07%|
|Latex|178,973,279.36|4.96%|136,811,844.75|4.17%|30.82%|
|Other|543,967,368.91|15.08%|78,998,326.29|2.41%|588.58%|
|By geographical segment||||||
|China|3,036,805,755.82|84.17%|2,922,728,178.70|89.05%|3.90%|
|Overseas|570,953,148.19|15.83%|359,315,816.42|10.95%|58.90%|

 (2) Business segments, products or geographical segments contributing over10% of the operating revenues or profit
√ Applicable□ Not applicable
Is the Company subject to any disclosure requirements for special industries?
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 No.
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
|||||Operating||Gross profit|
||Operating||Gross profit||Operating cost:||
|||Operating cost||revenue: YoY||margin: YoY|
||revenue||margin||YoY +/-%||
|||||+/-%||+/-%|
|By business segment|||||||
|Manufacture|3,063,791,535.10|2,565,346,640.38|16.27%|-4.35%|-3.83%|-0.45%|
|By product|||||||
|White cardboard|2,622,125,437.41|2,187,372,839.10|16.58%|-7.05%|-7.06%|0.01%|
|Presswork|262,692,818.33|218,370,022.14|16.87%|7.07%|8.78%|-1.31%|
|Latex|178,973,279.36|159,603,779.14|10.82%|30.82%|40.77%|-6.31%|
|By geographical segment|||||||
|China|2,593,974,435.92|2,147,307,785.27|17.22%|-8.78%|-7.76%|-0.92%|
|Overseas|469,817,099.18|418,038,855.11|11.02%|30.75%|23.05%|5.57%|

 Main business data of the prior year restated according to the changed statistical caliber for this Reporting Period
□ Applicable√ Not applicable
(3) Whether revenue from physical sales is higher than service revenue
√ Yes□ No
|||||||
|-|-|-|-|-|-|
|Business segment|Item|Unit|2016|2015|+/-%|
||Sales volume|0,000 tons|46.3|46.54|-0.52%|
|Paper-making|Output volume|0,000 tons|45.91|47.63|-3.61%|
||Inventory|0,000 tons|6.71|7.17|-6.42%|

 Reason for any over30% YoY movements in the data above
□ Applicable√ Not applicable
(4) Execution progress of major signed sales contracts in this Reporting Period
□ Applicable√ Not applicable
(5) Breakdown of operating costs
By business segment and product
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
|||2016||2015|||
||||As a percentage||As a percentage||
|Business segment|Item|||||+/-%|
|||Amount|of operating costs|Amount|of operating costs||
||||(%)||(%)||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||
|-|-|-|-|-|-|
|Manufacture|2,565,346,640.38|100.00%|2,667,631,646.77|100.00%|-3.83%|

 Unit: RMB
||||||||
|-|-|-|-|-|-|-|
|||2016||2015|||
||||As a percentage||As a percentage||
|Product|Item|||||+/-%|
|||Amount|of operating costs|Amount|of operating costs||
||||(%)||(%)||
|White cardboard||2,187,372,839.10|85.27%|2,353,512,145.87|88.22%|-7.06%|
|Presswork||218,370,022.14|8.51%|200,741,759.66|7.53%|8.78%|
|Latex||159,603,779.14|6.22%|113,377,741.24|4.25%|40.77%|

 Notes:
(6) Changes in the scope of the consolidated financial statements for this Reporting Period
□ Yes√ No
(7) Major changes in the business, products or services in this Reporting Period
□ Applicable√ Not applicable
(8) Main customers and suppliers
Main customers
|||
|-|-|
|Total sales to top five customers (RMB)|563,429,701.00|
|Total sales to top five customers as a percentage of the||
||15.62%|
|total sales for this Reporting Period (%)||
|Total sales to related parties among top five customers as||
|a percentage of the total sales for this Reporting Period|3.73%|
|(%)||

Information about top five customers
|||||
|-|-|-|-|
||||As a percentage of the total sales for this|
|No.|Customer|Sales amount (RMB)||
||||Reporting Period (%)|
|1|Customer A|158,436,629.36|4.39%|
|2|China Paper Corporation|134,681,889.58|3.73%|
|3|Customer C|98,312,256.21|2.73%|
|4|Customer D|86,841,917.97|2.41%|
|5|Customer E|85,157,007.88|2.36%|
|Total|--|563,429,701.00|15.62%|

Other information about the main customers
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016□ Applicable√ Not applicable
Main suppliers
|||
|-|-|
|Total purchases from top five suppliers (RMB)|1,258,976,287.17|
|Total purchases from top five suppliers as a percentage of||
||47.29%|
|the total purchases for this Reporting Period (%)||
|Total purchases from related parties among top five||
|suppliers as a percentage of the total purchases for this|0.00%|
|Reporting Period (%)||

Information about top five suppliers
|||||
|-|-|-|-|
||||As a percentage of the total purchases for|
|No.|Supplier|Purchase amount (RMB)||
||||this Reporting Period (%)|
|1|Supplier A|438,888,667.03|16.49%|
|2|Supplier B|263,288,475.58|9.89%|
|3|Supplier C|231,557,068.18|8.70%|
|4|Supplier D|169,410,827.46|6.36%|
|5|Supplier E|155,831,248.92|5.85%|
|Total|--|1,258,976,287.17|47.29%|

 Other information about the main suppliers
□ Applicable√ Not applicable
3. Expense
Unit: RMB
||||||
|-|-|-|-|-|
||2016|2015|+/-%|Reason for any significant change|
|Selling expenses|181,963,908.31|172,400,338.43|5.55%||
||121,123,804.25|158,119,192.47||Disposal of subsidiary Foshan|
|Administrative expenses|||-23.40%||
|||||Chengtong Paper Co., Ltd. last year|
||83,749,628.37|133,872,055.72||Increase in exchange gains and interest|
|Finance costs|||-37.44%|revenue from loans to non-financial|
|||||institutions|

4.R&D input
√ Applicable□ Not applicable
Since 2016, the Company continued to intensify product structure adjustment and strengthen technological innovation according to the situation of domestic economy and industrial development, based on market needs, with
the purpose of improving the added value of products. In 2016, the Company focused on the development and
research of new products such as customized ivory board for liquid packaging, customized food packaging board,
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 special color SBS lightweight tobacco packaging ivory board and high-gloss coated ivory board. Multiple new products such as customized ivory board for liquid packaging and special color SBS lightweight tobacco packaging ivory board were developed successfully and produced in batches. The product structure of the Company was further upgraded towards high-end and high added value products to enhance the market competitiveness of the products and facilitate the significant improvement of economic benefit. The Company continued to lead the development of ivory board industry with product quality and technological innovation.
At the same time, the Company continued to improve and optimize product quality through research and development of new raw and auxiliary materials instead and innovation of process and technology. As a result, the production and manufacturing cost was controlled effectively and significant economic benefits were achieved. Information aboutR&D input:
|||||
|-|-|-|-|
||2016|2015|+/-%|
||140|130|7.69%|
|Number of R&D personnel||||
|R&D personnel as a percentage|6.56%|5.93%|0.63%|
|in the total employees||||
||138,434,078.44|126,521,223.18|9.42%|
|R&D input (RMB)||||
|R&D input as a percentage in|3.84%|3.85%|-0.01%|
|operating revenues||||
||14,436,073.39|9,981,324.00|44.63%|
|Capitalized R&D input (RMB)||||
|Capitalized R&D input as a||||
||10.84%|6.46%|4.38%|
|percentage in the total R&D||||
|input||||

Reasons for any significant YoY change in the percentage of theR&D input in the operating revenues
□ Applicable√ Not applicable
Reason for any sharp variation in the percentage of the capitalizedR&D input and rationale
√ Applicable□ Not applicable
Since the capitalization of theR&D expenses is not recurring, subsidiary Hongta Renheng executed the capitalization on the parts which were recognized could be capitalized as well as were in the development phase according to the actual situation of theR&D investment.
5. Cash flows
Unit: RMB
|||||
|-|-|-|-|
|Item|2016|2015|+/-%|
|Subtotal of cash inflows from|3,374,196,669.68|3,163,621,643.76||
||||6.66%|
|operating activities||||
|Subtotal of cash outflows from|2,965,085,558.60|2,550,130,314.00||
||||16.27%|
|operating activities||||
|Net cash flows from operating|409,111,111.08|613,491,329.76||
||||-33.31%|
|activities||||
|Subtotal of cash inflows from|141,570,155.66|118,088,031.70||
||||19.89%|
|investing activities||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||
|-|-|-|-|
|Subtotal of cash outflows from|284,441,479.47|56,315,072.57||
||||405.09%|
|investing activities||||
|Net cash flows from investing|-142,871,323.81|61,772,959.13||
||||-331.28%|
|activities||||
|Subtotal of cash inflows from|1,595,506,545.27|2,214,769,096.43||
||||-27.96%|
|financing activities||||
|Subtotal of cash outflows from|1,692,755,938.46|2,822,887,656.76||
||||-40.03%|
|financing activities||||
|Net cash flows from financing|-97,249,393.19|-608,118,560.33||
||||84.01%|
|activities||||
|Net increase in cash and cash|171,143,376.58|72,711,701.24||
||||135.37%|
|equivalents||||

Explanation of why the data above varied significantly
√ Applicable□ Not applicable
1. Net cash flows from operating activities decreased33.31% from last year mainly because the Company purchased more raw materials in bulk, resulting in a RMB400 million increase in the cash paid for goods.
2. Cash outflows from investing activities increased405.09% and net cash flows from investing activities decreased331.28% from last year mainly because RMB209 million of bank structured deposit products was purchased.
3. Cash outflows from financing activities decreased40.03% and net cash flows from financing activities increased84.01% from last year mainly due to the decreased repayments to banks.
4. Due to the effects of operating, investing and financing activities combined, net increase in cash and cash equivalents increased135.37% from last year.
Reason for any big difference between the net operating cash flow and the net profit for this Reporting Period
□ Applicable√ Not applicable
III Analysis of non-core business
√ Applicable□ Not applicable
Unit: RMB
||||||
|-|-|-|-|-|
|||As a percentage of|||
||Amount||Source/reason|Recurring or not|
|||total profit (%)|||
||||Income from long-term||
||||equity investment||
||||(associated enterprise)||
|Investment income|19,399,881.52|12.03%|measured at the equity|Yes|
||||method and disposal of||
||||financial assets measured at||
||||fair value||
|Profit/Loss on fair|||Fair value of the closing||
||1,571,341.66|0.97%||No|
|value changes|||floating interest revenue||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||
|-|-|-|-|-|
||||receivable from the bank||
||||structured deposit products||
||||purchased||
||||Bad debt and inventory||
|Asset impairment|-4,071,141.13|-2.52%||No|
||||falling price provisions||
||||Governmental subsidies,||
|Non-operating|||||
||29,182,787.72|18.09%|revenue from disposal of|No|
|revenue|||||
||||non-current assets||
|Non-operating|||||
||4,113,896.86|2.55%|Loss on asset disposal|No|
|expense|||||

IV Analysis of assets and liabilities
1. Significant changes in the asset composition
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||December 31, 2016||December 31, 2015||||
|||As a||As a|Change in||
|||percentage of||percentage of|percentag|Reason for any significant change|
||Amount||Amount||||
|||total assets||total assets|e (%)||
|||(%)||(%)|||
||533,995,466.41||509,706,611.07||||
|Monetary funds||8.64%||8.41%|0.23%||
|Accounts|826,164,986.19||791,325,305.79||||
|||13.36%||13.06%|0.30%||
|receivable|||||||
||612,236,732.80||712,880,811.93||||
|Inventories||9.90%||11.76%|-1.86%||
|Investment|24,593,743.71||11,945,127.02||||
|||0.40%||0.20%|0.20%||
|property|||||||
|Long-term equity|252,775,695.55||262,089,226.45||||
|||4.09%||4.33%|-0.24%||
|investments|||||||
||2,451,794,797.91||2,539,372,551.91||||
|Fixed assets||39.66%||41.91%|-2.25%||
|Construction in|23,927,727.82||28,305,202.78||||
|||0.39%||0.47%|-0.08%||
|progress|||||||
|Short-term|821,900,000.00||912,724,440.16||||
|||13.29%||15.06%|-1.77%||
|borrowings|||||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 2. Assets and liabilities measured at fair value
√ Applicable□ Not applicable
Unit: RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Profit/loss on||||||
||||Cumulative fair|Impairment||||
|||fair value|||Purchased in|Sold in this||
||Opening||value changes|provided in this|||Closing|
|Item||changes in this|||this Reporting|Reporting||
||balance||charged to|Reporting|||balance|
|||Reporting|||Period|Period||
||||equity|Period||||
|||Period||||||
|Financial assets||||||||
|1. Financial||||||||
|assets at fair||||||||
|value through||||||||
||1,741,500.00|-170,158.34|||||1,571,341.66|
|profit/loss||||||||
|(excluding||||||||
|derivative||||||||
|financial assets)||||||||
|3.||||||||
|Available-for-sa||||||||
||288,700.00||||||288,700.00|
|le financial||||||||
|assets||||||||
|Subtotal of||||||||
||2,030,200.00|-170,158.34|||||1,860,041.66|
|financial assets||||||||
|Total of the||||||||
||2,030,200.00|-170,158.34|||||1,860,041.66|
|above||||||||
|Financial||||||||
||212,689.24|-212,689.24|||||0.00|
|liabilities||||||||

Significant changes in the measurement attributes of the main assets in this Reporting Period
□ Yes√ No
3. Restricted asset rights as of the end of this Reporting Period
RMB176.89 million of monetary funds were restricted in the Current Period, which were RMB126.63 million of deposits forbanker’s acceptance bills, as well as RMB50.26 million of L/C deposits and other deposits.
V Investments made
1. Total investments made
√ Applicable□ Not applicable
||||
|-|-|-|
|Investments made in this Reporting Period|||
||Investments made in the prior year (RMB)|+/-%|
|(RMB)|||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|0.00|3,000,000.00|-100.00%|

 2. Significant equity investments made in this Reporting Period
□ Applicable√ Not applicable
3. Significant non-equity investments ongoing in this Reporting Period
□ Applicable√ Not applicable
4. Financial investments
(1) Securities investments
□ Applicable√ Not applicable
No such cases in this Reporting Period
(2) Investment in derivative financial instruments
□ Applicable√ Not applicable
No such cases in this Reporting Period
5. Use of funds raised
□ Applicable√ Not applicable
No such cases in this Reporting Period
VI Sale of major assets and equity interests
1. Sale of major assets
□ Applicable√ Not applicable
No such cases in this Reporting Period.
2. Sale of major equity interests
□ Applicable√ Not applicable
VII Main controlled and joint stock companies
√ Applicable□ Not applicable
Main subsidiaries and joint stock companies with an over10% influence on theCompany’s net profit
Unit: RMB
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||||||
|-|-|-|-|-|-|-|-|-|
||Relationship|Main|||||||
|Company|||Registered|||Operating|Operating||
|||||Total assets|Net assets|||Net profit|
|||business|||||||
||with the||||||||
|name|||capital|||revenues|profit||
|||scope|||||||
||Company||||||||
|Zhuhai|||||||||
|||High-grade|||||||
|Hongta|||||||||
|||coated white|||||||
|Renheng|||||||||
|||cardboard,|600,000,000.|5,071,296,70|2,789,520,62|3,349,262,55|114,222,056.|125,460,098.|
|Packaging|Subsidiary||||||||
|||latex and|00|8.80|3.01|8.37|07|44|
|Co., Ltd.|||||||||
|||calcium|||||||
|(consolidated|||||||||
|||carbonate|||||||
|)|||||||||
|Zhuhai|||||||||
|Hongta|||||||||
|||High-grade|||||||
|Renheng|||600,000,000.|4,563,884,93|2,708,102,82|2,134,638,18|47,669,133.1|40,625,776.6|
||Subsidiary|coated white|||||||
|Packaging|||00|6.35|4.37|1.09|0|2|
|||cardboard|||||||
|Co., Ltd.|||||||||
|(alone)|||||||||
|Zhuhai|||||||||
|||High-grade|||||||
|Huafeng|||984,559,331.|2,597,421,60|1,044,259,74|1,844,763,31|51,854,601.7|68,306,151.3|
||Subsidiary|coated white|||||||
|Paper Co.,|||06|0.96|9.79|0.11|0|3|
|||cardboard|||||||
|Ltd.|||||||||
|Zhuhai|||||||||
|Golden||Latex and|||||||
||||69,271,940.0|231,829,911.|158,582,280.|266,587,431.|19,704,391.8|22,015,837.2|
|Pheasant|Subsidiary|calcium|||||||
||||0|00|02|52|8|5|
|Chemical||carbonate|||||||
|Co., Ltd.|||||||||
|Huaxin|||||||||
|(Foshan)|||||||||
|||Color|96,895,605.1|412,457,087.|212,412,483.|262,141,265.|||
|Color|Subsidiary||||||8,307,360.19|7,592,977.14|
|||packaging|4|94|75|46|||
|Printing Co.,|||||||||
|Ltd.|||||||||

Subsidiaries obtained or disposed in this Reporting Period
□ Applicable√ Not applicable
Information about the main controlled and joint stock companies
1. Hongta Renheng headquarters, Zhuhai Huafeng, Jinji Chemicals: Affected by severe macroeconomic environment at home and abroad, "de-stocking" pain in tobacco industry and newly increased production capacity of ivory board, the operating income of ivory board of the company reduced by7.05% year-on-year. In the face of difficulties and challenges, Hongta Renheng strictly implemented the "improving quality and efficiency" and "reducing deposit reserve rate and interest" work based on the guiding ideology "reforming with new initiatives, managing with new methods, operating in new ideas and activating with new mechanisms"
for operation management and based on the main line "increasing income and reducing expenditure" and acquired remarkable
effect——The total amount of the wholeyear’s profits of Hongta Renheng (merged company, including Jinji Chemicals) is RMB
138 million which increased by21% year-on-year.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 2. Huaxin Color Printing: In the face of the new normal state of falling back of macroeconomic growth, entity economy ran into the "excess de-capacity" industry reshuffle stage. Huaxin Color Printing actively carried out reform and adjustment, resource optimization, and transformation as well as upgrading in due time, and successfully developed new businesses. Printed matter income of the company increased by7.06% year-on-year and total amount of profits increased by10% year-on-year.
VIII Structured bodies controlled by the Company
□ Applicable√ Not applicable
IX Outlook for the future development of the Company
In 2016, ivory board industry went through the "double"-overlapping severe situation of "continued low market demand" and "centralized release of newly increased production capacity". In 2016, newly increased production capacity of ivory board reached 1.24 million tons (liquid food packaging board) which accounted for over12% of total effective production capacity and over15% of actual total yield. Newly increased production capacity hit the market continuously to cause fierce competition.
In 2017, affected by the continually rising price of domestic and overseas raw and auxiliary materials for paper making such as wood pulp, waste paper, chemicals and coal, raised price of domestic highway transportation unit price and the "environmental protection storm", since the Spring Festival of 2017, product price in domestic paper making industry showed tremendous "rise" trend, especially, the price of "black paper" rose in the largest extent, the price of "white paper" also rises in certain extent. However, ivory board industry still can't avoid the situation that the supply and demand of domestic production capacity can't reach a balance in short term, especially for the tobacco packaging board and liquid food packaging board, market competition is still fierce and price falling pressure still exists. The original profit of social ivory board was relatively low, given that the price of its raw materials has risen significantly, there is certain room for rise of its price.
(I) Strategies for the development of the company
Focus on the present, strengthen theR&D and manufacturing of high-end packaging paper materials, extend and broaden main industry value chain towards the depth of the industry chain and related diversification via merger& reorganization, achieve the upgrading and transformation from traditional industry to "new material fields". Look to the future, seize the opportunity of the transformation of Chengtong Group into capital operation company, give full play to own advantages based on the strategy development plan of China Paper and the actual situation of the Company, actively seek resources in the capital operating platform of the group that can be undertaken by the Company and pursue enterprise transformation and upgrading.
(II) Business plan of the Company in 2017
In 2017, the Company shall continue to implement the "Four Three Two Three" work plan based on the guiding ideology "reforming with new initiatives, managing with new methods, operating in new ideas and activating with new mechanisms", under the general keynote of "fulfilling the guiding ideology "reforming with new initiatives, managing with new methods, operating in new ideas and activating with new mechanisms" and achieving change step by step", with the operation target of budget, and shall try the best to accomplish the various operation targets put forward by the Board of Director in 2017.
1. New management ideas
(1) Intensify product structure adjustment and strengthen technological innovation, protect production capacity and reduce fixed allocated cost
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 In 2017, the Company shall continue to intensity product structure adjustment, further improve the added value of products and on that basis, increase production capacity utilization and reduce fixed allocated cost by increasing orders of social ivory board at the same time.
(2) Optimize asset and capital structure and reduce capital cost
For optimizing asset structure: In 2017, with respect to the finished goods inventory reduction plan of the operation center, "lean management" shall be carried out in "South China" (pilot) with customers as pilot like that in 2016; meanwhile, consignment sales of raw and auxiliary materials shall be further increased and inventory of raw materials and spares shall be optimized continuously via McKinsey model so as to reduce inventory cost. (3) Make experiments on integration of business experience and financial management in pilot area and increase benefits with new ideas
In 2017, the Company shall make experiments on the new supply and marketing mode of "integration of business experience and financial management" in pilot area and control risks through equity and equipment mortgage. (4) Exploit internal resources, create benefits and promote growth
Accomplish earnings growth and increase and create benefits by exploiting internal resources.
2. New management methods
(1) Intensify lean management and PMO management in pilot area
In 2017, the Company shall continue to intensify lean management and exploit and calculate pocket profit. At the same time, the Company shall draw lessons from PMO management and strengthen the promotion of major tasks. Focus on: identify waste of process execution efficiency and logistics execution efficiency.
(2) Integrate the standard, optimize orders, and reduce production change-related loss
In 2017, the company shall, on the basis of integration of standard and order implemented last year, further promote order scheduling efficiency and reduce the cutting and production change-related loss caused by excess varieties so as to further production change and recovery operation, reduce the loss arising in unscheduled downtime, promote quality improvement, improve the one-time pass rate of machines produced and reduce quality loss at the same time.
(3) Avoid exchange rate risk and reduce exchange loss
Domestic institution predicts that, RMB exchange rate in 2017 will depreciate to USD 7. To avoid exchange rate risk, the Company shall enhance the utilization efficiency of funds, reduce the burden of settlement in US dollar and reduce exchange loss.
3. New activation mechanisms
(1) Activate technological innovation and develop new strategic products
In 2017, the Company shall enhance new product development through technological innovation so as to further improve the core competitiveness of the Company's products.
Meanwhile, the Company shall further normalize and optimize the development process of new products and define the responsibility and authority in each link, strengthen the review of new product loading and the control over the process, link the performance of new production development personnel and technical development personnel and promote the initiative of technical development personnel through positive incentives.
(2) Activate marketing vitality and implement product line assessment
Currently, the Company mainly adopts the marketing mode of "longitudinal region" management. In 2017, we will strengthen the business control mode of "horizontal product line" management, define the responsibility, execute cross-regional horizontal overall coordination, planning and overall sales control, and implement assessment and incentive mechanism.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 4. New reform initiatives
(1) Outsource non-core business to reduce management cost
In 2017, the Company shall further reduce management cost by outsourcing non-core businesses
(2) Implement technological innovation to reduce production cost
In 2017, the Company shall enhance production and technological innovation and use alternative raw and auxiliary materials to further reduce production cost without compromising quality.
(3) Expand chemical color printing business to create new profit growth point
In 2017, the Company shall further increase production capacity utilization of chemical business and color printing business, increase sales income and reduce production cost by enhancing market development so as to create new profit growth point.
(III) Main risk factors and countermeasures
1. Market and policy risk
High-end coated ivory board is the dominant product of the Company. However, affected by the falling demand for high-end package and the tobacco industry, the tobacco packaging board market had appeared to be shrinking in 2016. The continuous and concentrated release of the new production capacity for various ivory boards in China in the past two years has brought unprecedented competition pressure to the industry market. Countermeasure: intensify product structure adjustment, and strengthen the efforts in developing new products and expanding new market.
2. Raw material price fluctuation
Main raw material used by the Company is paper pulp is mainly imported from abroad. The great fluctuation and change in international paper pulp price may result in the cost risks. Countermeasure: keep a close watch on the price change trend and RMB exchange rate tendency, gradually purchase more paper pulp at home, and meanwhile, strategically purchase paper pulp as reserves when necessary, in order to effectively control the cost. X Visits paid to the Company for purposes of research, communication, interview, etc.
1. In this Reporting Period
√ Applicable□ Not applicable
|||||
|-|-|-|-|
|Date of visit|Way of visit|Type of visitor|Index to main inquiry information|
||||Inquired the progress of the significant|
|21 Jan. 2016|Telephone communication|Individual||
||||events|
||||Inquired the production and operating|
|3 Mar. 2016|Telephone communication|Individual||
||||situation of the Company|
||||Inquired the situation of solving the B|
|22 Mar. 2016|Telephone communication|Individual||
||||shares|
||||Inquired the progress of the significant|
|18 Apr. 2016|Telephone communication|Individual|events and put forward the advices on|
||||solving the B shares.|
||||Inquired the delisting of the B shares and|
|26 May 2016|Telephone communication|Individual||
||||put forward the advices on combing the|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||
|-|-|-|-|
||||actual controller Chengtong Group as the|
||||state-owned capital operating platform as|
||||the opportunity to promote the share|
||||reform.|
||||Inquired the operating situation of the|
|9 Jun. 2016|Telephone communication|Individual||
||||first half year of the Company|
||||Inquired the progress of the significant|
|21 Jul. 2016|Telephone communication|Individual||
||||events|
||||Inquired the delisting of the B shares and|
|3 Aug. 2016|Telephone communication|Individual||
||||hoped relisting as soon as possible|
|||Individual|Inquired the handling of the significant|
|4 Aug. 2016|Telephone communication|||
||||events of the Company|
|||Individual|Inquired the delisting and relisting of the|
|18 Aug. 2016|Telephone communication|||
||||shares|
|||Individual|Inquired the delisting and relisting of the|
|23 Aug. 2016|Telephone communication|||
||||shares|
|||Individual|Inquired the handling of the significant|
|6 Sep. 2016|Telephone communication|||
||||events of the Company|
|||Individual|Suggested to enhance the handling|
|12 Sep. 2016|Telephone communication||strength of the significant events of the|
||||Company|
|||Individual|Inquired the progress of the significant|
|20 Sep. 2016|Telephone communication|||
||||events|
|||Individual|Inquired the delisting and relisting of the|
|29 Sep. 2016|Telephone communication|||
||||shares|
|||Individual|Inquired the progress of the significant|
|30 Sep. 2016|Telephone communication|||
||||events|
|||Individual|Inquired the delisting and relisting of the|
|13 Oct. 2016|Telephone communication|||
||||shares|
|||Individual|Inquired the progress of the significant|
|17 Oct. 2016|Telephone communication|||
||||events|
|||Individual|Inquired the progress of the significant|
|24 Oct. 2016|Telephone communication|||
||||events|
|||Individual|Inquired the delisting and relisting of the|
|18 Nov. 2016|Telephone communication|||
||||shares|
|||Individual|Inquired the delisting and relisting of the|
|21 Nov. 2016|Telephone communication|||
||||shares|
|||Individual|Inquired the progress of the significant|
|2 Dec. 2016|Telephone communication|||
||||events|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||
|-|-|-|-|-|
||||Individual|Inquired the progress of the significant|
|14 Dec. 2016|Telephone communication||||
|||||events|
||||Individual|Inquired the progress of the significant|
|28 Dec. 2016|Telephone communication||||
|||||events|
||||Individual|Inquired the progress of the significant|
|30 Dec. 2016|Telephone communication||||
|||||events|
|Times of visit||25|||
|Number of visiting institutions||0|||
|Number of visiting individuals||25|||
|Number of other visitors||0|||
|Significant undisclosed information disclosed,|||||
|||None|||
|revealed or leaked|||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Section V Significant Events
I Profit distribution and converting capital reserve into share capital for common shareholders
Formulation, execution or adjustments of profit distribution policy, especially cash dividend policy, for common shareholders in this Reporting Period
√ Applicable□ Not applicable
During the Reporting Period, the Company carried out the 2015 annual profit distribution plan (based on the total share capital on 31 Dec. 2015, a cash dividend of RMB0.38 (tax included) for every 10 shares to all the shareholders) reviewed and approved at the 2015 Annual General Meeting.
|||
|-|-|
|Special statement about cash dividend policy||
|In compliance with the Company’s Articles of Association and||
||Yes|
|resolution of general meeting||
|Specific and clear dividend standard and ratio|Yes|
|Complete decision-making procedure and mechanism|Yes|
|Independent directors fulfilled their responsibilities and played their||
||Yes|
|due role.||
|Minority interests have the chance to fully express their opinion||
||Yes|
|and desire and their legal rights and interests were fully protected.||
|In adjustment or alteration of the cash dividend policy, the||
|conditions and procedure were in compliance with applicable|No adjustments or alterations|
|regulations and transparent.||

Plans/proposals for profit distribution and converting capital reserve into share capital for common shareholders for the past three years (including this Reporting Period):
2016 profit distribution proposal: As approved at the second meeting of the sixth Board in 2017, based on the total shares of the Company as of December 31, 2016, it is proposed that a dividend of RMB0.32 (tax inclusive) per 10 shares should be distributed to all shareholders of the Company.
2015 profit distribution plan: Based on the total shares of the Company as of December 31, 2015, a dividend of RMB0.38 (tax inclusive) per 10 shares would be distributed to all shareholders of the Company.
2014 profit distribution plan: Based on the total shares of the Company as of December 31, 2014, a dividend of RMB0.15 (tax inclusive) per 10 shares would be distributed to all shareholders of the Company.
Cash dividend distribution of the Company to common shareholders over the past three years (including this Reporting Period) Unit: RMB
|||||||
|-|-|-|-|-|-|
|||Net profit|Proportion in net|||
||Cash dividends||||Ratio of cash|
|Year||attributable to|profit attributable to|Cash dividends in|dividends in other|
||(tax included)|||other forms||
||||||forms|
|||common|common|||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||
|-|-|-|-|-|-|
|||shareholders of the|shareholders of the|||
|||Company in the|Company in the|||
|||consolidated|consolidated|||
|||statements for the|statements for the|||
|||year|year (%)|||
|2016|16,173,600.00|61,324,088.11|26.37%|0.00|0.00%|
|2015|19,206,150.00|133,094,696.66|14.43%|0.00|0.00%|
|2014|7,581,375.00|83,284,859.23|9.10%|0.00|0.00%|

 Indicate by tick mark whether the Company made profit in this Reporting Period and the profit distributable to common shareholders of the Company was positive, but it did not put forward a proposal for cash dividend distribution to its common shareholders□ Applicable√ Not applicable
II Proposal for profit distribution and converting capital reserve into share capital for this Reporting Period
√ Applicable□ Not applicable
|||
|-|-|
|Bonus shares for every 10 shares (share)|0|
|Dividend for every 10 shares (RMB) (tax inclusive)|0.32|
|Additional shares to be converted from capital||
||0|
|reserve for every 10 shares (share)||
|Total shares as the basis for the profit distribution||
||505,425,000|
|proposal (share)||
|Total cash dividends (RMB) (tax included)|16,173,600.00|
|Distributable profit (RMB)|26,954,787.96|
|Percentage of cash dividends in the total profit to||
||100.00%|
|be distributed (%)||
|Cash dividend policy||
|If the development stage of the Company belongs to the mature period without any significant assets expenditure arrangement,||
|when executing the profits distribution, the ratio of the cash dividend to the profits distribution of the Reporting Period should at||
|least reach 20%.||
|Details about the proposal for profit distribution and converting capital reserve into share capital||
|Based on the total shares of the Company as of December 31, 2016, it is proposed that a dividend of RMB0.32 (tax inclusive) per||
|10 shares should be distributed to all shareholders of the Company; and that no capital reserve should be converted into share||
|capital, nor should any bonus shares be granted.||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 III Fulfillment of commitments
1. Commitments of theCompany’s actual controller, shareholders, related parties and acquirer, as well as the Company and other commitment makers, fulfilled in this Reporting Period or ongoing at the period-end
√ Applicable□ Not applicable
||||||||
|-|-|-|-|-|-|-|
|||||Time of|||
||Commitmen||||Period of||
|Commitment||Commitment type|Contents|making||Fulfillment|
||t maker||||commitment||
|||||commitment|||
|Commitment on|||||||
|share reform|||||||
||||In order to avoid potential||||
||||horizontal competition, China||||
||||Supplies Development||||
||||Investment Corporation (has||||
||||changed its name to ―China||||
||||Paper Corporation‖) made the||||
||||following commitment:||||
||||1. The Company and the||||
||||Company’s wholly owned and||||
||||controlling companies ensured||||
||||that there is no same or similar||||
||||business with Foshan Huaxin||||
||||Packaging Co., Ltd. 2. The||||
|Commitment in|||||||
||||Company and the Company’s||||
|the acquisition|||wholly owned and controlling||||
||China Paper|||||Normal|
|report or the|||companies ensured that there is|28 Jun. 2005|Long-term||
||Corporation|||||performance|
|report on equity|||no same or similar business||||
|changes|||with Foshan Huaxin Packaging||||
||||Co., Ltd.; The Company and the||||
||||Company’s wholly owned and||||
||||controlling companies will not||||
||||self-run no same or similar||||
||||business with Foshan Huaxin||||
||||Packaging Co., Ltd.; not self-||||
||||run any similar projects||||
||||constitute a direct competition||||
||||with Foshan Huaxin Packaging||||
||||Co., Ltd.; nor any method of||||
||||investment business||||
||||constituted or may constituted||||
||||competition with Foshan||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||
|-|-|-|-|-|-|
|||Huaxin Packaging Co., Ltd.||||
|||thus ensure to avoid any direct||||
|||or indirect business competition||||
|||to the production and operation||||
|||of Foshan Huaxin||||
|||Packaging Co., Ltd..||||
|||For defective real estate failing||||
|||to obtain the drawbacks of the||||
|||ownership certificate, Hongta||||
|||Group Co., Ltd., and Yanlord||||
|||Industries Pte. Ltd. committed||||
|||that: if a third party claim, such||||
|||as right, housing demolition any||||
|||lead to Hongta Group Co., Ltd.,||||
|||can not normally possess,||||
|||utilize, profit from and dispose||||
|||of defective (real estate),||||
|||Hongta Group Co., Ltd., and||||
|||Yanlord Industries Pte. Ltd.||||
||Singapore|||||
|||agreed to pay the compensation||||
||Renheng|||||
|||of suffered losses of Foshan||||
||Industry|||||
|||Huaxin Packaging Co., Ltd and||||
||Co., Ltd.;|||||
|||Long Bon International Co.,|||Long-term|
||Yunnan|||||
|Commitments||Ltd. within 30 days from|||commitment|
||Hongta|||||
|made in time of||receiving notice of Foshan|19 Oct. 2012|Long-term|belonging to|
||Group Co.,|||||
|asset restructuring||Huaxin Packaging Co., Ltd and|||need trigger|
||Ltd.,(both|||||
|||Long Bon International Co.,|||conditions|
||are not the|||||
|||Ltd., the value of defect real||||
||shareholders|||||
|||estate was comprehensive||||
||of the|||||
|||determined according to the||||
||Company)|||||
|||Rights and Interests of All||||
|||Shareholders Value Assets||||
|||Evaluation Report of Zhuhai||||
|||Special Economic Zone Hongta||||
|||Group Co., Ltd., issued by||||
|||Zhongshang Assets Appraisal||||
|||Co., Ltd. on 7 Nov. 2008||||
|||and used years and depreciation||||
|||of real estate Compensation||||
|||does not exceed the total||||
|||assessment net value of the||||
|||defective real estate of RMB||||
|||10,746,298.00.||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||
|-|-|-|-|-|-|
|||Foshan Huaxin Development||||
|||Co., Ltd. as the controlling||||
|||shareholder of Foshan Huaxin||||
|||Packaging Co., Ltd. (here in||||
|||after referred to as "YHB"||||
|||committed that Will not in||||
|||any place within or outside of||||
|||Guangdong province in any||||
|||way (including, but not limited||||
|Commitments|Foshan|to, with individual||||
|made upon first|Huaxin|proprietorship, joint venture or|||Normal|
||||23 Jun. 1999|Long-term||
|issuance or|Developmen|through another company hold|||performance|
|refinance|t Co., Ltd.|the share or own equities to||||
|||participate in similar business||||
|||activities may directly form||||
|||competition with YHB at that||||
|||time. Excepting as the||||
|||subsequent restructuring,||||
|||transfer, newly issuance, etc.,||||
|||Foshan Huaxin Development||||
|||Co., Ltd. no long effectively||||
|||control YHB.||||
|Commitment on||||||
|equity incentive||||||
|||The Company future the next||||
|||three years (2015-2017) the||||
|||specific returns planning of||||
|||shareholder: 1, the company||||
|||can take the ways of cash,||||
|||shares or cash combined to||||
|||allocate dividends, can||||
|||undertake metaphase cash||||
|Other|Foshan|||||
|||dividends. 1, the Company can||||
|commitments|Huaxin||||Normal|
|||take cash, shares or|29 Jun. 2015|2018-08-31||
|made to minority|Packaging||||performance|
|||combination o f cash and share,||||
|shareholders|Co., Ltd.|||||
|||with stock allocation of||||
|||dividends, can undertake||||
|||metaphase cash dividends. 2.||||
|||The next three years, the||||
|||Company will actively take||||
|||cash distribution of profits. In||||
|||accord with relevant laws,||||
|||regulations and provisions of||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||
|-|-|-|-|-|
||the Articles of Corporation and||||
||the system and conditions and||||
||the profit in the Company meet||||
||the capital demand of normal||||
||production and business||||
||operation and fully reserved||||
||legal accumulation fund and||||
||surplus accumulation, under||||
||such condition, if there is no||||
||major investment plan or major||||
||cash payments, etc, the next||||
||three years cumulative||||
||distribution of profits in cash||||
||will be not less than thirty||||
||percent of the average annual||||
||distributable profits realized in||||
||recent three years. 3, According||||
||to the actual situation of the||||
||Company and long-term||||
||sustainable development, the||||
||Board of Directors thought that||||
||when the profit allocation by||||
||stock dividend meets all the||||
||overall interests of||||
||shareholders, the Company can||||
||conduct stock dividend to||||
||distribute profit.||||
||The Company future the next||||
||three years (2012-2014) the||||
||specific returns planning of||||
||shareholder: 1, the company||||
||can take the ways of cash,||||
||shares or cash combined to||||
||allocate dividends, can||||
|Foshan|||||
||undertake metaphase cash|||Had|
|Huaxin|||||
||dividends. 1, the Company can|18 Jul. 2012|2015-08-31|completed the|
|Packaging|||||
||take cash, shares or|||performance|
|Co., Ltd.|||||
||combination o f cash and share,||||
||with stock allocation of||||
||dividends, can undertake||||
||metaphase cash dividends. 2.||||
||The next three years, the||||
||Company will actively take||||
||cash distribution of profits. In||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|||accord with relevant laws,|
|||regulations and provisions of|
|||the Articles of Corporation and|
|||the system and conditions and|
|||the profit in the Company meet|
|||the capital demand of normal|
|||production and business|
|||operation and fully reserved|
|||legal accumulation fund and|
|||surplus accumulation, under|
|||such condition, if there is no|
|||major investment plan or major|
|||cash payments, etc, the next|
|||three years cumulative|
|||distribution of profits in cash|
|||will be not less than thirty|
|||percent of the average annual|
|||distributable profits realized in|
|||recent three years. 3, According|
|||to the actual situation of the|
|||Company and long-term|
|||sustainable development, the|
|||Board of Directors thought that|
|||when the profit allocation by|
|||stock dividend meets all the|
|||overall interests of|
|||shareholders, the Company can|
|||conduct stock dividend to|
|||distribute profit.|
|Executed timely|||
||Yes||
|or not?|||
|If the|||
|commitments|||
|failed to complete|||
|the execution as|||
|expired, should|||
||N/A||
|specifically state|||
|the unfulfillment|||
|reasons and the|||
|work plan for the|||
|next step|||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 2. Where there had been an earnings forecast for an asset or project and this Reporting Period was still within the forecast period, explain why the forecast has been reached for this Reporting Period.
□Applicable√ Not applicable
IV Occupation of theCompany’s funds by the controlling shareholder or its related parties for non-operating purposes
□ Applicable√ Not applicable
No such cases in this Reporting Period.
V Explanations given by the Board of Directors, the Supervisory Board and the independent directors (if any) regarding the“auditor’s non-standard report” issued by the CPAs firm for this Reporting Period
□ Applicable√ Not applicable
VI YoY changes in accounting policies, estimations and methods
□ Applicable√ Not applicable
No such cases in this Reporting Period.
VII Retroactive restatement due to correction of material accounting errors in this Reporting Period
□ Applicable√ Not applicable
No such cases in this Reporting Period.
VIII YoY changes in the scope of the consolidated financial statements
□ Applicable√ Not applicable
No such cases in this Reporting Period.
IX Engagement and disengagement of CPAs firm
Current CPAs firm
|||
|-|-|
|Name of the domestic CPAs firm|Da Hua Certified Public Accountants (Special General Partnership)|
|The Company’s payment for the domestic CPAs firm||
||97|
|(RMB’0,000)||
|Consecutive years of the audit service provided by||
||2|
|the domestic CPAs firm||
|Names of the certified public accountants from the||
||Chen Baohua, Zhou Lingzhi|
|domestic CPAs firm||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Indicate by tick mark whether the CPAs firm was changed in this Reporting Period
□ Yes√ No
CPAs firm, financial advisor or sponsor engaged for internal control audit
√ Applicable□ Not applicable
The Company engaged Da Hua Certified Public Accountants (Special General Partnership) as the internal control auditor for the Current Year and paid RMB0.3 million additionally for that.
X Possibility of listing suspension or termination after disclosure of this Report
□ Applicable√ Not applicable
XI Bankruptcy and restructuring
□ Applicable√ Not applicable
No such cases in this Reporting Period.
XII Significant litigations and arbitrations
□ Applicable√ Not applicable
No such cases in this Reporting Period.
XIII Punishments and rectifications
□ Applicable√ Not applicable
No such cases in this Reporting Period.
XIV Credit conditions of the Company as well as its controlling shareholder and actual controller
□ Applicable√ Not applicable
XV Implementation of any equity incentive plan, employee stock ownership plan or other incentive measures for employees
□ Applicable√ Not applicable
No such cases in this Reporting Period.
XVI Significant related-party transactions
1. Related-party transactions relevant to routine operation
√Applicable□ Not applicable
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||Proporti||||Obtaina|||
||||||||on in||||ble|||
|||||||||Approv|||||Index|
|||||||Transact|total||||market|||
||Relation||Contents|||||ed|Over||||to|
|Related||Type of||Pricing|Transact|ion|amounts|||Mode of|price for|||
||with the||of|||||transacti|approve|||Disclos|disclose|
|transactio||transacti||principl|ion|amount|of|||settleme|transacti|||
||Compan||transacti|||||on line|d line or|||ure date|d|
|n party||on||e|price|(RMB’0|transacti|||nt|on of|||
||y||on|||||(RMB’0|not||||informa|
|||||||,000)|ons of||||the|||
|||||||||,000)|||||tion|
||||||||same||||same|||
||||||||kind||||kind|||
|||||Being||||||||||
|||||decided||||||||||
|||||through||||||||||
|China||Routine|Selling|||||||Transfer||||
||Actual|||negotiat||||||||||
|Paper||related|raw||Market|13,468.||||, bank||03/24/2||
||controll|||ion|||3.73%|20,300|No||N/A|||
|Corporati||transacti|material||value|19||||accepta||017||
||er|||based||||||||||
|on||on|s to|||||||nce||||
|||||on the||||||||||
|||||market||||||||||
|||||value||||||||||
|||||||13,468.||||||||
|Total||||--|--||--|20,300|--|--|--|--|--|
|||||||19||||||||
|Details of any sales return of a large||||||||||||||
|||||N/A||||||||||
|amount||||||||||||||
|Give the actual situation in this||||||||||||||
|Reporting Period (if any) where a||||||||||||||
|forecast had been made for the total||||||||||||||
|||||N/A||||||||||
|amounts of routine related-party||||||||||||||
|transactions by type to occur in this||||||||||||||
|Reporting Period||||||||||||||
|Reason for any significant difference||||||||||||||
|between the transaction price and the||||N/A||||||||||
|market reference price (if applicable)||||||||||||||

2. Related-party transactions regarding purchase or sales of assets or equity interests
□ Applicable√ Not applicable
No such cases in this Reporting Period.
3. Related-party transitions regarding joint investments
□ Applicable√ Not applicable
No such cases in this Reporting Period.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 4. Credits and liabilities with related parties
√ Applicable□ Not applicable
Indicate by tick mark whether there were any credits and liabilities with related parties for non-operating purposes.
□ Yes√ No
No such cases in this Reporting Period.
5. Other significant related-party transactions
□ Applicable√ Not applicable
No such cases in this Reporting Period.
XVII Significant contracts and execution
1. Entrustment, contracting and leasing
(1) Entrustment
□ Applicable√ Not applicable
No such cases in this Reporting Period.
(2) Contracting
□ Applicable√ Not applicable
No such cases in this Reporting Period.
(3) Leasing
□ Applicable√ Not applicable
No such cases in this Reporting Period.
2. Significant guarantees
√ Applicable□ Not applicable
(1) Guarantees
Unit: RMB'0,000
||||||||||
|-|-|-|-|-|-|-|-|-|
|Guarantees provided by the Company and its subsidiaries for external parties (excluding those for subsidiaries)|||||||||
||Disclosure||||||||
||||Actual|||||Guarante|
||date of the|||Actual|||||
|||Line of|occurrence date||Type of|Term of|Due or|e for a|
|Guaranteed party|guarantee|||guarantee|||||
|||guarantee|(date of||guarantee|guarantee|not|related|
||line|||amount|||||
||||agreement|||||party or|
||announcem||||||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||||||
|-|-|-|-|-|-|-|-|-|
||ent||signing)|||||not|
|Guarantees between the Company and its subsidiaries|||||||||
||Disclosure||||||||
||||Actual|||||Guarante|
||date of the||||||||
||||occurrence date|Actual||||e for a|
||guarantee|Line of|||Type of|Term of|Due or||
|Guaranteed party|||(date of|guarantee||||related|
||line|guarantee|||guarantee|guarantee|not||
||||agreement|amount||||party or|
||announcem||||||||
||||signing)|||||not|
||ent||||||||
|Zhuhai Hongta|||||||||
|||||||2014.5.7-201|||
|Renheng Packaging|2014.5.21|33,000|2014.5.7|12,383|Joint-liability||No|Yes|
|||||||7.5.6|||
|Co., Ltd.|||||||||
|Zhuhai Hongta|||||||||
|||||||2015.3.13-20|||
|Renheng Packaging|2015.2.12|3,880|2015.3.13|3,500|Joint-liability||No|Yes|
|||||||20.3.13|||
|Co., Ltd.|||||||||
|Zhuhai Hongta|||||||||
|||||||2016.2.1-201|||
|Renheng Packaging|2016.2.19|20,000|2016.2.1|20,000|Joint-liability||No|Yes|
|||||||7.1.21|||
|Co., Ltd.|||||||||
|Zhuhai Hongta|||||||||
|||||||2016.3.1-201|||
|Renheng Packaging|2016.4.29|20,000|2016.3.1|6,421|Joint-liability||No|Yes|
|||||||9.12.31|||
|Co., Ltd.|||||||||
|Zhuhai Hongta|||||||||
|||||||2016.1.14-20|||
|Renheng Packaging|2016.1.9|10,000|2016.1.14|10,000|Joint-liability||No|Yes|
|||||||17.1.13|||
|Co., Ltd.|||||||||
|Zhuhai Hongta|||||||||
|||||||2016.5.30-20|||
|Renheng Packaging|2017.4.9|10,000|2016.5.30|704|Joint-liability||No|Yes|
|||||||17.2.2|||
|Co., Ltd.|||||||||
|Zhuhai Hongta|||||||||
|||||||2016.6.12-20|||
|Renheng Packaging|2016.6.2|10,000|2016.6.12|10,000|Joint-liability||No|Yes|
|||||||18.3.31|||
|Co., Ltd.|||||||||
|Zhuhai Hongta|||||||||
|||||||2016.7.1-201|||
|Renheng Packaging|2016.2.19|15,000|2016.7.1|10,000|Joint-liability||No|Yes|
|||||||8.7.1|||
|Co., Ltd.|||||||||
|Zhuhai Huafeng Paper||||||2016.10.29-2|||
||2016.10.25|35,000|2016.10.29|8,702|Joint-liability||No|Yes|
|Co., Ltd.||||||019.10.28|||
|Huaxin (Foshan)|||||||||
|||||||2016.1.1-202|||
|Color Printing Co.,|2016.8.5|6,000|2016.9.14|2,000|Joint-liability||No|Yes|
|||||||0.12.31|||
|Ltd.|||||||||
|Huaxin (Foshan)|||||||||
|||||||2016.12.23-2|||
|Color Printing Co.,|2016.12.18|2,000|2016.12.23|993.6|Joint-liability||No|Yes|
|||||||017.10.23|||
|Ltd.|||||||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Total actual guarantee|||||
|Total guarantee line for|||||||||
|||||amount for subsidiaries|||||
|subsidiaries approved during this||260,000||||128,000|||
|||||during this Reporting|||||
|Reporting Period (B1)|||||||||
|||||Period (B2)|||||
|||||Total actual guarantee|||||
|Total approved guarantee line for|||||||||
|||||balance for subsidiaries at|||||
|subsidiaries at the end of this||164,880||||84,703.6|||
|||||the end of this Reporting|||||
|Reporting Period (B3)|||||||||
|||||Period (B4)|||||
|Guarantees between subsidiaries|||||||||
||Disclosure||||||||
||||Actual|||||Guarante|
||date of the||||||||
||||occurrence date|Actual||||e for a|
||guarantee|Line of|||Type of|Term of|Due or||
|Guaranteed party|||(date of|guarantee||||related|
||line|guarantee|||guarantee|guarantee|not||
||||agreement|amount||||party or|
||announcem||||||||
||||signing)|||||not|
||ent||||||||
|Zhuhai Huafeng Paper||||||2016.7.8-201|||
||2016.3.22|20,000|2016.7.8|14,382|Joint-liability||No|Yes|
|Co., Ltd.||||||7.12.31|||
|Zhuhai Golden|||||||||
|||||||2015.8.31-20|||
|Pheasant Chemical|2015.11.21|10,000|2015.8.31|2,000|Joint-liability||No|Yes|
|||||||18.8.30|||
|Co., Ltd.|||||||||
|||||Total actual guarantee|||||
|Total guarantee line for|||||||||
|||||amount for subsidiaries|||||
|subsidiaries approved during this||40,000||||20,000|||
|||||during this Reporting|||||
|Reporting Period (C1)|||||||||
|||||Period (C2)|||||
|||||Total actual guarantee|||||
|Total approved guarantee line for|||||||||
|||||balance for subsidiaries at|||||
|subsidiaries at the end of this||30,000||||16,382|||
|||||the end of this Reporting|||||
|Reporting Period (C3)|||||||||
|||||Period (C4)|||||
|Total guarantee amount (total of the above-mentioned three kinds of guarantees)|||||||||
|||||Total actual guarantee|||||
|Total guarantee line approved|||||||||
|||||amount during this|||||
|during this Reporting Period||300,000||||148,000|||
|||||Reporting Period|||||
|(A1+B1+C1)|||||||||
|||||(A2+B2+C2)|||||
|||||Total actual guarantee|||||
|Total approved guarantee line at|||||||||
|||||balance at the end of this|||||
|the end of this Reporting Period||194,880||||101,085.6|||
|||||Reporting Period|||||
|(A3+B3+C3)|||||||||
|||||(A4+B4+C4)|||||
|Proportion of the total actual guarantee amount (A4+B4+C4) in|||||||||
|||||51.04%|||||
|net assets of the Company|||||||||
|Of which:|||||||||
|Amount of guarantees provided for shareholders, the actual||||0|||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||
|-|-|
|controller and their related parties (D)||
|Amount of debt guarantees provided directly or indirectly for||
||0|
|entities with a liability-to-asset ratio over 70% (E)||
|Portion of the total guarantee amount in excess of 50% of net||
||0|
|assets (F)||
|Total amount of the three kinds of guarantees above (D+E+F)|0|

 Composite guarantees:
(2) Illegal provision of guarantees for external parties
□ Applicable√ Not applicable
No such cases in this Reporting Period.
3. Entrusted cash management
(1) Entrusted asset management
□ Applicable√ Not applicable
No such cases in this Reporting Period.
(2) Entrusted loans
□ Applicable√ Not applicable
No such cases in this Reporting Period.
4. Other significant contracts
□ Applicable√ Not applicable
No such cases in this Reporting Period.
XVIII Social responsibilities
1. Targeted measures taken to help people lift themselves out of poverty
□ Applicable√ Not applicable
2. Other social responsibilities taken
The Company according to the requirements of the Company Law, Securities Law and Articles of Association and other relevant
laws and regulations as well as combined with the actual situation, constructed the normative corporate governance structure, the
Annual General Meeting, the Board of the Directors, the Board of Supervisors and the managers level charged by the GM with
responsibilities and clear as well as constructed the corporate checks and balances management mechanism with separated ownership
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 and managerial authority, independent decision-making power, executive power and supervision power as well as configurative Annual General Meeting, the Board of Directors and the Board of Supervisors. The Company strictly stipulated the rights, obligations and responsibility scope of the Annual General Meeting, the Board of Directors, the Board of Supervisions and the GM. The Company paid attention on the execution of the social responsibilities which exceeded the idea of regarding the profits as the sole target, so in the process of the production, operating and the business development, when creating the value for the shareholders, it took great efforts to achieve the mutual coordination between the economic efficiency and the social efficiency, the short-term profits and the long-term profits, the self development and the society development by complying with the other appeal of the nation and devoting itself to the promotion of the comprehensive development of the society that to realize the healthy and harmonious development of between the Company and the employees, the Company and the society, the Company and the environment. The Company took the provide of the green environmental protection packaging materials and the packaging solving proposals as it s mission, regarded the construction of the international first-class enterprise as the target, unshakably walked on the scientific innovation development path, constantly innovate the enterprise management, enhanced the products quality, enlarged theR&D strength of the new products, produced the paper products with high quality and high-tech content that met with the production social demand, made great efforts to forge the excellent project of the national paper brand and create the environmental protecting as well as high quality social wealth. When the Company was realizing the profits, should insist to share the development results with the society, try its best to pursuit the harmonious and unity with the social development, constantly promotes the development and progress of the society and the economy, so that to pay for and contribute to the society with excellent performances.
The Company devoted itself to the construction of the international first-class papermaking enterprise possessed of green ecology and constantly development and as one of the major enterprises among the domestic papermaking, during theyears’ development, the Company always regard the development of the green ecological paper industry as the goal and positively introduced and upgraded the high-efficient, energy-saving and environmental protection international high-end production line for promoting the transformation and upgrade of the enterprise.
The key emission reduction energy-saving work completed by the Company was including: firstly, further optimization of the reclaimed water reuse project of the Zhuhai Huafeng under construction which could intensify the recycle usage of the water, reduce the water consumption and realize the target of energy-saving and emission-reduction; secondly, the investment and construction of turbine fan project of Zhuhai Huafeng which could reduce the energy consumption of paper machine; thirdly, the completion of reconstruction project of desulfurization and denitration of Zhuhai Huafeng; fourthly, the startup of advanced wastewater treatment project of Zhuhai Huafeng; fifthly, the renovation of Hongta Renheng BM2 air compressor energy saving project in the energy management mode specified in the contract.
Is the Company or any of its subsidiaries a heavily polluting business identified by the environmental protection authorities of China? Not applicable.
Indicate by tick mark whether a social responsibility report is released
□ Yes√ No
XIX Other significant events
√ Applicable□ Not applicable
During the Reporting Period, the Company planned the significant events involving the solving of the historical problems of the Share B and the shares of the Company constantly delisted as the market started since 22 Jun. 2015, which the Company issued once process announcement on the delist of the significant events on every 5 transaction date.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 XX Significant events of subsidiaries
√ Applicable□ Not applicable
(I) Restructuring of controlling subsidiary Hongta Renheng
On 29 Jan. 2016, Zhuhai Hongta Renheng Packaging Co., Ltd. held the establishment meeting.
On 1 Mar. 2016, the industrial and commercial change of Zhuhai Hongta Renheng Packaging Co., Ltd. had completed with the name of the company had officially altered.
(II) Name changing of subsidiaries
1. Pinghu Huaxin Packaging Materials Technology Co., Ltd. changed its name for business development needs. New name: Zhejiang Hongta Renheng Packaging Technology Co., Ltd.
2. Foshan Chancheng Zhujiang Color Printing Co., Ltd. (Level 2 wholly-owned subsidiary) changed its name for business development needs. New name: Foshan Hongta Liyan Materials Technology Co., Ltd.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Section VI Share Changes andShareholders’ Profile
I Share changes
1. Share changes
Unit: share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before||Increase/decrease (+/-)|||||After||
||||||Increase|||||
|||Percentag|New|Bonus|from||||Percentag|
||Number|||||Other|Subtotal|Number||
|||e (%)|issues|shares|capital||||e (%)|
||||||reserve|||||
||333,500,0|||||||333,500,0||
|I. Non-tradable shares||65.98%|||||||65.98%|
||00|||||||00||
||333,500,0|||||||333,500,0||
|1. Sponsor’s shares||65.98%|||||||65.98%|
||00|||||||00||
|Shares held by|332,930,2|||||||332,930,2||
|||65.87%|||||||65.87%|
|domestic corporations|90|||||||90||
|Other|5,697,101|0.11%||||||5,697,101|0.11%|
|3. Employee-held shares|0|0.00%||||||0|0.00%|
|4. Preference shares or other|0|0.00%||||||0|0.00%|
||171,925,0|||||||171,925,0||
|II. Tradable shares||34.02%|||||||34.02%|
||00|||||||00||
|2. Domestically listed|171,925,0|||||||171,925,0||
|||34.02%|||||||34.02%|
|foreign shares|00|||||||00||
||505,425,0|||||||505,425,0||
|III. Total shares||100.00%|0|0|0|0|0||100.00%|
||00|||||||00||

Reasons for any share changes
□ Applicable√ Not applicable
Approval of share changes
□ Applicable√ Not applicable
Transfer of share ownership
□ Applicable√ Not applicable
Effects of share changes on the basic EPS, diluted EPS, net assets per share attributable to common shareholders of the Company and
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 other financial indexes over the prior year and the prior period
□ Applicable√ Not applicable
Other contents that the Company considers necessary or is required by the securities regulatory authorities to disclose
□ Applicable√ Not applicable
2. Changes in restricted shares
□ Applicable√ Not applicable
II Issuance and listing of securities
1. Securities (excluding preference shares) issued in this Reporting Period
□ Applicable√ Not applicable
2. Changes in total shares of the Company and the shareholder structure, as well as the asset and liability structures
□ Applicable√ Not applicable
3. Existing employee-held shares
□ Applicable√ Not applicable
III Shareholders and actual controller
1. Total number of shareholders and their shareholdings
Unit: share
|||||||||
|-|-|-|-|-|-|-|-|
|||||||Total number of||
|||Total number of||||||
|||||Total number of||preference||
|||common||||||
|||||preference||shareholders||
|Total number of||shareholders at||||||
|||||shareholders||with resumed||
|common||the prior||||||
||14,163||14,163|with resumed|0|voting rights at|0|
|shareholders at||month-end||||||
|||||voting rights at||the prior||
|the period-end||before the||||||
|||||the period-end (if||month-end||
|||disclosure of this||||||
|||||any) (see note 8)||before the||
|||Report||||||
|||||||disclosure of this||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|||||||||Report (if any)||
|||||||||(see note 8)||
|5% or greater shareholders or the top 10 shareholders||||||||||
||||Total|Increase/|Number||Pledged or frozen shares|||
|||||||Number||||
|||Sharehol|shares|decrease|of|||||
|||||||of||||
|Name of|Nature of|ding|held at|during|non-trada|||||
|||||||tradable||||
|shareholder|shareholder|percenta|the|this|ble||Status||Number|
|||||||shares||||
|||ge (%)|period-en|Reportin|shares|||||
|||||||held||||
||||d|g Period|held|||||
|FOSHANHUAXINDEVELOPMENTCO., LTD.|State-ownedcorporation|65.20%|329,512,030|0|329,512,030|0||||
|GUOTAI JUNANSECURITIES(HONGKONG)LIMITED|Foreigncorporation|0.81%|4,084,905|0|4,084,905|0||||
|WU HAOYUAN|Foreignindividual|0.42%|2,561,991|0|2,561,991|0||||
|VANGUARDTOTALINTERNATIONAL STOCKINDEX FUND|Foreigncorporation|0.27%|1,362,902|0|1,362,902|0||||
|NORGES BANK|Foreigncorporation|0.27%|1,352,720|0|1,352,720|0||||
|ESSENCEINTERNATIONAL SECURITIES(HONG KONG)CO., LTD.|Foreigncorporation|0.26%|1,305,152|0|1,305,152|0||||
|BOCISECURITIESLIMITED|Foreigncorporation|0.25%|1,280,990|0|1,280,990|0||||
|WU FENQIANG|Domesticindividual|0.24%|1,233,901|0|1,233,901|0||||
|FOSHAN CHANBEN DEDEVELOPMENTCO., LTD.|State-ownedcorporation|0.23%|1,139,420|0|1,139,420|0||||
|MIAO JUN|Domestic|0.22%|1,119,20|0|1,119,20|0||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||||
|-|-|-|-|-|-|-|
||individual||0|0|||
|||It is unknown whether there is among the above shareholders any related parties or|||||
|Related or acting-in-concert parties|||||||
|||acting-in-concert parties as defined in the Administrative Measures for the Acquisition of|||||
|among the shareholders above|||||||
|||Listed Companies.|||||
|Shareholdings of the top ten tradable shareholders|||||||
||||||Type of shares||
|Name of shareholder||Number of tradable shares held at the period-end|||||
||||||Type|Number|
|GUOTAI JUNANSECURITIES(HONGKONG)LIMITED||4,084,905|||Domestically||
||||||listed foreign|4,084,905|
||||||share||
|WU HAOYUAN||2,561,991|||Domestically||
||||||listed foreign|2,561,991|
||||||share||
|VANGUARD TOTALINTERNATIONAL STOCK INDEXFUND||1,362,902|||Domestically||
||||||listed foreign|1,362,902|
||||||share||
|NORGES BANK||1,352,720|||Domestically||
||||||listed foreign|1,352,720|
||||||share||
|ESSENCE INTERNATIONALSECURITIES (HONG KONG) CO.,LTD.||1,305,152|||Domestically||
||||||listed foreign|1,305,152|
||||||share||
|BOCI SECURITIES LIMITED||1,280,990|||Domestically||
||||||listed foreign|1,280,990|
||||||share||
|WU FENQIANG||1,233,901|||Domestically||
||||||listed foreign|1,233,901|
||||||share||
|MIAO JUN||1,119,200|||Domestically||
||||||listed foreign|1,119,200|
||||||share||
|CHINA MERCHANTSSECURITIES (HK) CO., LTD.||1,069,410|||Domestically||
||||||listed foreign|1,069,410|
||||||share||
|KGI ASIA LIMITED||1,002,459|||Domestically||
||||||listed foreign|1,002,459|
||||||share||
|Related or acting-in-concert parties||It is unknown whether there is among the above shareholders any related parties or|||||
|among the top ten non-restrictedly||acting-in-concert parties as defined in the Administrative Measures for the Acquisition of|||||
|tradable share holders and between||Listed Companies.|||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||
|-|
|the top ten non-restrictedly tradable|
|share holders and the top ten|
|shareholders|

Indicate by tick mark whether any of the top ten common shareholders or the top ten non-restricted common shareholders of the Company conducted any promissory repo during this Reporting Period.
□ Yea√ No
No such cases in this Reporting Period.
2. Information about the controlling shareholder
Nature of the controlling shareholder: Controlled by a central state-owned corporation
Type of the controlling shareholder: Corporation
||||||
|-|-|-|-|-|
||Legal||||
|Name of controlling|||||
||representative/person|Date of establishment|Credibility code|Main business scope|
|shareholder|||||
||in charge||||
|||||Production, manufacture|
|||||and distribution of packing|
|||||materials, papermaking,|
|||||cable, wire, new materials;|
|FOSHAN HUAXIN||||distribution of packing|
||Ji Xiangdong|5 Jan. 1993|19353992-5||
|DEVELOPMENT CO., LTD.||||machinery and repairing|
|||||services, amplifiers and|
|||||fittings, decoration|
|||||materials, and drinks;|
|||||information consulting|
|Shareholdings of the|||||
|controlling shareholder in|||||
|other listed companies at|None||||
|home or abroad in this|||||
|Reporting Period|||||

Change of the controlling shareholder during this Reporting Period
□ Applicable√ Not applicable
No such cases in this Reporting Period.
3. Information about the actual controller
Nature of the actual controller: Central institution for state-owned assets management
Type of the actual controller: Corporation
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||
|-|-|-|-|-|
||Legal||||
|||Date of|||
|Name of actual controller|representative/per||Credibility code|Main business scope|
|||establishment|||
||son in charge||||
|||||Investment and development of|
|||||capital goods of major industrial|
|||||products, metal materials, sales|
|China Paper Corporation|Huang Xin|22 Jan. 1998|10000890-7||
|||||of raw materials and products of|
|||||chemical light industry and|
|||||paper, import & export industry.|
|Shareholdings of the actual|||||
|controller in other listed|Guangdong Guanhao High-tech Co., Ltd. (600433.SH), Yueyang Forest & Paper Co., Ltd.||||
|companies at home or abroad in|(600963.SH).||||
|this Reporting Period|||||

Change of the actual controller during this Reporting Period
□ Applicable√ Not applicable
No such cases in this Reporting Period.
Ownership and control relations between the actual controller and the Company
SASAC of the State Council
100%
China Chengtong Holdings Group
Ltd
100%
78.26%
China Paper Corporation
66.79%
Jiacheng Forestry Holdings Co.,
Ltd.
0.11%
Foshan Huaxin Development Co.,
6.62%
Ltd
65.2% 34.69%
Foshan Huaxin Packaging Co., Ltd
Other sponsor shareholders
& B-shareholders
Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset management.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016□ Applicable√ Not applicable
4.10% or greater corporate shareholders
□ Applicable√ Not applicable
5. Limitations on shareholding decrease by theCompany’s controlling shareholder, actual controller, reorganizer and other commitment makers
□ Applicable√ Not applicable
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Section VII Preference Shares
□ Applicable√ Not applicable
No preference shares in this Reporting Period.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Section VIII Directors, Supervisors, Executive Officers and Staff I Changes in shareholdings of directors, supervisors and executive officers
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Increase|Decrease|||
||||||||Opening|||Other|Closing|
|||||||||in this|in this|||
||Office|Incumben|||Starting|Ending|sharehold|||increase/d|sharehold|
|Name|||Gender|Age|date of|date of||Reporting|Reporting|||
||title|t/former|||||ing|||ecrease|ing|
||||||tenure|tenure||Period|Period|||
||||||||(share)|||(share)|(share)|
|||||||||(share)|(share)|||
|Huang|Board|Incumben|||4 Dec.|6 Jun.||||||
||||Male|55|||0|0|0|0|0|
|Xin|Chairman|t|||2015|2017||||||
|Ji|Vice|||||||||||
|||Incumben|||6 Jun.|6 Jun.||||||
|Xiangdon|Board||Male|43|||0|0|0|0|0|
|||t|||2014|2017||||||
|g|Chairman|||||||||||
|||Incumben|||6 Jun.|6 Jun.||||||
|Hong Jun|Director||Male|58|||0|0|0|0|0|
|||t|||2014|2017||||||
|Zhang||Incumben|||27 Jan.|6 Jun.||||||
||Director||Male|43|||0|0|0|0|0|
|Qiang||t|||2016|2017||||||
|||Incumben|||6 Jun.|6 Jun.||||||
|Ye Meng|Director||Male|49|||0|0|0|0|0|
|||t|||2014|2017||||||
|Yang||Incumben|||6 Jun.|6 Jun.||||||
||Director||Male|47|||0|0|0|0|0|
|Weixing||t|||2014|2017||||||
||Independ|||||||||||
||||||6 Jun.|16 Dec.||||||
|Zhao Wei|ent|Former|Male|56|||0|0|0|0|0|
||||||2014|2016||||||
||Director|||||||||||
|Xu|Independ|||||||||||
|||Incumben|||16 Dec.|6 Jun.||||||
|Changlon|ent||Male|55|||0|0|0|0|0|
|||t|||2016|2017||||||
|g|Director|||||||||||
||Independ|||||||||||
|Yang||Incumben|||6 Jun.|6 Jun.||||||
||ent||Male|47|||0|0|0|0|0|
|Zhenyu||t|||2014|2017||||||
||Director|||||||||||
||Independ|||||||||||
|Zhang||Incumben|||6 Jun.|6 Jun.||||||
||ent||Male|50|||0|0|0|0|0|
|Wenjing||t|||2014|2017||||||
||Director|||||||||||
||Superviso|||||||||||
|Ren||Incumben|||6 Jun.|6 Jun.||||||
||ry Board||Male|55|||0|0|0|0|0|
|Xiaoming||t|||2014|2017||||||
||Chairman|||||||||||
|Huang|Superviso|Former|Male|61|6 Jun.|12 Apr.|0|0|0|0|0|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Jianrong|r||||2014|2016||||||
|Yang|Superviso||||6 Jun.|24 Jun.||||||
|||Former|Male|44|||0|0|0|0|0|
|Chenglin|r||||2014|2016||||||
|Ji||||||||||||
|||Incumben|||6 Jun.|6 Jun.||||||
|Xiangdon|GM||Male|43|||0|0|0|0|0|
|||t|||2014|2017||||||
|g||||||||||||
|||Incumben|||6 Jun.|6 Jun.||||||
|Chen Jiali|Vice GM||Male|60|||0|0|0|0|0|
|||t|||2014|2017||||||
|Liu||Incumben|||6 Jun.|6 Jun.||||||
||Vice GM||Male|48|||0|0|0|0|0|
|Hanwen||t|||2014|2017||||||
|Wu||Incumben|||6 Jun.|6 Jun.||||||
||Vice GM||Male|55|||0|0|0|0|0|
|Yirong||t|||2014|2017||||||
|Chen||Incumben|||6 Jun.|6 Jun.||||||
||Vice GM||Male|51|||0|0|0|0|0|
|Zhenran||t|||2014|2017||||||
||Vice GM,|||||||||||
|Yang|CFO,||||6 Jun.|6 May||||||
|||Former|Male|47|||0|0|0|0|0|
|Yinghui|Board||||2014|2016||||||
||Secretary|||||||||||
|Liu|Board|Incumben|||6 May|6 Jun.||||||
||||Male|48|||0|0|0|0|0|
|Hanwen|Secretary|t|||2016|2017||||||
|Yang||Incumben|||5 Jul.|6 Jun.||||||
||CFO||Male|44|||0|0|0|0|0|
|Chenglin||t|||2016|2017||||||
|Tang|Superviso|Incumben|||29 Jun.|6 Jun.||||||
||||Male|34|||0|0|0|0|0|
|Liming|r|t|||2016|2017||||||
|Zhang|Superviso|Incumben|||12 Apr.|6 Jun.||||||
||||Female|47|||14,600|0|0|0|0|
|Hong|r|t|||2016|2017||||||
|Total|--|--|--|--|--|--|14,600|0|0|0|0|

 II Changes in directors, supervisors and executive officers
||||||
|-|-|-|-|-|
|Name|Office title|Type of change|Date|Reason|
||Independent||||
|Zhao Wei||Left|16 Dec. 2016|Resignation|
||Director||||
|Huang Jianrong|Supervisor|Left|12 Apr. 2016|Retirement|
|Yang Chenglin|Supervisor|Left|24 Jun. 2016|Resignation|
||Vice GM, CFO,||||
|Yang Yinghui||Left|6 May 2016|Resignation|
||Board Secretary||||
||Independent|Appointed and||The Shareholders’ General Meeting elected new|
|Xu Changlong|||16 Dec. 2017||
||Director|dismissed||Independent Director|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||
|-|-|-|-|-|
|||Appointed and|||
|Zhang Hong|Supervisor||12 Apr. 2016|The Shareholders’ General Meeting elected Supervisor|
|||dismissed|||
|||Appointed and|||
|Tang Liming|Supervisor||24 Jun. 2017|The congress of workers and staff elected supervisor|
|||dismissed|||
|||Appointed and|||
|Yang Chenglin|Vice GM, CFO||5 Jul. 2016|The Board of Directors elected new Vice GM and CFO|
|||dismissed|||
|||Appointed and|||
|Liu Hanwen|Board Secretary||4 Jun. 2017|The Board of Directors appointed new Board Secretary|
|||dismissed|||

III Brief biographies
Professional backgrounds, main working experience and current responsibilities in the Company of the incumbent directors, supervisors and executive officers
Board Chairman Huang Xin, born in 1962, master degree holder. From 1993 to Mar. 2006, he successively served as Deputy General Manager, Manager of OperationDept.Ⅱ, Manager of Industrial Dept., Deputy Manager of Stratagem Investment Dept. and Manager of Asset Management Dept. in China Material Development Investment Corporation. He has been acting as the Director of the Company since May 2003. He held a post in Foshan Huaxin Packaging Co., Ltd as a Deputy General Manager from Mar. 2006 to May 2008. He worked as Deputy General Manager in Foshan Huaxin Development Co., Ltd from May 2008 to Jul. 2009; he acted as General Manager in Zhuhai Hongta Renheng Paper Co., Ltd from Jun. 2008 to March 2012, and is also Deputy General Manager in Foshan Huaxin Packaging Co., Ltd from Jul. 2009 to Jun. 2011. He used to be a Vice GM, the Executive GM and the GM and is now the Board Chairman of China Paper Corporation from Mar. 2012. He has been acting as General Manager of Hunan Tiger Forest& Paper Group Co., Ltd. since Aug. 2012, and now is Chairman; From July 2013 up to now act as Chairman of Yueyang Forest& Paper Co., Ltd.
Vice Board Chairman& General Manager Ji Xiangdong, born in 1974, master degree holder and CPA. He held the posts in China Materials Development Investment Corporation as Deputy Manger and Manager of Financial Dept from Aug. 2004 to May 2007; from May 2007 to May 2009, he acted as Chief Financial Officer in Foshan Huaxin Packaging Co., Ltd. He has been acting as Deputy General Manager in Zhuhai Hongta Renheng Paper Co., Ltd since Jan. 2009. He acted as the Assistant General Manager in China Materials Development Investment Corporation from May to Jul. 2009. He acted as Deputy General Manager in Foshan Huaxin Packaging Co., Ltd from Jul. 2009 to May 2014. He has been acting as Vice president& General Manager in Foshan Huaxin Packaging Co., Ltd since 2014.
Director Hong Jun, born in 1959, is a master degree holder and senior economist. From 1991 to Sep. 2007, he successively took posts as Vice Chief of Appointment& Dismissal Office, Personnel Division in Materials Department, Vice Chief of Cadre Office of Personnel Organ in Domestic Trade Department and General Manager of Human Resource Department in China Chengtong Holding Group Co., Ltd; he has been successively holding a post as Vice Secretary and Secretary of the CPC, Deputy General Manager in China National Paper-industry Investment Corp. since Sep. 2007; Concurrently he acted as Secretary of the CPC in Foshan Huaxin Packaging Co., Ltd since Jul. 2008 as well as Chairman of the Supervisory Committee of Foshan Huaxin Packaging Co., Ltd from May 2008 to May 2014. He has been acting as Director of Foshan Huaxin Packaging Co., Ltd. since June 2014.
Director Zhang Qiang, male, born in 1974, is a CPA withmaster’s degree. He used to act as the Assistant Manager of the Operating Management Department of the China Material Development Corporation, the Assistant Manager of Strategic Development Department, the Deputy General Manager of Zhanjiang Guanlong Paper Industrial Co., Ltd., the GM Assistant of Guangdong Guanhao High-tech Co., Ltd., the Manager of the Strategic Development Department of China Paper Investment Co., Ltd., the
Chairman of the Board and the legal representative of MCC Meili Pulp Paper Co., Ltd., the Director, the Deputy Chairman of the
Board, the GM, the Generation of Board Secretary of MCC Meili Paper Industry Co., Ltd.; and now he acts as the Chairman of the
Board of MCC Meili Paper Industry Co., Ltd., the Director of MCC Meili Paper Group Co., Ltd., the Chairman of the Board of
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Guangdong Guanhao High-tech Co., Ltd. and the GM of China Paper Corporation (used to be a Vice GM in it).
Director Yang Weixing, born in 1970, is a bachelor degree holder and economist. From Dec. 1999 to Aug. 2006, he successively took posts as Vice Director of Assets Operation Department in Foshan Industry Investment Holding Co., Ltd, Minister of Property Management Department, Assistant to General Manager and Deputy General Manger in Foshan Chan Ben De Development Co., Ltd and Deputy General Manager in Foshan Taiji Wine Co., Ltd; he acted as General Manager in Foshan Chan Ben De Development Co., Ltd since Jun. 2007. From Jan. 2010 to Nov. 2013, he acted as Chairman of Board of Supervisors in Foshan Investment Holdings Co., Ltd.; from Oct. 2013 up to now, he has been acting as Chairman of Foshan East Asia Co., Ltd.; from Dec. 2013 up to now, he has been acting as Director, Deputy General Vice Manager in Foshan Investment Holdings Co., Ltd.
Director Ye Meng, born in 1968, Chinese nationality with no right of permanent residency abroad, master degree holder, Senior Economist. He used to be the HR Manager and a Deputy GM of Yueyang Paper Co., Ltd.; Secretary of the Board, Chief Economist and Chief Legal Officer in Tiger Forest& Paper Group Co., Ltd.; Secretary of the Party Committee in Yueyang Paper Co., Ltd. (concurrently); and General Manager Assistant in China Paper Corporation. And he is now a Vice President& Party Committee Member (concurrently) in Tiger Forest& Paper Group Co. , Ltd., the Supervisory Board Chairman in Yueyang Paper Co., Ltd. and a Director in Foshan Huaxin Packaging Co., Ltd.
Independent Director: Xu Changlong: male, born in Jul. 1962, postgraduate degree, certified public accountant, certified cost engineer and member of Revolutionary Committee of the Chinese Kuomintang. Xu Changlong once served in the Hunan Provincial Audit Office and the Changsha Resident Office, National Audit Office of the People's Republic of China and has successively held the posts of the head of Hunan Zhongshan Auditing Firm, the Chairman and Senior Accountant of Hunan Yongxin Limited Liability Accounting Firm, the General Manager of Hunan Yongxin Assets Appraisal Co., Ltd., the Head of Hunan Yongxin Judicial Expertise Institute, the Chairman of Hunan Yongxin Engineering Project Management Co., Ltd., and the Equity Partner of Shinewing Certified Public Accountants Limited. At present, he holds the posts of the Chairman of the Council of Hunan Zheng Dongguo Education Foundation, the General Manager of Reanda Certified Public Accountants Hunan Branch, and the Vice General Manager of ZBX Construction Cost Consulting (Beijing) Co., Ltd.
Independent Director Yang Zhenyu, born in 1970, college degree, auditor. He has been Chief of Business Section of Hong Kong Jieren Co., (Guangzhou) Company from Jun. 1994 to Mar. 1996; Manager of Guangxi Datong Certified Public Accountant from Mar. 1996 to Dec. 1997; Vice GM of Guangdong Guangxin Certified Public Accountant from De. 1997 to Sep. 2009. He has been partner of Grant Thornton China and Ascenda Certified Public Accountants since Sep. 2009.
Independent Director Zhang Wenjing, born in 1967, master degree, lawyer. He acted as Prosecutor in Zhuhai West Zone People's Procuratorate from Jul, 1995 to Dec. 1997. He has been acting as lawyer officer of Guangdong Chenguang Law Offices (now renamed as De Heng (Zhuhai) Law Offices). Now he acts as the Standing Committee of the National People' s Congress of Zhuhai City, Legal Counsel of Zhuhai Municipal Housing and Urban and Rural Planning Construction Bureau. He has been acting as Independent Director in Foshan Huaxin Packaging Co., Ltd. since Jun. 2014.
Chairman of the Supervisory Committee Ren Xiaoming, born in 1962, bachelor degree, lecturer. he has successively held the posts of Deputy Manager of Planning Department, Director of Financial Department, Deputy Officer of Integrated Office, Deputy Manager of Personnel Administration Department (Office) Party Committee, Deputy Officer of General Manager Office (Party-Mass Work) in China Materials Development Investment Corporation ( now renamed as China National Paper-industry Investment Corp.) he has been acting as Commission for Discipline Inspection Committee in China Materials Development Investment Corporation ( now renamed as China National Paper-industry Investment Corp.) since May 2008, Discipline Inspection Commission Secretary, Party Committee Members in Foshan Huaxin Packaging Co., Ltd. since Oct. 2011. He has been acting as Chairman of the Supervisory Committee in Foshan Huaxin Packaging Co., Ltd. since Jun. 2014.
Supervisor: Zhang Hong, female, born in Dec. 1970, bachelor degree, Human Resources Management Division, Level 1. Zhang Hong once held the posts of the Teacher, the Secretary for the Office of the Party Committee, and the Deputy Business Director of Labor Output Training Division in Jiangxi Yichun Technician School; the Office Executive Secretary, Deputy Director and Director
and the Human Resources Manager in Hongta Renheng Paper Co., Ltd. At present, she holds the posts of Human Resources Manager
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 and GM Assistant in Zhuhai Hongta Renheng Packaging Co., Ltd.
Supervisor: Tang Liming, male, born in Jan. 1984, bachelor degree, accountant. Tang Liming held the posts of the Material Accountant and the Cost Accountant successively in Print-Rite Unicorn Image Products Co.,Ltd of Zhuhai from Jul. 2006 to Mar. 2009; held the posts of the Accountant, the Supervisor and the Deputy Finance Manager successively in Zhuhai Hongta Renheng Paper Co., Ltd. from Mar. 2009 to Feb. 2015; held the post of Finance Manager in Zhuhai Hongta Renheng Packaging Co., Ltd. since Feb. 2015.; held the post of the Supervisor (Worker Representative) in Foshan Huaxin Packaging Co., Ltd. since Jul. 2016.
Vice General Manager Chen Jiali, born in 1957, is a junior college graduate and engineer. He served as Deputy General Manager in Huaxin Tetra (Foshan) Packaging Co., Ltd from Feb. 1997 to Sep. 2012. He has been acting as Deputy General Manager in Foshan Huaxin Packaging Co., Ltd since Jul. 1999, concurrently serves as an executive director in Huaxin (Foshan) Color Printing Co., Ltd. Vice General Manager& Board Secretary Liu Hanwen, born in 1969, bachelor degree holder, engineer. He acted as technician in Technology Reform Office, Assistant Engineer and Minister of Production Technology Division of Foshan Huafeng Paper Co., Ltd. from 1989 to 2001; as GM of Strategy Development Division of Foshan Huaxing Packaging Co., Ltd. from 2001 to 2002; as GM of Huaxin (Foshan) Color Printing Co., Ltd from 2002 to 2003; as Director of Production Line, Assistant to GM, GM of Foshan Huafeng Paper Co., Ltd from 2004 to 2008; as Vice GM since 2009 to present; and Vice GM of Foshan Huaxin Packaging Co., Ltd. since Jun. 2011.
CFO Yang Chenglin, born in 1973, with a bachelor degree and is a CPA. He acted as CFO in Zhuhai Huihai Development Co., Ltd. from Aug. 2001 to Nov. 2006, Financial Manager in MABOX from Dec. 2006 to Jun. 2009. He successively acted as Accounting, Deputy Director, Deputy Financial Manager, Financial Manager, and Assistant of General Manager in Zhuhai S.E.Z Hongta Renheng Paper Co., Ltd. since Jun. 2009. He has been acting as the CFO of Foshan Huaxin Packaging Co., Ltd. since Jun. 2016. Vice General Manager Wu Yirong, born in Oct. 1962, bachelor degree, Senior Engineer. He acted as Deputy Section Chief, Section Chief, the Chief Engineer in Hongjiang Paper-Making Factory, Technology Deputy Managers, Sales Managers, Deputy Chief Engineer, Deputy General Manager in Zhuhai S.E.Z Hongta Renheng Paper Co., Ltd. He has been acting as Deputy General Manager in Zhuhai S.E.Z Hongta Renheng Paper Co., Ltd. since 2008. He has been acting as Deputy General Manager in Foshan Huaxin Packaging Co., Ltd. since Jun. 2014.
Vice General Manager Chen Zhenran, born in 1966, is a MBA degree holder and Mechanical Engineer. From June 1989 to Dec. 1990, he acted as Technician of New Plant Construction Office of Foshan Huaxin Composite Materials Co., Ltd.; from Jan. 1991 to Jun. 1995, he acted as Vice manager and duty manager in production department of Foshan Huaxin Composite Material Co., Ltd.; from Jul. 1995 to Jun. 2004, he acted as Printing Manager, QA Manager, WCM Coordinator in Tetra Huaxin (Foshan) Packaging Co., Ltd.; from Jul. 2004 to Jun. 2006, he acted as Vice Manager and New Plant Project Manager in Huaxin (Foshan) Color Printing Co., Ltd.; from Jul. 2006 up to now, he has been acting as General Manager of Huaxin (Foshan) Color Printing Co., Ltd. And he has been acting as a vice general manager of Foshan Huaxin Packaging Co., Ltd. since Jun. 2014.
Posts concurrently held in shareholding entities
√Applicable□Not applicable
|||||||
|-|-|-|-|-|-|
||||||Allowance from|
|Name|Shareholding entity|Post|Starting date of|Ending date of|the shareholding|
||||tenure|tenure||
||||||entity|
|||Board||||
|Huang Xin|China Paper Corporation||23 Aug. 2016||Yes|
|||Chairman||||
|||Party||||
|Hong Jun|China Paper Corporation|Secretary,|1 Sep. 2007||Yes|
|||Vice GM||||
|Zhang Qiang|China Paper Corporation|GM|6 Nov. 2016||Yes|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||
|-|-|-|-|-|
|Ye Meng|China Paper Corporation|GM Assistant|1 Aug. 2011|Yes|
|||Executive|||
|Yang Weixing|Foshan Chan Ben De Co., Ltd.||1 Jun. 2007|Yes|
|||GM|||

Posts held concurrently in other entities
√Applicable□Not applicable
|||||||
|-|-|-|-|-|-|
|Name|Other entity|Post|Starting date oftenure|Ending date of|Allowance from|
|||||tenure|the entity|
||Hunan branch of Reanda Certified Public|||||
|Xu Changlong||GM|1 Dec. 2011||Yes|
||Accountants (Special General Partnership)|||||
||Grant Thornton China and Ascenda|||||
|Yang Zhenyu||Partner|1 Sep. 2009||Yes|
||Certified Public Accountants|||||
|Zhang Wenjing|De Heng (Zhuhai) Law Offices|Director|1 Dec. 1997||Yes|

Punishments imposed in the recent three years by the securities regulators on the incumbent directors, supervisors and executive officers as well as those who left in this Reporting Period
□ Applicable√ Not applicable
IV Remuneration of directors, supervisors and executive officers
Decision-making procedure, determination basis and actual remuneration payment of directors, supervisors and executive officers 1. Decision-making procedure of remuneration of directors, supervisors and senior executives: remuneration of directors and supervisors was deliberated and approved byshareholders’ general meeting; the standards of remuneration of senior executives were decided by the remuneration and appraisal commission according to management regulations of remuneration and business performance, and then were submitted to the board of directors for approval.
2. Determination basis of remuneration of directors, supervisors and senior executives: the Company, according to the income level of industry and region and considering business performance of the Company and contribution to the Company, decided the scope of annual remuneration of directors, supervisors and senior executives. On the basis of appraisal results, annual remuneration was determined. Moreover, according to the growth of annual business performance and accomplishment of major projects, the extra rewards would be granted after the authorization of the board of directors and verification of Chairman of the board of directors.
Remuneration of directors, supervisors and executive officers in this Reporting Period
Unit: RMB'0,000
||||||||
|-|-|-|-|-|-|-|
||||||Total before-tax|Remuneration|
||||||remuneration|from related|
|Name|Office title|Gender|Age I|ncumbent/former|||
||||||from the|parties of the|
||||||Company|Company|
|Huang Xin|Board Chairman|Male|54 I|ncumbent|0|Yes|
||Vice Board||||||
|Ji Xiangdong||Male|42 I|ncumbent|83.8|No|
||Chairman & GM||||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||||
|-|-|-|-|-|-|-|
|Hong Jun|Director|Male|57|Incumbent|0|Yes|
|Zhang Qiang|Director|Male|42|Incumbent|0|Yes|
|Ye Meng|Director|Male|48|Incumbent|0|Yes|
|Yang Weixing|Director|Male|46|Incumbent|0|Yes|
||Independent||||||
|Zhao Wei||Male|56|Former|8|No|
||Director||||||
||Independent||||||
|Yang Zhenyu||Male|46|Incumbent|8|No|
||Director||||||
||Independent||||||
|Zhang Wenjing||Male|49|Incumbent|8|No|
||Director||||||
||Chairman of the||||||
|Ren Xiaoming|Supervisory|Male|54|Incumbent|53.1|No|
||Committee||||||
|Huang Jianrong|Supervisor|Male|60|Former|6.4|No|
||Staff-Representati||||||
|Tang Liming||Male|32|Incumbent|11|No|
||ve Supervisor||||||
|Zhang Hong|Supervisor|Female|46|Incumbent|14|No|
|Yang Chenglin|CFO|Male|43|Incumbent|72.4|No|
|Chen Jiali|Vice GM|Male|59|Incumbent|32|No|
||Vice GM &||||||
|Liu Hanwen||Male|47|Incumbent|70.9|No|
||Board Secretary||||||
|Wu Yirong|Vice GM|Male|54|Incumbent|69.2|No|
|Chen Zhenran|Vice GM|Male|50|Incumbent|57.9|No|
|Yang Yinghui|Vice GM|Male|46|Former|18.2|Yes|
|Total|--|--|--|--|512.9|--|

 Equity incentives for directors, supervisors and executive officers in this Reporting Period
□ Applicable√ Not applicable
V Employees
1. Number, functions and educational backgrounds of employees
|||
|-|-|
|Number of in-service employees of the Company|26|
|Number of in-service employees of main subsidiaries|2,108|
|Total number of in-service employees|2,134|
|Total number of employees with remuneration in this Reporting||
||2,134|
|Period||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||
|-|-|
|Number of retirees to whom the Company or its main||
||0|
|subsidiaries need to pay retirement pension||
|Functions||
|Function|Number of employees|
|Production|1,301|
|Sales|119|
|Technical|59|
|Financial|45|
|Administrative|610|
|Total|2,134|
|Educational backgrounds||
|Educational background|Number of employees|
|Masters and above|17|
|Bachelors|253|
|College graduates|360|
|Technical secondary school graduates|495|
|High school graduates|550|
|Middle school graduates|432|
|Primary school graduates|27|
|Total|2,134|

 2. Employee remuneration policy
The Company adopts a Board-appraised annual salary mechanism on executive officers, as well as a base and performance pay system for staff.
3. Employee training plans
The Company properly implements annual and extraordinary training plans according to the requirements of different positions in its development.
4. Labor outsourcing
□ Applicable√ Not applicable
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Section IX Corporate Governance
I Basic situation of corporate governance
In the Reporting Period, the Company continuously perfected its corporate governance structure, built up a modern enterprise system, and regulated its operation in accordance to Company Law, Securities Law and Code of Corporate Governance of Listed Companies as well as requirements of other relevant laws and statutes. In view of this, the Board of Directors believes that the actual situation of theCompany’s corporate governance is basically in line with the requirements of the Code of Corporate Governance for Listed Companies, which is detailed as follows:
(I) About shareholders andShareholders’ General Meeting: The Company according to requirements such as the Articles of Association and Rules of Procedure of the General Assembly, further standardized the convening of theShareholders’ General Meeting, so as to ensure the full exercise of allshareholders’ legal rights and interests; to fully take advantage of the internet voting instruments, to ensure the full exercise of allshareholders’ legal rights and interests, as well as the fair treatment for all shareholders, especially minority shareholders.
(II) About the controlling shareholders and the listed Company: the controlling shareholders acted according to rules, and did not go beyond theShareholders’ General Meeting for direct or indirect interference in theCompany’s decisions and business activities; the Company was separated from its controlling shareholders in such aspects as personnel, assets, financial affairs, organs and business activities. The Board of Directors, the Board of Supervisors and theCompany’s other internal organs worked independently; the transactions between the Company and its controlling shareholders, as well as other related parties, were conducted in a fair and just way.
(III) About the directors and the Board of Directors: directors of the Company were elected in strict compliance with the stipulation in the Company Law and the Articles of Association of the Company. And the number of directors and the structure of the Board of Directors were in accordance to the requirements of laws and regulations. In according to Rules of Procedures for the Board, attended the Board meetings in a conscientious and responsible manner.
(IV) About Supervisors and the Board of Supervisors: the number of supervisors and the structure of the Board of Supervisors were in line with the requirements of laws and regulations. And all the supervisors of the Company conscientiously performed their duties by supervising the legitimacy of duty performance of the directors, managers and other senior management personnel.
(V) Independent directors played an important role in theCompany’s decision-making. The Company paid attention to the roles of the independent directors and during the management, the independent directors carried out a carefully investigation of the financial audit, significant related transaction, recruitment of senior executives and declared relevant independent advice.
(VI) About the performance appraisal and incentive& restraining mechanism: the performance appraisal and incentive& restraining mechanism of Directors, Supervisors and Senior Executives were being gradually established in the Company to work impartially and transparently.
(VII) About information disclosure and transparency: the Secretary of the Board of Directors was assigned by the Company to take charge of information disclosure. In strict compliance with relevant laws and regulations, as well as the Information Disclosure Rules, relevant information was disclosed in time with authenticity, accuracy and completeness. And it was made sure that all shareholders were fairly treated in terms of information disclosure. (VIII) About related beneficiaries: the Company fully respected and protected the legal rights and interests of its related beneficiaries, and managed to reach a balance among interests of its shareholders, employees, the society
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 and other related beneficiaries, so as to promote theCompany’s continuous and healthy development.
(IX) About management of the relationship with investors: the Company had specially-appointed staff to manage the relationship with investors, and established a platform of communication with investors. And the phones calls and letters from investors were carefully answered and replied in details. Meanwhile, the investors visiting the Company in person were well received.
Any significant incompliance with the regulatory documents issued by the CSRC governing the governance of listed companies□ Yes√ No
No such cases in this Reporting Period.
II Independence of businesses, personnel, asset, organizations and finance which are separate from the controlling shareholder
The Company, the controlling shareholders and the actual controllers of the Company realized the independent execution in business, personnel, assets, finance and institution with independent calculation and respectively burden the responsibilities and risks. The Company possesses independent and entire business and self operating ability. 1. As for the personnel: the Company possessed independent labor, HR and salary management system and the Senior Executives such as the GM, the managers, the Financial Administrator and the Board Secretary were all paid by the Company and unable to take charge in the controllingshareholders’ units of the Company. 2. As for the assets: the Company possessed the independent production and operating system as well as the supporting facilities, and the assets the controlling shareholders invested in the Company were independent as well as complete with clear ownership. 3. As for the finance: the Company set up the independent financial and accounting department and built up the independent accounting calculation mechanism and financial management system; the Company opened the independent account and paid for the taxes according to laws. 4. As for the institutions: the Company set up the organizations and intuitions independent of the controlling shareholders for independently handling the official business and the execution of the functions. 5. As for the business: the Company possessed the independent and complete business and decision-making system as well as the independent operating ability that entirely independent of the controlling shareholders and the actual controllers. III Horizontal competition
□ Applicable√ Not applicable
IV Annual and special meetings of shareholders convened during this Reporting Period 1. Meetings of shareholders convened during this Reporting Period
|||||||
|-|-|-|-|-|-|
||||||Index to the|
|||Investor||||
|Meeting|Type||Convened date|Disclosure date|disclosed|
|||participation ratio||||
||||||information|
||||||Name of|
||||||announcement:|
|2015 Annual General|Annual General|||||
|||0.00%|04/12/2016|04/13/2016|Foshan Huaxin|
|Meeting|Meeting|||||
||||||Packaging Co.,|
||||||Ltd.-Announcement|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||
|-|-|-|-|-|-|
||||||on Resolution of|
||||||2015 Annual|
||||||General Meeting;|
||||||Number of|
||||||announcement:|
||||||2016-044|
||||||Newspaper and|
||||||website on which the|
||||||announcement was|
||||||disclosed: Securities|
||||||Times, HK Ta Kung|
||||||Pao, Cninfo|
||||||(http:/www.cninfo.co|
||||||m.cn)|
||||||Name of|
||||||announcement:|
||||||Foshan Huaxin|
||||||Packaging Co.,|
||||||Ltd.-Announcement|
||||||on Resolution of the|
||||||1st Extra ordinary|
||||||General Meeting for|
|The 1st Extra|||||2016; Number of|
||Extra ordinary|||||
|ordinary General||0.00%|01/27/2016|01/28/2016|announcement:|
||General Meeting|||||
|Meeting for 2016|||||2016-011|
||||||Newspaper and|
||||||website on which the|
||||||announcement was|
||||||disclosed: Securities|
||||||Times, HK Ta Kung|
||||||Pao, Cninfo|
||||||(http:/www.cninfo.co|
||||||m.cn)|
||||||Name of|
||||||announcement:|
||||||Foshan Huaxin|
||||||Packaging Co.,|
|The 2nd Extra||||||
||Extra ordinary||||Ltd.-Announcement|
|ordinary General||0.00%|06/20/2016|06/21/2016||
||General Meeting||||on Resolution of the|
|Meeting for 2016||||||
||||||2nd Extra ordinary|
||||||General Meeting for|
||||||2016; Number of|
||||||announcement:|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||
|-|-|-|-|-|-|
||||||2016-069|
||||||Newspaper and|
||||||website on which the|
||||||announcement was|
||||||disclosed: Securities|
||||||Times, HK Ta Kung|
||||||Pao, Cninfo|
||||||(http:/www.cninfo.co|
||||||m.cn)|
||||||Name of|
||||||announcement:|
||||||Foshan Huaxin|
||||||Packaging Co.,|
||||||Ltd.-Announcement|
||||||on Resolution of the|
||||||3rd Extra ordinary|
||||||General Meeting for|
|The 3rd Extra|||||2016; Number of|
||Extra ordinary|||||
|ordinary General||0.01%|12/16/2016|12/17/2016|announcement:|
||General Meeting|||||
|Meeting for 2016|||||2016-0113|
||||||Newspaper and|
||||||website on which the|
||||||announcement was|
||||||disclosed: Securities|
||||||Times, HK Ta Kung|
||||||Pao, Cninfo|
||||||(http:/www.cninfo.co|
||||||m.cn)|

2. Special meetings of shareholders convened at the request of preference shareholders with resumed voting rights
□ Applicable√ Not applicable
V Performance of independent directors in this Reporting Period
1. Attendance of independent directors in board meetings and meetings of shareholders
||||||||
|-|-|-|-|-|-|-|
|Attendance of independent directors in board meetings|||||||
||Due presence in||Presence by|||Absence for two|
|||Presence on site||Presence through|||
|Independent director|this Reporting||telecommunicati||Absence (times)|consecutive|
|||(times)||a proxy (times)|||
||Period (times)||on (times)|||times|
|Zhao Wei|12|1|11|0|0|No|
|Yang Zhenyu|13|0|12|1|0|No|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||||
|-|-|-|-|-|-|-|
|Zhang Wenjing|13|0|12|1|0|No|
|Xu Changlong|1|0|1|0|0|No|
|Attendance of independent directors in|||||||
|meetings of shareholders as non-voting||2|||||
|delegates (times)|||||||

Notes to any absence for two consecutive times:
2. Objections raised by independent directors on issues of the Company
Indicate by tick mark whether any independent directors raised any objections on issues of the Company.
□ Yes√ No
No such cases in this Reporting Period.
3. Other details about the performance of duties by independent directors
Indicate by tick mark whether any suggestions from independent directors were adopted by the Company.
√ Yes□ No
Suggestions from independent directors adopted or not adopted by the Company:
The Company, according to the relevant regulations and requirements of Company Law and Guideline on Establishing Independent Director System in Listed Company, Articles of Association, earnestly fulfilled the obligations of laws and regulations, articles of association and independent director system, actively attended the board meetings andshareholders’ general meetings, examined and guided the production and operation of the Company, proposed independent opinions on significant events, put forward many valuable and expert advices about internal control and daily operation decisions, fulfilled the duties diligently, faithfully, brought their roles into full play and effectively safeguarded the interests of listed companies and general shareholders.
VI Performance of duties by specialized committees under the Board during this Reporting Period
The board of directors of the Company set up nomination committee, remuneration and appraisal committee, audit and strategy committee. Each committee proposed expert advices and opinions about the development of the Company in line with its own responsibilities and promoted the standardized corporate development. In 2016, duty performance of each committee affiliated to the board of directors:
1. During the Reporting Period, the audit committee totally participated in the annual audit work for 2015 and the formulation of the 2016 audit plan including formulation of plan on annual audit, examination and verification of the first draft of annual audit report and establishment of the final draft. The audit committee held 3 meetings in 2016, of which the first one deliberated and approved report on 2015 annual financial statements, the 2015 annual financial report preliminarily reviewed by the auditor and the annual final account report, and the second one was to discuss the duty performance summary of the CPAs firm, and the last one communicated with accounting firm for the audit plan of the 2016 annual financial report.
2. During the Reporting Period, the remuneration committee held one meeting in total on which deliberated and approved proposal on remuneration distribution of the management for 2015.
3. During the Reporting Period, the Nomination Committee held three meetings in total, at which proposals on the
supplementation of directors, independent directors and supervisors were reviewed and approved and then
submitted to the Board.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 VII Performance of duties by the Supervisory Board
Did the Supervisory Board find any risks to the Company during its supervision in this Reporting Period?
□ Yes√ No
The Supervisory Board raised no objections in this Reporting Period.
VIII Appraisal and incentive for executive officers
1. The Company, according to principles of remuneration and stock incentive mechanisms approved byshareholders’ general meeting , Management Method of Remuneration and Incentive of Foshan Huaxin Packaging Co., Ltd. and Implementation Rules of Remuneration and Incentive of Foshan Huaxin Packaging Co., Ltd. revised in 2010 by the remuneration and appraisal committee and the board of directors, determined the amount of incentive remuneration for senior executives on the basis of appraisal results. 2. In the Reporting Period, the subsidy for independent directors was RMB80 thousand per year and the expenses for duty performance were borne by the Company.
IX Internal control
1. Serious internal control defects found in this Reporting Period
□ Yes√ No
2. Internal control self-evaluation report
||||
|-|-|-|
|Disclosure date of the internal control|||
||03/27/2017||
|self-evaluation report|||
|Index to the disclosed internal control|||
||2016 Self-appraisal Report on Internal Control, www.cninfo.com.cn||
|self-evaluation report|||
|Total assets of the evaluated entities as a|||
||100.00%||
|percentage in the consolidated total assets|||
|Operating revenues of the evaluated|||
|entities as a percentage in the consolidated|100.00%||
|operating revenues|||
|Defect identification standards|||
|Type|Financial-report related|Non-financial-report related|
||Indications of the great defect of the|If there were unambiguous evidence|
||financial report including: ① malpractices|indicated the Company possessed one of|
||of the Directors, Supervisors and the Senior|the following conditions among the|
||Executives of the Company; ② published|evaluation at the period-end, should be|
|Nature standard|||
||financial report with significant|recognized as the great defect of the|
||misstatement which influenced its|internal control: ① the significant|
||authenticity, integrity and fairness that the|events lacked of the legal|
||Company would make certain verification;|decision-making process; ② lacked of|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
||③ CPA discovered the significant|the decision-making process or the|
||misstatement of the current financial report|process was not normative that caused|
||while the internal control failed to find out|significant mistakes; ③ violated the|
||during the operating;④ the supervision on|national laws, regulations, rules or|
||the internal control by the Audit Committee|normative documents that received the|
||and the internal audit institution of the|administrative punishment such as the|
||Company was invalid. The indications of the|criminal penalties or be ordered for|
||significant defect of the financial report|suspension of production or business, be|
||including: ① the environmental control|withheld or revoked the permits or|
||was invalid; ② the accounting polices|license; ④ the great defect of the|
||formulated by the Company violated the|internal control had not been verified; ⑤|
||ASBE; ③ the applied accounting polices|the significant business lacked of the|
||not met with the accounting system of the|systematic control or which was invalid.|
||Company; ④ had not built up the fraud|There was unambiguous evidence|
||program and control measurements; ⑤ the|indicated the Company possessed one of|
||financial treatment with unconventional or|the following conditions among the|
||special transactions did not build up|evaluation at the period-end, should be|
||corresponding control system or failed to|recognized as the significant defect of|
||execute; ⑥ there was one or multiple|the internal control: ① there was|
||defects during the control of financial report|decision-making process but not|
||at the period-end and could not reasonably|complete enough; ② the|
||ensure the statement of the compile of the|decision-making process was irregular|
||financial report was real and complete.|that caused rather big mistake; ③|
||General defect refers to the other control|violated the national laws, regulations,|
||defect except for the above great defect and|rules and the normative documents that|
||significant defect.|received the administrative punishment|
|||except the criminal penalties or the order|
|||of the suspension of production or|
|||business or be withheld or revoked the|
|||permits or license; ④ significant|
|||business mechanism or system existed|
|||significant defect; ⑤ the significant|
|||defect of the internal control had not|
|||been verified. The general defect refers|
|||to the other control defect except for the|
|||above great defect and significant defect.|
||The quantitative criteria regarded the total|The quantitative criteria regarded the|
||assets amount of the consolidated financial|directly financial losses amount as the|
||report as the measurement index. If the|measurement index. If the defect alone or|
||defect alone or accompanied with other|accompanied with other defects which|
|Quantitative standard|||
||defects which may cause the amount of the|may cause the amount of the directly|
||misstatement of the financial report lower|financial losses lower than 0.5% of the|
||than 0.5% of the total assets amount of the|total assets amount of the consolidated|
||consolidated statements, should be|statements, should be recognized as the|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
||recognized as the general defect; if exceeded|general defect; if exceeded 0.5% of the|
||0.5% of the total assets amount of the|total assets amount of the consolidated|
||consolidated statement but still lower than|statement but still lower than 1% of|
||1% of which, should be recognized as the|which, should be recognized as the|
||significant defect; if exceeded 1% of the|significant defect; if exceeded 1% of the|
||total assets amount of the consolidated|total assets amount of the consolidated|
||statement, should be recognized as the great|statement, should be recognized as the|
||defect.|great defect.|
|Number of significant defects of financial|||
||0||
|report (Piece)|||
|Number of significant defects of non-|||
||0||
|financial report (Piece)|||
|Number of important defects of financial|||
||0||
|report (Piece)|||
|Number of important defects of|||
||0||
|non-financial report (Piece)|||

XAuditor’s report on internal control
√ Applicable□ Not applicable
|||
|-|-|
|Opinion paragraph in the auditor’s report on internal control||
|Huaxin Packaging maintained valid internal control of the financial report in the significant aspects according to the C-SOX and||
|the relevant regulations on 31 Dec. 2016.||
|Auditor’s report on internal control||
||Disclosed|
|disclosed or not||
|Disclosure date|03/27/2017|
|Index to the disclosed auditor’s||
||www.cninfo.com.cn|
|report on internal control||
|Type of the auditor’s opinion|Standard unqualified opinion|
|Serious non-financial-report-related||
||None|
|defects||

Indicate by tick mark whether any modified opinions are expressed by the CPAs firm in itsauditor’s report on theCompany’s internal control.
□ Yes√ No
Indicate by tick mark whether theauditor’s report on theCompany’s internal control issued by the CPAs firm is consistent with the self-evaluation report of the Board.
√ Yes□ No
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Section X Corporate Bonds
Are there any corporate bonds publicly offered and listed on the stock exchange, which were undue before the approval date of this Report or were due but could not be redeemed in full?
Yes
I Bond profile
|||||||||
|-|-|-|-|-|-|-|-|
||||||||How to pay|
||||||Balance|||
|Bond name|Abbr.|Bond code|Date of issue|Due date||Interest rate|interest and|
||||||(RMB’0,000)|||
||||||||principals|
|2012 Company|||||||Paid for the|
|bonds of|||||||interests once|
|Foshan Huaxin|12HBZ|112130|26 Nov. 2012|26 Nov. 2017|79,998|5.80%|by year and the|
|Packaging Co.,|||||||principals once|
|Ltd.|||||||when expired|
|Place for listing or transferring||SZSE||||||
|||Public and institutional investors who has a qualified securities account in the registration||||||
|Investor eligibility||authority (except for those who are forbidden by laws and regulations to purchase corporate||||||
|||bonds)||||||
|Interest and principal payments||||||||
|||Normal||||||
|during this Reporting Period||||||||
|||According to the Prospectus on the Public Issuance of Company Bonds of Foshan Huaxin||||||
|||Packaging Co., Ltd. (hereinafter referred to as ―Prospectus‖) disclosed on 22 Nov. 2012 by Foshan||||||
|||Huaxin Packaging Co., Ltd. (hereinafter referred to as ―the Company‖) and the stated sell-back||||||
|||provisions of the Company bonds issued in Y2012 (bond code: 112130 with the abbr. of||||||
|Where the bond carries any||―12HBZ‖) was disclosed on the 1st Indicative Announcement of the Nominal Interest Rate||||||
|issuer or investor option clause,||Adjustment of the ―12HBZ‖ and the Execution Methods of the Sell-back of the Bonds Holders of||||||
|interchangeable clause or other||Foshan Huaxin Packaging Co., Ltd. (Announcement No.:2015-042), and had respectively issued||||||
|special clauses, give the||the 2nd, 3rd, 4th Indicative Announcement on 29 Oct. 2015, 30 Oct. 2015, 2 Nov. 2015||||||
|execution details (if applicable)||(Announcement No.: 2015-044, 2015-058, 2015-W13). The investors could choose not to put||||||
|of these clauses during this||back, partly put back or wholly put back to the Company of the held ―12HBZ‖ on the put-back||||||
|Reporting Period||registration date with the put-back price of RMB100/piece and the put-back registration date of||||||
|||the ―12HBZ‖ was respectively of 20 Oct. 2015, 30 Oct. 2015 and 2 Nov. 2015. According to the||||||
|||data from the Shenzhen Branch of CSDC, the total number of the put-back of the ―12HBZ‖ was of||||||
|||200 with the total put-back amount of RMB20,000.00 (interests excluded) and the retained trusted||||||
|||amount of 7,999,800.||||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 II Bond trustee and credit rating agency
|||||||||
|-|-|-|-|-|-|-|-|
|Bond trustee:||||||||
||||19F and 20F,|||||
||||Guangzhou|||||
||||International|||||
||Guangzhou||Finance Center,|||||
|Name|Securities Co.,|Office address|No. 5 of|Contact|Liao Jianqiang|Tel.|020-88836636|
||Ltd.||Zhujiang West|||||
||||Rd, Tianhe|||||
||||District,|||||
||||Guangzhou|||||
|Credit rating agency which conducted the follow-up rating for the bond throughout this Reporting Period:||||||||
||||||F12, PICC Building, No. 2 of Jianguomen Outer|||
|Name|United Ratings Co., Ltd.|||Office address||||
||||||Street, Chaoyang District, Beijing|||

III Utilization of funds raised through corporate bonds
|||
|-|-|
|Utilization of funds raised through|Had wholly used for the payment for the bank loans and supplement to the current|
|corporate bonds and procedures executed|funds according to the regulations|
|Period-end balance (RMB’0,000)|0|
|Operation of special account for raised||
||The raised funds had complete the usage and the special account had been written-off|
|funds||
|Whether the utilization of raised funds is in||
|line with the promised utilization,||
||Yes|
|utilization plan or other promises in the||
|prospectus||

IV Rating results of corporate bonds
It’s estimated that in Apr. 2017, United Ratings Co., Ltd. will execute the tracking rating on the current Company bonds with the rating results will be timely disclosed on the www.cninfo.com.cn.
V Credit enhancement, repayment plan and other repayment guarantee measures
The Company was with favorable operating conditions and strong repayment capacity that completely performed as the repayment plan on the prospectus.
VI Meetings of bondholders during this Reporting Period
None
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 VII Performance of duties by the bond trustee during this Reporting Period
The bonds trustee will disclose the entrusted management affairs report on www.cninfo.com.cn and the website of SZSE after the disclose of the annual report of the Company.
VIII Main financial results of the Company for the recent two years
Unit:RMB’0,000
|||||
|-|-|-|-|
|Item|2016|2015|+/-%|
||44,987.58|48,470.99|-7.19%|
|EBITDA||||
|Current ratio|117.14%|167.21%|-50.07%|
|Debt-to-assets ratio|41.79%|42.09%|-0.30%|
|Quick ratio|91.18%|120.72%|-29.54%|
|Total debt-to-EBITDA ratio|17.41%|23.81%|-6.40%|
|Times interest earned|2.42|1.32|83.33%|
|Times interest earned, cash||||
||5.02|5.53|-9.22%|
|basis||||
|Times interest earned, EBITDA||||
||3.95|3.44|14.83%|
|basis||||
|Loan repayment ratio|100.00%|100.00%|0.00%|
|Interest coverage ratio|100.00%|100.00%|0.00%|

 Reason for any over30% YoY movements in the data above
√ Applicable□ Not applicable
The current ratio dropped considerably because RMB798 million of soon due corporate bonds was restated as non-current liabilities due within one year under the current liabilities item and the current liabilities increased significantly for that.
Times interest earned changed due to the varied interest expenditure and total profit.
IX Interest and principal payments for other bonds and debt financing instruments during this Reporting Period
RMB10,560,000 was paid as MTN interest on July 31, 2016.
X Credit lines granted by banks, utilization and repayment during this Reporting Period In this Reporting Period, a total credit line of RMB3.33 billion was granted by banks, of which RMB1.116 billion was utilized. And all the bank loans were repaid on time or before the due dates.
XI Fulfillment of commitments made in the bond prospectus during this Reporting Period
Normal
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 XII Significant events during this Reporting Period
None
XIII Guarantor for corporate bonds
□ Yes√ No
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Section XI Financial Report
IAuditor’s report
|||
|-|-|
|Type of auditor’s opinion|Standard unqualified opinion|
|Date of signing the auditor’s report|03/27/2017|
||Da Hua Certified Public Accountants (Special General|
|Name of the auditor||
||Partnership)|
|No. of the auditor’s report|Da Hua Audit Report [2017] No. 001457|
|Name of CPA|Zhou Lingzhi, Chen Baohua|

Text of theAuditor’s Report
Auditor’s Report
Da Hua Audit Report[2017] No. 001457 All shareholders of Foshan Huaxin Packaging Co., Ltd.,
We have audited the accompanying financial statements of Foshan Huaxin Packaging Co., Ltd. (the―Company‖), which comprise theCompany’s and consolidated balance sheets as at December 31, 2016, theCompany’s and consolidated income statements, theCompany’s and consolidated cash flow statements, theCompany’s and consolidated statements of changes inshareholders’ equity for the year then ended, as well as the notes to the financial statements.
1. Themanagement’s responsibility for the financial statements
The management of the Company is responsible for the preparation and fair presentation of these financial statements. Such a responsibility includes: (1) preparing financial statements according to the Accounting Standards for Business Enterprises and make them a fair presentation; and (2) designing, implementing and maintaining internal control relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
2.Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
have conducted our audit in accordance with the Audit Standards for Chinese Registered
Accountants, which require that we comply with ethical requirements and plan and perform the
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 audit to obtain reasonable assurance as to whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risks assessments, the auditor considers the internal control related to the preparation of the financial statements so as to design proper audit procedures. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate, which provides a basis for us to express auditing opinion.
3.Auditor’s opinion
In our opinion, the financial statements of the Company have been prepared according to the Accounting Standards for Business Enterprises in all material aspects, which give a fair view of theCompany’s and consolidated financial positions as at December 31, 2016 and theCompany’s and consolidated operating results and cash flows for the year then ended.
Da Hua Certified Public Accountants (Special CPA:
General Partnership)
Beijing· China
CPA:
March 27, 2017
II Financial statements
Currency unit for the financial statements: RMB
1. Consolidated balance sheet
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Prepared by Foshan Huaxin Packaging Co., Ltd.
December 31, 2016
Unit: RMB
||||
|-|-|-|
|Item|December 31, 2016|December 31, 2015|
|Current assets:|||
|Monetary funds|533,995,466.41|509,706,611.07|
|Settlement reserve|||
|Interbank lendings|||
|Financial assets at fair value through|||
||1,571,341.66|1,741,500.00|
|profit/loss|||
|Derivative financial assets|||
|Notes receivable|420,840,618.16|265,679,151.34|
|Accounts receivable|826,164,986.19|791,325,305.79|
|Accounts paid in advance|131,278,347.97|116,290,696.98|
|Premiums receivable|||
|Reinsurance premiums receivable|||
|Receivable reinsurance contract|||
|reserve|||
|Interest receivable|6,309,042.57|5,233,556.60|
|Dividends receivable|||
|Other accounts receivable|12,207,568.74|143,862,308.16|
|Financial assets purchased under|||
|agreements to resell|||
|Inventories|612,236,732.80|712,880,811.93|
|Assets held for sale|||
|Non-current assets due within one|||
|year|||
|Other current assets|217,871,497.69|17,147,074.25|
|Total current assets|2,762,475,602.19|2,563,867,016.12|
|Non-current assets:|||
|Loans and advances to customers|||
|Available-for-sale financial assets|288,700.00|288,700.00|
|Held-to-maturity investments|||
|Long-term accounts receivable|490,240,600.41|490,240,600.41|
|Long-term equity investments|252,775,695.55|262,089,226.45|
|Investment property|24,593,743.71|11,945,127.02|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Fixed assets|2,451,794,797.91|2,539,372,551.91|
|Construction in progress|23,927,727.82|28,305,202.78|
|Engineering materials|||
|Disposal of fixed assets|||
|Productive living assets|||
|Oil-gas assets|||
|Intangible assets|128,267,732.43|108,048,541.44|
|R&D expenses|4,045,184.55||
|Goodwill|11,547,305.29|11,547,305.29|
|Long-term deferred expenses|3,299,686.70|2,903,771.31|
|Deferred tax assets|24,333,954.14|33,209,638.28|
|Other non-current assets|5,147,078.23|7,519,746.40|
|Total non-current assets|3,420,262,206.74|3,495,470,411.29|
|Total assets|6,182,737,808.93|6,059,337,427.41|
|Current liabilities:|||
|Short-term borrowings|821,900,000.00|912,724,440.16|
|Borrowings from the Central Bank|||
|Money deposits accepted and|||
|inter-bank deposits|||
|Interbank borrowings|||
|Financial liabilities at fair value|||
|||212,689.24|
|through profit/loss|||
|Derivative financial liabilities|||
|Notes payable|217,381,869.35|127,562,392.61|
|Accounts payable|383,383,165.05|365,555,758.89|
|Accounts received in advance|39,799,982.39|9,817,369.72|
|Financial assets sold for repurchase|||
|Fees and commissions payable|||
|Payroll payable|28,332,211.67|33,391,126.62|
|Taxes payable|36,087,856.83|37,570,856.48|
|Interest payable|11,446,093.94|10,684,484.26|
|Dividends payable|3,468,350.84|11,019,644.79|
|Other accounts payable|18,426,283.07|24,761,471.30|
|Reinsurance premiums payable|||
|Insurance contract reserve|||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Payables for acting trading of|||
|securities|||
|Payables for acting underwriting of|||
|securities|||
|Liabilities held for sale|||
|Non-current liabilities due within one|||
||798,066,823.66||
|year|||
|Other current liabilities|||
|Total current liabilities|2,358,292,636.80|1,533,300,234.07|
|Non-current liabilities:|||
|Long-term borrowings|||
|Bonds payable|199,520,397.22|995,587,962.29|
|Of which: Preference shares|||
|Perpetual bonds|||
|Long-term accounts payable|3,137,995.76|7,630,748.49|
|Long-term payroll payable|||
|Special payables|||
|Provisions|2,117,357.80|1,758,780.68|
|Deferred income|18,225,377.45|9,200,905.88|
|Deferred tax liabilities|2,729,046.50|2,875,132.08|
|Other non-current liabilities|||
|Total non-current liabilities|225,730,174.73|1,017,053,529.42|
|Total liabilities|2,584,022,811.53|2,550,353,763.49|
|Owners’ equity:|||
|Share capital|505,425,000.00|505,425,000.00|
|Other equity instruments|||
|Of which: Preference shares|||
|Perpetual bonds|||
|Capital reserve|256,822,373.42|256,822,373.42|
|Less: Treasury shares|||
|Other comprehensive income|169,714.39|169,714.39|
|Special reserve|||
|Surplus reserve|190,275,071.84|187,280,095.40|
|Provisions for general risks|||
|Retained earnings|1,027,703,010.59|988,580,048.92|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Equity attributable to owners of the|||
||1,980,395,170.24|1,938,277,232.13|
|Company|||
|Minority interests|1,618,319,827.16|1,570,706,431.79|
|Total owners’ equity|3,598,714,997.40|3,508,983,663.92|
|Total liabilities and owners’ equity|6,182,737,808.93|6,059,337,427.41|

 Legal representative: Huang Xin Accounting head for this Report: Ji Xiangdong Head of the accounting department: Yang Chenglin
2. Balance sheet of the Company
Unit: RMB
||||
|-|-|-|
|Item|December 31, 2016|December 31, 2015|
|Current assets:|||
|Monetary funds|8,409,271.75|68,234,826.12|
|Financial assets at fair value through|||
|profit/loss|||
|Derivative financial assets|||
|Notes receivable|||
|Accounts receivable||12,775,461.68|
|Accounts paid in advance|141,509.43|141,509.43|
|Interest receivable|5,950,976.18||
|Dividends receivable|||
|Other accounts receivable|979,766,646.61|964,414,178.70|
|Inventories|||
|Assets held for sale|||
|Non-current assets due within one|||
|year|||
|Other current assets|813,127.39|1,432,574.60|
|Total current assets|995,081,531.36|1,046,998,550.53|
|Non-current assets:|||
|Available-for-sale financial assets|288,700.00|288,700.00|
|Held-to-maturity investments|||
|Long-term accounts receivable|490,240,600.41|490,240,600.41|
|Long-term equity investments|1,314,515,693.41|1,312,361,239.94|
|Investment property|||
|Fixed assets|266,429.96|380,975.78|
|Construction in progress|||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Engineering materials|||
|Disposal of fixed assets|||
|Productive living assets|||
|Oil-gas assets|||
|Intangible assets|141,444.24|433,782.13|
|R&D expenses|||
|Goodwill|||
|Long-term deferred expenses|||
|Deferred tax assets|||
|Other non-current assets|||
|Total non-current assets|1,805,452,868.02|1,803,705,298.26|
|Total assets|2,800,534,399.38|2,850,703,848.79|
|Current liabilities:|||
|Short-term borrowings|100,000,000.00|100,000,000.00|
|Financial liabilities at fair value|||
|through profit/loss|||
|Derivative financial liabilities|||
|Notes payable||45,000,000.00|
|Accounts payable||12,775,461.68|
|Accounts received in advance|||
|Payroll payable|||
|Taxes payable|2,491.38|142,128.32|
|Interest payable|9,164,692.68|9,179,970.44|
|Dividends payable|201,107.63|179,458.65|
|Other accounts payable||5,003,595.00|
|Liabilities held for sale|||
|Non-current liabilities due within one|||
||798,066,823.66||
|year|||
|Other current liabilities|||
|Total current liabilities|907,435,115.35|172,280,614.09|
|Non-current liabilities:|||
|Long-term borrowings|||
|Bonds payable|199,520,397.22|995,587,962.29|
|Of which: Preference shares|||
|Perpetual bonds|||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Long-term payables|||
|Long-term payroll payable|||
|Special payables|||
|Provisions|||
|Deferred income|||
|Deferred tax liabilities|||
|Other non-current liabilities|||
|Total non-current liabilities|199,520,397.22|995,587,962.29|
|Total liabilities|1,106,955,512.57|1,167,868,576.38|
|Owners’ equity:|||
|Share capital|505,425,000.00|505,425,000.00|
|Other equity instruments|||
|Of which: Preference shares|||
|Perpetual bonds|||
|Capital reserve|250,531,482.00|250,531,482.00|
|Less: Treasury shares|||
|Other comprehensive income|||
|Special reserve|||
|Surplus reserve|190,275,071.84|187,280,095.40|
|Retained earnings|747,347,332.97|739,598,695.01|
|Total owners’ equity|1,693,578,886.81|1,682,835,272.41|
|Total liabilities and owners’ equity|2,800,534,399.38|2,850,703,848.79|

 3. Consolidated income statement
Unit: RMB
||||
|-|-|-|
|Item|2016|2015|
|1. Operating revenues|3,607,758,904.01|3,282,043,995.12|
|Including: Sales income|3,607,758,904.01|3,282,043,995.12|
|Interest income|||
|Premium income|||
|Fee and commission income|||
|2. Operating costs|3,492,514,684.40|3,240,504,576.79|
|Including: Cost of sales|3,087,077,230.55|2,733,163,536.13|
|Interest expenses|||
|Fee and commission expenses|||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Surrenders|||
|Net claims paid|||
|Net amount provided as insurance|||
|contract reserve|||
|Expenditure on policy dividends|||
|Reinsurance premium|||
|Taxes and surtaxes|22,671,254.05|16,325,153.64|
|Selling expenses|181,963,908.31|172,400,338.43|
|Administrative expenses|121,123,804.25|158,119,192.47|
|Finance costs|83,749,628.37|133,872,055.72|
|Asset impairment loss|-4,071,141.13|26,624,300.40|
|Add: Profit on fair value changes (―-‖|||
||1,571,341.66|1,528,810.76|
|means loss)|||
|Return on investment (―-‖ means|||
||19,399,881.52|121,166,566.33|
|loss)|||
|Including: Share of profit/loss of|||
||15,434,824.76|15,711,019.67|
|associates and joint ventures|||
|Exchange gains (―-‖ means loss)|||
|3. Operating profit (―-‖ means loss)|136,215,442.79|164,234,795.42|
|Add: Non-operating income|29,182,787.72|23,729,196.71|
|Including: Profit on disposal of|||
||692,850.74|2,265,238.32|
|non-current assets|||
|Less: Non-operating expense|4,113,896.86|1,263,680.97|
|Including: Loss on disposal of|||
||1,382,895.45|955,586.75|
|non-current assets|||
|4. Total profit (―-‖ means loss)|161,284,333.65|186,700,311.16|
|Less: Corporate income tax|22,182,851.07|15,784,568.82|
|5. Net profit (―-‖ means loss)|139,101,482.58|170,915,742.34|
|Net profit attributable to owners of|||
||61,324,088.11|133,094,696.66|
|the Company|||
|Minority interests’ income|77,777,394.47|37,821,045.68|
|6. Other comprehensive income net of tax|||
|Other comprehensive income net of|||
|tax attributable to owners of the|||
|Company|||
|6.1 Other comprehensive income|||
|that will not be reclassified into|||
|profit/loss|||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|6.1.1 Changes in net liabilities|||
|or assets with a defined benefit plan upon|||
|re-measurement|||
|6.1.2 Share of other|||
|comprehensive income of investees that|||
|cannot be reclassified into profit/loss|||
|under the equity method|||
|6.2 Other comprehensive income|||
|to be subsequently reclassified into|||
|profit/loss|||
|6.2.1 Share of other|||
|comprehensive income of investees that|||
|will be reclassified into profit/loss under|||
|the equity method|||
|6.2.2 Profit/loss on fair value|||
|changes of available-for-sale financial|||
|assets|||
|6.2.3 Profit/loss on|||
|reclassifying held-to-maturity|||
|investments into available-for-sale|||
|financial assets|||
|6.2.4 Effective profit/loss on|||
|cash flow hedges|||
|6.2.5 Currency translation|||
|differences|||
|6.2.6 Other|||
|Other comprehensive income net of|||
|tax attributable to minority interests|||
|7. Total comprehensive income|139,101,482.58|170,915,742.34|
|Attributable to owners of the|||
||61,324,088.11|133,094,696.66|
|Company|||
|Attributable to minority interests|77,777,394.47|37,821,045.68|
|8. Earnings per share|||
|8.1 Basic earnings per share|0.12|0.26|
|8.2 Diluted earnings per share|0.12|0.26|

 Where business mergers under the same control occurred in this Reporting Period, the net profit achieved by the merged parties before the business mergers was RMB000, with the corresponding amount for the last period being RMB000.
Legal representative: Huang Xin Accounting head for this Report: Ji Xiangdong
Head of the accounting department: Yang Chenglin
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 4. Income statement of the Company
Unit: RMB
||||
|-|-|-|
|Item|2016|2015|
|1. Operating revenues|0.00|255,247,489.31|
|Less: Operating costs|0.00|255,247,489.31|
|Taxes and surtaxes|86,188.67|208,990.35|
|Selling expenses|||
|Administrative expenses|7,268,079.51|10,678,245.22|
|Finance costs|-5,464,736.96|-11,234,310.55|
|Asset impairment loss|||
|Add: profit on fair value changes (―-‖|||
|means loss)|||
|Return on investment (―-‖ means|||
||31,891,035.77|-39,467,993.33|
|loss)|||
|Including: Share of profit/loss of|||
||14,902,809.13|15,735,223.61|
|associates and joint ventures|||
|2. Operating profit (―-‖ means loss)|30,001,504.55|-39,120,918.35|
|Add: Non-operating income||1,473,110.14|
|Including: Profit on disposal of|||
|||1,108,861.40|
|non-current assets|||
|Less: Non-operating expense|51,740.15|1,860.53|
|Including: Loss on disposal of|||
|non-current assets|||
|3. Total profit (―-‖ means loss)|29,949,764.40|-37,649,668.74|
|Less: Corporate income tax|||
|4. Net profit (―-‖ means loss)|29,949,764.40|-37,649,668.74|
|5. Other comprehensive income net of|||
|tax|||
|5.1 Other comprehensive income that|||
|will not be reclassified into profit and|||
|loss|||
|5.1.1 Changes in net liabilities or|||
|assets with a defined benefit plan upon|||
|re-measurement|||
|5.1.2 Share of other|||
|comprehensive income of investees that|||
|cannot be reclassified into profit/loss|||
|under the equity method|||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|5.2 Other comprehensive income to|||
|be subsequently reclassified into|||
|profit/loss|||
|5.2.1 Share of other|||
|comprehensive income of investees that|||
|will be reclassified into profit/loss|||
|under the equity method|||
|5.2.2 Profit/loss on fair value|||
|changes of available-for-sale financial|||
|assets|||
|5.2.3 Profit/loss on reclassifying|||
|held-to-maturity investments into|||
|available-for-sale financial assets|||
|5.2.4 Effective profit/loss on cash|||
|flow hedges|||
|5.2.5 Currency translation|||
|differences|||
|5.2.6 Other|||
|6. Total comprehensive income|29,949,764.40|-37,649,668.74|
|7. Earnings per share|||
|7.1 Basic earnings per share|||
|7.2 Diluted earnings per share|||

5. Consolidated cash flow statement
Unit: RMB
||||
|-|-|-|
|Item|2016|2015|
|1. Cash flows from operating activities:|||
|Cash received from sale of|||
||3,268,199,277.63|3,039,588,223.77|
|commodities and rendering of service|||
|Net increase in money deposits from|||
|customers and interbank placements|||
|Net increase in loans from the|||
|Central Bank|||
|Net increase in funds borrowed from|||
|other financial institutions|||
|Cash received from premium of|||
|original insurance contracts|||
|Net cash received from reinsurance|||
|business|||
|Net increase in deposits of policy|||
|holders and investment fund|||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Net increase in disposal of financial|||
|assets at fair value through profit/loss|||
|Interest, fees and commissions|||
|received|||
|Net increase in interbank borrowings|||
|Net increase in funds in repurchase|||
|business|||
|Tax refunds received|115,664.68|80,290.26|
|Cash received from other operating|||
||105,881,727.37|123,953,129.73|
|activities|||
|Subtotal of cash inflows from operating|||
||3,374,196,669.68|3,163,621,643.76|
|activities|||
|Cash paid for goods and services|2,484,300,356.98|1,989,083,751.81|
|Net increase in loans and advances to|||
|customers|||
|Net increase in funds deposited in the|||
|Central Bank and interbank placements|||
|Cash paid for claims of original|||
|insurance contracts|||
|Interest, fees and commissions paid|||
|Cash paid as policy dividends|||
|Cash paid to and for employees|203,207,101.35|203,434,376.23|
|Taxes paid|182,720,197.94|179,765,117.75|
|Cash paid for other operating|||
||94,857,902.33|177,847,068.21|
|activities|||
|Subtotal of cash outflows from|||
||2,965,085,558.60|2,550,130,314.00|
|operating activities|||
|Net cash flows from operating activities|409,111,111.08|613,491,329.76|
|2. Cash flows from investing activities:|||
|Cash received from retraction of|||
|investments|||
|Cash received as return on|||
||24,748,355.66|370,307.68|
|investments|||
|Net cash received from disposal of|||
|fixed assets, intangible assets and other|643,600.00|68,780,908.16|
|long-term assets|||
|Net cash received from disposal of|||
||105,000,000.00|44,869,829.86|
|subsidiaries or other business units|||
|Cash received from other investing|||
||11,178,200.00|4,066,986.00|
|activities|||
|Subtotal of cash inflows from investing|141,570,155.66|118,088,031.70|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|activities|||
|Cash paid to acquire fixed assets,|||
|intangible assets and other long-term|75,441,479.47|56,315,072.57|
|assets|||
|Cash paid for investment|||
|Net increase in pledged loans|||
|Net cash paid to acquire subsidiaries|||
|and other business units|||
|Cash paid for other investing|||
||209,000,000.00||
|activities|||
|Subtotal of cash outflows from|||
||284,441,479.47|56,315,072.57|
|investing activities|||
|Net cash flows from investing activities|-142,871,323.81|61,772,959.13|
|3. Cash flows from financing activities:|||
|Cash received from capital|||
|contributions|||
|Including: Cash received from|||
|minority shareholder investments by|||
|subsidiaries|||
|Cash received as borrowings|1,269,760,258.44|2,177,214,602.70|
|Cash received from issuance of|||
|bonds|||
|Cash received from other financing|||
||325,746,286.83|37,554,493.73|
|activities|||
|Subtotal of cash inflows from financing|||
||1,595,506,545.27|2,214,769,096.43|
|activities|||
|Repayment of borrowings|1,360,092,249.37|2,648,801,607.88|
|Cash paid for interest expenses and|||
||153,771,923.50|174,086,048.88|
|distribution of dividends or profit|||
|Including: dividends or profit paid|||
||36,684,507.41|41,400,266.00|
|by subsidiaries to minority interests|||
|Cash paid for other financing|||
||178,891,765.59||
|activities|||
|Sub-total of cash outflows from|||
||1,692,755,938.46|2,822,887,656.76|
|financing activities|||
|Net cash flows from financing activities|-97,249,393.19|-608,118,560.33|
|4. Effect of foreign exchange rate|||
||2,152,982.50|5,565,972.68|
|changes on cash and cash equivalents|||
|5. Net increase in cash and cash|||
||171,143,376.58|72,711,701.24|
|equivalents|||
|Add: Opening balance of cash and|||
||185,960,324.24|113,248,623.00|
|cash equivalents|||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|6. Closing balance of cash and cash|||
||357,103,700.82|185,960,324.24|
|equivalents|||

6. Cash flow statement of the Company
Unit: RMB
||||
|-|-|-|
|Item|2016|2015|
|1. Cash flows from operating activities:|||
|Cash received from sale of|||
||12,775,461.68|328,257,641.76|
|commodities and rendering of service|||
|Tax refunds received|||
|Cash received from other operating|||
||281,378,754.06|731,296,731.46|
|activities|||
|Subtotal of cash inflows from operating|||
||294,154,215.74|1,059,554,373.22|
|activities|||
|Cash paid for goods and services|57,775,461.68|328,257,641.77|
|Cash paid to and for employees|4,178,230.91|6,744,701.10|
|Taxes paid|861,532.43|2,878,820.20|
|Cash paid for other operating|||
||346,401,234.86|591,337,365.04|
|activities|||
|Subtotal of cash outflows from|||
||409,216,459.88|929,218,528.11|
|operating activities|||
|Net cash flows from operating activities|-115,062,244.14|130,335,845.11|
|2. Cash flows from investing activities:|||
|Cash received from retraction of|||
|investments|||
|Cash received as return on|||
||41,736,582.30|19,796,783.06|
|investments|||
|Net cash received from disposal of|||
|fixed assets, intangible assets and other|14,100.00|65,610,551.60|
|long-term assets|||
|Net cash received from disposal of|||
||105,000,000.00|45,000,000.00|
|subsidiaries or other business units|||
|Cash received from other investing|||
|activities|||
|Subtotal of cash inflows from investing|||
||146,750,682.30|130,407,334.66|
|activities|||
|Cash paid to acquire fixed assets,|||
|intangible assets and other long-term||201,641.91|
|assets|||
|Cash paid for investment|12,000,000.00|3,288,700.00|
|Net cash paid to acquire subsidiaries|||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|and other business units|||
|Cash paid for other investing|||
|activities|||
|Subtotal of cash outflows from|||
||12,000,000.00|3,490,341.91|
|investing activities|||
|Net cash flows from investing activities|134,750,682.30|126,916,992.75|
|3. Cash flows from financing activities:|||
|Cash received from capital|||
|contributions|||
|Cash received as borrowings|100,000,000.00|449,100,000.00|
|Cash received from issuance of|||
|bonds|||
|Cash received from other financing|||
||4,500,000.00||
|activities|||
|Subtotal of cash inflows from financing|||
||104,500,000.00|449,100,000.00|
|activities|||
|Repayment of borrowings|100,000,000.00|568,770,000.00|
|Cash paid for interest expenses and|||
||79,513,992.53|79,411,991.70|
|distribution of dividends or profit|||
|Cash paid for other financing|||
|||4,500,000.00|
|activities|||
|Sub-total of cash outflows from|||
||179,513,992.53|652,681,991.70|
|financing activities|||
|Net cash flows from financing activities|-75,013,992.53|-203,581,991.70|
|4. Effect of foreign exchange rate|||
|changes on cash and cash equivalents|||
|5. Net increase in cash and cash|||
||-55,325,554.37|53,670,846.16|
|equivalents|||
|Add: Opening balance of cash and|||
||63,734,826.12|10,063,979.96|
|cash equivalents|||
|6. Closing balance of cash and cash|||
||8,409,271.75|63,734,826.12|
|equivalents|||

7. Consolidated statement of changes inowners’ equity
2016
Unit: RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||2016|||||||||||||
||Equity attributable to owners of the Company|||||||||||||
|||||||||||||Minorit|Total|
|Item||||||||||||||
|||Other equity||||Less:|Other|||General|Retaine|||
||Share||||Capital|||Special|Surplus|||y|owners’|
|||instruments||||Treasur|compre|||risk|d|||
||capital||||reserve|||reserve|reserve|||interests|equity|
|||Prefer|Perpe|t Other||y shares|hensive|||reserve|earning|||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|||ence|ual||income||s|||
|||shares|bonds|||||||
|1. Balance at the|505,42|||||||1,570,7|3,508,9|
|||||256,822|169,714|187,280|988,580|||
|end of the prior|5,000.|||||||06,431.|83,663.|
|||||,373.42|.39|,095.40|,048.92|||
|year|00|||||||79|92|
|Add: Changes||||||||||
|in accounting||||||||||
|policies||||||||||
|Correction of||||||||||
|errors in prior||||||||||
|periods||||||||||
|Business||||||||||
|mergers under the||||||||||
|same control||||||||||
|Other||||||||||
|2. Balance at the|505,42|||||||1,570,7|3,508,9|
|||||256,822|169,714|187,280|988,580|||
|beginning of the|5,000.|||||||06,431.|83,663.|
|||||,373.42|.39|,095.40|,048.92|||
|year|00|||||||79|92|
|3. Increase/||||||||||
|decrease in the||||||2,994,9|39,122,|47,613,|89,731,|
|period (―-‖ means||||||76.44|961.67|395.37|333.48|
|decrease)||||||||||
|3.1 Total||||||||||
||||||||61,324,|77,777,|139,101|
|comprehensive||||||||||
||||||||088.11|394.47|,482.58|
|income||||||||||
|3.2 Capital||||||||||
|increased and||||||||||
|reduced by owners||||||||||
|3.2.1||||||||||
|Ordinary shares||||||||||
|increased by||||||||||
|shareholders||||||||||
|3.2.2 Capital||||||||||
|increased by||||||||||
|holders of other||||||||||
|equity instruments||||||||||
|3.2.3||||||||||
|Amounts of||||||||||
|share-based||||||||||
|payments charged||||||||||
|to owners’ equity||||||||||
|3.2.4 Other||||||||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||||
|-|-|-|-|-|-|-|-|
|3.3 Profit||||2,994,9|-22,201,|-30,163,|-49,370,|
|distribution||||76.44|126.44|999.10|149.10|
|3.3.1||||||||
|||||2,994,9|-2,994,9|||
|Appropriation to||||||||
|||||76.44|76.44|||
|surplus reserve||||||||
|3.3.2||||||||
|Appropriation to||||||||
|general risk||||||||
|provisions||||||||
|3.3.3||||||||
|Appropriation to|||||-19,206,|-30,163,|-49,370,|
|owners (or|||||150.00|999.10|149.10|
|shareholders)||||||||
|3.3.4 Other||||||||
|3.4 Internal||||||||
|carry-forward of||||||||
|owners’ equity||||||||
|3.4.1 New||||||||
|increase of capital||||||||
|(or share capital)||||||||
|from capital||||||||
|reserve||||||||
|3.4.2 New||||||||
|increase of capital||||||||
|(or share capital)||||||||
|from surplus||||||||
|reserve||||||||
|3.4.3 Surplus||||||||
|reserve for making||||||||
|up loss||||||||
|3.4.4 Other||||||||
|3.5 Special reserve||||||||
|3.5.1||||||||
|Withdrawn for the||||||||
|period||||||||
|3.5.2 Used in||||||||
|the period||||||||
|3.6 Other||||||||
||505,42||||1,027,7|1,618,3|3,598,714,997.40|
|||256,822|169,714|190,275||||
|4. Closing balance|5,000.||||03,010.|19,827.||
|||,373.42|.39|,071.84||||
||00||||59|16||

2015
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Unit: RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||2015|||||||||||||
||Equity attributable to owners of the Company|||||||||||||
|||Other equity||||||||||Minorit||
||||||||Other||||||Total|
|Item||||||||||||||
|||instruments||||Less:||||General|Retaine|y||
||Share||||Capital||compre|Specific|Surplus||||owners’|
|||Prefer|Perpet|||Treasur||||risk|d|interest||
||capital||||reserve||hensive|reserve|reserve||||equity|
|||ence|ual|Other||y shares||||reserve|earnings|s||
||||||||income|||||||
|||shares|bonds|||||||||||
|1. Balance at the|505,42|||||||||||1,609,9|3,422,7|
||||||256,822||169,714||187,280||863,066|||
|end of the prior|5,000.|||||||||||55,356.|19,266.|
||||||,373.42||.39||,095.40||,727.26|||
|year|00|||||||||||23|70|
|Add: Changes||||||||||||||
|in accounting||||||||||||||
|policies||||||||||||||
|Correction of||||||||||||||
|errors in prior||||||||||||||
|periods||||||||||||||
|Business||||||||||||||
|mergers under the||||||||||||||
|same control||||||||||||||
|Other||||||||||||||
|2. Balance at the|505,42|||||||||||1,609,9|3,422,7|
||||||256,822||169,714||187,280||863,066|||
|beginning of the|5,000.|||||||||||55,356.|19,266.|
||||||,373.42||.39||,095.40||,727.26|||
|year|00|||||||||||23|70|
|3. Increase/||||||||||||||
|decrease in the|||||||||||125,513|-39,248|86,264,|
|period (―-‖ means|||||||||||,321.66|,924.44|397.22|
|decrease)||||||||||||||
|3.1 Total||||||||||||||
||||||||||||133,094|37,821,|170,915|
|comprehensive||||||||||||||
||||||||||||,696.66|045.68|,742.34|
|income||||||||||||||
|3.2 Capital||||||||||||||
|||||||||||||-12,343|-12,343,|
|increased and||||||||||||||
|||||||||||||,394.48|394.48|
|reduced by owners||||||||||||||
|3.2.1||||||||||||||
|Ordinary shares||||||||||||-12,343|-12,343,|
|increased by||||||||||||,394.48|394.48|
|shareholders||||||||||||||
|3.2.2 Capital||||||||||||||
|increased by||||||||||||||
|holders of other||||||||||||||
|equity instruments||||||||||||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||
|-|-|-|-|
|3.2.3||||
|Amounts of||||
|share-based||||
|payments charged||||
|to owners’ equity||||
|3.2.4 Other||||
|3.3 Profit|-7,581,3|-64,726|-72,307,|
|distribution|75.00|,575.64|950.64|
|3.3.1||||
|Appropriation to||||
|surplus reserve||||
|3.3.2||||
|Appropriation to||||
|general risk||||
|provisions||||
|3.3.3||||
|Appropriation to|-7,581,3|-60,332|-67,913,|
|owners (or|75.00|,548.87|923.87|
|shareholders)||||
|||-4,394,|-4,394,0|
|3.3.4 Other||||
|||026.77|26.77|
|3.4 Internal||||
|carry-forward of||||
|owners’ equity||||
|3.4.1 New||||
|increase of capital||||
|(or share capital)||||
|from capital||||
|reserve||||
|3.4.2 New||||
|increase of capital||||
|(or share capital)||||
|from surplus||||
|reserve||||
|3.4.3 Surplus||||
|reserve for making||||
|up loss||||
|3.4.4 Other||||
|3.5 Special reserve||||
|3.5.1||||
|Withdrawn for the||||
|period||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||||
|-|-|-|-|-|-|-|-|
|3.5.2 Used in||||||||
|the period||||||||
|3.6 Other||||||||
||505,42|||||1,570,7|3,508,9|
|||256,822|169,714|187,280|988,580|||
|4. Closing balance|5,000.|||||06,431.|83,663.|
|||,373.42|.39|,095.40|,048.92|||
||00|||||79|92|

 8. Statement of changes inowners’ equity of the Company
2016
Unit: RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||2016|||||||||||
|||Other equity instruments|||||Other|||||
|||||||Less:||||Retaine|Total|
|Item||||||||||||
||Share|Prefere|||Capital||comprehe|Special|Surplus|||
||||Perpetu|||Treasury||||d|owners’|
||capital|nce||Other|reserve||nsive|reserve|reserve|||
||||al bonds|||shares||||earnings|equity|
|||shares|||||income|||||
|1. Balance at the||||||||||||
||505,425,||||250,531,4||||187,280,0|739,598|1,682,835|
|end of the prior||||||||||||
||000.00||||82.00||||95.40|,695.01|,272.41|
|year||||||||||||
|Add: Changes||||||||||||
|in accounting||||||||||||
|policies||||||||||||
|Correction of||||||||||||
|errors in prior||||||||||||
|periods||||||||||||
|Other||||||||||||
|2. Balance at the||||||||||||
||505,425,||||250,531,4||||187,280,0|739,598|1,682,835|
|beginning of the||||||||||||
||000.00||||82.00||||95.40|,695.01|,272.41|
|year||||||||||||
|3. Increase/||||||||||||
|decrease in the|||||||||2,994,976|7,748,6|10,743,61|
|period (―-‖ means|||||||||.44|37.96|4.40|
|decrease)||||||||||||
|3.1 Total||||||||||||
|||||||||||29,949,|29,949,76|
|comprehensive||||||||||||
|||||||||||764.40|4.40|
|income||||||||||||
|3.2 Capital||||||||||||
|increased and||||||||||||
|reduced by owners||||||||||||
|3.2.1||||||||||||
|Ordinary shares||||||||||||
|increased by||||||||||||
|shareholders||||||||||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||
|-|-|-|-|
|3.2.2 Capital||||
|increased by||||
|holders of other||||
|equity instruments||||
|3.2.3||||
|Amounts of||||
|share-based||||
|payments charged||||
|to owners’ equity||||
|3.2.4 Other||||
|3.3 Profit|2,994,976|-22,201,|-19,206,1|
|distribution|.44|126.44|50.00|
|3.3.1||||
||2,994,976|-2,994,9||
|Appropriation to||||
||.44|76.44||
|surplus reserve||||
|3.3.2||||
|Appropriation to||-19,206,|-19,206,1|
|owners (or||150.00|50.00|
|shareholders)||||
|3.3.3 Other||||
|3.4 Internal||||
|carry-forward of||||
|owners’ equity||||
|3.4.1 New||||
|increase of capital||||
|(or share capital)||||
|from capital||||
|reserve||||
|3.4.2 New||||
|increase of capital||||
|(or share capital)||||
|from surplus||||
|reserve||||
|3.4.3 Surplus||||
|reserve for making||||
|up loss||||
|3.4.4 Other||||
|3.5 Special reserve||||
|3.5.1||||
|Withdrawn for the||||
|period||||
|3.5.2 Used in||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||
|-|-|-|-|-|-|
|the period||||||
|3.6 Other||||||
||505,425,|250,531,4|190,275,0|747,347|1,693,578,886.81|
|4. Closing balance||||||
||000.00|82.00|71.84|,332.97||

 2015
Unit: RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||2015|||||||||||
|||Other equity instruments|||||Other|||||
|||||||Less:||||Retaine|Total|
|Item|Share|Prefere|||Capital||comprehe|Special|Surplus|||
||||Perpetu|||Treasury||||d|owners’|
||capital|nce||Other|reserve||nsive|reserve|reserve|||
||||al bonds|||shares||||earnings|equity|
|||shares|||||income|||||
|1. Balance at the||||||||||||
||505,425,||||250,531,4||||187,280,0|784,829|1,728,066|
|end of the prior||||||||||||
||000.00||||82.00||||95.40|,738.75|,316.15|
|year||||||||||||
|Add: Changes||||||||||||
|in accounting||||||||||||
|policies||||||||||||
|Correction of||||||||||||
|errors in prior||||||||||||
|periods||||||||||||
|Other||||||||||||
|2. Balance at the||||||||||||
||505,425,||||250,531,4||||187,280,0|784,829|1,728,066|
|beginning of the||||||||||||
||000.00||||82.00||||95.40|,738.75|,316.15|
|year||||||||||||
|3. Increase/||||||||||||
|decrease in the||||||||||-45,231,|-45,231,0|
|period (―-‖ means||||||||||043.74|43.74|
|decrease)||||||||||||
|3.1 Total||||||||||||
|||||||||||-37,649,|-37,649,6|
|comprehensive||||||||||||
|||||||||||668.74|68.74|
|income||||||||||||
|3.2 Capital||||||||||||
|increased and||||||||||||
|reduced by owners||||||||||||
|3.2.1||||||||||||
|Ordinary shares||||||||||||
|increased by||||||||||||
|shareholders||||||||||||
|3.2.2 Capital||||||||||||
|increased by||||||||||||
|holders of other||||||||||||
|equity instruments||||||||||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||
|-|-|-|-|-|-|
|3.2.3||||||
|Amounts of||||||
|share-based||||||
|payments charged||||||
|to owners’ equity||||||
|3.2.4 Other||||||
|3.3 Profit||||-7,581,3|-7,581,37|
|distribution||||75.00|5.00|
|3.3.1||||||
|Appropriation to||||||
|surplus reserve||||||
|3.3.2||||||
|Appropriation to||||-7,581,3|-7,581,37|
|owners (or||||75.00|5.00|
|shareholders)||||||
|3.3.3 Other||||||
|3.4 Internal||||||
|carry-forward of||||||
|owners’ equity||||||
|3.4.1 New||||||
|increase of capital||||||
|(or share capital)||||||
|from capital||||||
|reserve||||||
|3.4.2 New||||||
|increase of capital||||||
|(or share capital)||||||
|from surplus||||||
|reserve||||||
|3.4.3 Surplus||||||
|reserve for making||||||
|up loss||||||
|3.4.4 Other||||||
|3.5 Special reserve||||||
|3.5.1||||||
|Withdrawn for the||||||
|period||||||
|3.5.2 Used in||||||
|the period||||||
|3.6 Other||||||
||505,425,|250,531,4|187,280,0|739,598|1,682,835|
|4. Closing balance||||||
||000.00|82.00|95.40|,695.01|,272.41|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 III Company profile
1. Place of incorporation, organization form and address of headquarters
Foshan Huaxin Packaging Co., Ltd. (hereinafter referred to as the Company) was promoted by Foshan Huaxin Development Co., Ltd., as a main sponsor, under approval ofPeople’s Government of Guangdong Province with YBH (1999) No. 297 document and Economic System Reform Committee of Guangdong Province with YTG (1999) No. 032 document, and jointly invested by seven shareholders such as Foshan Municipal Investment General Corporation, Foshan Xinhui Industrial Development Co., Ltd., China Packaging General Corporation, China Material Development& Investment General Corporation, Guangdong Technical Reforming& Investment Co., Ltd., China Chemistry& Light Industry General Corporation, and Foshan Light Industry Company by promotion with total share capital of RMB290,000,000 at par value of RMB1 per share. The Company is joint-stock company who was registered in Administration Bureau for Commerce& Industry of Guangdong Province on June 21, 1999. In the year of 2000, the Company successfully placed domestically listed foreign shares (B shares) amounting to 149,500,000 by mean of private placing, which was listed in Shenzhen Stock Exchange for trade. After offering, theCompany’s total share capital was increased to RMB439,500,000.00. In June 2007, the Company distributed dividends of 65,925,000 shares, thus, the total share capital was changed into RMB505,425,000.00. The credibility code of the Company is 914406007076822793.
As at 31 Dec. 2016, the Company accumulatively issued 505,425,000 shares in number and the registered capital stood at RMB505,425,000. TheCompany’s registered address is No. 18; Jihua
5th
Road, Foshan, Guangdong, and the office address of headquarters is 19/F, Jinghua Bldg., Jihua Rd., Foshan. The parent company of the Company is Foshan Huaxin Development Co., Ltd., and the ultimate controller of the Company is China Chengtong Holdings Group Ltd.
2. Nature of business and main operation activities
The Company is in the industry of papermaking, paper packaging and printing, and mainly manufactures (operated by subsidiary companies under the Company) and sells packaging materials, and packaging products, materials for decoration and aluminum and plastic compound materials; sells and maintains package machinery; invests in industry in terms of package and printing. Main products include high-grade coated white cardboard and color packages printing products.
3. Approval of financial statements
The financial statements have been approved by the Board of Directors on 27 Mar. 2017.
7 subsidiaries were included in the consolidated financial statements of the current period, which are as follows:
|||||
|-|-|-|-|
|Subsidiary|Type|Tier|TheCompany’sshareholdingpercentage (%)|
|Zhuhai Hongta Renheng Packaging Co., Ltd.*1(―Hongta Renheng‖)|Controlledsubsidiary|Tier 1|41.9653%|
|Zhuhai Huafeng Paper Co., Ltd. (―Zhuhai Huafeng‖)|Controlledsubsidiary|Tier 2|100%|
|Zhuhai Golden Pheasant Chemical Co., Ltd. (―GoldenPheasant Chemical‖)|Controlledsubsidiary|Tier 2|51%|
|Huaxin (Foshan) Color Printing Co., Ltd. (―HuaxinColor Printing‖)|Wholly-ownedsubsidiary|Tier 1|100%|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||
|-|-|-|-|
|Kunshan Focai Packaging & Printing Co., Ltd.(―Kunshan Focai‖)|Wholly-ownedsubsidiary|Tier 1|100%|
|Foshan Hongta Liyan Material Technology Co.,Ltd.*2 (―Hongta Liyan‖)|Wholly-ownedsubsidiary|Tier 2|100%|
|Zhejiang Hongta Renheng Packaging TechnologyCo., Ltd.*3 (―Zhejiang Hongta Renheng‖)|Wholly-ownedsubsidiary|Tier 1|100%|

*1: Zhuhai Hongta Renheng Packaging Co., Ltd. was formerly known as―Zhuhai S.E.Z. Hongta Renheng Paper Co.,Ltd.‖ until 1 Mar. 2016.
*2: Foshan Hongta Liyan Material Technology Co., Ltd. was formerly known as―Foshan Chancheng Pearl River Color Printing Co.,Ltd.‖ until 17 Oct. 2016.
*3: Zhejiang Hongta Renheng Packaging Technology Co., Ltd. was formerly known as―Pinghu Huaxin Packing Material Co.,Ltd‖ until 31 Mar. 2016.
TheCompany’s control over Hongta Renheng:
On 30 June 2009, the Company acquired40.176% equities of Hongta Renheng through capital increase and share expansion method. There were 5 members of the Board of Directors of Hongta Renheng, of which 3 of them were sent by the Company, 1 from Yunnan Hongta Group Co., Ltd. and 1 from Renheng Industrial Co., Ltd.. The Chairman (legal representative) was appointed from the Company with the GM and the CFO were both the expatriate personnel from the Company. The Company could control the routine production and operating activities of Hongta Renheng and thus from July of 2009, Hongta Renheng began to be included in the consolidated financial statement scope of the Company. On 1 February 20110, Hongta Renheng completed the industrial and commercial alternation procedures of the capital increase with the equities of Hongta Renheng that held by the Company increased to41.9653%, and at the same time according to the resolution of the Board of Directors held on 25 February 2010 by Hongta Renheng, the contracts, articles of Hongta Renheng had altered with the Board members changed from 5 to 7 Directors, of which 4 of them (originally were 3) sent by the Company. 2 of them by Yunnan Hongta Group (originally was 1), 1 of them by Renheng Industrial Co., Ltd. and none of them by Dragon State International Limited. The Company still could decide the financial and operating policies of Hongta Renheng as well as could execute the control, thus would continue to include Hongta Renheng into the consolidated scope of the Company.
For reasons why theCompany’s shareholding percentage in a subsidiary is different from the voting stock percentage, as well as why the Company holds only50% or below of the voting stock in an investee but still controls it, see―(I) Equity interests insubsidiaries‖ under―Note IX Equity interests in otherentities‖.
The entities included in the consolidated financial statements of the current period are the same with the last period.
IV. Basis for the preparation of financial statements
1. Preparation basis
With the going-concern assumption as the basis and based on transactions and other events that actually occurred,
the Group prepared financial statements in accordance with<The Accounting Standards for Business
Enterprises—BasicStandard> issued by the Ministry of Finance and with each specific accounting standard, the
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Application Guidance of Accounting Standards for Business Enterprises, the Interpretation of Accounting Standards for Business Enterprises and other regulations (hereinafter jointly referred to as―the Accounting Standards for BusinessEnterprises‖,―China AccountingStandards‖ or―CAS‖), as well as the Rules for Preparation Convention of Disclosure of Public Offering Companies No.15– General Regulations for Financial Reporting by China Securities Regulatory Commission (revised in 2014).
2. Continuation
The Company evaluated the processes constantly operation ability with 12 months since the Reporting Period. There was no significant suspect event to the continuation. Thus, the financial statement was prepared on the base of the assumption of continuation
V. Important accounting policies and estimations
Is the Company subject to any disclosure requirements for special industries?
No.
Indication of specific accounting policies and estimations:
Naught
1. Statement for complying with the accounting standard for business enterprise
The financial statements for the Reporting Period prepared by the Company are in compliance with the requirements of the accounting standard for business enterprise, and have reflected theCompany’s financial status, operating results and cash flows in an accurate and complete way.
2. Fiscal period
The fiscal year of the Company is a solar calendar year, which is from January 1 to December 31.
3. Operating cycle
The operating cycle of the Company is 12 months.
4. Standard currency of accounts
The Company adopts Renminbi as a standard currency of accounts.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 5. Accounting process of business combinations under the same control and not under the same control (1) Each transaction items, conditions and economy influence in confirm with the following one or several conditions, when realizing enterprise combination by steps. Several transaction events were considered as a package deal and conducted accounting method
1) The transaction was set up in the same time or had considered the influence to each others:
2) The transaction only stand as a whole, a perfect commercial result can be arrived.
3) A transaction incurred depends on at least one transaction occurred;
4) A transaction is not economical, however, together with other transaction are economical.
(2) Business combination under the same control
The assets and liabilities that the combining party obtains in a business combination shall be measured on the basis of their carrying amount in the combined party (including goodwill formed from the final control party purchase combined party) combing party on the combining date. As for the balance between the carrying amount of the net assets obtained by the combining party and the carrying amount of the consideration paid by it (or the total par value of the shares issued), the additional paid-in capital shall be adjusted. If the additional paid-in capital is not sufficient to be offset, the retained earnings shall be adjusted.
In the event that the contingent consideration exists and the accrued liabilities or assets need to be recognized, the difference between the accrued liabilities or assets and the settlement amount of subsequent contingent consideration shall adjust the capital surplus (capital premium or stock premium), and if the capital surplus is not sufficient, adjust the retained earnings.
Where the corporate merger and acquisition is realized through multiple transactions, if these transactions belong to a package transaction, each transaction shall be accounted as a transaction to obtain the right to control; if these transactions do not belong to a package transaction, on the date the right to control is obtained, the difference between the initial investment costs of the long-term equity investment and the carrying value of long-term equity investment before theM&A plus the carrying value of the new consideration paid to further get the shares on the date ofM&A shall be charged against the capital surplus, and if the capital surplus is insufficient, the difference shall be charged against the remaining earnings. For the equity investment held before the date ofM&A, the other comprehensive earnings accounted for using the equity method or recognized with the financial tool and accounted for and recognized using the measurement criteria shall not be accounted, until the investment is disposed, at which time, the investment shall be accounted on the same basis as the investee directly disposes related assets or liabilities; the changes to theowner’s equity in theinvestee’s net assets accounted and recognized using the equity method other than the net profit or losses, other comprehensive earnings and profit distribution, shall not be accounted, until the investment is disposed, at which time, it shall be carried over to the current profits or losses.
(3) Business combination not under the same control
The Company shall, on the acquisition date, measure the assets given and liabilities incurred or assumed by an enterprise for a business combination in light of their fair values, and shall record the balances between them and their carrying amounts into the profits and losses at the current period.
The Company shall recognize the positive balance between the combination costs and the fair value of the identifiable net assets it obtains from the acquiree as business reputation. The Company shall record, upon recheck, the negative balance between the combination costs and the fair value of the identifiable net assets it obtains from the acquiree into the profit and loss of the current period.
Where a merger of enterprises not under the same control is realized through multiple transactions step by step, if these transactions belong to a package transaction, each transaction shall be accounted as a transaction to obtain
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 the right to control; if these transactions do not belong to a package transaction, and the equity investment held before the date ofM&A is accounted using the equity method, the sum of the carrying value of the equity investment in the acquiree held before the date of the acquisition, plus the new investment costs on the date of the acquisition shall be the initial investment costs of the investment; other comprehensive earnings of the equity investment held before the date of acquisition accounted and recognized using the equity method shall be accounted on the same basis as the investee directly disposes relevant assets or liabilities when the investment is disposed. If the equity investment held before the date ofM&A is recognized using the financial tool and accounted using the measurement criterion, the sum of the fair value of the equity investment on the date ofM&A plus the new investment costs shall be the initial investment costs at the date ofM&A. The difference between the fair value and carrying value of the held equity and changes to the accumulated fair value charged against other comprehensive earnings shall be fully converted the current investment earnings at the date ofM&A.
(4) Relevant costs incurred from the business combination
The intermediary fees (fees for audit, legal and evaluation& consulting services, etc.) and other relevant management expenses incurred on the acquirer for the business combination shall be recorded into current gains and losses when incurred. The trading expenses arising from the acquirer's issuing equity securities or debt securities as the combination consideration shall be included in the initially recognized amount of the equity securities or debt securities.
6. Methods for preparing consolidated financial statements
(1) Consolidation scope
The scope of consolidated financial statements shall be confirmed based on the control. All subsidiaries (including individual entities controlled by the Company) of the Company shall be included into the consolidated financial statement.
(2) Consolidation process
The Company based on the financial statements of itself and its subsidiaries, in line with other relevant information, prepare the consolidated financial statements. The consolidated financial statements the Company prepare was considered the whole enterprise group as a accountant entity, in line with the requirement of presentation, recognition and calculation in ASBE and a uniform accountant policies, reflect the financial situation, operation results and cash flows of the whole enterprise group.
The accounting policies and accounting period adopted by the subsidiaries that are included into the scope of consolidated financial statement consistent with those the Company adopts. If the accounting policies and accounting period adopted by a subsidiary are different from those adopted by the Company, necessary adjustments shall be made to the financial statements under the accounting policies and accounting period adopted by the Company.
Consolidated financial statement shall be prepared by the parent company after the effects of the internal transactions between the Company and its subsidiaries and between its subsidiaries themselves on the consolidated balance sheets, consolidated income statement, consolidated cash flow and consolidated statement of change inowners’ equity are offset. If standing at the point of view of enterprise group consolidated financial statement, and its recognition of common trade differ from the accounting entity of Company or subsidiary, adjust it from the point of view of the enterprise group.
Minorityshareholders’ portions of equities and income in subsidiaries shall be separately stated respectively underowners’ equity in the consolidated balance sheet and net profit in the consolidated income statement. For the
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 deficit of current period exceeding the share in the beginning ofowner’s equity, the balance shall offset against the minorityshareholder’s equity.
For subsidiary obtained by business combination under same control, adjust the financial statement on the base of book value of assets, liabilities (including goodwill formed by the financial control party purchasing the subsidiary) in financial statement of final control party.
For subsidiary obtained by business combination not under same control, adjust the financial statement on the base of identifiable net assets on purchase date
1) Increasing the subsidiaries or business
During the Reporting Period, for the added subsidiary companies for business combination under the same control, shall adjust the beginning balance of the consolidated balance sheet, and shall involve the incomes, expenses and profits of the subsidiary companies incurred from the beginning of the current period to the end of reporting year into consolidated income statement; and shall include the cash flow of the subsidiary companies from the beginning of the current period to the Reporting Period into the consolidated cash flow statement. Meanwhile, relevant items in the statements shall be compared and adjusted with the reporting subject after the consolidation being regarded to have always existed since the control party start to control.
Owning to the reasons such as the additional investment, for the subsidiaries could execute control on the investees under the same control, should be regard as the individuals participated in the combination that to execute adjustment by existing as the current state when the ultimate control party began to control. For the equity investment held before acquiring the control right of the combined parties, the confirmed relevant gains and losses, other comprehensive income and the changes of other net assets since the date of the earlier one between the date when acquiring the original equity right and the date when the combine parties and combined ones were under the same control to the combination date, should be respectively written down and compared with the beginning balance of retained earnings or the current gains and losses during the statement period. During the Reporting Period, for the added subsidiary companies for business combination note under the same control, shall adjust the beginning balance of the consolidated balance sheet, and shall involve the incomes, expenses and profits of the subsidiary companies incurred from purchase date to the end of reporting year into consolidated income statement; and shall include the cash flow of the subsidiary companies from purchase date to the Reporting Period into the consolidated cash flow statement.
Owning to the reasons such as the additional investment that the subsidiaries could execute the control of the investees under different control, the Company shall re-measure the equity interests in the acquiree held by it before the acquisition date according to the equityinterests’ fair value on the acquisition date. And the difference between the fair value and the book value is recorded into current investment gains. Where the equity interests in the acquiree held by the Company which involved with the other comprehensive profits and changes of the otherowners’ equities except for the net gains and losses, other comprehensive profits as well as the profits distribution under the measurement of equity method before the acquisition date involves other comprehensive incomes, the relevant other comprehensive incomes and the changes of the otherowners’ equities are restated as investment gains for the period which the acquisition date belongs to, with the exception of the other comprehensive incomes occurred because of the changes of net liabilities or net assets of the defined benefit pension plans be re-measured for setting by the investees.
2) Disposal of the subsidiaries or business
A. General disposing method
The consolidated cash flow statement shall include the cash flow from the beginning of the current period to the settlement date.
Where the Company loses the control over a former subsidiary due to disposal of some equity investments or
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 other reasons, the Company re-measures the remaining equity investments after the disposal according to the fair value on the date when the control ceases. The consideration obtained in the equity disposal, plus the fair value of the remaining equities, less theCompany’s share of net assets in the former subsidiary calculated from the acquisition date according to the former shareholding ratio, is recorded into the investment gains for the period when the control ceases. Other comprehensive incomes in relation to the equity investments in the former subsidiary are restated as investment gains for the period when the control ceases. Where the equity interests in the subsidiary held by the Company which involved with the other comprehensive profits and changes of the otherowners’ equities except for the net gains and losses, other comprehensive profits as well as the profits distribution when losing control, the relevant other comprehensive incomes and the changes of the otherowners’ equities are restated as investment gains for current period , with the exception of the other comprehensive incomes occurred because of the changes of net liabilities or net assets of the defined benefit pension plans be re-measured for setting by the investees.
B. Step by step disposing the subsidiaries
Where the Company losses control on its original subsidiaries due to step by step disposal of equity investments through multiple transactions, all the transaction terms, conditions and economic impact of the disposal ofsubsidiaries’ equity investment are in accordance with one or more of the following conditions, which usually indicate the multiple transactions should be considered as a package deal for accounting treatment:
a. The transaction was set up in the same time or had considered the influence to each others;
b. The transaction only stand as a whole, a perfect commercial result can be arrived.
c. A transaction incurred depends on at least one transaction occurred;
d. A transaction is not economical, however, together with other transaction are economical.
When disposing each transaction of the Company losses control on its subsidiaries due to disposal of equity investments belonging to a package deal, should be considered as a transaction and conduct accounting treatment. However, Before losing control, every disposal cost and corresponding net assets balance of subsidiary of disposal investment are confirmed as other comprehensive income in consolidated financial statements, which together transferred into the current profits and losses in the loss of control , when the Company losing control on its subsidiary.
When disposing each transaction of the Company losses control on its subsidiaries due to disposal of equity investments not belonging to a package deal, before which losing the control right, should execute the accounting disposal according to the partly dispose the equity investment of the subsidiaries under the situation not losing the control right; when losing the control right, should execute accounting disposal according to the general disposing method disposal of the subsidiaries.
3) Purchasing minority equities of the subsidiaries
If there is any difference between the newly obtained long-term equity investment due to theCompany’s acquisition of minority interests and theCompany’s share of identifiable net assets which began to be calculated from the purchase date (or the combination date) in the subsidiary calculated according to the newly increased shareholding ratio, the stock premium under capital reserve in the balance sheet shall be adjusted according to the said difference. If the stock premium under capital reserve is not sufficient to be offset, the retained profit is adjusted.
4) Disposing the equity investment of the subsidiaries under the situation not losing the control right
The differences between the disposal income due to theCompany’s disposal of some equity investments in a subsidiary without losing the control over the subsidiary and theCompany’s share of net assets in the subsidiary calculated according to the disposed long-term equity investments, the stock premium under capital reserve in the balance sheet shall be adjusted according to the said difference. If the stock premium under capital reserve is not
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 sufficient to be offset, the retained profit is adjusted.
7. Classification of joint arrangements and accounting treatment of joint operations
8. Recognition standard for cash and cash equivalents
When preparing the cash flow statement, the term―cash‖ refers to cash on hand and deposits that are available for payment at any time. The term―cashequivalents‖ refers to short-term ( within 3 months from the purchase date) and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.
9. Foreign currency businesses and translation of foreign currency financial statements
As for a foreign currency transaction, the amount in the foreign currency shall be translated into the amount in the Renminbi at the spot exchange rate of the transaction date.
On balance sheet date, the foreign currency monetary items shall be translated as the spot exchange rate on the balance sheet date, the balance occurred thereof shall be recorded into the profits and losses at the current period except that the balance of exchange arising from foreign currency borrowings for the purchase and construction or production of assets eligible for capitalization shall be measured in the light of capitalization principle. The foreign currency non-monetary items measured at the historical cost shall still be translated at the spot exchange rate on the transaction date, of which the amount of functional currency shall not be changed.
The foreign currency non-monetary items measured at the fair value shall be translated at the spot exchange rate on the confirming date of fair value, of which the balance of exchange shall be included into the profit and loss of the current period or capital reserve. If it belongs available for sale foreign currency non-monetary items, the difference form of exchange record into other comprehensive income.
10. Financial instruments
Financial instruments include financial assets and liabilities and equity instruments.
(1) Categorization of financial instruments
The Company divides the financial instruments pursuant to the purpose to acquire the said financial assets or undertake the financial liabilities: the financial assets and liabilities which are measured at their fair values and of which the variation is included in the current profits and losses, including transactional financial assets and liabilities and the designated financial assets and liabilities which are measured at their fair values and of which the variation is included in the current profits and losses; the investments which will be held to their maturity; accounts receivable; financial assets available for sale; and other financial liabilities.
(2) Recognition basis and calculation method of financial instrument
1) Financial assets (liabilities) measured by fair value and the changes included in the current gains and losses The financial assets (or financial liabilities) that are measured by fair value with its change s recognized in the current profits and losses, including the transactional financial assets or financial liability and the financial assets or financial liabilities that are directly designated to be measured by fair value with its change recognized in the
current losses and profits.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Transactional financial assets or financial liabilities mean the financial assets or financial liabilities that meet any one of the following conditions:
A. The purpose of obtaining the financial assets or financial liabilities is to sell, repurchase or redeem it in a short time;
B. It is a part of the identifiable combination of financial instrument that the company manages together and there is objective evidence of a recent pattern of short-term profit making;
C. It belongs to the derivative financial instrument, but is designated as the derivative instrument of valid arbitrage instrument or belongs to the derivation instrument of financial guarantee contract, or it is connected to the equity instrument investment for which there is no quotation in active market and its fair value cannot be reliably measured, the derivative tool that shall be settled through delivering the equity instrument excluded.
Only if one of the following conditions is met, could the financial assets or financial assets be designated as the financial assets or financial liability that shall be measured by fair value with changes recognized in profit or loss in the period:
A. The designation is able to eliminate or obviously reduce the discrepancies in the recognition or measurement of relevant gains or losses arising from the different basis of measurement of the financial assets or financial liability;
B. The official written document of risk management or investment strategies of the enterprise concerned have described that the said combination of financial assets, the combination of financial liabilities, or the combination of financial assets and financial liabilities will be managed and evaluated on the basis of their fair values and will be reported to the key management personnel.
C. The mixed instruments include one or more embedded derivative instrument, unless the embedded derivative instrument does not materially change the cash flow of the mixed instrument, or it is obvious that the embedded instrument shall not be split from the relevant mixed instrument;
D. The mixed instrument that include the embedded derivative instrument that shall be split but cannot be separately measured when it is obtained or on the subsequent date of balance sheet.
For the financial assets or financial liabilities that is measured by fair value with its change recognized in the current profits or losses, the company will use the fair value (deducting the cash dividend that is announced but not issued, or the bond interest that is due but has not be claimed) as the initially recognized amount, and the related transaction costs shall be recognized in the current profits and losses. The interest or cash dividend obtained during the holding period shall be recognized as the investment earning, and at the end of the period, the change in fair value shall be recognized in the current profits and losses. At the time of disposal, the difference between its fair value and the initially recognized amount shall be recognized as the investment earnings, and at the same time, the change in fair value shall be recognized as the profit or loss.
2) Accounts receivable
Accounts receivable refers to the non-derivative financial assets for which there is no quoted price in the active market and of which the repo amount is fixed or determinable.
Thecreditor’s rights arising from selling goods or providing service by the Company and othercreditor’s rights to other enterprises held by the company that are not quoted in an active market, including accounts receivable, notes receivable, other receivables, long-term receivables, etc., the contract or agreement price should be taken as the initial recognition amount. If it has the nature of financing, it shall be recognized by present value.
Difference between the amount received and book value of the receivables shall be included into the profit or loss of the current period upon collection or disposal.
3) Held-to-maturity investments
Held-to-maturity investment means those non-derivative financial assets with fixed maturity date and fixed or
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 determinable recoverable amount and that company has both the positive intention and the ability to hold to maturity.
When the Company obtains the held-to-maturity investment (less the unpaid interest on bonds which has been accrued), the sum of the fair value and related transaction costs will be treated as initial confirmation amount. During the holding period, interest income shall be calculated in accordance with the amortized cost and the actual interest rate and included in investment income. The actual interest rates are determined upon acquisition and remain unchanged during the expected holding period or a shorter period if applicable. Difference between the proceeds received and book value of the investment is charged to investment income.
If the amount of other type of financial assets that are acquired through the disposal or reclassification of held-to-maturity investments is greater than the total amount of all held-to-maturity investments held by the Company prior to sales or reclassification, after such disposal or reclassification, the remaining held-to-maturity investments shall be reclassified into available-for-sale financial assets; on the date of reclassification, the difference between book value of the investment and the fair value shall be charged to investment income except the following circumstances:
A. The sales date or reclassification date is close to the maturity date or redemption date (e.g., with three months prior to the maturity date) and the change of market interest rate didn't exert a great influence on the fair value of the investment.
B. The enterprise has got back almost all the initial principal in the mode of payment as specified in the contract. C. The sales or reclassification is resulted from an independent event which is out of the control of the enterprise, will not occur repeatedly based on the predication and is difficult to estimate reasonably.
4) Available-for-sale financial assets
Available-for-sale financial assets were referred to the non-derivative financial assets available for sale, as well as the financial assets other than the other financial asset classes in the initial recognition.
When available-for-sale financial assets are acquired, its initial amount shall be recognized at the fair value (excluding cash dividends that have been declared but not yet distributed or bond interests that have matured but not yet received) plus transaction expense thereof. Interest or cash dividend received in holding period were recognized as investment income. Profits or losses from the change in fair value of available-for-sale financial assets except impairment losses and translation balance form foreign monetary financial assets, directly record into other comprehensive income. When disposing available-for-sale financial assets recorded the difference between the price and the book value of the financial assets into investment profits or losses, meanwhile, roll out the disposal part of the accumulative amount of change in fair value originally and directly recorded into other comprehensive income and record into investment profits or losses.
The equity instrument investment without offer and its fair value without reliable calculation, and derivative financial assets linked to and settled by the equity instruments, measured at cost.
5) Other financial liabilities
Other financial liabilities shall be initially recognized at fair value plus transaction costs. The subsequent measurement shall be made by adopting amortized costs.
(3) Recognition and measurement of transfer of financial assets
Where an enterprise has transferred nearly all of the risks and rewards relating to the ownership of the financial asset to the transferee, it shall stop recognizing the financial asset. If it retains nearly all of the risks and rewards relating to the ownership of the financial asset, it shall not stop recognizing the financial asset.
Substance over form philosophy should be adopted to determine whether the transfer of a financial asset can satisfy the conditions as described in these Standards for de-recognition of a financial asset. An enterprise shall differentiate the transfer of a financial asset into the entire transfer and the partial transfer of financial assets. If the
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 transfer of an entire financial asset satisfies the conditions for stop recognition, the difference between the amounts of the following 2 items shall recorded in the profits and losses of the current period:
1) The carrying amount of the transferred financial asset;
2) The aggregate consideration received from the transfer, and the accumulative amount of the changes of the fair value originally recorded in theowner’s equities (in the event that the financial asset involved in the transfer is a financial asset available for sale).
If the transfer of partial financial asset satisfies the conditions for stopping recognition, the carrying amount of the entire financial asset transferred shall be allocated at their respective relevant fair value, between the portion whose recognition has stopped and the portion whose recognition has not stopped, and the difference between the amounts of the following 2 items:
1) The carrying amount of the portion whose recognition has stopped;
2) The aggregate consideration of the portion whose recognition has stopped, and the portion of the accumulative amount of the changes in the fair value originally recorded in theowner’s equities which is corresponding to the portion whose recognition has stopped (in the event that the financial asset involved in the transfer is a financial asset available for sale).
The transfer of financial assets does not meet the de-recognition condition, the financial assets shall continue to be recognized, and the consideration received will be recognized as financial liabilities.
(4) Termination of recognition of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may the recognition of the financial liability be terminated in all or partly. Where the Company (debtor) enters into an agreement with a creditor so as to substitute the existing financial liabilities by way of any new financial liability, and if the contractual stipulations regarding the new financial liability is substantially different from that regarding the existing financial liability, it shall terminate the recognition of the existing financial liability, and shall at the same time recognize the new financial liability.
Where the Company makes substantial revisions to some or all of the contractual stipulations of the existing financial liability, it shall terminated the recognition of the existing financial liability or part of it, and at the same time recognize the financial liability after revising the contractual stipulations as a new financial liability.
Where the recognition of a financial liability is totally or partially terminated, the Company concerned shall include into the profits and losses of the current period the gap between the carrying amount which has been terminated from recognition and the considerations it has paid (including the non-cash assets it has transferred out and the new financial liabilities it has assumed).
Where the Company buys back part of its financial liabilities, it shall distribute, on the report day, the carrying amount of the whole financial liabilities in light of the comparatively fair value of the part that continues to be recognized and the part whose recognition has already been terminated. The gap between the carrying amount which is distributed to the part whose recognition has terminated and the considerations it has paid (including the non-cash assets it has transferred out and the new financial liabilities it has assumed) shall be recorded into the profits and losses of the current period.
(5) Determination of the fair value of financial assets and financial liabilities
As for the financial assets and liabilities in an active market, the closing quoted prices in the active market shall be used to determine the fair values thereof. The closing quoted prices in the active market includes the quoted prices of relevant assets and liabilities which are easy to be acquired from exchange, dealer, broker, industrial group, pricing institution or regulatory institution regularly and which can represent the market trading that occur actually and frequently on the basis of fair trade.
The fair value of initially obtained or derivative financial assets or borne financial liabilities shall be determined
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 according to the market transaction price thereof;
Where there is no active market for a financial assets and financial liabilities, the Company concerned shall adopt value appraisal techniques to determine its fair value. When evaluating, the Company adopt the valuation technique with sufficient useful data and supported by other information which suitable for the current situation, choose a input in concern with the characteristics of assets or liabilities considered in relevant assets or liabilities transaction with the market players, and as much as possible, give prior to using the relevant observable input under the situation that, the observable input value or it is not feasible to obtain, use unobservable input value. (6) Withdrawal method of provision for impairment on financial assets (excluding accounts receivable) Except for financial assets which are measured at their fair values and of which the variation is included in the current profits and losses, the Company checks the book values of all other financial assets on the balance sheet date. If there is objective evidence proving that a financial asset is impaired, an impairment provision is made. The objective evidences of impairment provision of financial assets include but not limited to:
1) Issuer or debtor had serious financial difficulties:
2) The debtor violates the items of the contact, such as violate a treaty or overdue to repay the interest or principal, etc;
3) The creditor considering the factors of economy or law makes concession to the debtor who had serious financial difficulty;
4) The debtor probably may go out of business or had other financial recombination;
5) Due to the issuer had serious financial difficulty; the financial assets cannot continue to trade in the active market;
6) The cash flow of a kind of asset in a group of financial assets decrease or not was beyond recognition, however, after conducting the overall evaluation in line with the public data, the estimate cash flow of the group of financial assets actually decrease and gaugeable since initial recognition, if the repay ability of the debtor steadily worsened, or the increase of unemployment rate, the decrease in the price of guaranty or the industry downturn that the district or country the debtor in, etc;
7) The great disadvantage change in technology, market, economy or legal environment that operation place that issuer of equity instrument locate at, which lead to the irrecoverable of investment cost of the equity instrument investors;
8) The fair value occurred seriously or non-transient decrease;
The specific impairment provision methods of financial assets were as follows:
1) Provision for impairment of available-for-sale financial assets:
On balance sheet date, the Company separately examines each available-for-sale equity instrument investment. If the fair value of the equity instruments which invests on the balance sheet date is lower than its initial investment cost for more than50% (including50%) or lower than its initial investment cost for the duration time for more than 1 year (including 1 year), which indicates that it had occurred impairment; if the fair value of the equity instruments which invests on the balance sheet date is lower than its initial investment cost for more than20% (including20%) but not reaches at50%, the Company will comprehensively considerate the other relevant factors such as the price volatility etc. and will judge the equity investment whether had occurred impairment.
The aforesaid "cost" recognized in line with the initial investment cost of available for sale financial instrument deducting principal recovered, amount amortized and the impairment losses recorded into profits or losses. The fair value of available-for-sale equity instrument investments that do not exist in active market shall be determined in accordance with the present value obtained from the discount of future cash flow with the present market return of similar financial assets; the fair value of available-for-sale equity instrument investment that has provided a quoted price in active market shall be determined in accordance with the final closing price of stock exchange,
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 unless the available-for-sale equity instrument investment has a restricted stock trade period. The fair value of available-for-sale equity instrument investment with a restricted stock trade period shall be determined in accordance with the final closing price of stock exchange less the compensation claimed by market participants who have to bear the risk that they can't sale the equity instrument at a public market in the specified period. Where a sellable financial asset is impaired, even if the recognition of the financial asset has not been terminated, the accumulative losses arising from the decrease of the fair value of theowner’s equity which was directly included shall be transferred out of theowners’ equities and recorded into the profits and losses of the current period. The accumulative losses that are transferred out shall be the balance obtained from the initially obtained costs of the sold financial asset after deducting the principals as taken back, the current fair value and the impairment-related losses as was recorded into the profits and losses of the current period.
As for the sellable debt instruments whose impairment-related losses have been recognized, if, within the accounting period thereafter, the fair value has risen and are objectively related to the subsequent events that occur after the originally impairment-related losses were recognized, the originally recognized impairment-related losses shall be reversed and be recorded into the profits and losses of the current period as for the impairment-related losses incurred to a sellable equity instrument investment, should be reversed by equity when the value raised of the equity instruments; however, the impairment-related losses incurred to an equity instrument investment for which there is no quoted price in the active market and whose fair value cannot be reliably measured, or incurred to a derivative financial asset which is connected with the said equity instrument and which shall be settled by delivering the said equity instrument, may not be reversed.
2) Impairment provision for held-to-maturity investments
If any objective evidence shows that a held-to-maturity investment has been impaired, the impairment loss shall be recognized at the gap between its book value and the present value of its estimated future cash flow; after the impairment provision is made, if there is any evidence proving that the value of the said held-to-maturity investment has been restored, the impairment loss as originally recognized may be reversed and be recorded into the profits and losses of the current period, but the reversed book value shall not be any more than the post-amortization costs of the said held-to-maturity investment on the day of reverse under the assumption that no provision is made for the impairment.
(7) The offset of financial assets and financial liabilities
Financial assets and financial liabilities are shown separately in balance sheet However, if they satisfy the following conditions, shown the net amount in the balance sheet after the offset;
1) The Company had legal rights of offsetting the recognition amount, and the legal right is executable in recently; 2) The Company plans to settle at net amount, or meanwhile realize the financial assets and pay off the financial liabilities.
11. Accounts receivable
(1) Bad debt provision for individually significant accounts receivable
|||
|-|-|
|Judgment basis or monetary standards of provision for bad debts|An account receivable exceeds 10 million, or another account|
|of the individually significant accounts receivable|receivable exceeds five million|
||An impairment test shall be conducted on the account receivable|
|Accounts receivable with significant single amount for which||
||and the difference of the present value of expected future cash|
|bad debt provision separately accrued at the period-end||
||flow less than its book value shall be withdrawn as the bad debt|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||
|-|
|provision and recorded into current gains/losses. Where an|
|impairment test is conducted on an account receivable and no|
|impairment occurs, classify into relevant group and withdraw|
|bad debt provision.|

(2) Accounts receivable which the bad debt provision is withdrawn by credit risk characteristics
|||
|-|-|
|Name of the group|Bad debt provision method|
|Certain accounts receivable groups divided by aging||
|characteristics||
|Aging analysis method group|Aging analysis method|

In the groups, adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Not applicable
||||
|-|-|-|
||Withdrawal proportion for accounts|Withdrawal proportion for other accounts|
|Aging|||
||receivable|receivable|
|1-3 months|0.00%|0.00%|
|4-12 months|5.00%|5.00%|
|1-2 years|10.00%|10.00%|
|2-3 years|20.00%|20.00%|
|Over 3 years|50.00%|50.00%|

 In the groups, adopting balance percentage method to withdraw bad debt provision:
□ Applicable√ Not applicable
In the groups, adopting other methods to withdraw bad debt provision:
□ Applicable√ Not applicable
(3) Accounts receivable with an insignificant single amount but for which the bad debt provision is made individually
|||
|-|-|
||There existing evidence that the Company unable to recover the|
|Reason of individually withdrawing bad debt provision:||
||account receivable in line with the original items.|
||At the gap between the carrying amount and the present value of|
|Withdrawing bad debt provision method||
||the estimated future cash flow (lower) of the account receivable|

 12. Inventory
Is the Company subject to any disclosure requirements for special industries?
No.
(1) Category
Inventory was referred to the finished goods or commodities for sale, products in the process, materials in
production or providing services, etc. Mainly include: raw materials, revolving materials, merchandise inventory,
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 goods in process, goods sent out, goods in outside processing and etc.
(2) Pricing method for outgoing inventories
When obtaining, the cost was considered as the initial calculation, including purchase cost, conversion cost and other cost. Adopting the weighted average method for pricing when outgoing inventories according to the end of the month at a time
(3) Recognition of net realizable value and withdrawal of provision for falling price of inventory
At the end of every year, the Company shall make an overall checking to inventory, thereafter, the provision for falling price of inventory shall be measured according to its cost or its net realizable value, whichever is lower. Finished goods, merchandise inventories, and available for sale materials which are applied directly for sales of stock inventory, under normal producing process, to the amount after deducting the estimated sale expense and relevant taxes from the estimated sell price of the inventory, the net realizable value has been recognized. Material inventories which need to be processed, under normal producing process, to the amount after deducting the estimated cost of completion, estimated sale expense and relevant taxes from the estimated sale price of produced finished goods, the net realizable value has been recognized. The net realizable value of inventories held for the execution of a sales contract or labor contract shall be calculated on the basis of the contract price. If an enterprise holds more inventories than the quantities subscribed in the sales contract, the net realizable value of the excessive inventories shall be calculated on the basis of the general sales price.
Ordinarily the Company shall make provision for falling price of inventories on the ground of each item of inventories. For inventories with large quantity and relatively low unit prices, the provision for falling price of inventories shall be made on the ground of the categories of inventories. For the inventories related to the series of products manufactured and sold in the same area, and of which the final use or purpose is identical or similar thereto, and if it is difficult to measure them by separating them from other items, the provision for falling price of inventories shall be made on a combination basis.
If the factors causing any write-down of the inventories have disappeared, the amount of write-down shall be resumed and be reversed from the provision for the loss on decline in value of inventories that has been made. The reversed amount shall be included in the current profits and losses.
(4) Inventory system for inventories:
Inventory system: Perpetual inventory system
(5) Amortization method of the low-value consumption goods and packing articles
1) One-off amortization method for the low-value consumption goods;
2) One-off amortization method for the packaging articles; and
3) One-off amortization method for other revolving materials.
13. Divided as assets held for sale
14. Long-term equity investment
(1) The recognition of investment cost
1) The relevant accounting policy of long term equity investment formed by enterprise combination, please refer to―(5) Accounting disposal method of the enterprise merger under or not under the samecontrol‖ under Note 4. 2) Long-term equity investment gained by other methods
The initial cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost which is actually paid. The initial cost of a long-term equity investment includes the cost, tax and other necessary
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 expense directly relevant to gaining long-term equity investment
The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair value of the equity securities issued.
As for a non-monetary assets transaction, under the premise that the transaction is commercial in nature and the fair value of the assets received or surrendered can be measured reliably, the initial cost of the fair value of the long-term equity investment received shall be recognized based on the fair value of the assets surrendered, unless there is any exact evidence showing that the fair value of the assets received is more reliable. Where any non-monetary assets transaction does not meet the conditions as prescribed in the above premises at the same time, the book value and relevant payable taxes of the assets surrendered shall be the initial cost of the long-term equity investment received.
The initial cost of a long-term equity investment obtained by debts restructuring shall be recognized based on the fair value.
(2) Subsequent measurement and gain/loss recognition method
1) Long-term equity investment measured by adopting cost method
The Company adopts cost method for measurement of the long-term equity investment controlled by invested entities, and shall be calculated at its initial investment cost, add or withdraw investment and adjust the cost of the long-term equity investment.
The return on investment at current period shall be recognized in accordance with the cash dividend or profit announced to distribute by the invested entity, except the announced but not distributed cash dividend or profit included in the actual payment or consideration upon gaining the investment.
2) Long-term equity investment measured by adopting equity method
The Company adopts the equity method to measure the long-term equity investment of the associated enterprises and joint ventures. for part of equity investment of associated enterprise through risk investment institutions, mutual funds, trust companies or directly held by including within unit-linked insurance fund similar entities, adopts fair value method, and its change records into profits or losses.
The long-term equity investment that does joint control or significant influences over the Company shall be measured by employing the equity method. If the initial cost of a long-term equity investment is more than the investingenterprise’ attributable share of the fair value of the investedentity’s identifiable net assets for the investment, the initial cost of the long-term equity investment may not be adjusted. If the initial cost of a long-term equity investment is less than the investing enterprise' attributable share of the fair value of the investedentity’s identifiable net assets for the investment, the difference shall be included in the current profits and losses. The Company should respectively recognize investment income and other comprehensive income according to the net gains and losses as well as the portion of other comprehensive income which should be enjoyed or be shared, and at the same time adjust the book value of the long-term equity investment; corresponding reduce the book value of the long-term equity investment according to profits which be declared to distribute by the investees or the portion of the calculation of cash dividends which should be enjoyed; for the other changes except for the net gains and losses, other comprehensive income and theowners’ equity except for the profits distribution of the investees, should adjust the book value of the long-term equity investment as well as include in the capital reserve. The investing enterprise shall, on the ground of the fair value of all identifiable assets of the invested entity when it obtains the investment and according to the accounting policies as well as the accounting period of the Company, recognize the attributable share of the net profits and losses of the invested entity after it adjusts the net profits of the invested entity. For the transaction happened between the Company and associated enterprises as well as joint ventures, the portion of the unrealized gains and losses of the internal transaction, which belongs to the Company according to the calculation of the enjoyed proportion, should offset and recognized the investment
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 gains and losses on the basis.
The Company shall handle to the net losses of the invested enterprise recognized by it: A. offset book value of long-term equity investment; B. if the book value of long-term equity investment is insufficient to dilute, investment loss shall be recognized based on the book value of other long-term rights and interests (reminder: should clearly confirm the specific content and the recognition standard of the sort of long-term rights and interest) which substantially form the net investment made to the invested entity, to offset book value of long-term receivables items; and C. through the above treatment, where the Company still has the obligation to undertake extra losses as per investment contracts or agreements, the obligation that is expected to undertake shall be recognized the project liabilities, and recorded into losses on investment of the current period.
The investee profit in the subsequent periods, the Company after deducting unrecognized share loss amount, adopts the aforesaid progress. Writes off the book value of estimated liabilities recognized, recovers others actual form the book value of long term equity and long term equity investment of the net investment of investee, and recovers the recognition of investment income.
(3) The accounting method transfer of long-term equity investment
1) Fair value calculation transfer to equity method
TheCompany’s original holding of investee's equity investment that without control, common control or significant influence recognized at financial tools and accounted at standards of measurement, due to the additional investment and other reason s that had significant influence to the investee or implement of common control but not form control of the investee, in line with the Accounting Standards for Business Enterprises No. 22--Recognition and Measurement of Financial Instruments, recognized the total of original holding of fair value of equity investment plus the newly increase investment cost, which considered as the initial investment cost changing measurement at equity method.
The difference between the fair value and carrying value of the original held equity investment classify as available for sale financial assets, and changes to the accumulated fair value charged against other comprehensive earnings shall be fully converted the current profits or losses change measurement at equity method.
The initial investment cost measured at equity method which smaller than the difference between the fair value of net identifiable assets on additional date the investee enjoyed recognized in line with the new shareholding proportion measurement after additional investment, adjust the book value of long term equity investment, and record into current non-operation income.
2) Fair value calculation or equity method accounting transfer to cost method
The Company's original holding of investee's equity investment that without control, common control or significant influence recognized at financial tools and accounted at standards of measurement, or original holding of long term equity investment to joint venture or associated enterprise, due to the additional investment and other reasons that control the investee not under same control, When preparing individual financial statement, in line with the total of the book value of equity investment original held plus the newly increase investment cost, which considered as the initial investment cost changing measurement at cost method.
The original held of equity investment was recognized as other comprehensive income due to adopting equity accounting, when disposing the investment adopt accounting treatment on the same basis with that the investee directly disposing the relevant assets or liabilities.
The equity investment before purchase date, adopt accounting treatment in line with the stipulations of Accounting Standards for Business Enterprises No. 22--Recognition and Measurement of Financial Instruments, and the change in fair value originally recorded into other comprehensive income record into current profits or losses when changing accounting method as cost method .
3) Equity method transfer into fair value calculation
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 The remained equity due to the disposal of part of equity and other reason losing common control or significant influence to the investee, calculated in line with the Accounting Standards for Business Enterprises No. 22--Recognition and Measurement of Financial Instruments after disposal. The difference between the fair value and book value on the date of losing common control or significant influence was record into current profit or losses.
The original held of equity investment was recognized as other comprehensive income due to adopting equity accounting, when terminating adopt equity method, adopt accounting treatment on the same basis with that the investee directly disposing the relevant assets or liabilities.
4) Cost method transfer into equity method
The remained equity implementing common control or had significant influence to the investee, due to the Company's disposal of part of equity investment losing the control to the investee, changes accounting treatment as equity method, When preparing individual financial statement, adjusts the remained equity adopt equity method since gained.
5) Cost method to fair value measurement
The remained equity cannot implementing common control or had significant influence to the investee, due to the Company's disposal of part of equity investment losing the control to the investee, calculated in line with stipulation of the Accounting Standards for Business Enterprises No. 22--Recognition and Measurement of Financial Instruments, when preparing individual financial statement, The difference between the fair value and book value on the date of losing control was record into current profit or losses.
(4) Disposal of long-term equity investment
When disposing long term equity investment, the difference between the book value and actual purchase price shall be record into current profits or losses. The equity investment adopting equity accounting, when disposing the investment, adopt accounting treatment on the same basis with that the investee directly disposing the relevant assets or liabilities and conducts accounting treatment to part of them originally recorded into other comprehensive income in line with relevant proportion.
Each transaction items, conditions and economy influence in confirm with the following one or several conditions, several transaction events were considered as a package deal and conducted accounting method;
A. The transaction was set up in the same time or had considered the influence to each others;
B. The transaction only stand as a whole, a perfect commercial result can be arrived;
C. A transaction incurred depends on at least one transaction occurred;
D. A transaction is not economical, however, together with other transaction are economical.
For that the Company's disposal of part of equity investment losing the control to the investee and not belonging to a package deal, conducts accounting treatment to the individual financial statement and consolidated financial statement respectively:
A. In the individual financial statement, for the disposal equity, the difference between the book value and actual purchase price was recorded into current profits or losses. The remained equity cannot implementing common control or had significant influence to the investee, changes accounting treatment as equity method, when preparing individual financial statement, adjusts the remained equity adopt equity method since gained, the remained equity cannot implementing common control or had significant influence to the investee, after disposal, calculated in line with stipulation of the Accounting Standards for Business Enterprises No. 22--Recognition and Measurement of Financial Instruments, the difference between the fair value and book value on the date of losing control was record into current profit or losses.
B. In consolidated financial statement, for each transaction before losing the control to the subsidiary, the difference between the disposal price and the corresponding net assets share enjoyed of subsidiary when disposing
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 long term equity investment since purchase date or start calculation, adjusts capital reserve (stock premium), capital reserve is insufficient for write-downs, adjusts the retained earnings. The difference between the consideration obtained in the equity disposal, plus the fair value of the remaining equities, less theCompany’s share of net assets net assets share enjoyed of subsidiary when disposing long term equity investment since purchase date or start calculation according to the former shareholding ratio, is recorded into the investment gains for the period when the control ceases, meanwhile, writes down goodwill. Other comprehensive income related to former subsidiary's equity investment, transfer into current investment income when the control ceases.
When disposing each transaction of the Company losses control on its subsidiaries due to disposal of equity investments belonging to a package deal, should be considered as a transaction of disposing equity investment of subsidiary and losing control, conduct accounting treatment, conducts accounting treatment to the individual financial statement and consolidated financial statement respectively:
A. In individual financial statement, the difference between each disposal price before losing control and the book value of corresponding long term equity investment in the disposal of equity, recognized as other comprehensive income, when the control ceases, transfers into current profits or losses of the period of losing control.
B. In consolidated financial statement, the difference between each disposal price before losing the control, and the corresponding net assets share enjoyed of subsidiary when disposing long term equity investment, recognized as other comprehensive income, when the control ceases, transfers into current profits or losses of the period of losing control.
(5) Judgment standard of joint control and significant influences
If the Company implements a collective control arrangement together with other participants in line with relevant agreement, and the activity decision with significant influence to the reward of the arrangement only exist when the participants who sharing the control power have a common agreement, which was considered as the Company and the participants are in control of a arrangement, and the arrangement was belong to the joint venture arrangement.
The joint venture arrangement arrived at individual entity, in line with the relevant agreements, when judging the power the Company enjoy the net assets in the individual entity, considers the individual entity as joint venture, and adopts equity method. If, in line with the relevant agreements, when judging the power the Company does not enjoy the net assets in the individual entity, considers the individual entity as joint operation, the Company recognized the relevant items of the profits of joint operation, and conducts accounting treatment in line with the stipulations of relevant Accounting Standards for Business Enterprises.
The term―significantinfluence‖ means having the power to participate in the formulation of financial and operating policies of an enterprise, but not the power to control or jointly control the formulation of these policies together with other parties. The Company through the follow one or several situations and comprehensively consider all the facts and conditions to judge the significant influence to the investee. A. Have representatives in the Board of Directors of investee or similar organ of authority; B. Take part in the establish progress of finance and operation policies of investee; C. Have significant transaction with the investee; D. Send administrators to the investee; E. Provide key technology information to investee.
15. Investment property
Measurement mode of investment real estates
Measurement of cost method
Depreciation or amortization method
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 The Company adopts the cost method in the subsequent measurement of investment property. In line with the estimate useful life and net ratio of remaining value withdrawing depreciation or amortization. The lists of investment property in line with the estimate useful life and net ratio of remaining value withdrawing depreciation or amortization are as follows:
||||
|-|-|-|
|Category|Estimate useful life (year)|Estimate net ratio ofremaining value|
|Houses and buildings|30|5%|

16. Fixed assets
(1) Recognized standard of fixed assets
The term "fixed assets" refers to the tangible assets that simultaneously possess the features as follows: they are held for the sake of producing commodities, rendering labor service, renting or business management; and their useful life is in excess of one fiscal year. No fixed asset may be recognized unless it simultaneously meets the conditions as follows: (1) The economic benefits pertinent to the fixed asset are likely to flow into the enterprise; (2) The cost of the fixed asset can be measured reliably
(2) Depreciation method
||||||
|-|-|-|-|-|
||||Expected net salvage||
|Category|Depreciation method|Useful life||Annual deprecation|
||||value||
|Houses and buildings|Straight-line depreciation|30-40|5|2.375-3.17|
|Machinery equipment|Straight-line depreciation|10-25|5|3.80-9.50|
|Transportation|Straight-line depreciation|5|5|19.00|
|Electronic equipment and|||||
||Straight-line depreciation|5-10|5|9.50-19.00|
|other|||||

(3) Recognition basis and pricing method of fixed assets by finance lease
Where one of the following provisions is regulated in the rental agreement signed between the Company and the leaser, is shall be recognized as an asset acquired under finance leases: (1) the ownership of the leased asset is transferred to the Company after the term of lease expires; (2) the Company has the option to buy the asset at a price which is far lower than the fair value of the asset at the date when the option becomes exercisable; (3) the lease term covers the major part of the use life of the leased asset; (4) in the case of the lessee, the present value of the minimum lease payments on the lease beginning date amounts to substantially all of the fair value of the leased asset. (5) When nature of the leased asset is special, if there is no great transform, only the Company can use it, As for the fixed assets by finance lease, the Company shall record the lower one of the fair value of the leased asset and the present value of the minimum lease payments as the entering value in an account, recognize
the amount of the minimum lease payments as the entering value in an account of long-term account payable,
and treat the balance between the recorded amount of the leased asset and the long-term account payable as
unrecognized financing charges. When the negotiation of lease and signing lease contract occurred simultaneously,
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 the handling charge,attorney’s fees and traveling expenses, stamp duty, and other direct cost belonging to the lease project, recorded into value of leased assets. The unrecognized financing cost was amortized by effective interest method at each period within the lease term. The Company adopting depreciation policies in concern with self-owned fixed assets withdraw depreciation of fixed assets under financing lease. The ownership of fixed assets under financing lease reasonably ensured to obtain the expiration of the lease term, withdraw depreciation within useful life; The ownership of fixed assets under financing lease cannot reasonably ensured to obtain the expiration of the lease term, withdraw depreciation within the shorter one of useful life and lease term.
17. Construction in progress
Is the Company subject to any disclosure requirements for special industries?
No.
(1) Initial measurement of construction in progress
The valuation of the Company's self-construction of construction in progress is in line with the actual cost which was formed by all the necessary expenditures that the asset of construction arrived at the expected useful status, including cost of engineering materials, labor cost, and the relevant cost of tax, the borrowing cost of should being capitalization and the indirect cost should be amortized.
(2) Standard and time point of construction in progress transferring into fixed assets
All expenditure occurred before the assets are brought to the expected conditions for use shall be recognized as the entering value of fixed assets. The construction in progress of fixed assets has been reached to the expected conditions for use but has not yet has handle completion and settlement procedures, the construction in progress shall be transferred into the fixed assets at the appraisal value in accordance with construction budget, cost or actual cost since the date that the construction in progress reaches to the expected conditions for use, and the depreciation of the fixed assets shall withdrawn in the light of the depreciation policy of fixed assets. After completion and settlement procedures, the Company shall adjust the original provisional estimate price at the actual cost, but not adjust original depreciation withdrawn.
18. Borrowing costs
(1) Recognition principle of capitalization of borrowing costs
Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and construction or production of assets eligible for capitalization, it shall be capitalized and recorded into the costs of relevant assets. Other borrowing costs shall be recognized as expenses on the basis of the actual amount incurred, and shall be recorded into the current profits and losses.
The term―assets eligible forcapitalization‖ shall refer to the fixed assets, investment real estate, inventories and other assets, of which the acquisition and construction or production may take quite a long time to get ready for its intended use or for sale.
The borrowing costs shall not be capitalized unless they simultaneously meet the following requirements: A. The asset disbursements have already incurred, which shall include the cash, transferred non-cash assets or interest bearing debts paid for the acquisition and construction or production activities for preparing assets eligible for capitalization;
B. The borrowing costs have already incurred; and
C. The acquisition and construction or production activities which are necessary to prepare the asset for its
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 intended use or sale have already started.
(2) Capitalization period
The capitalization period shall refer to the period from the commencement to the cessation of capitalization of the borrowing costs, excluding the period of suspension of capitalization of the borrowing costs.
When the qualified asset under acquisition and construction or production is ready for the intended use or sale, the capitalization of the borrowing costs shall be ceased.
When the part of projects in the qualified asset under acquisition and construction or production are completed separately and is ready for use alone, the capitalization of the borrowing costs of such part of assets shall be ceased.
Where each part of an asset under acquisition and construction or production is completed separately and is ready for use or sale during the continuing construction of other parts, but it cannot be used or sold until the asset is entirely completed, the capitalization of the borrowing costs shall be ceased when the asset is completed entirely. (3) The period of suspension of capitalization of the borrowing costs
Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended. If the interruption is a necessary step for making the qualified asset under acquisition and construction or production ready for the intended use or sale, the capitalization of the borrowing costs shall continue. The borrowing costs incurred during such period shall be recognized as expenses, and shall be recorded into the profits and losses of the current period, till the acquisition and construction or production of the asset restarts.
(4) Calculation method of capitalized amount of borrowing costs
Interest of specific loan (deducting interest income of loan capital deposit in the bank or investment income obtained from temporary investment) and its subsidiary expenses before the construction or production of assets eligible for capitalization arrived at available for use or sale, capitalized them.
The enterprise shall calculate and determine the to-be-capitalized amount of interests on the general borrowing by multiplying the weighted average asset disbursement of the part of the accumulative asset disbursements minus the general borrowing by the capitalization rate of the general borrowing used. The capitalization rate shall be calculated and determined in light of the weighted average interest rate of the general borrowing.
Where there is any discount or premium, the amount of discounts or premiums that shall be amortized during each accounting period shall be determined by the real interest rate method, and an adjustment shall be made to the amount of interests in each period.
19. Biological assets
20. Oil and gas assets
21. Intangible assets
(1) Pricing method, useful life and impairment test
Intangible assets refer to identifiable non-monetary assets that are owned or controlled by the Company without material state, including right to use land sites, software and non-patented technology.
1) Initial measurement of intangible assets
The cost of outsourcing intangible assets shall include the purchase price, relevant taxes and other necessary
expenditures directly attributable to intangible assets for the expected purpose. Where the payment of purchase
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 price for intangible assets is delayed beyond the normal credit conditions, which is of financing intention, the cost of intangible assets shall be determined on the basis of the current value of the purchase price.
For intangible assets obtained through debt restructuring, which are pay a debt by the debtor, its entering value shall be recognized based on the fair value of such intangible assets. The balance between book value for debt restructuring and the fair value of the intangible assets shall be recorded into the profits and losses of the current period.
As for a non-monetary assets transaction, under the premise that the transaction is commercial in nature and the fair value of the assets received or surrendered can be measured reliably, the initial cost of the fair value of the intangible assets received shall be recognized based on the fair value of the assets surrendered, unless there is any exact evidence showing that the fair value of the assets received is more reliable. Where any non-monetary assets transaction does not meet the conditions as prescribed in the above premises at the same time, the book value and relevant payable taxes of the assets surrendered shall be the initial cost of the intangible assets received.
As for intangible assets through business combination under the same control, its entering value shall be recognized based on the book value of combined party. As for intangible assets through business combination not under the same control, its entering value shall be recognized at its fair value.
The cost of self-developed intangible assets shall include: materials used, service cost, registration fee when developing such intangible assets, and amortization expenses of other patent right used in the course of development and interest expense eligible for capitalization, as well as other direct cost incurred before the expected purposes of use of such intangible assets are realized.
2) Subsequent measurement
The Company shall analyze and judge the service life of intangible assets, classify as intangible assets with limited service life and intangible assets with uncertain service life
A. Intangible assets with limited service life
With regard to intangible assets with limited service life, shall be amortized by the straight-line method within the period when the intangible asset can bring economic benefits to the Company. Estimated useful life of intangible assets with limited useful life:
|||
|-|-|
|Item|Estimated useful life|
|Software|2-10 years|
|Land use right|50 years|
|Non-patent right|10 years|

The Company shall, at the end of every year, check the useful life and the amortization method of the said intangible assets with limited service life. If there is any difference between the expected useful life and the previously estimated data, the expected useful life shall be adjusted.
After check, useful life and the amortization method of the said intangible assets remained the same as the previous valuation.
B. Intangible assets with uncertain service life
If it is unable to forecast the period when the intangible asset can bring economic benefits to the enterprise, it shall be regarded as an intangible asset with uncertain service life.
The Company shall, at the end of every year, check the useful life and does not conduct the amortization method of the said intangible assets with uncertain service life. If after check, useful life of the said intangible assets remained in uncertainty, the Company shall make an impairment test at the end of year.
After check, the Company has no intangible assets with uncertain service life.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 (2) Accounting policies of internalR&D expenses
1) Standard for classifying research phase and development phase of theCompany’sR&D projects
The term―research‖ refers to the creative and planned investigation to acquire and understand new scientific or technological knowledge.
The term "development" refers to the application of research achievements and other knowledge to a certain plan or design, prior to the commercial production or use, so as to produce any new material, device or product, or substantially improved material, device and product.
The expenditures ofR&D stage in internalR&D project, was recorded into current profits or losses.
2) Standard for capitalization of development expenditures
The expenses inR&D stage for its internal research and development projects of the Company may be capitalized when they satisfy the following conditions simultaneously:
A. It is feasible technically to finish intangible assets for use or sale;
B. It is intended to finish and use or sell the intangible assets;
C. The usefulness of methods for intangible assets to generate economic benefits shall be proved, including being able to prove that there is a potential market for the products manufactured by applying the intangible assets or there is a potential market for the intangible assets itself or the intangible assets will be used internally;
D. It is able to finish the development of the intangible assets, and able to use or sell the intangible assets, with the support of sufficient technologies, financial resources and other resources; and
E. The development expenditures of the intangible assets can be reliably measured.
The expenses not meet the aforesaid conditions, record into current profits or losses.R&D expenses had recorded into profits or losses in previous period, was derecognized as assets in the subsequent period. The capitalized expenses inR&D stage had been listed asR&D expenses in the balance sheet; transfer into intangible assets since the project arrived at the date expected use.
22. Impairment of long-term assets
The Company shall, on the day of balance sheet, make a judgment on whether there is any sign of possible assets impairment. If there are signs of long-term assets impairment, on the basis of single item assets, estimate the recoverable amount; for it is difficult to estimate the recoverable amount of an individual asset, determines the recoverable amount of an asset group based on the assets belongs to the group.
The estimation of recoverable amount of assets, recognized according to the higher between the net present value after its fair value minus the disposal expenses and the present value of expected future cash flow of an asset. The measurement results of the recoverable amount show that, the recoverable amount lower than the book value, writes down the book value of long term assets to recoverable amount which recognized as assets impairment losses, record into current profits or losses. Meanwhile, withdraw relevant assets impairment provision. Once the assets impairment losses are recognized, it will no longer being switch back in subsequent accounting period. After the recognition of assets impairment losses, the depreciation and amortization expenses of impairment assets adjusted in future period, which ensure the assets systematically amortized the book value of assets after the adjustment ( after deducting estimate net salvage) within the remaining service life.
For intangible assets with uncertain goodwill or service life formed by enterprise combination, whatever there is sign of impairment conduct impairment test every year.
When conducting impairment test to the goodwill, share the book value of goodwill to the group assets or
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 combination of group assets estimate benefited from synergistic effect of enterprise combination When conducting impairment test to the relevant group assets or combination of group assets including goodwill, if there is sign of impairment, conduct impairment test to those excluding goodwill, calculate recoverable amount and compare to the relevant book value, recognize the relevant impairment losses. Then, conduct impairment test to the relevant group assets or combination of group assets including goodwill, compare the book value( including the part of book value of goodwill amortized and its recoverable amount, if the recoverable amount lower than its book value, recognize the impairment losses of goodwill.
23. Long-term unamortized expenses
(1) Amortization method
Long-term deferred expenses refer to general expenses with the apportioned period over one year that have occurred but attributable to the current and future periods. Long-term deferred expense shall be straight-line amortized by stage within benefit period.
2. Amortization period
|||
|-|-|
|Type|Amortization period|
|Expenses on decoration of rentedplants|5 years|
|Technical service expenses|5 years|
|Expenses on maintenance andalteration|3-5 years|

24. Payroll
(1) Accounting treatment of short-term compensation
Short-term compensation refers to the payroll payment of the employee providing service during the end of Reporting Period within 12 months that the Company should pay, excepting the welfare after demission and termination benefits. During the accounting period that the employees providing the service, should be calculated and recognized the corresponding payroll amount according to the stated withdrawal basic and proportion (2) Accounting treatment of the welfare after demission
Welfare after demission refers to the Company, in order to obtain services provided by the employees, provide all kinds of rewards and benefits after the retirement of the employees or cancellation of staff employment contracts, excepting short-term compensation and retirement benefits.
All the Company's welfare after demission plans are setting drawing plans.
The setting drawing plan of welfare after demission is the social basic pension insurance, unemployment
insurance, etc, which implemented by the local labor and social security offices. During the accounting period that
the employee providing service for the Company, the amount should pay in line with the setting drawing plan will
be recognized as liabilities and record into current profits or losses or cost of relevant assets.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Apart from regularly making the aforesaid payments pursuant to thegovernment’s standards and the annuity fund plan, the Company bears no responsibility for other payments in this respect.
(3) Accounting treatment of demission welfare
Demission welfare is refers to the Company's cancellation of the labor relationship with the employees before the labor contract maturity or compensation for encouraging the employee voluntarily accept reduction, when the Company is unable to unilaterally withdraw the plan on the cancellation of labor relationship or the layoff proposal, or when recognizing the costs or expenses (the earlier one between the two) related to the reorganization of paying the demission welfare, should recognize the payroll liabilities from the demission welfare and include in the current gains and losses.
(4) Accounting treatment of other welfare of the long-term employees
Other welfare of the long-term employees refers to other welfares excluding short term compensation, welfare after demission and demission welfare.
25. Accrued liabilities
(1) Recognition standard of estimated liabilities
The obligation pertinent to the Contingencies shall be recognized as estimated liabilities when the following conditions are satisfied simultaneously:
A. The obligation is a current obligation of the company;
B. It is likely to cause any economic benefit to flow out of the Company as a result of performance of the obligation; and
C. The amount of the obligation can be measured in a reliable way.
(2) Measurement method of estimated liabilities
The estimated debts shall be initially measured in accordance with the best estimate of the necessary expenses for the performance of the current obligation.
To determine the best estimate, an enterprise shall take into full consideration of the risks, uncertainty, time value of money, and other factors pertinent to the Contingencies. If the time value of money is of great significance, the best estimate shall be determined after discounting the relevant future outflow of cash.
The best estimate shall be conducted in the light of the following situations:
If there is a sequent range for the necessary expenses and if all the outcomes within this range are equally likely to occur, the best estimate shall be determined in accordance with the middle estimate (average number of bound) within the range.
If there is not a sequent range for the necessary expenses, or although there is a sequent range for the necessary expenses but all possible outcomes are not the same within the scope, i.e. If the Contingencies concern a single item, best estimate shall be determined in the light of the most likely outcome; If the Contingencies concern two or more items, the best estimate should be calculated and determined in accordance with all possible outcomes and the relevant probabilities.
When all or some of the expenses necessary for the liquidation of an estimated debts of an enterprise is expected
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 to be compensated by a third party, the compensation should be separately recognized as an asset only when it is virtually certain that the reimbursement will be obtained. The amount recognized for the reimbursement should not exceed the book value of the estimated debts.
26. Share-based payment
27. Other financial instruments such as preferred shares and perpetual capital securities
28. Revenue
Is the Company subject to any disclosure requirements for special industries?
No.
(1) Criteria for recognition time of revenue from sale of goods
The significant risks and rewards of ownership of the goods have been transferred to the buyer by the enterprise; The enterprise retains neither continuous management right that usually keeps relation with the ownership nor effective control over the sold goods; The relevant amount of revenue can be measured in a reliable way; The relevant economic benefits may flow into the enterprise; and the relevant costs incurred or to be incurred can be measured in a reliable way.
Confirmation methods of sales revenues of the Company:
1) Confirmation methods of domestic sales revenue
Shall satisfy following conditions: products should be delivered according tocustomer’s requirements; amount of sales revenues is determined, received or respected to receive; sales slip should be invoiced; costs of sold products should be calculated;
2) Confirmation methods of export sales revenue
Shall satisfy following conditions: products should be produced according to export sales agreement signed with customers, received export declaration after qualified inspection and obtained bill of lading (waybill) after delivery by transport company; amount of sales revenues is determined, received or respected to receive; sales slip should be invoiced; costs of sold products should be calculated.
(2) Recognition basis of revenue from transferring use rights of assets
The relevant economic benefits are likely to flow into the enterprise; and the amount of revenues can be measured in a reliable way. The revenue from a alienating the right to use assets shall be recognized in the light of the following methods:
1) The amount of interest revenue should be measured and confirmed in accordance with the length of time for which the enterprise's cash is used by others and the actual interest rate;
2) The amount of royalty revenue should be measured and confirmed in accordance with the period and method of charging as stipulated in the relevant contract or agreement.
(3) Recognition basis and method for recognizing the revenue from providing labor services
If the Company can, on the date of the balance sheet, reliably estimate the outcome of a transaction concerning the labor services it provides, it shall recognize the revenue from providing services employing the percentage-of-completion method. Schedule of completion under the transaction concerning the providing of labor services shall be recognized in the light of the measurement of the work completed.
The reliably estimate the outcome of a transaction concerning the labor services it provides, which simultaneously meets the following conditions:
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 A. The amount of revenue can be measured in a reliable way.
B. Relevant economy profits may inflow enterprises
C. The schedule of completion of the transaction can be measured in a reliable way.
D. The cost occurred or will occur in the transaction can be measured in a reliable way.
The Company shall ascertain the total revenue from the providing of labor services in accordance with the received or to-be-received price of the party that receives the labor services as stipulated in the contract or agreement, unless the received or to-be-received price as stipulated in the contract or agreement is unfair. The Company shall, on the date of the balance sheet, ascertain the current revenue from providing labor services in accordance with the amount of multiplying the total amount of revenues from providing labor services by the schedule of completion then deducting the accumulative revenues from the providing of labor services that have been recognized in the previous accounting periods. At the same time, the enterprise shall carry forward the current cost of labor services in accordance with the sum of multiplying the total amount of revenues arising from the providing of labor services by the schedule of completion and then deducting the accumulative revenues from the providing of labor services.
If the Company can, on the date of the balance sheet, reliably estimate the outcome of a transaction concerning the labor services it provides, it shall recognize the revenue from providing services employing the percentage-of-completion method.
A. If the cost of labor services incurred is expected to be compensated, the revenue from the providing of labor services shall be recognized in accordance with the amount of the cost of labor services incurred, and the cost of labor services shall be carried forward at the same amount;
B. If the cost of labor services incurred is not expected to compensate, the cost incurred should be included in the current profits and losses, and no revenue from the providing of labor services may be recognized.
If the contracts the Company sign with other enterprises include sale of goods and rendering of service, and both of them can be separated and individually calculated, deal with them separately. For those sale of goods and rendering of service cannot be separated, or though can be separated but not be individually calculated, consider sale of goods and rendering of service as sale of goods.
(4) Assets transfer with repurchase conditions
When selling goods or transferring assets, the Company signs agreement of sale of goods or assets transfer, judges the sale of goods whether meeting the recognition condition of revenue or not in lie with the agreement or not. If sales with Buyback Agreements belong to financing transaction, the Company derecognizes the revenue of sale, when delivering products or assets. If the price of repurchase is higher than the balance of sale price, withdraw interest on schedule during the repo period, withdraw financial cost.
29. Government subsidies
(1) Judgment basis and accounting treatment of government subsidies related to assets
Government subsidies related to assets are recognized as deferred income and recorded into non-operation revenue by stage in line with service life of assets purchased or constructed.
(2) Judgment basis and accounting treatment of government subsidies related to profits
Government subsidies related to profits, as for those subsidies used for compensating the related future expenses
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 or losses of the enterprise shall be recognized as deferred income and shall included in non-operation revenue during the period when the relevant expenses are recognized; those subsidies used for compensating the related expenses or losses incurred to the enterprise shall be directly included in non-operation revenue of current period. The government recognized need to return, which deposited in the balance of relevant deferred income, write-downs related deferred income balance, the part beyond include in the current profits and losses, for those not in deferred income, include in current profits or losses directly.
30. Deferred income tax assets/deferred income tax liabilities
Deferred income tax assets and deferred income tax liabilities recognize in line with the difference between tax base of assets and liabilities and their book value. On balance sheet date, deferred income tax assets and deferred income tax liabilities calculated in line with suitable tax rate in the period of estimate recover the assets or pay off the liabilities.
(1) Recognition basis of deferred income tax assets
The Company probably recognizes the deferred income tax assets incurred from deductable temporary difference using the limit of taxable income amount of deductible losses and tax credits deducting temporary differences and can be brought forward to next accounting year. However, derecognize the deferred income tax assets incurred from the initial recognition of assets or liabilities in the transaction of the follows with these characteristics: (1) The transaction is not enterprise combination. (2) When the transaction occurring, it has no influence to the accounting profits, taxable amount or deductible losses.
The deductable temporary difference of relevant association enterprise investment, simultaneously meet the follow conditions, recognize as corresponding deferred tax assets; temporary difference probably switch back in the foreseeable future, and obtain taxable amount using for deducting deductable temporary difference.
(2) Recognition basis of deferred income tax liabilities
The Company recognizes the taxable temporary differences unpaid in the current period or previous period as deferred income tax liabilities. But not include:
1) Temporary differences formed by the initial recognition of goodwill
2) The transaction or event is not formed by enterprise combination, and the happen of transaction or event has no influence to the accounting profits or temporary differences formed by taxable income (Deductible losses) 3) For taxable temporary differences related to the investment with the subsidiary and association enterprise, the time of the reverse of temporary differences can be control and the temporary difference probably does not switch back in the foreseeable future.
(3) Deferred income tax assets and deferred income tax liabilities are stated at net offset amounts when the following conditions are simultaneously satisfied:
1) The Company is legally authorized to settle the income tax assets and liabilities of the current period at net amounts; and
2) The deferred income tax assets and liabilities are related to the income tax levied by the same tax authority on the same tax payer, or such on different tax payers but in the future period of the reversal of each important deferred income tax assets and liabilities, the involved tax payers intend to settle the income tax assets and liabilities of the current period at net amounts or obtain assets and repay debts at the same time.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 31. Lease
(1) Accounting treatment of operating lease
1) Rent charge paid for leasing assets shall be apportioned at the straight-line method and recorded into the current expense within the overall rent period including rent-free period. The initial direct expense paid by the Company related to lease transaction shall be included into the current expense.
Where the lessor undertakes the expenses related to the lease that should be undertaken by the Company, the Company shall deduct such expense from total rental, and such deducted rental fee shall be apportioned within the rent period and included into the current expense.
2) Rent charge received for renting out assets shall be apportioned at the straight-line method and recognized as rental income within the overall rent period including rent-free period. The initial direct expense paid by the Company related to lease transaction shall be included into the current expense. In the event of the larger amount, it shall be capitalized and recoded into the current income by installment within the overall lease period.
Where the Company undertakes the expenses related to the lease that should be undertaken by the lessor, the Company shall deduct such expense from total rental income, and such deducted rental fee shall be apportioned within the rent period.
(2) Accounting treatments of financial lease
1) Assets acquired under finance leases: On the lease beginning date, the Company shall record the lower one of the fair value of the leased asset and the present value of the minimum lease payments on the lease beginning date as the entering value in an account, recognize the amount of the minimum lease payments as the entering value in an account of long-term account payable, and treat the balance between the recorded amount of the leased asset and the long-term account payable as unrecognized financing charges.
For the recognition standards, measurement and depreciation methods for assets acquired under finance leases, see―(14) Fixedassets‖ under Note 4 herein.
The unrecognized financing charges are amortized over the lease term and recorded into finance costs adopting the effective interest rate method.
2) Assets lost under finance leases: On the lease beginning date, the Company shall recognize the difference between financing lease receivables and the unguaranteed residual value in a finance lease as unrealized financing income and recognize as income of lease during the future period of receiving lease income. The initial direct cost related to lease transaction occurred in the Company, record into initial calculation of financing lease receivables, decrease the amount of lease income recognized during lease period.
32. Other significant accounting policies and estimates
33. Changes in main accounting policies and estimates
(1) Change of accounting policies
□ Applicable√ Not applicable
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 (2) Changes in accounting estimates
□ Applicable√ Not applicable
34. Other
The Ministry of Finance issued the Provisions Concerning the Accounting Treatments on Value-Added Tax (CK[2016] No. 22) on 3 Dec. 2016.
The Provisions Concerning the Accounting Treatments on Value-Added Tax specifies that: After full trial implementation of the proposals "Change from Business Tax to Value-added Tax", the "Business Taxes and Surcharges" item is adjusted as "Taxes and Additional" item which calculates the consumption tax, urban maintenance and construction tax, resource tax, education surcharges and property tax, land use tax, vehicle and vessel use tax and stamp tax. The "Business Taxes and Surcharges" item in the profit statement is adjusted as "Taxes and Additional" item.
The Provisions Concerning the Accounting Treatments on Value-Added Tax also clearly requires that: the ending debit balance of classification items such as "value added tax payable", "unpayed value added tax", "pending deduct VAT on purchase", "pending certification VAT on purchase" and "excess VAT value" under "tax payable" item shall be presented under "other current assets" item or "other non-current assets" item in the balance sheet according to the situation; the ending debit balance of classification items such as "taxes payable (stay - recognition tax)" item shall be presented under the "other current liabilities" item or "other non-current liabilities" item in the balance sheet.
The Company has adjusted the amount of the items that are presented in financial statements such as the balance sheet and the income statement and affected by the Provisions Concerning the Accounting Treatments on Value-Added Tax in relation to transactions between 1 May 2016 and the date of implementation of the provisions as specified thereof, including adjustment of the property tax, land use tax, vehicle and vessel use tax and stamp tax (total RMB 6,494,663.77) from "administration expense" item to "taxes and additional" item and adjustment of that (total RMB 8,698,861.83) from "tax payable" item to generated after 1 May. However, as for the transactions between 1 Jan. 2016 and 30 Apr. 2016, no adjustment will be made. Besides, no adjustment will be made to the financial statements in comparable period in 2016.
VI. Taxation
1. Main taxes and tax rate
||||
|-|-|-|
|Category of taxes|Tax basis|Tax rate|
||Revenue from sale of goods, taxable||
|VAT|revenue from rendering services, intangible|17%|
||assets or real estate||
|Urban maintenance and construction tax|Turnover tax actually paid|5%, 7%|
|Enterprise income tax|Taxable income|25%|
||Taxable turnover before the business||
|Business tax||5%|
||tax-to-VAT reform||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
||70% of the original value of the property||
|Property tax||1.2%|
||considered as tax base||

Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
|||
|-|-|
|Name|Income tax rate|
|Zhuhai Hongta Renheng Packaging Co., Ltd.|15%|
|Zhuhai Golden Pheasant Chemical Co., Ltd.|15%|
|Huaxin (Foshan) Color Printing Co., Ltd.|15%|
|Zhuhai Huafeng Paper Co., Ltd.|25%|
|Kunshan Focai Packaging & Printing Co., Ltd.|25%|
|Foshan Hongta Liyan Material Technology Co., Ltd.|25%|
|Zhejiang Hongta Renheng Packaging Technology Co., Ltd.|25%|

2. Tax preference
1) According to the Circular on issuing the First Name List of Hi-tech Enterprise through the review in Guangdong Province for Y2015 (YKGS (2015) Document No. 24) issued by Science& Technology Department of Guangdong Province, Hongta Renheng passed First Batch of Hi-tech Enterprise in Guangdong Province for Y2015, and gained Certificate for Hi-tech Enterprise (Certificate No.: GR201544000238, with three years of validity). So, in 2016, the Hongta Renheng shall pay the corporate income tax according to the corporate income tax rate of15%.
2) According to the Circular on issuing the Second Name List of Hi-tech Enterprise in Guangdong Province for Y2013 (YKGZi (2014) Document No. 60) jointly issued by Science& Technology Department of Guangdong Province, Department of Finance of Guangdong Province, Guangdong Provincial Office, SAT, Guangdong Local Taxation Bureau, the sub-subsidiary of the Company Zhuhai Jinji Chemicals Co., Ltd. had passed the affirmation of the second name list of high-tech enterprise of 2013 and the gained the Certification of Hi-tech Enterprise (the Certification No.: GR201344000618 with the validity for 3 years). Thus the sub-subsidiary Zhuhai Jinji Chemicals Co., Ltd. had been enjoyed the relevant preferential policies of the high-tech enterprise of the state for continuous three years since 2013 (including 2013), with the corporate income tax be calculated according to the corporate income tax rate of15%. According to the Circular on Second Name List of Proposed Hi-tech Enterprise in Guangdong Province for Y2016 issued by the National Leading Group Office for the Management of High-tech Enterprises Recognition, Zhuhai Jinji Chemicals Co., Ltd. had passed the affirmation of the second name list of high-tech enterprise of 2016. Thus the sub-subsidiary Zhuhai Jinji Chemicals Co., Ltd. shall pay the corporate income tax according to the corporate income tax rate of15%.
3) According to the Circular on issuing the Name List of Hi-tech Enterprise in Guangdong Province for Y2015 (YKGZi[2016] Document No. 17) jointly issued by Science& Technology Department of Guangdong Province, Department of Finance of Guangdong Province, Guangdong Provincial Office, SAT, Guangdong Local Taxation Bureau, the subsidiary of the Company Huaxin (Foshan) Color Printing Co., Ltd. had passed the affirmation of high-tech enterprise of 2016 and the gained the Certification of Hi-tech Enterprise (the Certification No.:
GR201544001352 with the validity for 3 years). Thus Huaxin (Foshan) Color Printing Co., Ltd. shall pay the
corporate income tax according to the corporate income tax rate of15%.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 3. Other
VII. Notes to major items in the consolidated financial statements of the Company
1. Monetary funds
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Cash on hand|137,530.97|312,658.48|
|Bank deposits|356,966,169.85|185,647,665.76|
|Other monetary funds|176,891,765.59|323,746,286.83|
|Total|533,995,466.41|509,706,611.07|

 Other notes:
Of which, the list of restricted monetary capital was as follow:
|||
|-|-|
|Item|Closing balance|
|Deposit of bank acceptance|126,634,278.53|
|L/C Guarantee deposits|---|
|Cash Deposit|50,056,233.21|
|Fixed time deposit or call depositsused for guarantee|---|
|Other use restricted deposits|201,253.85|
|Total|176,891,765.59|

2. Financial assets measured by fair value and the changes included in the current gains and losses
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Financial assets measured by fair value and|||
|the changes included in the current gains|1,571,341.66|1,741,500.00|
|and losses|||
|Total|1,571,341.66|1,741,500.00|

 Other Notes:
Thecompany’s subsidiaries Hongta Renheng Paper Co., Ltd. and Zhuhai Huafeng purchased thebank’s structural deposits as financial products, and the fair value of the floating interest was calculated on December 31, 2016 as per the contract.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 3. Derivative financial assets
□ Applicable√ Not applicable
4. Notes receivable
(1)Notes receivable listed by category
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Bank acceptance bill|418,475,541.19|265,679,151.34|
|Commercial acceptance bill|2,365,076.97||
|Total|420,840,618.16|265,679,151.34|

 (2) Notes receivable pledged by the Company at the end of the period
Unit: RMB Yuan
|||
|-|-|
|Item|Amount|

(3) Notes receivable endorsed by the Company or discounted and not due on the balance sheet date at the end of the period
Unit: RMB Yuan
||||
|-|-|-|
||Derecognized Amount at the end of the|Non-derecognized amount at the end of the|
|Item|||
||period|period|
|Bank acceptance bill|936,475,435.29||
|Total|936,475,435.29||

(4) Notes transferred to accounts receivable because drawer of the notes failed to execute the contract or agreement
Unit: RMB Yuan
|||
|-|-|
||Amount of the notes transferred to accounts receivable at the end|
|Item||
||of the period|

Other Notes:
Notes receivable closing balance increased58.40% when compared to the opening balance mainly because thecompany’s clients completed the settlement by means of notes.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 5. Accounts receivable
(1) Accounts receivable classified by category
Unit: RMB Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|||||Withdrawalproportion|||||||
|Category|||||Book||||||
|||Proportio|||||Proportio||Withdrawal|Book Value|
||Amount||Amount||value|Amount||Amount|||
|||n|||||n||proportion||
|Accounts receivable|||||||||||
|withdrawal of bad|||||||||||
||829,359,||3,194,86||826,164,9|793,480||6,249,280||787,230,95|
|debt provision by||95.40%||0.39%|||95.26%||0.79%||
||855.38||9.19||86.19|,231.46||.00||1.46|
|credit risks|||||||||||
|characteristics:|||||||||||
|Accounts receivable|||||||||||
|with insignificant|||||||||||
|single amount for|39,978,1||39,978,1|||39,491,||35,397,41||4,094,354.3|
|||4.60%||100.00%|||4.74%||89.63%||
|which bad debt|17.09||17.09|||772.33||8.00||3|
|provision separately|||||||||||
|accrued|||||||||||
||869,337,||43,172,9||826,164,986.19|832,972||41,646,69||791,325,305.79|
|Total||100.00%||4.97%|||100.00%||5.00%||
||972.47||86.28|||,003.79||8.00|||

 Accounts receivable with significant single amount for which bad debt provision separately accrued at the end of the period□ Applicable√ Not applicable
Among these groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Not applicable
Unit: RMB Yuan
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Account receivable|Bad debt provision|Withdrawal proportion|
|Subentry within 1 year||||
|1-3 months|780,287,950.06|||
|3-12 months|45,196,011.86|2,259,800.59|5.00%|
|Subtotal of within 1 year|825,483,961.92|2,259,800.59|5.00%|
|1 to 2 years|1,935,071.33|193,507.13|10.00%|
|2 to 3 years|762,832.00|152,566.40|20.00%|
|Over 3 years|1,177,990.13|588,995.07|50.00%|
|Total|829,359,855.38|3,194,869.19|0.39%|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Notes of the basis of recognizing the group:
Among these groups, accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable√ Not applicable
Among these groups, accounts receivable adopting other methods to withdraw bad debt provision:
(2) Bad debt provision withdrawal, reversed or recovered in the report period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB 1,526,288.28; the amount of the reversed or collected part during the Reporting Period was of RMB 0.0.
Significant amount of reversed or recovered bad debt provision:
Unit: RMB Yuan
||||
|-|-|-|
|Name of the entity|Amount|Method|

(3) Particulars of the actual verification of accounts receivable during the Reporting Period
Unit: RMB Yuan
|||
|-|-|
|Item|Amount|

Of which: significant actual verification of accounts receivable
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
||||||Whether occurred|
|Name of the entity|Nature|Amount|Reason|Procedure|because of related|
||||||party transactions|

 Notes:
(4) Top five of account receivable of closing balance collected by arrears party
||||
|-|-|-|
|Name of the entity|Closing balance|Proportion%|
|Customer A|41,717,321.03|4.8|
|Customer B|33,877,751.08|3.9|
|Customer C|28,120,990.54|3.23|
|Customer D|23,534,239.31|2.71|
|Customer E|22,891,063.95|2.63|
|Total|150,141,365.91|17.27|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 (5) Derecogniziton of account receivable due to the transfer of financial assets
(6) The amount of the assets and liabilities formed due to the transfer and the continued involvement of accounts receivable
Other notes:
6. Prepayment
(1) List by aging analysis:
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Aging|||||
||Amount|Proportion|Amount|Proportion|
|Within 1 year|129,394,303.41|98.57%|100,305,038.17|86.25%|
|1 to 2 years|725,582.93|0.55%|14,339,162.73|12.33%|
|2 to 3 years|155,097.35|0.12%|1,295,593.58|1.12%|
|Over 3 years|1,003,364.28|0.76%|350,902.50|0.30%|
|Total|131,278,347.97|--|116,290,696.98|--|

Notes of the reasons of the prepayment ages over 1 year with significant amount but failed settled in time:
(2) Top 5 of the closing balance of the prepayment collected according to the prepayment target
|||||
|-|-|-|-|
|Name of the entity|Closing balance|Proportion(%)|Time|
|Customer A|29,109,931.09|22.17|Within 1 year|
|Customer B|25,238,239.76|19.22|Within 1 year|
|Customer C|16,501,895.42|12.57|Within 1 year|
|Customer D|16,161,972.38|12.31|Within 1 year|
|Customer E|7,436,923.19|5.67|Within 1 year|
|Total|94,448,961.84|71.94||

Other Notes:
7. Interest receivable
(1) Category of interest receivable
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Fixed time deposits|358,066.39|5,233,556.60|
|Interest of Foreign Loan|5,950,976.18||
|Total|6,309,042.57|5,233,556.60|

 (2) Significant overdue interest
||||||
|-|-|-|-|-|
|||||Whether occurred|
|Entity|Closing balance|Overdue time|Overdue reason|impairment and its|
|||||judgment basis|

 Other Notes:
Interest of foreign loan included in Interest receivable refers to the interest that shall be collected from Foshan Chengtong Paper Co., Ltd. in the
4th
quarter for this period, and such interest was received on January 19, 2017.
8. Dividend receivable
(1) Dividend receivable
Unit: RMB Yuan
||||
|-|-|-|
|Item (or investees)|Closing balance|Opening balance|

(2) Significant dividend receivable aged over 1 year
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|||||Whether occurred|
|Item (or investees)|Closing balance|Aging|Reason|impairment and its|
|||||judgment basis|

 Other Notes:
9. Other accounts receivable
(1) Other account receivable classified by category
Unit: RMB Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|||||Withdrawalproportion|||||||
|Category|||||Book||||||
|||Proportio|||||Proportio||Withdrawal|Book Value|
||Amount||Amount||value|Amount||Amount|||
|||n|||||n||proportion||
|Other accounts|19,464,5|51.88%|19,464,5|100.00%||18,610,|10.93%|18,610,62|100.00%||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|receivable with|53.91||53.91|||629.25||9.25|||
|insignificant single|||||||||||
|amount for which|||||||||||
|bad debt provision|||||||||||
|separately accrued|||||||||||
|Other accounts|||||||||||
|receivable withdrawn|||||||||||
||12,868,4||660,870.||12,207,56|146,532||2,669,923||143,862,30|
|bad debt provision||34.30%||5.14%|||86.03%||1.83%||
||39.14||40||8.74|,231.59||.43||8.16|
|according to credit|||||||||||
|risks characteristics|||||||||||
|Other accounts|||||||||||
|receivable with|||||||||||
|insignificant single|5,184,22||5,184,22|||5,178,2||5,178,290|||
|||13.82%||100.00%|||3.04%||100.00%||
|amount for which|2.65||2.65|||90.54||.54|||
|bad debt provision|||||||||||
|separately accrued|||||||||||
||37,517,2||25,309,6||12,207,568.74|170,321||26,458,84||143,862,308.16|
|Total||100.00%||67.46%|||100.00%||15.53%||
||15.70||46.96|||,151.38||3.22|||

 Other accounts receivable with significant single amount for which bad debt provision separately accrued at the end of the period√ Applicable□ Not applicable
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Closing balance||||
|Other accounts|||||
||Other accountsreceivable||||
|receivable||Bad debt provision|Withdrawal proportion|Withdrawal reason|
|Hong Kong Hang Fung|||||
|Holdings Limited Co.,|13,464,553.91|13,464,553.91|100.00%|Not expected to recover|
|Ltd.|||||
|Zhuhai Yidesheng|||||
||6,000,000.00|6,000,000.00|100.00%|Not expected to recover|
|Industrial Co., Ltd.|||||
|Total|19,464,553.91|19,464,553.91|--|--|

Among these groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Not applicable
Unit: RMB Yuan
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Other accounts receivable|Bad debt provision|Withdrawal proportion|
|Subentry within 1 year||||
|1-3 months|7,853,806.30|||
|4-12 months|1,848,245.23|92,412.26|5.00%|
|Subtotal of within 1 year|9,702,051.53|92,412.26|5.00%|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||
|-|-|-|-|
|1 to 2 years|1,894,504.09|189,450.41|10.00%|
|2 to 3 years|856,446.79|171,289.36|20.00%|
|Over 3 years|415,436.73|207,718.37|50.00%|
|Total|12,868,439.14|660,870.40|5.14%|

 Notes:
Among these groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable√ Not applicable
Among these groups, other accounts receivable adopting other methods to withdraw bad debt provision:
□ Applicable√ Not applicable
(2) Bad debt provision withdrawal, reversed or recovered in the report period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB ; the amount of the reversed or collected part during the Reporting Period was of RMB1,149,196.26.
Significant amount of reversed or recovered bad debt provision;
Unit: RMB Yuan
||||
|-|-|-|
|Name of the entity|Reversed or collected amount|Method|

(3) Particulars of the actual verification of other accounts receivable during the Reporting Period
Unit: RMB Yuan
|||
|-|-|
|Item|Amount|

Of which: significant actual verification of other accounts receivable
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
||||||Whether occurred|
|Name of the entity|Nature|Amount|Reason|Procedure|because of related|
||||||party transactions|

 Notes of write-off other accounts receivable:
(4) Other account receivable classified by account nature
Unit: RMB Yuan
||||
|-|-|-|
|Nature|Closing book balance|Opening book balance|
|Margin|4,557,712.86|4,341,696.10|
|Pretty cash|2,212,246.03|1,862,991.83|
|Freight and miscellaneous charges on|||
||3,374,742.46|3,036,100.63|
|behalf|||
|Account receivable due to debt|||
|||25,209,797.91|
|restructuring|||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Amount of equity transfer||105,000,000.00|
|Other intercourse funds|27,372,514.35|30,870,564.91|
|Total|37,517,215.70|170,321,151.38|

 (5) Top 5 of the closing balance of the other accounts receivable collected according to the arrears party Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
||||||Closing balance of|
|Name of the entity|Nature|Closing balance|Aging|Proportion%||
||||||bad debt provision|
||Other intercourse|||||
|Customer A||13,464,553.91|Over 3 years|35.89%|13,464,553.91|
||funds|||||
||Other intercourse|||||
|Customer B||6,000,000.00|Over 3 years|15.99%|6,000,000.00|
||funds|||||
|Customer C|Margin|2,000,000.00|Over 3 years|5.33%|2,000,000.00|
|Customer D|Margin|1,540,000.00|1-3 months|4.10%||
||Other intercourse|||||
|Customer E||1,105,650.00|Over 3 years|2.95%|1,105,650.00|
||funds|||||
|Total|--|24,110,203.91|--|64.26%|22,570,203.91|

 (6) Account receivable involving government subsidies
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Project of government|||Estimated recovering|
|Name of the entity||Closing balance|Closing aging||
||subsidies|||time, amount and basis|

 (7) Other account receivable derecognized due to the transfer of financial assets
(8) Amount of transfer other account receivable and assets and liabilities formed by its continuous involvement
Other Notes:
Other closing accounts receivable decreased77.97% when compared to the opening accounts receivable, resulting from the amount of equity transfer of Foshan Chengtong Paper Co., Ltd., and the account receivable due to debt restructuring.
10. Inventory
Whether the company need abide by relevant disclosure requirements prevailing among the real estate industries or not?
No
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 (1) Category of inventory
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Falling price|||Falling price||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|Raw materials|204,284,126.92|4,389,802.22|199,894,324.70|216,300,558.09|13,733,332.71|202,567,225.38|
|Goods in process|41,566,211.76||41,566,211.76|68,497,349.74||68,497,349.74|
|Inventory goods|377,910,881.78|7,134,685.44|370,776,196.34|453,400,085.67|11,583,848.86|441,816,236.81|
|Total|623,761,220.46|11,524,487.66|612,236,732.80|738,197,993.50|25,317,181.57|712,880,811.93|

 Whether the company need satisfy relevant disclosure requirements stated in SZSE Industrial Information Disclosure Guidance No.4---Listed Company Specialized in Seed Industry and Planting Businesses or not?
No
(2) Falling price reserves of inventory
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|||Increase||Decrease|||
|Item|Opening balance|||Reverse or||Closing Balance|
|||Withdrawal|Other||Other||
|||||write-off|||
|Raw materials|13,733,332.71|930.27||9,344,460.76||4,389,802.22|
|Inventory goods|11,583,848.86|6,073,247.02||10,522,410.44||7,134,685.44|
|Total|25,317,181.57|6,074,177.29||19,866,871.20||11,524,487.66|

 The write-off of the falling price reserves of inventory was caused by the sales of raw materials for this current period.
(3) Notes of the closing balance of the inventory which includes capitalized borrowing expenses
(4) Completed unsettled assets formed from the construction contact at the end of the period
Unit: RMB Yuan
|||
|-|-|
|Item|Amount|

Other Notes:
11. Held-for-sale Assets
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||||Estimated disposal||
|Item|Closing book value|Fair value||Estimated disposal time|
||||expense||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Other Notes:
12. Non-current assets due within 1 year
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|

Other Notes:
13. Other current assets
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|The VAT deduction|8,698,861.83|17,147,074.25|
|Structural Deposits|209,000,000.00||
|Advance Payment of corporate income tax|172,635.86||
|Total|217,871,497.69|17,147,074.25|

 Other Notes:
Other current assets at the end of the period increased1,170.60% when compared to that at the beginning of the period, resulting from the newly-added structural deposits (financial products) in this year.
14. Available-for-sale financial assets
(1) List of available-for-sale financial assets
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|Available-for-sale equity|||||||
||288,700.00||288,700.00|288,700.00||288,700.00|
|instruments:|||||||
|Total|288,700.00||288,700.00|288,700.00||288,700.00|

 (2) Available-for-sale financial assets measured by fair value at the end of the period
Unit: RMB Yuan
|||||
|-|-|-|-|
|Category|Available-for-sale equity|Available-for-sale debt||
||||Total|
||instruments|instruments||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 (3) Available-for-sale financial assets measured by cost at the end of the period
Unit: RMB Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Book balance||||Depreciation reserves||||Shareholdi|Cash|
||||||||||ng|bonus of|
|Investee|Opening|||Closing|Opening|||Closingperiod|proportion|the|
|||Increase|Decrease|||Increase|Decrease||||
||period|||period|period||||among the|Reporting|
||||||||||investees|Period|
|China|||||||||||
|Guangfa|||||||||||
||288,700.00|||288,700.00|||||0.00%||
|Bank Co.,|||||||||||
|Ltd.|||||||||||
|Total|288,700.00|||288,700.00|||||--||

(4) Changes of the impairment of the available-for-sale financial assets during the Reporting Period Unit: RMB Yuan
|||||
|-|-|-|-|
||Available-for-sale equity|Available-for-sale debt||
|Category|||Total|
||instruments|instruments||

(5) Relevant notes of the fair value of the available-for-sale equity instruments which seriously fell or temporarily fell but not withdrawn the impairment provision
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|Item of||||Continued fallingtime (month)|||
||||Falling range of||Withdrawn|Reason of not|
|available-for-sale|||||||
||Investment cost|Closing fair value|the fair value||impairment|withdrawn the|
|equity|||||||
||||against the cost||amount|impairment|
|instruments|||||||

Other Notes:
The Company received0.0004248% share equity of China Guangfa Bank Co., Ltd. held by the subsidiary Foshan Chengtong Paper Co., Ltd.
No major falling or temporary falling happened to the available-for-sale equity instruments at the end of the period, and depreciation reserves were not withdrawn.
15. Investment held-to-maturity
(1) List of investment held-to-maturity
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||
|-|-|-|-|-|-|
||Depreciation|||Depreciation||
|Book balance||Book value|Book balance||Book value|
||reserves|||reserves||

(2) Significant held-to-maturity investment at the end of the period
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Bond item|Book value|Nominal interest rate|Actual interest rate|Due date|

 (3) Re-classified held-to-maturity investment during the Reporting Period
Other Notes:
16. Long-term accounts receivable
(1) Long-term accounts receivable
Unit: RMB Yuan
|||||||||
|-|-|-|-|-|-|-|-|
||Closing balance|||Opening balance||||
||||||||Discount rate|
|Item||Bad debt|||Bad debt|||
||Book balance||Book value|Book balance||Book value|range|
|||provision|||provision|||
||490,240,600.4||490,240,600.4|490,240,600.4||490,240,600.4||
|Loan||||||||
||1||1|1||1||
||490,240,600.4||490,240,600.41|490,240,600.4||490,240,600.41||
|Total|||||||--|
||1|||1||||

(2) Long-term accounts receivable which terminate the recognition owning to the transfer of the financial assets
(3) The amount of the assets and liabilities formed due to the transfer and the continued involvement of long-term accounts receivable
Other Notes:
In Reporting Period, the Company disposes its subsidiary Foshan Chengtong Paper Co., Ltd. which shall pay RMB490,240,600.41 to the Company. In line with theCreditor’s Rights and Debts Settlement Agreement signed, since Jan. 1, 2016, the Company charged interests for capital usage quarterly from Foshan Chengtong Paper Co., Ltd., in according to the same period of three-year benchmark loan interest rate on a regular basis issued byPeople’s Bank of China. Foshan Chengtong Paper Co., Ltd. shall return all the principal and interests before Dec. 31, 2019.
17. Long-term equity investment
Unit: RMB Yuan
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Increase/decrease in Reporting Period||||||||||
|||||Investme|||||||Closing|
||||||Adjustme|||||||
|||||nt profit||||Withdraw|||balance|
|||Additiona|||nt of||Declarati|||||
||Opening||Negative|and loss||Other||n||Closing|of|
|Investee||||||||||||
|||l|||other||on of cash|||||
||balance||investmen|recognize||equity||impairme|Other|balance|impairme|
|||investmen|||comprehe||dividends|||||
||||t|d under||changes||nt|||nt|
|||t|||nsive||or profits|||||
|||||the equity||||provision|||provision|
||||||income|||||||
|||||method||||||||
|I. Joint ventures||||||||||||
|II. Associated enterprises||||||||||||
|Guangdo||||||||||||
|ng||||||||||||
|Chengton|7,835,428|||532,015.6||||||8,367,444|7,835,428|
|g|.65|||3||||||.28|.65|
|Logistics||||||||||||
|Co., Ltd.||||||||||||
|Chengton||||||||||||
||254,253,7|||14,902,80|||24,748,35|||244,408,2|254,253,7|
|g Finance||||||||||||
||97.80|||9.13|||5.66|||51.27|97.80|
|Co., Ltd.||||||||||||
||262,089,2|||15,434,82|||24,748,35|||252,775,6|262,089,2|
|Subtotal||||||||||||
||26.45|||4.76|||5.66|||95.55|26.45|
||262,089,2|||15,434,82|||24,748,35|||252,775,6|262,089,2|
|Total||||||||||||
||26.45|||4.76|||5.66|||95.55|26.45|

 Other Notes:
Long-term equity investment notes:
(1) In 2012, the subsidiary of the Company Zhuhai S.E.Z.Hongta Renheng Paper Co., Ltd. held24% of the shares of Guangdong Chengtong Logistics Co., Ltd. of significant influences, and the equity method shall be applied. On Mar. 31, 2013, Guangdong Chengtong Logistics Co., Ltd. executed the shares withdrawal and assets reduction[(Singapore) Renheng Industry Co., Ltd. (occupied25% shares) withdrawn the equity of Guangdong Chengtong Logistics Co.,Ltd.]. Therefore, the shareholding proportion of Guangdong Chengtong Logistics Co., Ltd. by the subsidiary of the Company Zhuhai S.E.Z.Hongta Renheng Paper Co., Ltd. increased from24% to32% of significant influences, and shall be measured by equity method.
(2) On Dec. 23, 2013, the Company reviewed and approved Proposal on the Related Transaction of Purchasing20% Equity of Chengtong Finance Co., Ltd. held by China Investment Ltd. in 2013. The company had signed the Equity Transfer Agreement with China Paper Industry Co., Ltd., planing to transfer20% equity of Chengtong Finance Co., Ltd. held by China Paper Industry Investment Co., Ltd. with the equity transfer price of RMB 231,450,200 after the negotiation by both parties. Chengtong Finance Co., Ltd. had changed its shareholder registration on Jun. 23, 2014. Therefore, from July 2014 on, the Company held20% equity of Chengtong Finance
Co., Ltd., and the equity method shall be applied.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 18. Investment property
(1) Investment property adopting the cost measurement method
√ Applicable□ Not applicable
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Houses and buildings|Land use right|Construction in progress|Total|
|I. Original book value|||||
|1. Opening balance|20,444,648.02|||20,444,648.02|
|2. Increased amount|||||
||13,631,079.10|||13,631,079.10|
|of the period|||||
|(1) Outsourcing|||||
|(2) Transfer of|||||
|inventory\fixed|||||
|assets\project under|||||
|construction|||||
|(3) Increased from|||||
|enterprise merger|||||
|(4) Others|13,631,079.10|||13,631,079.10|
|3. Decreased|||||
|amount of the period|||||
|(1) Disposal|||||
|(2) Other transfers|||||
|4. Closing balance|34,075,727.12|||34,075,727.12|
|II. Accumulative|||||
|depreciation and|||||
|accumulative|||||
|amortization|||||
|1. Opening balance|8,499,521.00|||8,499,521.00|
|2. Increased amount|||||
||982,462.41|||982,462.41|
|of the period|||||
|(1) Withdrawal or|||||
||658,724.28|||658,724.28|
|amortization|||||
|Transferred-in amount|||||
||323,738.13|||323,738.13|
|for this period|||||
|3. Decreased|||||
|amount of the period|||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|(1) Disposal|||
|(2) Other transfers|||
|4. Closing balance|9,481,983.41|9,481,983.41|
|III. Depreciation reserves|||
|1. Opening balance|||
|2. Increased amount|||
|of the period|||
|(1) Withdrawal|||
|3. Decreased|||
|amount of the period|||
|(1) Disposal|||
|(2) Other transfers|||
|4. Closing balance|||
|IV. Book value|||
|1. Book value of the||24,593,743.71|
||24,593,743.71||
|period-end|||
|2. Opening book||11,945,127.02|
||11,945,127.02||
|value|||

(2) Investment property adopting the fair value measurement method
□ Applicable√ Not applicable
(3) Details of investment property failed to accomplish certification of property
Unit: RMB Yuan
||||
|-|-|-|
|Item|Book value|Reason|

Other Notes:
The original value of investment property increased66.67% at the end of the period when compared to that at the beginning of the period because newly-rent plant was transferred into the investment property. 19. Fixed assets
(1) List of fixed assets
Unit: RMB Yuan
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||
|-|-|-|-|-|-|
||House and buildings|Machinery|Transportation|Other electronic||
|Item|||||Total|
|||equipment||equipment||
|I. Original book||||||
|value||||||
|1. Opening||||||
||1,199,530,571.75|2,761,436,368.89|54,796,625.06|100,099,188.75|4,115,862,754.45|
|balance||||||
|2. Increased||||||
||14,994,399.80|87,825,038.63|2,334,892.20|33,252,253.90|138,406,584.53|
|amount of the period||||||
|(1) Purchase|1,360,868.45|24,582,006.59|2,334,892.20|7,468,030.82|35,745,798.06|
|(2) Transfer of||||||
|project under|13,633,531.35|34,510,617.04||2,561,137.77|50,705,286.16|
|construction||||||
|(3) Increased||||||
|from enterprise||||||
|merger||||||
|(4)||||||
|||28,732,415.00||23,223,085.31|51,955,500.31|
|Reclassification||||||
|3. Decreased||||||
||47,178,969.50|22,529,478.84|8,007,529.42|176,631.84|77,892,609.60|
|amount of the period||||||
|(1) Disposal or||||||
|||4,121,868.93|8,007,529.42|176,631.84|12,306,030.19|
|Scrap||||||
|Other transfers|13,631,079.10||||13,631,079.10|
||33,547,890.40|18,407,609.91|||51,955,500.31|
|(3)Reclassification||||||
|4. Closing balance|1,167,346,002.05|2,826,731,928.68|49,123,987.84|133,174,810.81|4,176,376,729.38|
|II. Accumulative||||||
|depreciation||||||
|1. Opening||||||
||338,904,428.09|1,049,430,134.46|43,025,451.48|68,450,431.51|1,499,810,445.54|
|balance||||||
|2. Increased||||||
||32,607,799.02|110,266,352.51|4,564,187.13|19,443,342.75|166,881,681.41|
|amount of the period||||||
|(1) Withdrawal|32,607,799.02|110,266,352.51|4,564,187.13|10,670,478.55|158,108,817.21|
|||||8,772,864.20|8,772,864.20|
|(2)Reclassification||||||
|3. Decreased||||||
||323,738.13|11,002,652.78|7,323,892.66|139,668.91|18,789,952.48|
|amount of the period||||||
|(1) Disposal or||||||
|||2,229,788.58|7,323,892.66|139,668.91|9,693,350.15|
|Scrap||||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||
|-|-|-|-|-|-|
|Other transfers|323,738.13||||323,738.13|
|||8,772,864.20|||8,772,864.20|
|(3)Reclassification||||||
|4. Closing balance|371,188,488.98|1,148,693,834.19|40,265,745.95|87,754,105.35|1,647,902,174.47|
|II. Accumulative||||||
|depreciation||||||
|1. Opening||||||
|||76,679,757.00|||76,679,757.00|
|balance||||||
|2. Increased||||||
|amount of the period||||||
|(1) Withdrawal||||||
|3. Decreased||||||
|amount of the period||||||
|(1) Disposal or||||||
|Scrap||||||
|4. Closing balance||76,679,757.00|||76,679,757.00|
|IV. Book value||||||
|1. Closing book||||||
||796,157,513.07|1,601,358,337.49|8,858,241.89|45,420,705.46|2,451,794,797.91|
|value||||||
|2. Opening book||||||
||860,626,143.66|1,635,326,477.43|11,771,173.58|31,648,757.24|2,539,372,551.91|
|value||||||

(2) List of temporarily-idle fixed assets
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
|||Accumulative|Impairment|||
|Item|Original book value|||Book value|Notes|
|||depreciation|provision|||
|None||||||

(3) Fixed assets leased in from financing lease
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|||Accumulative|||
|Item|Original book value||Impairment provision|Book value|
|||depreciation|||
|Houses and buildings|12,212,610.00|8,652,323.69||3,560,286.31|
|Machinery equipment|3,160,000.00|3,002,000.00||158,000.00|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||
|-|-|-|-|
|Total|15,372,610.00|11,654,323.69|3,718,286.31|

 (4) Fixed assets leased out from operation lease
Unit: RMB Yuan
|||
|-|-|
|Item|Closing book value|

(5) Details of fixed assets failing to accomplish certification of property
Unit: RMB Yuan
||||
|-|-|-|
|Item|Book value|Reason|
|||Property right certificate was under|
|Houses and buildings|103,522,569.39||
|||processing.|

Other Notes:
20. Construction in progress
(1) List of construction in progress
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|BM1 transmission|||||||
|||||3,099,922.32||3,099,922.32|
|actuator renovation|||||||
|BM3 Tetra project|4,985,121.78||4,985,121.78|4,651,150.58||4,651,150.58|
|Upscale special|||||||
|white cardboard|2,480,438.79||2,480,438.79|2,272,891.62||2,272,891.62|
|BM4 new project|||||||
|Huafeng OARS|||||||
|||||3,032,611.11||3,032,611.11|
|library|||||||
|BM3 energy|||||||
|management center||||1,364,476.46||1,364,476.46|
|construction|||||||
|BM3 vacuum pump|||||||
|energy saving||||2,228,316.18||2,228,316.18|
|renovation project|||||||
|Automatic|||||||
|packaging line||||7,357,259.18||7,357,259.18|
|renovation project|||||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||
|-|-|-|-|-|
|Latex phase II|||||
|matching raw|||||
||8,835,858.29|8,835,858.29|1,025,703.02|1,025,703.02|
|material tank farm|||||
|project|||||
|PP diaphragm filter|||||
||||1,043,219.59|1,043,219.59|
|press project|||||
|Advanced|||||
|waste-water|||||
||2,394,735.57|2,394,735.57|||
|treatment and water|||||
|reuse project|||||
|Equipment under|||||
||1,951,641.12|1,951,641.12|||
|Construction|||||
|Others|3,279,932.27|3,279,932.27|2,229,652.72|2,229,652.72|
|Total|23,927,727.82|23,927,727.82|28,305,202.78|28,305,202.78|

 (2) Changes of significant construction in progress
Unit: RMB Yuan
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||Ofwhich:|||
|||||Amount|||Proporti||||||
||||||||||Accumul||||
|||||that|||on|||the|Capitaliz||
||||||Other||||ative||||
|||||transferr|||estimate|||amount|ation rate||
||Estimate||||decrease||||amount||||
|||Opening||ed to||Closing|d of the|Project||of the|of the|Capital|
|Name of item|d||Increase||d amount||||of||||
|||balance||fixed||balance|project|progress||capitaliz|interests|resources|
||number||||of the||||capitaliz||||
|||||assets of|||accumul|||ed|of the||
||||||period||||ed||||
|||||the|||ative|||interests|period||
||||||||||interests||||
|||||period|||input|||of theperiod|||
|BM1|||||||||||||
|transmission|2,600,00|3,099,92|40,396.5|3,140,31|||||||||
|||||||||100||||Others|
|actuator|0.00|2.32|8|8.90|||||||||
|renovation|||||||||||||
|BM3 Tetra|18,730,0|4,651,15|333,971.|||4,985,12|||||||
|||||||||24.83||||Others|
|project|00.00|0.58|20|||1.78|||||||
|Upscale special|||||||||||||
|white|700,000,|2,272,89|207,547.|||2,480,43|||||||
|||||||||0.22||||Others|
|cardboard BM4|000.00|1.62|17|||8.79|||||||
|new project|||||||||||||
|Huafeng OARS|26,339,1|3,032,61|7,722,07|10,754,6|||||||||
|||||||||100||||Others|
|library|00.00|1.11|8.82|89.93|||||||||
|BM3 energy|2,572,00|1,364,47|76,223.1|1,440,69||||100||||Others|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||||
|-|-|-|-|-|-|-|-|
|management|0.00|6.46|8|9.64||||
|center||||||||
|construction||||||||
|BM3 vacuum||||||||
|pump energy||||||||
||2,600,00|2,228,31|5,167,08|7,395,40||||
|saving||||||100|Others|
||0.00|6.18|9.17|5.35||||
|renovation||||||||
|project||||||||
|Automatic||||||||
|packaging line|7,003,00|7,357,25|206,312.|7,563,57||||
|||||||100|Others|
|renovation|0.00|9.18|61|1.79||||
|project||||||||
|Latex phase II||||||||
|matching raw|75,000,0|1,025,70|7,810,15||8,835,85|||
|||||||11.78|Others|
|material tank|00.00|3.02|5.27||8.29|||
|farm project||||||||
|PP diaphragm||||||||
||1,400,00|1,043,21|451,577.|1,494,79||||
|filter press||||||100|Others|
||0.00|9.59|02|6.61||||
|project||||||||
|BM3 paper||||||||
|defect testing||||||||
||2,600,00||1,278,01|1,278,01||||
|system||||||100|Others|
||0.00||4.02|4.02||||
|reconstruction||||||||
|project||||||||
|BM3 coating||||||||
|hot-air box|5,000,00||3,146,49|3,146,49||||
|||||||100|Others|
|nozzle|0.00||9.89|9.89||||
|transformation||||||||
|Advanced||||||||
|waste-water||||||||
||18,000,0||2,394,73||2,394,73|||
|treatment and||||||25|Others|
||00.00||5.57||5.57|||
|water reuse||||||||
|project||||||||
|Self -bring||||||||
|heating boiler||||||||
|environmental||||||||
||25,000,0||1,410,13|1,410,13||||
|upgrading||||||100|Others|
||00.00||7.17|7.17||||
|technical||||||||
|renovation||||||||
|project||||||||
|BM3||||||||
||1,200,00||940,170.|940,170.||100|Others|
|Paper-making||||||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||||||
|-|-|-|-|-|-|-|-|-|
|Plant|0.00||94|94|||||
|Low-voltage|||||||||
|Power|||||||||
|Distribution|||||||||
|System|||||||||
|Harmonic|||||||||
|Suppression|||||||||
|Project|||||||||
|||||||||Others|
||888,044,|26,075,5|31,184,9|38,564,3|18,696,1||||
|Total||||||--|--|--|
||100.00|50.06|08.61|04.24|54.43||||

(3) List of the withdrawal of the impairment provision of the construction in progress
Unit: RMB Yuan
||||
|-|-|-|
|Item|Withdrawn amount|Reason|

Other Notes:
Construction in process during this period transferred into fixed assets was RMB 50,705,286.16.
21. Engineering material
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Opening Balance|

Other Notes:
22. Liquidation of fixed assets
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Opening Balance|

Other Notes:
23. Productive biological assets
(1) Productive biological assets adopting cost measurement method
□ Applicable√ Not applicable
(2) Productive biological assets adopting fair value measurement method
□ Applicable√ Not applicable
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 24. Oil and gas assets
□ Applicable√ Not applicable
25. Intangible assets
(1) List of intangible assets
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
|Item|Land use right|Patent right|Non-patent right|Software and others|Total|
|I. Original book||||||
|value||||||
|1. Opening||||||
||131,683,573.11||26,753,152.05|8,187,286.12|166,624,011.28|
|balance||||||
|2. Increased||||||
||15,260,725.78||11,031,006.69|761,512.69|27,053,245.16|
|amount of the period||||||
|(1) Purchase|15,260,725.78|||761,512.69|16,022,238.47|
|(2) Internal R||||||
||||11,031,006.69||11,031,006.69|
|&D||||||
|(3) Increased||||||
|from enterprise||||||
|merger||||||
|3. Decreased||||||
|||||673,800.00|673,800.00|
|amount of the period||||||
|(1) Disposal||||||
|||||673,800.00|673,800.00|
|4.Closing||||||
||146,944,298.89||37,784,158.74|8,274,998.81|193,003,456.44|
|Balance||||||
|II. Total accrued||||||
|amortization||||||
|1. Opening||||||
||43,293,838.13||12,731,330.10|2,550,301.61|58,575,469.84|
|balance||||||
|2. Increased||||||
||3,332,683.94||2,446,519.59|847,095.64|6,626,299.17|
|amount of the period||||||
|(1)||||||
||3,332,683.94||2,446,519.59|847,095.64|6,626,299.17|
|Withdrawal||||||
|3. Decreased||||466,045.00|466,045.00|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||
|-|-|-|-|-|
|amount of the period|||||
|(1) Disposal|||||
|(2) Other transfers|||466,045.00|466,045.00|
|4.Closing|||||
||46,626,522.07|15,177,849.69|2,931,352.25|64,735,724.01|
|Balance|||||
|III. Depreciation|||||
|reserves|||||
|1. Opening|||||
|balance|||||
|2. Increased|||||
|amount of the period|||||
|(1)|||||
|Withdrawal|||||
|3. Decreased|||||
|amount of the period|||||
|(1) Disposal|||||
|4.Closing|||||
|Balance|||||
|IV. Book value|||||
|1. Closing book|||||
||100,317,776.82|22,606,309.05|5,343,646.56|128,267,732.43|
|value|||||
|2. Opening|||||
||88,389,734.98|14,021,821.95|5,636,984.51|108,048,541.44|
|book value|||||

The proportion of the intangible assets formed from the internalR&D through the Company amount the balance of the intangible assets at the end of the period was5.72%.
(2) Details of fixed assets failing to accomplish certification of land use right
Unit: RMB Yuan
||||
|-|-|-|
|Item|Book value|Reason|

Other Notes:
26.R&D expenses
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Opening|||Closing|
|Item||Increase|Decrease||
||Balance|||Balance|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||
|-|-|-|-|-|
|Vacuum|||||
|plating paper|||||
|project|7,068,625.60|7,068,625.60|||
|(215gsm/225|||||
|gsm)|||||
|Cigarette|||||
|packet|||||
|coating|360,000.00||360,000.00||
|highlight|||||
|ivory board|||||
|Special-gloss|||||
|Paperboard|||||
||200,000.00||200,000.00||
|Research|||||
|Project|||||
|Lemei White|||||
|Liquid|||||
||3,205,846.39|||3,205,846.39|
|Package|||||
|Project|||||
|Lemei Cup|||||
||3,962,381.09|3,962,381.09|||
|Paper Project|||||
|Gaosong|||||
|Thick Paper|||||
|Cup|839,338.16|||839,338.16|
|Re-coating|||||
|Project|||||
||15,636,191.2|11,031,006.6|||
|Total|||560,000.00|4,045,184.55|
||4|9|||

Other Notes:
27. Goodwill
(1) Original book value of goodwill
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Name of the|||||
|investees or the|||||
||Opening balance|Increase|Decrease|Closing balance|
|events formed|||||
|goodwill|||||
|Zhuhai S.E.Z.|||||
|Hongta Renheng|9,129,025.01|||9,129,025.01|
|Paper Co., Ltd.|||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Zhuhai Jinji|||
|Chemicals Co.,|2,418,280.28|2,418,280.28|
|Ltd.|||
|Total|11,547,305.29|11,547,305.29|

 (2) Impairment provision of goodwill
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Name of the|||||
|investees or the|||||
||Opening balance|Increase|Decrease|Closing balance|
|events formed|||||
|goodwill|||||

Notes of the testing process of goodwill impairment, parameters and the recognition method of goodwill impairment losses: Other Notes:
On Jun. 30, 2009, the Company obtained the control of Zhuhai S.E.Z. Hongta Renheng Paper Co., Ltd. through business combination not under the same control with the combination cost RMB808.4487 million, and obtained the fair value of the identifiable net assets of the Company RMB799,319.7 million. Combination cost being larger than the fair value of the identifiable net assets balance formed goodwill RMB9129025.01. At the end of the period, through combining the analysis of the present value of the expected future cash flow of the assets with the evaluation of assets group of the two production line equipment and recoverable amount, there was no sign of goodwill impairment, thus no provision for impairment loss.
On Jul. 1, 2012, the Company obtained the control of Zhuhai Jinji Chemicals Co., Ltd. through business combination not under the same control with the combination cost RMB69,000,000.00, and obtained the fair value of the identifiable net assets of the Company RMB66,581,719.72. Combination cost being larger than the fair value of the identifiable net assets balance formed goodwill RMB2,418,280.28. At the end of the period, through combining the analysis of the present value of the expected future cash flow of the assets with the evaluation of assets group of the two production line equipment and recoverable amount, there was no sign of goodwill impairment, thus no provision for impairment loss.
28. Long-term unamortized expenses
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
||||Amortization|||
|Item|Opening balance|Increase||Decrease|Closing balance|
||||amount|||
|Decoration expense||||||
||239,490.03||159,523.23||79,966.80|
|for rent-in plant||||||
|Fee for technical||||||
||407,412.12||87,302.64||320,109.48|
|service||||||
|Maintaining||||||
|renovation of||||||
||2,256,869.16|1,497,726.26|854,985.00||2,899,610.42|
|construction||||||
|project||||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||
|-|-|-|-|-|
|Total|2,903,771.31|1,497,726.26|1,101,810.87|3,299,686.70|

 Other Notes:
29. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets that had not been set-off
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Closing Balance||Opening Balance||
|Item|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|assets|difference|assets|
|Assets impairment|||||
||144,181,548.35|21,628,644.75|159,371,305.68|27,822,494.18|
|provision|||||
|Internal trading|||||
||||2,953,255.99|632,811.37|
|unrealized profits|||||
|Withholding sales|||||
||10,829,370.22|1,624,405.53|9,155,596.07|1,373,339.41|
|agency fee|||||
|Accrued liabilities|929,802.09|139,470.31|837,738.20|125,660.73|
|Withholding|||||
|transportation fee of|6,276,223.65|941,433.55|21,702,217.24|3,255,332.59|
|paper|||||
|Total|162,216,944.31|24,333,954.14|194,020,113.18|33,209,638.28|

 (2) Deferred income tax liabilities that had not been set-off
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Closing Balance||Opening Balance||
|Item|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|liabilities|difference|liabilities|
|Added value of|||||
|evaluation of assets not|||||
||16,622,301.67|2,493,345.25|17,756,549.66|2,645,810.47|
|under same control|||||
|enterprise combination|||||
|Net amount of change in|||||
|fair value of trading|1,571,341.66|235,701.25|1,528,810.76|229,321.61|
|financial assets|||||
|Total|18,193,643.33|2,729,046.50|19,285,360.42|2,875,132.08|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 (3) Deferred income tax assets or liabilities listed by net amount after set-off
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Mutual set-off amount of|Amount of deferred||Amount of deferred|
||||Mutual set-off amount of||
||deferred income tax|income tax assets or||income tax assets or|
|Item|||deferred income tax||
||assets and liabilities at|liabilities after set-off at||liabilities after set-off at|
||||assets and liabilities||
||the end of the period|the end of the period||the period-begin|
|Deferred income tax||24,333,954.14||33,209,638.28|
|assets|||||
|Deferred income tax||2,729,046.50||2,875,132.08|
|liabilities|||||

(4) List of unrecognized deferred income tax assets
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Opening Balance|
|Deductible losses|105,598,840.28|88,387,629.70|
|Fixed assets depreciation reserves|201,333.37||
|Total|105,800,173.65|88,387,629.70|

 (5) Deductible losses of unrecognized deferred income tax assets due in the following years
Unit: RMB Yuan
|||||
|-|-|-|-|
|Years|Closing balance|Opening balance|Notes|
|2017|17,075,899.85|||
|2018|13,206,217.94|||
|2020|72,934,938.44|||
|2021|2,381,784.05|||
|Total|105,598,840.28||--|

Other Notes:
30. Other non-current assets
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Opening Balance|
|Prepayment of equipment|5,147,078.23|7,519,746.40|
|Total|5,147,078.23|7,519,746.40|

Other Notes:
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 31. Short-term loans
(1) Category of short-term loans
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Opening Balance|
|Pledge loan|158,177,940.16|272,724,440.16|
|Guaranteed loan|563,722,059.84|510,000,000.00|
|Credit loan|100,000,000.00|130,000,000.00|
|Total|821,900,000.00|912,724,440.16|

 Notes of short-term loans category
(1) Pledge Loan means that the company regard the guaranteed loan in other monetary funds as the pledge. (2) Guaranteed Loan means that the company provide its subsidiary with corresponding guarantee to obtain the loan.
(2) List of the short-term loans overdue but not returned
The total amount of the overdue but not returned short-term borrowings at the end of the period was of RMB 000, of which, the significant short-term borrowings overdue but not returned are as follows:
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Entity|Closing balance|Borrowing rate|Overdue time|Overdue rate|

 Other Notes:
32. Financial liabilities measured by fair value and the changes included in the current gains and losses Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Opening Balance|
|Financial liabilities specified as measured|||
|by fair value and the changes included in||212,689.24|
|the current gains and losses|||
|Total||212,689.24|

 Other Notes:
33. Derivative financial liabilities
□ Applicable√ Not applicable
34. Notes payable
Unit: RMB Yuan
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Category|Closing Balance|Opening Balance|
|Bank acceptance bill|217,381,869.35|127,562,392.61|
|Total|217,381,869.35|127,562,392.61|

 The total amount of the due but not paid notes payable at the end of the period was of RMB000.
35. Accounts payable
(1) List of accounts payable
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Opening Balance|
|Payment of material|328,808,851.45|271,218,660.09|
|Payment of equipment|16,512,842.23|25,102,687.10|
|Others|38,061,471.37|69,234,411.70|
|Total|383,383,165.05|365,555,758.89|

 (2) Notes of the accounts payable aging over one year
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Reason|
|TEMBEL INC.|3,381,627.71|Unsettled|
|Marubeni Corporation|2,158,058.57|Unsettled|
|Total|5,539,686.28|--|

Other Notes:
36. Advance from customers
(1) List of advance from customers
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Opening Balance|
|Within 1 year|38,345,372.77|8,449,921.92|
|1-2 years|580,149.32|727,234.35|
|2-3 years|308,888.09|640,213.45|
|Over 3 years|565,572.21||
|Total|39,799,982.39|9,817,369.72|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 (2) Significant advance from customers aging over one year
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Reason|

(3) Particulars of settled but unfinished projects formed by construction contract at the end of the period. Unit: RMB Yuan
|||
|-|-|
|Item|Amount|

Other Notes:
Advance collections at the end of the period increased305.40% when compared to that at the beginning of the period because the advances on sales were largely increased in this year.
37. Payroll payable
(1) List of Payroll payable
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|I. Short-term salary|33,391,126.62|184,216,654.97|189,275,569.92|28,332,211.67|
|II. Post-employment|||||
|benefit-defined||13,439,239.03|13,439,239.03||
|contribution plans|||||
|III. Termination benefits||492,292.40|492,292.40||
|Total|33,391,126.62|198,148,186.40|203,207,101.35|28,332,211.67|

 (2) List of Short-term salary
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|1. Salary, bonus,|||||
||25,749,217.27|156,213,578.69|161,798,956.29|20,163,839.67|
|allowance, subsidy|||||
|2. Employee welfare||11,802,988.27|11,802,988.27||
|3. Social insurance||7,210,564.44|7,210,564.44||
|Including: 1.|||||
|Medical insurance||6,168,796.08|6,168,796.08||
|premiums|||||
|Work-related injury|||||
|||530,692.91|530,692.91||
|insurance|||||
|Maternity insurance||511,075.45|511,075.45||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||
|-|-|-|-|-|
|4. Housing fund|292,844.00|5,060,508.72|5,238,958.72|114,394.00|
|5. Labor union budget|||||
|and employee education|7,349,065.35|3,929,014.85|3,224,102.20|8,053,978.00|
|budget|||||
|Total|33,391,126.62|184,216,654.97|189,275,569.92|28,332,211.67|

 (3) List of drawing scheme
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening Balance|Increase|Decrease|Closing Balance|
|1. Basic pension benefits||12,761,465.07|12,761,465.07||
|2. Unemployment|||||
|||677,773.96|677,773.96||
|insurance|||||
|Total||13,439,239.03|13,439,239.03||

Other Notes:
38. Taxes payable
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Opening Balance|
|VAT|16,754,326.63|22,744,304.43|
|Corporate income tax|8,941,924.35|6,341,081.18|
|Personal income tax|172,153.74|172,648.12|
|Urban maintenance and construction tax|902,485.46|1,718,019.44|
|Business Tax||2,205.00|
|Property tax|6,286,965.76|3,646,294.99|
|Education Surcharge|644,860.36|1,228,217.17|
|Dike fee||154,587.98|
|Stamp tax|107,199.04|287,791.21|
|Land use tax|2,277,941.49|1,275,706.96|
|Total|36,087,856.83|37,570,856.48|

 Other Notes:
39. Interest payable
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Opening Balance|
|Enterprise bond interest|9,031,776.01|9,031,776.00|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Interest payable of short-term loans|2,414,317.93|1,652,708.26|
|Total|11,446,093.94|10,684,484.26|

 Particulars of significant overdue unpaid interest:
Unit: RMB Yuan
||||
|-|-|-|
|Entity|Overdue amount|Overdue reason|

Other Notes:
40. Dividends payable
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Opening Balance|
|Common stock dividends|3,468,350.84|11,019,644.79|
|Total|3,468,350.84|11,019,644.79|

 Notes: Including significant unpaid dividends payable over one year, relevant reasons shall be disclosed:
Closing balance of interest payable mainly was the profits of minority shareholder of Jinji Chemicals Co., Ltd. 41. Other accounts payable
(1) Other accounts payable listed by nature of the account
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Opening Balance|
|Pledged and margin|7,469,278.11|10,042,416.81|
|Prepayment|6,530,702.85|5,569,221.82|
|Capital of related parties|570,384.98|5,000,000.00|
|Final payment of engineering|1,433,095.30|1,155,901.59|
|Others|2,422,821.83|2,993,931.08|
|Total|18,426,283.07|24,761,471.30|

 (2) Other significant accounts payable with aging over one year
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Unpaid/ Un-carry-over reason|
|||Logistics margin, transaction is under|
|Yunan Yuxi Tengyin Logistics Co., Ltd.|1,050,000.00||
|||processing|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Guangdong Chengtong Logistics Co., Ltd.|570,384.98|Margin, transaction is under processing|
|||Logistics margin, transaction is under|
|Eastern Sunday Logistics Co., Ltd.|500,000.00||
|||processing|
|Total|2,120,384.98|--|

Other Notes:
42. Liabilities classified as holding for sale
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Opening Balance|

Other Notes:
43. Non-current liabilities due within 1 year
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Opening Balance|
|Long-term bonds payable due within 1|||
||798,066,823.66||
|year|||
|Total|798,066,823.66||

Other Notes:
1. Increase and Decrease of Non-current liability due within one year
||||||
|-|-|-|-|-|
|Bond Name|Nominal Value|Date of Issue|Term of Bond|Amount|
|12HuabaoBebt|800,000,000.00|2012/11/26|5 years|791,700,000.00|
|Total|800,000,000.00|2012/11/26|5 years|791,700,000.00|

Continued:
||||||
|-|-|-|-|-|
|Bond Name||Withdraw interest at|Overflow discount|Payment in|
||The current issue||||
|||par|amortization|current period|
|12HuabaoBebt|---|46,398,840.00|1,701,618.36|---|
|Total|---|46,398,840.00|1,701,618.36|---|

2. Notes of Non-current Liability due within 1 year:
In accordance with the Resolution Made at the
6th
meeting of the
5th
Board of Directors on Dec. 16, 2012, and the Resolution Made at the First SpecialShareholders’ General Meeting for 2012 on Jan. 4, 2012, as well as the approval of CSRC with the Reply on Approving the Public Issuance of Corporate Bonds for Foshan Huaxin Packaging Co., Ltd. (ZJXK[2012] No. 725) on May 28, 2012, the Company publicly issued 8 million pieces of corporate bonds with the par value of RMB100 per piece by adopting the way of online public issuance for the public investors and off-line inquiry placing for the institution investors, with the nominal rate of5.8%, and the
term of bonds was five years from the date of issuance, and the raised capital after deducting the bond issuance
underwriting fees and custodian fees was RMB791,700,000.00. The bonds using simple interest shall be paid on
yearly basis without the compound interest. The final phase of interest was paid together with the principal
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 redemption, and the interest period started from Nov. 26, 2012.
44. Other current-liabilities
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Opening Balance|

Changes on short term bonds payable:
Unit: RMB Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Overflow|||
|||||||The|Withdraw||Pay in||
|Name of|Book|||Issue|Opening|||discount||Closing|
|||Issue date|Period|||current|interest at||current||
|the bond|value|||amount|balance|||amortizati||Balance|
|||||||issue|par||period||
|||||||||on|||

Other Notes:
45. Long-term loan
(1) Category of long-term loan
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Opening Balance|

Notes of short-term loans category:
Other notes including interest rate range:
46. Bonds payable
(1) Bonds payable
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Opening Balance|
|Corporation bonds||796,365,205.30|
|Medium-term notes of the bank|199,520,397.22|199,222,756.99|
|Total|199,520,397.22|995,587,962.29|

 (2) Changes on bonds payable (not including other financial instrument classified as preferred stock and perpetual capital securities of financial liabilities)
Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|15HUAB|||||||||
||200,000,0|||199,100,0|199,222,7|10,560,00|297,640.2|199,520,3|
|AO||2015/7/31|3 years||||||
||00.00|||00.00|56.99|0.00|3|97.22|
|MTN001|||||||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||199,100,0|199,222,7|10,560,00|297,640.2|199,520,3|
|Total|--|--|--||||||
|||||00.00|56.99|0.00|3|97.22|

 (3) Note to conditions and time of share transfer of convertible bonds
(4) Note to other financial instrument classified as financial liabilities
Basic information of preferred stock, perpetual capital securities and other financial instruments outstanding issued at the end of the period
Change list of preferred stock, perpetual capital securities and other financial instruments outstanding issued at the end of the period Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Financial|Opening period||Increase||Decrease||Closing period||
|instruments|||||||||
|outstanding|Amount|Book value|Amount|Book value|Amount|Book value|Amount|Book value|
|issued|||||||||

Notes to the basis of other financial instrument classified as financial liabilities
Other Notes:
In line with the Second Special Meeting of the General Shareholders held by the company on Nov. 10, 2014, the meeting reviewed and approved the Proposal of the Issue of Medium-Term Notes, agreeing to issue no more than RMB five hundred million of the medium-term notes. The Company received the Acceptance of Registration Notice ZSXZ[2015] No. MTN253, agreeing to accept the Company's registration of Medium-Term Notes. The Company's total issue amount was RMB200, 000,000.00 with the coupon rate5.28% and the term of Medium-Term Notes was 3 years. Meanwhile, the total raised capital after deducting the bond issuance underwriting fees and custodian fees was RMB199,100,000.00. The bonds using simple interest shall be paid on yearly basis without the compound interest. The final phase of interest was paid together with the principal redemption, and the interest period started from Jul. 31, 2015.
47. Long-term payable
(1) Long-term payable listed by nature of the account
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Opening Balance|
|Finance lease|3,137,995.76|7,630,748.49|
|Total|3,137,995.76|7,630,748.49|

 Other Notes:
48. Long term payroll payable
(1) List of long term payroll payable
Unit: RMB Yuan
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Item|Closing Balance|Opening Balance|

(2) Changes of defined benefit plans
Present worth of defined benefit plans obligation:
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|

Plan assets:
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|

Net liabilities (net assets) of defined benefit plans
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|

Notes to the influence of the content and related risk of defined benefit plans to the future cash flows, time and uncertainty of the Company:
Notes to analysis results of major actuarial assumptions and sensibility of defined benefit plans
Other Notes:
49. Special payable
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|Formation reasons|

 Other Notes:
50. Accrued liabilities
Unit: RMB Yuan
|||||
|-|-|-|-|
|Item|Closing Balance|Opening Balance|Formation reasons|
||||Estimated litigation|
|Pending litigation|425,523.53|||
||||compensation|
||||Predicted losses resulting from|
|Product quality guarantee|1,691,834.27|1,758,780.68||
||||any product quality problem|
|Total|2,117,357.80|1,758,780.68|--|

Other Notes: including related important assumptions and estimates of accrued liabilities:
51. Deferred income
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
|Item|Opening Balance|Increase|Decrease|Closing Balance|Formation reasons|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||
|-|-|-|-|-|-|
|Government||||||
||9,200,905.88|11,178,200.00|2,153,728.43|18,225,377.45||
|subsidies||||||
|Total|9,200,905.88|11,178,200.00|2,153,728.43|18,225,377.45|--|

Items involved in government subsidies:
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||||Amount accrued||||
|||Amount of newly||||Related to the|
|Item|Opening balance||in non-business|Other changes|Closing balance||
|||subsidy||||assets/ income|
||||income||||
|Renovation|||||||
|project of the|||||||
|information|||||||
|system of||||||Related to the|
||784,000.00||32,000.00||752,000.00||
|paper-making||||||assets|
|enterprise energy|||||||
|management|||||||
|center (1)|||||||
|Project of the|||||||
|information|||||||
|system of|||||||
|||||||Related to the|
|paper-making|700,000.00||350,000.00||350,000.00||
|||||||assets|
|enterprise energy|||||||
|management|||||||
|center (1)|||||||
|No. 1 paper|||||||
|machine update||||||Related to the|
||240,000.00||6,400.00||233,600.00||
|& renovation||||||assets|
|project (2)|||||||
|Liquid paper|||||||
|||||||Related to the|
|renovation|303,333.28||35,000.04||268,333.24||
|||||||assets|
|project (3)|||||||
|Funds for|||||||
|energy-saving|||||||
|||||||Related to the|
|and|600,000.00||300,000.00||300,000.00||
|||||||assets|
|emission-reductio|||||||
|n (4)|||||||
|Renovation|||||||
|project of the|||||||
|information||||||Related to the|
||1,400,000.00||23,333.33||1,376,666.67||
|system of energy||||||assets|
|management|||||||
|center (4)|||||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||
|-|-|-|-|-|-|
|Steam||||||
|condensation||||||
||||||Related to the|
|water recycling|1,920,000.00|||1,920,000.00||
||||||assets|
|and energy saving||||||
|projects (4)||||||
|Subsidy of||||||
|improvement of|||||Related to the|
||2,797,572.60||699,381.03|2,098,191.57||
|Zhuhai motor|||||assets|
|efficiency (6)||||||
|Subsidy of latex||||||
|phase II||||||
||||||Related to the|
|production line|456,000.00||114,000.00|342,000.00||
||||||assets|
|technological||||||
|transformation(7)||||||
|BM1 ink-jet||||||
|printer system||||||
|and drive system||||||
||||||Related to the|
|upgrade synthesis||8,441,800.00|534,647.33|7,907,152.67||
||||||assets|
|technique||||||
|transformation||||||
|project(8)||||||
|Zhuhai Gaolan||||||
|Port national||||||
|treasury||||||
|equipment|||||Related to the|
|||1,040,000.00|38,133.37|1,001,866.63||
|renewal (Robot|||||assets|
|Application)||||||
|special fund||||||
|subsidies(9)||||||
|Energy||||||
|management||||||
|center||||||
||||||Related to the|
|energy-saving||1,138,400.00|18,973.33|1,119,426.67||
||||||assets|
|technological||||||
|innovation||||||
|support fund (10)||||||
|Post-awarded||||||
|subsidies of||||||
|Automatic|||||Related to the|
|||558,000.00|1,860.00|556,140.00||
|packaging line|||||assets|
|technical||||||
|innovation (11)||||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||
|-|-|-|-|-|-|
|Total|9,200,905.88|11,178,200.00|2,153,728.43|18,225,377.45|--|

 Other Notes:
1. In accordance with the Notice of Zhuhai Municipal Bureau of Finance on Delivering the Interest Subsidy Funds on Technical Renovation of the Provincial Industrial Structure Adjustment Special Funds in 2012 (ZCG[2012] No. 066), theCompany’s subsidiary Zhuhai S.E.Z. Hongta Renheng Paper Co., Ltd. gained the government grant of RMB800,000.00 for the information system renovation project of the Paper-making Enterprises Energy. The system had been put into use in 2015, which amortized in line with asset depreciation period. In 2013, the Company received the government subsidiary RMB1.4 million, and the system had been put into use in 2014, which amortized in line with asset depreciation period, and the system had been put into use in 2014, which amortized in line with asset depreciation period.
2. Zhuhai S.E.Z. Hongta Renheng Paper Co., Ltd. gained the government grant of RMB240,000.00 for No. 1 paper machine update& renovation project in Oct. 2012. Such government subsidies related to the assets were put into use in this year, and shall be amortized based on theassets’ service life.
3. RMB350,000 of government subsidies for Tetra liquid paper renovation project was received by Hongta Renheng in Nov. 2013. The system was put in use, and shall be amortized according to their service life from the year 2014 on.
4. RMB1.2 million of special fund for Guangdong Provincial Energy-saving and circular economy project in December 2013 was received by Hongta Renheng. The system was put in use, and shall be amortized according to their service life from the year 2014 on.
5. According to the Announcement on Ordering Special Funds for Province Energy Saving in 2012 (the second) (ZCG[2012] No. 123), the subsidiary of the Company Zhuhai Huafeng Co., Ltd. received RMB1.92 million of government subsidies for steam condensation water recycling and energy saving projects, RMB 1.40 million of government subsidies for information system project and energy management center project in Feb, 2013. The above assets-related government subsidies shall be amortized based on the service life from this year on.
6. In line with the Announcement on Rules for the Implementation of Subsidiary Improvement of Motor Efficiency of Guangdong Province (YCG[2013] No. 389) and the Announcement on Rules for the Implementation of Subsidiary Improvement of Motor Efficiency of Zhuhai (ZKGMX[2014] No. 392) issued by Guangdong Finance Department and Economic and Information Council of Guangdong, the Company's subsidiary Zhuhai S.E.Z. Hongta Renheng Paper Co., Ltd. received RMB1, 813,877.00 of Government Subsidy for Improvement of Motor Efficiency. Zhuhai Huafeng Co., Ltd.. The Subsidiary of Zhuhai S.E.Z. Hongta Renheng Paper Co., Ltd., received RMB1, 683,109.00 of Government Subsidy for Improvement of Motor Efficiency. The purchased equipment was put into use in 2015, and shall be amortized based on its service life from this year on.
7. In line with the spirit of the Announcement on Advice on Implementation of Promoting Industry Structure Adjustment(ZHF[2010] No. 162) and Interim Measures of Zhuhai Technology Innovation Assets Management (ZKGMX[2013] No. 259), Zhuhai Jinji Chemicals Co., Ltd. under the control of the Company received government subsidiary RMB570,000. Latex phase II Project was completed and put into use in 2015 and shall be
amortized based on its service life.
8. (1) According to the Notice of Printing and Issuing Guangdong Industrial Enterprise Technical Innovation
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 After-awarded Subsidies Rules published by The Economic& Information Commission of Guangdong Province and Department of Finance of Guangdong Province, the subsidiary Hongta Renheng received RMB 8,201,800.00 as the subsidies for BM1 ink-jet printer system and drive system upgrade synthesis technique transformation project on December 22, 2016, and such subsidiaries were put into use during this period, and shall be amortized in this year based on the service life period of the assets.
(2) According to the Reply on Technical Innovation Capital Allocation in Xiangzhou District for the Year 2015 issued by thepeople’s government in Xiangzhou District of Zhuhai and relevant annexes, thecompany’s subsidiary Hongta Renheng received RMB 240,000.00 granted by the Finance Bureau in Xiangzhou District of Zhuhai as subsidies for BM1 ink-jet printer project on February 29, 2016. Such system was successfully upgraded and put into service this year. The company will receive RMB 8,441,800.00 as subsidies for the project, which shall be amortized in this year based on the service life period of the assets.
8. According to the special recheck on provincial enterprise transformation special equipment upgrade (Robot Application) project conducted by The Economic& Information Commission of Guangdong Province and Department of Finance of Guangdong Province, thecompany’s subsidiary Zhuhai Huafeng received RMB 1.04 million as the special funds for Zhuhai Gaolan Port national treasury equipment renewal (Robot Application) project on February 26, 2016. Such equipment was put into service during this Reporting Period, which shall be amortized in this year based on the service life period of the assets.
9. According to the Notice on 2016 Energy-saving Special Funds Project Declaration issued by Gaolan Port Energy-saving& Cost-reducing Leading Group Office, thecompany’s subsidiary Zhuhai Huafeng received RMB1,138,400.00 as the energy management center energy-saving technical innovation support funds on December 27, 2016. The company has completed the construction of energy management center energy-saving project which has been transferred into fixed assets, and corresponding amortization shall be conducted based on the service life period of the assets.
10. According to the Notice on 2016 Guangdong Provincial Enterprise Technical Innovation Post-awarded Subsidies Publicity issued by Zhuhai Technology and Industrial Informatization Bureau, thecompany’s subsidiary Zhuhai Huafeng received RMB 558,000.00 as the automatic packaging line project technical innovation post-awarded subsidies on December 16, 2016. The technical innovation project was completed, and corresponding amortization shall be conducted based on the service life period of the assets.
52. Other non-current liabilities
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Opening Balance|

Other Notes:
53. Share capital
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|Opening|Increase/decrease (+/-)|||||Closing|
|balance|Newly issue|Bonus shares|Capitalization|Other|Subtotal|Balance|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||
|-|-|-|-|-|
|||share|of public||
||||reserves||
|The sum of|505,425,000.00|||505,425,000.00|
|shares|||||

Other Notes:
54. Other equity instruments
(1) Basic information of preferred stock, perpetual capital securities and other financial instruments outstanding issued at period-begin
(2) Change list of preferred stock, perpetual capital securities and other financial instruments outstanding issued at period-begin
Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Financial|Opening period||Increase||Decrease||Closing period||
|instruments|||||||||
|outstanding|Amount|Book value|Amount|Book value|Amount|Book value|Amount|Book value|
|issued|||||||||

Changes, reason of change and basis of relevant accounting treatment of other equity instruments in Reporting Period:
Other Notes:
55. Capital reserves
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening Balance|Increase|Decrease|Closing Balance|
|Capital premium|256,362,525.38|||256,362,525.38|
|Other capital reserves|459,848.04|||459,848.04|
|Total|256,822,373.42|||256,822,373.42|

 Other Notes: including changes and reason of change:
56. Treasury stock
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening Balance|Increase|Decrease|Closing Balance|

 Other Notes: including changes and reason of change:
57. Other comprehensive income
Unit: RMB Yuan
|||||
|-|-|-|-|
|Item|Opening|Reporting Period|Closing|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||||
|-|-|-|-|-|-|-|-|
||Balance||Less: Amount||||Balance|
||||transferred|||||
||||into profit and|||||
||||loss in the|||||
|||Amount|||After-tax|After-tax||
||||current period|Less:||||
|||incurred|||attribute to|attribute to||
||||that|income tax||||
|||before|||the parent|minority||
||||recognized|expense||||
|||income tax|||company|shareholder||
||||into other|||||
||||comprehensive|||||
||||income in|||||
||||prior period|||||
|I. Other comprehensive no longer|||||||169,714.3|
||169,714.39|||||||
|reclassified into profits or losses|||||||9|
|Shares in other comprehensive||||||||
|income no longer reclassified into|||||||169,714.3|
||169,714.39|||||||
|profits or losses in future in investee|||||||9|
|entity under the equity method||||||||
||169,714.39||||||169,714.39|
|Total||||||||

 Other Notes: including the adjustment of the recognition of initial amount of effective part of the cash flow hedging gains and losses transferred into arbitraged items:
58. Special reserves
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening Balance|Increase|Decrease|Closing Balance|

 Other Notes, including changes and reasons of change:
59. Surplus reserves
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening Balance|Increase|Decrease|Closing Balance|
|Statutory surplus|||||
||187,280,095.40|2,994,976.44||190,275,071.84|
|reserves|||||
|Total|187,280,095.40|2,994,976.44||190,275,071.84|

 Other notes, including changes and reasons of change
60. Retained profits
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting Period|Last period|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Opening balance of retained profits beforeadjustments|||
||988,580,048.92|863,066,727.26|
|Opening balance of retained profits afteradjustments|988,580,048.92||
|||863,066,727.26|
|Add: Net profit attributable to owners of theCompany|||
||61,324,088.11|133,094,696.66|
|Less: Withdrawal of statutory surplus reserves|2,994,976.44||
|Dividend of common stock payable|19,206,150.00|7,581,375.00|
|Closing retained profits|1,027,703,010.59|988,580,048.92|

 List of adjustment of opening retained profits:
1) RMB000 opening retained profits were affected by retrospective adjustment conducted according to the Accounting Standards for Business Enterprises and relevant new regulations.
2) RMB000 opening retained profits were affected by changes on accounting policies.
3) RMB000 opening retained profits were affected by correction of significant accounting errors.
4) RMB000 opening retained profits were affected by changes in combination scope arising from same control.
5) RMB000 opening retained profits were affected totally by other adjustments.
61. Revenues and operating costs
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Reporting Period||Same period of last year||
|Item|||||
||Revenue|Operating costs|Revenue|Operating costs|
|Main operations|3,063,791,535.10|2,565,346,640.38|3,203,045,668.83|2,667,631,646.77|
|Other operations|543,967,368.91|521,730,590.17|78,998,326.29|65,531,889.36|
|Total|3,607,758,904.01|3,087,077,230.55|3,282,043,995.12|2,733,163,536.13|

 62. Business tax and surcharges
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Urban maintenance and construction tax|9,299,355.68|8,583,319.05|
|Education Surcharge|6,647,644.32|6,144,296.15|
|Property Tax|3,510,734.89||
|Land use tax|1,607,318.60||
|Vehicle and vessel use tax|33,613.92||
|Stamp Duty|1,342,996.36||
|Business Tax||379,975.11|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Dike Fees|229,590.28|1,217,563.33|
|Total|22,671,254.05|16,325,153.64|

 Other Notes:
63. Sales expenses
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Salary and benefits|12,796,044.47|12,957,318.34|
|Sales agency fee|4,579,860.62|8,525,942.10|
|Business entertainment fees|5,285,187.73|6,502,420.81|
|Packing charges|9,580,068.52|9,227,310.96|
|Warehousing fees|3,466,319.28|4,468,599.38|
|Transport fees|134,309,505.72|127,476,312.11|
|Office expenses|1,067,253.08|1,232,279.29|
|Others|10,879,668.89|2,010,155.44|
|Total|181,963,908.31|172,400,338.43|

 Other Notes:
64. Administrative expenses
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Salary and benefits|39,144,638.78|49,783,049.42|
|Social insurance|17,429,542.48|18,426,517.99|
|Housing fund|4,197,117.76|4,551,491.31|
|Tax|3,956,658.53|10,769,454.82|
|Amortization of depreciation fee|19,381,114.99|16,899,481.64|
|Office expenses|3,057,375.69|4,173,721.57|
|R&D expenses|4,914,523.37|21,373,458.01|
|Employ agency fee|5,872,853.30|5,500,609.79|
|Water & electricity fees|4,280,847.73|3,109,682.52|
|Rental fee|1,828,796.99|1,818,076.44|
|Business travel charges|3,118,674.68|2,685,182.34|
|Business entertainment fees|2,244,273.23|2,144,447.74|
|Material Consumption|2,550,902.70|5,233,346.30|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Others|9,146,484.02|11,650,672.58|
|Total|121,123,804.25|158,119,192.47|

 Other Notes:
65. Financial expenses
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Interest expenses|113,981,677.05|112,147,615.10|
|Less: Interest income|26,563,359.13|8,764,125.77|
|Exchange gains and losses|-6,945,672.70|24,566,838.57|
|Others|3,276,983.15|5,921,727.82|
|Total|83,749,628.37|133,872,055.72|

 Other Notes:
Financial expenses resulting during this period decreased37.44% when compared to that last year due to loan interest revenue from non-financial institutes and the increase in exchange income.
66. Asset impairment loss
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|I. Bad debt loss|377,092.02|21,592,987.90|
|II. Inventory falling price loss|-4,448,233.15|5,031,312.50|
|Total|-4,071,141.13|26,624,300.40|

 Other Notes:
Influenced by the inventory falling price reserves restitution of Hongta Renheng and Zhuhai Huafeng, the asset impairment loss during this period decreased115.29% when compared to that last year.
67. Gains on the changes in the fair value
Unit: RMB Yuan
||||
|-|-|-|
|Source|Reporting Period|Same period of last year|
|2. Financial assets measured by fair value|||
|and the changes be included in the current|1,571,341.66|1,741,500.00|
|profits and losses|||
|Financial liabilities measured by fair value|||
|||-212,689.24|
|and the changes included in the current|||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|gains and losses|||
|Total|1,571,341.66|1,528,810.76|

 Other Notes:
Profits from change in fair value resulted from the fact that theCompany’s subsidiary Zhuhai S.E.Z. Hongta Renheng Paper Co., Ltd. purchased the structural deposits (financial product) from the bank, and the fair value was based on the receivable floating interest income.
68. Investment income
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Long-term equity investment income|||
||15,434,824.76|15,711,019.67|
|accounted by equity method|||
|Investment income arising from disposal of|||
|||112,969,816.59|
|long-term equity investments|||
|Investment income received from disposal of|||
|financial assets measured by fair value and the|||
||3,965,056.76|-7,690,593.72|
|changes be included in the current profits and|||
|losses|||
|Investment income received from disposal of|||
|||176,323.79|
|available-for-sale financial assets|||
|Total|19,399,881.52|121,166,566.33|

 Other Notes:
Influence by the disposal of the equity investment of thecompany’s subsidiary Foshan Chengtong Paper Co., Ltd., the investment income during this period decreased83.99% when compared to that last year.
69. Non-operating gains
Unit: RMB Yuan
|||||
|-|-|-|-|
||||Recorded in the amount of the|
|Item|Reporting Period|Same period of last year||
||||non-recurring gains and losses|
|Total gains from disposal of|692,850.74|2,265,238.32||
||||692,850.74|
|non-current assets||||
|Including: Gains from disposal||||
||692,850.74|1,156,376.92|692,850.74|
|of fixed assets||||
|Gains from disposal of||||
|||1,108,861.40||
|intangible assets||||
|Gains from debt restructuring||2,288,256.01||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||
|-|-|-|-|
|Government subsidies|26,022,524.47|16,481,293.41|26,022,524.47|
|Compensation income|556,269.23||556,269.23|
|Others|1,911,143.28|2,694,408.97|1,911,143.28|
|Total|29,182,787.72|23,729,196.71|29,182,787.72|

Government subsidies recorded into current profits and losses
Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Whether|||||
|||||influence|Whether||||
|||Distributi||||||Related to the|
||Distribution|||the profits|Special|Reporting|Same period||
|Item||on|Nature/type|||||assets/|
||entity|||or losses|subsidy or|Period|of last year||
|||reason||||||income|
|||||of the year|not||||
|||||or not|||||
||||Subsidy gained in||||||
|Amortization|||||||||
||||conformity with||||||
|of|Zhuhai||||||||
||||local government||||||
|government|Municipal|||||||Related to the|
|||Subsidy|attracting|Yes|No|2,153,728.43|1,514,413.44||
|subsidies in|Finance|||||||assets|
||||investment and||||||
|deferred|Bureau||||||||
||||local supportive||||||
|revenue|||||||||
||||policy etc.||||||
||||Subsidy gained in||||||
|Special funds|||||||||
||||conformity with||||||
|of promoting|Zhuhai||||||||
||||local government||||||
|import|Municipal|||||||Related the|
|||Subsidy|attracting|Yes|No|640,085.00|993,624.00||
|(Import|Finance|||||||income|
||||investment and||||||
|discount|Bureau||||||||
||||local supportive||||||
|interest)|||||||||
||||policy etc.||||||
|Import|||Subsidy gained in||||||
|discount|||conformity with||||||
||Zhuhai||||||||
|interest for|||local government||||||
||Municipal|||||||Related the|
|promote &||Subsidy|attracting|Yes|No|2,260,617.00|2,182,820.00||
||Finance|||||||income|
|encourage|||investment and||||||
||Bureau||||||||
|important|||local supportive||||||
|goods|||policy etc.||||||
||||Subsidy gained in||||||
|The special|||conformity with||||||
||Zhuhai||||||||
|matching|||local government||||||
||Municipal|||||||Related the|
|funds for||Subsidy|attracting|Yes|No|1,359,095.00|1,097,523.00||
||Finance|||||||income|
|expending|||investment and||||||
||Bureau||||||||
|import|||local supportive||||||
||||policy etc.||||||
|Zhuihai|Zhuihai|Subsidy|Subsidy gained in|Yes|No|528,460.00|967,010.00|Related the|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||||||
|-|-|-|-|-|-|-|-|-|
|International|International||conformity with|||||income|
|Freight|Freight||local government||||||
|Terminal|Terminal||attracting||||||
|(Gaolan) Co.,|(Gaolan) Co.,||investment and||||||
|Ltd.|Ltd.||local supportive||||||
|government|||policy etc.||||||
|consign|||||||||
|subsidy|||||||||
||||Subsidy gained in||||||
||Zhuhai||||||||
||||conformity with||||||
|Industrial|Gaolan||||||||
||||local government||||||
|water price|Financial|||||||Related the|
|||Subsidy|attracting|Yes|No|4,745,800.00|3,977,454.00||
|difference|Treasury|||||||income|
||||investment and||||||
|subsidy|Payment||||||||
||||local supportive||||||
||Center||||||||
||||policy etc.||||||
|Special funds|||||||||
||||Subsidy gained in||||||
|for promoting|||||||||
||||conformity with||||||
|the|Zhuhai||||||||
||||local government||||||
|transformatio|Municipal|||||||Related the|
|||Subsidy|attracting|No|No||525,000.00||
|n and|Finance|||||||income|
||||investment and||||||
|upgrading of|Bureau||||||||
||||local supportive||||||
|processing|||||||||
||||policy etc.||||||
|trade|||||||||
||||Subsidy gained in||||||
||||conformity with||||||
|Zhuhai|Zhuhai||||||||
||||local government||||||
|technical|Municipal|||||||Related the|
|||Subsidy|attracting|Yes|No|608,900.00|160,000.00||
|transformatio|Finance|||||||income|
||||investment and||||||
|n fund|Bureau||||||||
||||local supportive||||||
||||policy etc.||||||
|Special funds|||||||||
|for provincial|||||||||
|enterprise|||Subsidy gained in||||||
|transformatio|||conformity with||||||
||Zhuhai||||||||
|n and|||local government||||||
||Municipal|||||||Related the|
|upgrading||Subsidy|attracting|No|No||100,000.00||
||Finance|||||||income|
|(two|||investment and||||||
||Bureau||||||||
|integration|||local supportive||||||
|management|||policy etc.||||||
|system|||||||||
|project)|||||||||
|Subsidy for|Zhuhai||Subsidy from R&D|||||Related the|
|||Subsidy||Yes|No|497,682.00|2,458,331.97||
|Zhuhai|Municipal||Technical updating|||||income|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||||||
|-|-|-|-|-|-|-|-|-|
|enterprise|Finance||and transformation,||||||
|R&D fee of|Bureau||etc.||||||
|2013|||||||||
||||Subsidy gained in||||||
|Special fund|||||||||
||Bureau of||conformity with||||||
|for external|||||||||
||finance of||local government||||||
|economy||||||||Related the|
||Foshan|Subsidy|attracting|No|No||1,040,000.00||
|trade||||||||income|
||Chancheng||investment and||||||
|development|||||||||
||District||local supportive||||||
|of 2015|||||||||
||||policy etc.||||||
|Special fund|||Subsidy gained in||||||
|for Province|||conformity with||||||
||Zhuhai||||||||
|and ministry|||local government||||||
||Municipal|||||||Related the|
|cooperation||Subsidy|attracting|No|No||500,000.00||
||Finance|||||||income|
|of industry,|||investment and||||||
||Bureau||||||||
|university|||local supportive||||||
|and research|||policy etc.||||||
|Zhuhai|||||||||
|Bureau of|||||||||
||||Subsidy gained in||||||
|Quality|||||||||
||||conformity with||||||
|Supervision|Zhuhai||||||||
||||local government||||||
|Technology|Municipal|||||||Related the|
|||Award|attracting|No|No|170,000.00|260,000.00||
|Standards|Finance|||||||income|
||||investment and||||||
|Strategy|Bureau||||||||
||||local supportive||||||
|Special Fund|||||||||
||||policy etc.||||||
|Application|||||||||
|Project|||||||||
||||Subsidy gained in||||||
||||conformity with||||||
|Foshan|Foshan||||||||
||||local government||||||
|government|Municipal|||||||Related the|
|||Award|attracting|No|No||200,000.00||
|bonds|Finance|||||||income|
||||investment and||||||
|support funds|Bureau||||||||
||||local supportive||||||
||||policy etc.||||||
||||Subsidy gained in||||||
||||conformity with||||||
|Special funds|Zhuhai||||||||
||||local government||||||
|for energy|Municipal|||||||Related the|
|||Subsidy|attracting|Yes|No|306,200.00|300,000.00||
|saving of|Finance|||||||income|
||||investment and||||||
|2015|Bureau||||||||
||||local supportive||||||
||||policy etc.||||||
|Special Fund|Plan Finance|Subsidy|Subsidy gained in|No|No||100,000.00|Related the|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||||||
|-|-|-|-|-|-|-|-|-|
|for|Office of||conformity with|||||income|
|Technology|Quality and||local government||||||
|Standards|Technical||attracting||||||
|Strategy of|Supervision||investment and||||||
|Guangdong|of||local supportive||||||
|of 2015|Guangdong||policy etc.||||||
||Province||||||||
||||Subsidy gained in||||||
|Hi-tech|||||||||
||||conformity with||||||
|Enterprise|Zhuhai||||||||
||||local government||||||
|and|Municipal|||||||Related the|
|||Subsidy|attracting|Yes|No|708,000.00|||
|Enterprise|Finance|||||||income|
||||investment and||||||
|R&D Support|Bureau||||||||
||||local supportive||||||
|Funds|||||||||
||||policy etc.||||||
||Finance||||||||
|Enterprise|Bureau in||Government||||||
|||||||||Related the|
|Listing|Xiangzhou|Award|subsidies granted to|Yes|No|400,000.00|||
|||||||||income|
|Subsidy|District of||the listed enterprise.||||||
||Zhuhai||||||||
|Environment|||||||||
|al pollution|Gaolan Port||Subsidy gained in||||||
|prevention|Economic||conformity with||||||
|and control|District||local government||||||
|||||||||Related the|
|(boiler|Finance|Subsidy|attracting|Yes|No|4,536,600.00|||
|||||||||income|
|transformatio|Treasury||investment and||||||
|n and air|Payment||local supportive||||||
|pollution|Center||policy etc.||||||
|etc.)|||||||||
||||Subsidy gained in||||||
||||conformity with||||||
||Zhuhai||||||||
|Industrial|||local government||||||
||Municipal|||||||Related the|
|Support||Subsidy|attracting|Yes|No|5,700,000.00|||
||Finance|||||||income|
|Funds|||investment and||||||
||Bureau||||||||
||||local supportive||||||
||||policy etc.||||||
||||Subsidy gained in||||||
||||conformity with||||||
||Zhuhai||||||||
||||local government||||||
||Municipal|||||||Related the|
|Others||Subsidy|attracting|Yes|No|1,407,357.04|105,117.00||
||Finance|||||||income|
||||investment and||||||
||Bureau||||||||
||||local supportive||||||
||||policy etc.||||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||||26,022,524.4|16,481,293.4||
|Total|--|--|--|--|--|||--|
|||||||7|1||

Other Notes:
70. Non-operating expenses
Unit: RMB Yuan
|||||
|-|-|-|-|
||||Recorded in the amount of the|
|Item|Reporting Period|Same period of last year||
||||non-recurring gains and losses|
|Loss on disposal of non-current|1,382,895.45|955,586.75||
||||1,382,895.45|
|assets||||
|Including: Loss on disposal of||||
||1,382,895.45|955,586.75|1,382,895.45|
|fixed assets||||
|Donation|100,000.00|54,000.00|100,000.00|
|Fines, compensation, fine for||||
||650,989.04|102,650.00|650,989.04|
|delaying payment||||
|Raw material abandoning loss|1,601,538.57||1,601,538.57|
|Others|378,473.80|151,444.22|378,473.80|
|Total|4,113,896.86|1,263,680.97|4,113,896.86|

 Other Notes:
Due the increase in assets disposal and raw material abandoning loss during this period, non-operating expenses during this period increased225.55% when compared to that last year.
71. Income tax expense
(1) Lists of income tax expense
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Current income tax expense|13,453,252.51|13,680,317.37|
|Deferred income tax expense|8,729,598.56|2,104,251.45|
|Total|22,182,851.07|15,784,568.82|

 (2) Adjustment process of accounting profit and income tax expense
Unit: RMB Yuan
|||
|-|-|
|Item|Reporting Period|
|Total profits|161,284,333.65|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||
|-|-|
|Current income tax expense accounted by tax and relevant||
||40,321,083.41|
|regulations||
|Influence of different tax rate suitable to subsidiary|-10,706,479.60|
|Influence of income tax before adjustment|-100,503.04|
|Influence of non-taxable income|-7,972,758.94|
|Influence of not deductible costs, expenses and losses|2,036,400.07|
|Influence of deductible losses of unrecognized deferred income||
||-9,110,220.75|
|tax assets used in previous years||
|Influence of deductible temporary difference or deductible losses||
||640,797.65|
|of unrecognized deferred income tax assets||
|Influence of deferred income tax assets and liabilities at the||
||7,416,265.27|
|beginning of tax rate change and adjustment period||
|The influence of R&D fee plus the deduction|-341,733.00|
|Income tax expense|22,182,851.07|

 Other Notes:
72. Other comprehensive incomes
Refer to the note 57.
73. Supplementary information to cash flow statement
(1) Other cash received related to operating activities
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Intercourse funds|54,360,640.47|103,110,590.80|
|Government subsidies|23,868,796.04|14,966,879.97|
|Interest income|26,781,477.65|3,530,569.17|
|Income of compensation|870,813.21|2,345,089.79|
|Total|105,881,727.37|123,953,129.73|

 Notes:
(2) Other cash paid related to operating activities
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Intercourse funds|28,158,591.74|117,650,598.40|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Expense|60,825,338.63|56,815,933.81|
|Employee pretty cash|5,873,971.96|3,380,536.00|
|Total|94,857,902.33|177,847,068.21|

 Notes:
(3) Other cash received related to investment activity
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Government subsidies|11,178,200.00|4,066,986.00|
|Total|11,178,200.00|4,066,986.00|

 Notes:
(4) Other cash paid related to investment activity
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Principal of Structural Deposits|209,000,000.00||
|Total|209,000,000.00||

Notes:
(5) Other cash received related to financing activities
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Restricted monetary capital used for|||
||323,746,286.83|37,554,493.73|
|margin or pledge|||
|The related party’s Loans|2,000,000.00||
|Total|325,746,286.83|37,554,493.73|

 Notes:
(6) Other cash paid related to financing activities
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Restricted monetary capital used for|||
||176,891,765.59||
|margin or pledge|||
|The related party’s Loans|2,000,000.00||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||
|-|-|
|Total|178,891,765.59|

Notes:
74. Supplementary information to cash flow statement
(1) Supplementary information to cash flow statement
Unit: RMB Yuan
||||
|-|-|-|
|Supplementary Information|Reporting Period|Last period|
|1. Reconciliation of net profit to net cash|||
||--|--|
|flows generated from operating activities|||
|Net profit|139,101,482.58|170,915,742.34|
|Add: Provision for impairment of assets|-4,071,141.13|26,624,300.40|
|Depreciation of fixed assets, of oil-gas|||
||158,767,541.49|151,114,049.23|
|assets, of productive biological assets|||
|Amortization of intangible assets|6,626,299.17|5,144,973.73|
|Long-term unamortized expenses|1,101,810.87|794,578.41|
|Losses on disposal of fixed assets, intangible|||
|assets and other long-term assets (gains:|690,044.71|-1,309,651.57|
|negative)|||
|Losses from variation of fair value|-1,571,341.66|-1,528,810.76|
|Financial cost (gains: negative)|100,551,844.85|140,956,000.53|
|Investment loss (gains: negative)|-19,399,881.52|-121,166,566.33|
|Decrease in deferred income tax assets|||
||8,875,684.14|2,036,896.99|
|(gains: negative)|||
|Increase in deferred income tax liabilities|||
||-146,085.58|69,548.08|
|(―-‖ means decrease)|||
|Decrease in inventory (gains: negative)|114,436,773.04|204,919,569.38|
|Decrease in accounts receivable from|||
||-180,524,601.22|73,634,068.38|
|operating activities (gains: negative)|||
|Increase in payables from operating|||
||84,672,681.34|-51,269,611.93|
|activities (decrease: negative)|||
|Other||12,556,242.88|
|Net cash flows generated from operating|409,111,111.08|613,491,329.76|
|activities|||
|2. Investing and financing activities that do|||
||--|--|
|not involving cash receipts and payment:|||
|3. Net increase in cash and cash equivalents|--|--|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Closing balance of cash|357,103,700.82|185,960,324.24|
|Less: Opening balance of cash|185,960,324.24|113,248,623.00|
|Net increase in cash and cash equivalents|171,143,376.58|72,711,701.24|

 (2) Net Cash paid obtaining from the subsidiary
Unit: RMB Yuan
|||
|-|-|
||Amount|
|Of which:|--|
|Of which:|--|
|Of which:|--|

Other Notes:
(3) Net Cash received from the disposal of the subsidiary
Unit: RMB Yuan
|||
|-|-|
||Amount|
|Cash or cash equivalents received from disposal of subsidiaries in||
||105,000,000.00|
|Reporting Period||
|Of which:|--|
|Of which:|--|
|Of which:|--|
|Net Cash received from disposal of the subsidiary|105,000,000.00|

 Other Notes:
Cashes received from the disposal of the subsidiary during this period refer to the equity balance from the disposal of Foshan Chengtong Paper Co., Ltd.
(4) Cash and cash equivalents
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing Balance|Opening Balance|
|I. Cash|357,103,700.82|185,960,324.24|
|Including: Cash on hand|137,530.97|312,658.48|
|Bank deposit on demand|356,966,169.85|185,647,665.76|
|III. Closing balance of cash and cash|357,103,700.82|185,960,324.24|
|equivalents|||

Other Notes:
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 75. Note of statement of changes in the owner's equity
Explain "others" project name and adjustment amount of the adjustment of closing balance in previous year, etc.:
76. The assets with the ownership or use right restricted
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing book value|Reason|
|Monetary Capital|176,891,765.59|Bill and LC Margin|
|Total|176,891,765.59|--|

Other Notes:
Restricted Assets mainly include the margin for short-term financing without influencing thecompany’s normal operation. 77. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB Yuan
|||||
|-|-|-|-|
||Closing foreign currency||Closing convert to RMB|
|Item||Exchange rate||
||balance||balance|
|Of which: Dollars|41,977,731.16|6.9370|291,192,478.18|
|Hong Kong Dollars|9,770.69|0.8945|8,739.88|
|Pounds|190,427.15|8.5094|1,620,420.79|
|Of which: Dollars|8,954,667.41|6.9370|62,118,537.21|
|Hong Kong Dollars|3,014,552.88|0.8945|2,696,547.70|
|Pounds|524,930.56|8.5094|4,466,844.18|
|Account Payable||||
|Of which: Dollars|9,705,451.06|6.9370|67,326,714.03|
|Euro|65,604.91|7.3068|479,361.96|

 Other Notes:
(2) Notes to overseas entities including: for significant oversea entities, main operating place, recording currency and selection basis shall be disclosed; if there are changes into recording currency, relevant reasons shall be disclosed.
□ Applicable√ Not applicable
78. Arbitrage
Arbitrage item, relevant arbitrage tools and the arbitraged risk qualitative and quantitative information disclosed based on arbitrage
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 category:
79. Others
VIII. Changes of merger scope
1. Business merger not under same control
(1) Business merger not under same control in Reporting Period
Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||||||||Income of|Net profits of|
||Time and||||||||
|||Cost of||Way to gain||Recognition|acquiree|acquiree|
|Name of|place of||Proportion of||||||
|||gaining the||the stock|Purchase date|basis of|during the|during the|
|acquiree|gaining the||stock rights||||||
|||stock rights||rights||purchase date|purchase date|purchase date|
||stock rights||||||||
||||||||to period-end|to period-end|

 Other Notes:
(2) Combined cost and goodwill
Unit: RMB Yuan
||
|-|
|Combined cost|

Note to determination method, consideration and changes of fair value of combined cost:
The main formation reason for the large goodwill:
Other Notes:
(3) The identifiable assets and liabilities of acquiree on purchase date
Unit: RMB Yuan
|||
|-|-|
|Fair value on purchase date|Book value on purchase date|

 The recognition method of the fair value of identifiable assets and liabilities
Contingent liability of acquiree undertaken by business merger
Other Notes:
(4) The profit or loss from equity held by the date before acquisition in accordance with the fair value measured again
Whether there is a transaction that through multiple transaction step by step to realize enterprises merger and gaining the control
during the Reporting Period
□ Yes√ No
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 (5) Notes to reasonable consideration or identifiable assets, fair value of liabilities of the acquiree that cannot be determined on the acquisition date or during the closing period of the merge
(6) Other notes
2. Business combination under the same control
(1) Business combination under the same control during the Reporting Period
Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||||||Income from|Net profits|||
||||||the|from the|||
|||||Recognition|||Income|Net profits|
||||||period-begin|Reporting|||
|Combined|Proportion of||Combination|basis of|||during the|during the|
|||Basis|||to the|Period to the|||
|party|the profits||date|combination|||period of|period of|
||||||combination|combination|||
|||||date|||comparison|comparison|
||||||date of the|date of the|||
||||||combination|combination|||

Other Notes:
(2) Combination cost
Unit: RMB Yuan
||
|-|
|Combination Cost|

Note to contingent consideration or other changes:
Other Notes:
(3) The book value of the assets and liabilities of the combined party on combining date
Unit: RMB Yuan
|||
|-|-|
|Combination date|Period-end of last period|

 Contingent liabilities of the combined party undertaken in combination
Other Notes:
3. Counter purchase
Basic transaction information, the basis for transaction constituting counter purchase and the assets and liabilities retained by the listed company could enable the confirmation of business and corresponding basis and the combined cost as well as the amount of adjusted rights and interests when handled based on equity transaction, and corresponding calculation:
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 4. The disposal of subsidiary
Whether there is a single disposal of the investment to the subsidiary and lost control?
□ Yes√ No
Whether there are several disposals of the investment to the subsidiary and lost controls?
□ Yes√ No
5. Other reasons for the changes in combination scope
Note to reasons for the changes in combination scope (Newly established subsidiary and subsidiary of liquidation) and relevant information:
6. Other
IX. Equity in other entities
1. Equity in subsidiary
(1) The structure of the enterprise group
||||||||
|-|-|-|-|-|-|-|
|Name of the|Main operating||Nature of|Holding percentage (%)|||
|||Registration place||||Way of Gaining|
|subsidiary|place||business|Directly|Indirectly||
|||||||Business|
|Huaxin (Foshan)|||||||
||||Manufacturing|||combination|
|Color Printing|Foshan|Foshan||100.00%|||
||||industry|||under the same|
|Co., Ltd.|||||||
|||||||control|
|||||||Business|
|Zhuhai Huafeng|||Manufacturing|||combination|
||Zhuhai|Zhuhai|||100.00%||
|Paper Co., Ltd.|||industry|||under the same|
|||||||control|
|||||||Business|
|Zhuhai S.E.Z.|||||||
||||Manufacturing|||combination not|
|Hongta Renheng|Zhuhai|Zhuhai||41.97%|||
||||industry|||under the same|
|Paper Co., Ltd.|||||||
|||||||control|
|Foshan Hongta|||||||
|Liyan Material|||Manufacturing||||
||Foshan|Foshan|||100.00%|Establishment|
|Technology Co.,|||industry||||
|Ltd.|||||||
|Kunshan Focai|||Manufacturing||||
||Suzhou|Suzhou||100.00%||Establishment|
|Packaging &|||industry||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||||
|-|-|-|-|-|-|-|
|Printing Co., Ltd.|||||||
|||||||Business|
|Zhuhai Jinji|||||||
||||Manufacturing|||combination not|
|Chemicals Co.,|Zhuhai|Zhuhai|||51.00%||
||||industry|||under the same|
|Ltd.|||||||
|||||||control|
|Zhejiang Hongta|||||||
|Renheng|||||||
||||Manufacturing||||
|Packaging|Jiaxing|Jiaxing||100.00%||Establishment|
||||industry||||
|Technology Co.,|||||||
|Ltd.|||||||

Notes: holding proportion in subsidiary different from voting proportion:
On acquisition date as Jun. 30, 2009, the Company gained40.176% shares of Hongta Renheng by the way of capital and share increase. There were five directors in the Board of Directors of Hongta Renheng, of which the Company sent three directors, Yunnan Hongta Group Co., Ltd. and Renheng Industrial Co., Ltd. sent one director respectively. The Chairman of the Board (Legal representative) was sent by the Company, General Manager and Chief Financial Officer were also sent by the Company, so as to control the routine producing and operating activities of Hongta Renheng, and thus it shall be consolidated into the consolidated statement of the Company since Jul. 2009. On Feb. 1, 2010, Hongta Renheng finished relevant change procedures for capital increase in industry and commerce, and thus shares of Hongta Renheng held by the Company increased to41.9653%. Meanwhile, the contract and Articles of Association of Hongta Renheng was revised according to the resolution of the Board of Directors of Hongta Renheng on Feb. 25, 2010. Afterwards, the directors of the Board of
Directors changed from five to seven, as the Company sent four directors (originally three), Yunnan Hongta Group Co., Ltd. sent two directors (originally one), Renheng Industrial Co., Ltd. sent one, Dragon State
International Limiteddidn’t send any director. The Company still can decide the financial and operating policies of Hongta Renheng, and shall still be consolidated into the scope of consideration.
Basis of holding half or less voting rights but still controlling the investee and holding more than half of the voting rights but not controlling the investee:
Significant structural entities and controlling basis in the scope of combination:
Basis of determining whether the Company is the agent or the principal:
Other Notes:
(2) Significant non-wholly-owned subsidiary
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|||The profits and losses|Declaring dividends|Balance of minority|
||Shareholding proportion||||
|Name of the subsidiary||arbitrated to the minority|distributed to minority|shareholder at closing|
||of minority shareholder||||
|||shareholders|shareholder|period|
|Zhuhai Hongta Renheng|||||
||58.03%|77,777,394.47|30,163,999.10|1,618,319,827.16|
|Packaging Co., Ltd.|||||

Holding proportion of minority shareholder in subsidiary different from voting proportion:
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Other Notes:
(3) The main financial information of significant not wholly owned subsidiary
Unit: RMB Yuan
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Name of|Closing balance||||||Opening balance||||||
|the||Non-curr|||Non-curr|||Non-curr|||Non-curr||
||current||Totalassets|Current||Total|current||Total|Current||Total|
|subsidiar||ent|||ent|||ent|||ent||
||assets|||liabilities||liabilities|assets||assets|liabilities||liabilities|
|y||assets|||liability|||assets|||liability||
|Zhuhai|||||||||||||
|Hongta|||||||||||||
|Renheng|2,625,95|2,445,34|5,071,29|1,388,15|893,624,|2,281,77|2,247,65|2,524,64|4,772,30|1,298,18|762,913,|2,061,09|
|Packagin|1,940.55|4,768.25|6,708.80|1,886.13|199.66|6,085.79|9,971.76|8,275.64|8,247.40|1,498.26|998.83|5,497.09|
|g Co.,|||||||||||||
|Ltd.|||||||||||||

Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||Reporting Period||||Same period of last year||||
|Name of the|||Total||||Total||
||Operationrevenue|||Operating|Operation|||Operating|
|subsidiary||Net profit|comprehensi|||Net profit|comprehensi||
|||||cash flow|revenue|||cash flow|
||||ve income||||ve income||
|Zhuhai|||||||||
|Hongta|||||||||
||3,349,262,55|125,460,098.|125,460,098.|405,950,591.|3,032,414,95|100,626,805.|100,626,805.|579,124,223.|
|Renheng|||||||||
||8.37|44|44|71|4.02|71|71|10|
|Packaging|||||||||
|Co., Ltd.|||||||||

Other Notes:
(4) Significant restrictions of using theenterprise’s group assets and paying off theenterprise’s group debt. (5) Financial support or other supports provided to structural entities incorporated into the scope of consolidated financial statements
Other notes:
2. The transaction of the Company with itsowner’s equity share changed but still controlling the subsidiary (1) Note to theowner’s equity share changed in subsidiary
(2) Thetransaction’s influence on the equity of minority shareholders and the owner's equity attributable
to the parent company
Unit: RMB Yuan
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
 Other Notes:
3. Equity in joint venture arrangement or associated enterprise
(1) Significant joint venture arrangement or associated enterprise
||||||||
|-|-|-|-|-|-|-|
|||||Holding percentage (%)||Accounting|
|||||||treatment of the|
||Main operating||Nature of|||investment of|
|Name||Registration place|||||
||place||business|Directly|Indirectly|joint venture or|
|||||||associated|
|||||||enterprise|
|Chengtong|||||||
||Beijing|Beijing|Financial industry|20.00%||Equity method|
|Finance Co., Ltd.|||||||

Notes to holding proportion of joint venture or associated enterprise different from voting proportion:
Basis of holding less than20% of the voting rights but having a significant impact or holding20% or more voting rights but not having a significant impact:
(2) Main financial information of significant joint venture
Unit: RMB Yuan
|||
|-|-|
|Closing balance/ Reporting Period|Opening balance /last period|

 Other Notes:
(3) Main financial information of significant associated enterprise
Unit: RMB Yuan
||||
|-|-|-|
||Closing balance/ Reporting Period|Opening balance /last period|
||Chengtong Finance Co., Ltd.|Chengtong Finance Co., Ltd.|
|current assets|25,321,260,369.06|7,216,204,389.99|
|Non-current assets|3,988,760.19|6,659,691.42|
|Total assets|25,325,249,129.25|7,222,864,081.41|
|Current liabilities|24,215,863,455.13|6,064,250,674.62|
|Total liabilities|24,215,863,455.13|6,064,250,674.62|
|Equity attribute to the parent company|221,877,134.82|231,722,681.36|
|Net assets proportion measured at|||
||244,408,251.27|254,253,797.80|
|shareholding proportion|||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Book value of equity investment to|||
||132,120,589.35|131,793,995.59|
|associated enterprise|||
|Operation revenue|74,514,045.63|78,676,118.04|
|Net profit|74,514,045.63|78,676,118.04|
|Dividends received from the joint venture|||
||24,748,355.66||
|in this year|||

Other Notes:
(4) Summary financial information of insignificant joint venture or associated enterprise
Unit: RMB Yuan
||||
|-|-|-|
||Closing balance/ Reporting Period|Opening balance /last period|
|Joint venture:|--|--|
|The total of following items according to the|||
||--|--|
|shareholding proportions|||
|Associated enterprise:|--|--|
|The total of following items according to the|||
||--|--|
|shareholding proportions|||

Other Notes:
(5) Note to the significant restrictions in the ability of joint venture or associated enterprise to transfer funds to the Company
(6) The excess loss of joint venture or associated enterprise
Unit: RMB Yuan
|||||
|-|-|-|-|
||The cumulative recognized|The derecognized losses or the||
||||The cumulative unrecognized|
|Name|losses in previous accumulative|share of net profit in this||
||||losses in this Reporting Period|
||derecognized period|Reporting Period||

Other Notes:
(7) The unrecognized commitment related to joint venture investment
(8) Contingent liabilities related to joint venture or associated enterprise investment
4. Significant common operation
|||||||
|-|-|-|-|-|-|
|||||Proportion /share portion||
|Name|Main operating place|Registration place|Nature of business|||
|||||Directly|Indirectly|

Note to holding proportion or share portion in common operation different from voting proportion:
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Basis of common operation as a single entity classified as common operation
Other notes:
5. Equity in the structured entity not included in the scope of consolidated financial statements
Related notes to structured entity not included in the scope of consolidated financial statements
6. Others
X. The risk related financial instruments
XI. The disclosure of the fair value
1. Closing fair value of assets and liabilities calculated by fair value
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Closing fair value||||
|Item|Fair value measurement|Fair value measurement|Fair value measurement||
|||||Total|
||items at level 1|items at level 2|items at level 3||
|I. Consistent fair value|||||
||--|--|--|--|
|measurement|||||
|(3)Derivative Financial|||||
||1,571,341.66|||1,571,341.66|
|assets|||||
|II. Inconsistent fair value|||||
||--|--|--|--|
|measurement|||||

2. Market price recognition basis for consistent and inconsistent fair value measurement items at level 1 The Company listed the book value of financial assets instruments measured at fair value on Dec. 31, 2016 according to three levels of fair value. When the overall fair value classified in three levels,it’s in line with the first level of three levels of each significant input value used in the calculation of fair value. Definitions of three levels were as follows:
The first level, the non-adjustable offer of the same assets or liabilities in the active market on the calculation date; The second level, the directly or indirectly observable input value of related assets or liabilities except the input value on the first level;
The second level input value including: 1)Offer of similar assets or liabilities in the active market; 2) offer of identical or similar assets or liabilities in the non-active market; 3) Other observable input value except offer, including the observable interest rate during the interval period of common offer, profit rate curve, implied volatility and credit spread etc.; 4) the input value for market verification etc..
The third level was the unobserved input value of related assets or liabilities.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 3. Valuation technique adopted and nature and amount determination of important parameters for consistent and inconsistent fair value measurement items at level 2
4. Valuation technique adopted and nature and amount determination of important parameters for consistent and inconsistent fair value measurement items at level 3
5. Sensitiveness analysis on unobservable parameters and adjustment information between opening and closing book value of consistent fair value measurement items at level 3
6. Explain the reason for conversion and the policy governing when the conversion happens if conversion happens among consistent fair value measurement items at different levels
7. Changes in the valuation technique in the current period and the reason for such change
8. Fair value of financial assets and liabilities not measured at fair value
9. Others
XII. Related party and related Transaction
1. Information related to the parent company
|||||||
|-|-|-|-|-|-|
||||||Proportion of voting|
|||||Proportion of share||
||||||rights owned by|
|Name of parent||||held by parent||
||Registration place|Nature of business|Registered capital||parent company|
|company||||company against the||
||||||against the Company|
|||||Company (%)||
||||||(%)|
|Foshan Huaxin||||||
|||Manufacturing||||
|Development Co.,|Foshan||457,930,000.00|65.20%|65.20%|
|||industry||||
|Ltd.||||||
|China National||||||
|Paper Industry|Beijing|Comprehensive|5,033,000,000.00|65.31%|65.31%|
|Investment Corp.||||||
|China Chengtong||||||
|Holdings Group Co.,|Beijing|Comprehensive|9,380,165,000.00|65.31%|65.31%|
|Ltd.||||||

Notes: information on the parent company:
Foshan Huaxin Development Co., Ltd.
On Jun. 28, 2005, Foshan Gongying Investment Holding Co., Ltd. transferred62.1142% shares (capital contribution was RMB 284,440,000) of Foshan Huaxin Development Co., Ltd. to China National Materials
Development& Investment Corporation which has changed its name to China National Paper-industry Investment
Corporation. Foshan Huaxin Development Co., Ltd is the parent company and holds65.20% shares of the
Company.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 China National Paper Industry Investment Corp.;
China National Paper-industry Investment Corporation originally held0.11% shares of the Company, and China National Paper-industry Investment Corporation held65.31% shares of the Company directly and indirectly as the actual controller of the Company.
China Chengtong Holdings Group Co., Ltd.;
China Chengtong Holdings Group Co., Ltd. holds100% shares of China National Paper-industry Investment Corporation and has become the ultimate controller of the Company.
The ultimate controller of the Company is China Chengtong Holdings Group Co., Ltd..
Other notes:
2. Subsidiaries of the Company
See details in Notes IX. Equity in other entities,
3. Information on the joint ventures and associated enterprises of the Company
For details of significant joint ventures and associated enterprises of the Company, please refer to Notes IX. Equity in other entities. Information on other joint ventures and associated enterprises developing related party transactions with the Company in this Reporting Period, or forming balance due to related party transactions in previous periods:
|||
|-|-|
|Name|Relationship|
|Chengtong Finance Co., Ltd.|Subsidiary of joint venture|
|Guangdong Chengtong Logistics Co., Ltd.|Subsidiary of joint venture|

Other Notes:
4. Information on other related parties of the Company
|||
|-|-|
|Name|Relationship|
|Foshan Huaxin Import & Export Co., Ltd.|Under the control of the same actual controller|
|Guangdong Guanhao High-tech Co., Ltd.|Under the control of the same actual controller|
|Dragon State International Limited|Under the control of the same ultimate controller|
|Tianjin Port Free Trade Zone Zhongwu Investment Development||
||Under the control of the same actual controller|
|Co., Ltd.||
|Yueyang Forest & Paper Co., Ltd.|Under the control of the same actual controller|
|Yueyang Antai industrial Co., Ltd|Under the control of the same actual controller|
|Yuanjian Paper Co., Ltd.|Under the control of the same actual controller|
|Hunan Juntai Pulp Paper Co., Ltd.|Under the control of the same actual controller|
||Under the control of the same ultimate controller|
|Guangdong Guanhao High-tech Co., Ltd.|Under the control of the same ultimate controller|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||
|-|-|
|China Chengtong International Co., Ltd.|Under the control of the same ultimate controller|
|HONG KONG DRAGON STATE YAN WING||
||Under the control of the same ultimate controller|
|INTERNATIONAL COMPANY||
|Zhanjiang Guanhao Paper Co., Ltd.|Under the control of the same ultimate controller|

Other Notes:
5. List of related-party transactions
(1) Information on acquisition of goods and reception of labor service (unit: ten thousand Yuan)
Information on acquisition of goods and reception of labor service (unit: ten thousand Yuan)
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
||||The approval trade|Whether exceed trade|Same period of last|
|Related-party|Content|Reporting Period||||
||||credit|credit or not|year|
|China National||||||
||Purchase of raw|||||
|Paper Industry||148,252,577.79|287,000,000.00|No|286,476,105.01|
||material|||||
|Investment Corp.||||||
|Guangdong||||||
||Purchase of raw|||||
|Guanhao High-tech||13,967.35|680,940.17|No|17,245.46|
||material|||||
|Co., Ltd.||||||
|Tianjin Port Free||||||
|Trade Zone||||||
|Zhongwu|Purchase of raw|||||
|||0.00|37,000,000.00|No|21,844,699.64|
|Investment|material|||||
|Development Co.,||||||
|Ltd.||||||
|Guangdong||||||
||Providing|||||
|Chengtong||15,499,988.56|21,000,000.00|No|21,796,488.21|
||logistics services|||||
|Logistics Co., Ltd.||||||
|Guangdong||||||
||Purchase of raw|||||
|Guanhao High-tech||413,718.56|||582,918.39|
||material|||||
|Co., Ltd.||||||
|China Chengtong||||||
||Purchase of raw|||||
|International Co.,||89,829,578.15||No||
||material|||||
|Ltd.||||||
|HONG KONG||||||
|DRAGON STATE||||||
||Purchase of raw|||||
|YAN WING||8,601,905.87||No||
||material|||||
|INTERNATIONAL||||||
|COMPANY||||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Yueyang Antai|Purchase of raw||
|||219,759.19|
|Industrial Co., Ltd.|material||
|Foshan Huaxin|||
||Purchase of fixed||
|Import and Export||180,116.60|
||assets||
|Co., Ltd.|||

Information of sales of goods and provision of labor service
Unit: RMB Yuan
|||||
|-|-|-|-|
|Related-party|Content|Reporting Period|Same period of last year|
|China National Paper Industry||||
||Sales of raw materials|134,681,889.58|24,293,495.59|
|Investment Corp.||||
|Yuanjian Paper Co., Ltd.|Sales of raw materials||3,924,986.64|
|Yueyang Forest & Paper Co.,||||
||Sales of products|19,279,321.75|12,936,664.65|
|Ltd.||||
|Guangdong Guanhao High-tech|Sales of products and raw|||
|||6,668,453.70|1,265,830.00|
|Co., Ltd.|materials|||
|Zhanjiang Guanhao Paper Co.,|Sales of products and raw|||
|||370,427.36||
|Ltd.|materials|||
|Long Bond Investment||||
||Sales of raw materials|24,098,726.25||
|Development Co., Ltd.||||
|HONG KONG DRAGON||||
|STATE YAN WING||||
||Sales of raw materials|8,927,172.47||
|INTERNATIONAL||||
|COMPANY||||

Notes
Notes:
Sales of goods and provision of labor service Notes: since thecompany’s actual controller China National Paper Industry Investment Corp. was influenced by the capital arrangement and foreign exchange, various wholly-owned subsidiaries were established in line with the actual production and operation, including Hong Kong Long Bond Investment Development Co., Ltd., HONG KONG DRAGON STATE YAN WING INTERNATIONAL COMPANY (sub-subsidiary) and ChinaChengtong’s subsidiary China Chengtong International Co., Ltd. as thecompany’s object for daily related transactions to jointly use the amount of daily related transactions of China National Paper Industry Investment Corp. and the company. According to the Proposal of theSubsidiary’s Daily Related Transaction and Daily Related Transaction Estimation concluded in the 13th meeting held by the 6th Board of Directors in 2016, the approved purchasing amount granted to China National Paper Industry Investment Corp. from May to December in 2016 was RMB 224 million; according to Proposal of theSubsidiary’s Daily Related Transaction Estimation (Announcement No.: 2015-005) approved in the 2014 AGM, the approved purchasing amount granted to China National Paper Industry Investment Corp. from January to April in 2016 was RMB 63 million, and the total amount in 2016 was RMB 287 million. In terms of the actual transaction in 2016, the total trading volume of China National Paper Industry Investment Corp., Chengtong International and DRAGON STATE YAN WING INTERNATIONAL was RMB 246.68 million within the designated limit (RMB 287 million).
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 (2) Related trusteeship/contract
Lists of related trusteeship/contract:
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|Name of the|Name of the|||||Income|
|entruster/contract|entrustee/|Type|Initial date|Due date|Pricing basis|recognized in the|
|ee|contractor|||||Reporting Period|

 Notes:
Lists of entrust/contractee
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|Name of the|Name of the|||||Charge|
|entruster/contract|entrustee/|Type|Initial date|Due date|Pricing basis|recognized in the|
|ee|contractor|||||Reporting Period|

 Notes:
(3) Information of related lease
The Company was lessor:
Unit: RMB Yuan
|||||
|-|-|-|-|
|||The lease income confirmed in|The lease income confirmed in|
|Name of lessee|Category of leased assets|||
|||this year|last year|
|Guangdong Chengtong||||
||Houses and buildings|1,210,342.86|1,328,194.00|
|Logistics Co., Ltd.||||

The Company was lessee:
Unit: RMB Yuan
|||||
|-|-|-|-|
|||The lease income confirmed in|The lease income confirmed in|
|Name of lessee|Category of leased assets|||
|||this year|last year|
|Foshan Huaxin Development||||
||Office and office equipment|542,285.71|569,400.00|
|Co., Ltd.||||

Notes:
(4) Related-party guarantee
The Company was guarantor:
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|||||Execution accomplished|
|Secured party|Guarantee amount|Start date|End date||
|||||or not|
|Zhuhai S.E.Z. Hongta|||||
||330,000,000.00|May 7, 2014|May 6, 2017|No|
|Renheng Paper Co., Ltd.|||||
|Zhuhai S.E.Z. Hongta|38,800,000.00|March 13, 2015|March 13, 2020|No|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
||||||
|-|-|-|-|-|
|Renheng Paper Co., Ltd.|||||
|Zhuhai S.E.Z. Hongta|||||
||200,000,000.00|February 1, 2016|January 21, 2017|No|
|Renheng Paper Co., Ltd.|||||
|Zhuhai S.E.Z. Hongta|||||
||200,000,000.00|March 1, 2016|December 31, 2019|No|
|Renheng Paper Co., Ltd.|||||
|Zhuhai S.E.Z. Hongta|||||
||100,000,000.00|January 14, 2016|January 13, 2017|No|
|Renheng Paper Co., Ltd.|||||
|Zhuhai S.E.Z. Hongta|||||
||100,000,000.00|May 30, 2016|February 2, 2017|No|
|Renheng Paper Co., Ltd.|||||
|Zhuhai S.E.Z. Hongta|||||
||100,000,000.00|June 12, 2016|March 31, 2018|No|
|Renheng Paper Co., Ltd.|||||
|Zhuhai S.E.Z. Hongta|||||
||150,000,000.00|July 1, 2016|July 1, 2018|No|
|Renheng Paper Co., Ltd.|||||
|Zhuhai Huafeng Paper|||||
||200,000,000.00|July 8, 2016|December 31, 2017|No|
|Co., Ltd.|||||
|Zhuhai Jinji Chemicals|||||
||100,000,000.00|August 31, 2015|August 30, 2018|No|
|Co., Ltd.|||||
|Zhuhai Huafeng Paper|||||
||350,000,000.00|October 29, 2016|October 28, 2019|No|
|Co., Ltd.|||||
|Huaxin (Foshan) Color|||||
||60,000,000.00|January 1, 2016|December 31, 2020|No|
|Printing Co., Ltd.|||||
|Huaxin (Foshan) Color|||||
||20,000,000.00|December 23, 2016|October 23, 2017|No|
|Printing Co., Ltd.|||||

The Company was Secured party
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|||||Execution accomplished|
|Guarantor:|Guarantee amount|Start date|End date||
|||||or not|

Notes
(5) Inter-bank lending of capital of related parties:
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Amount borrowed and||||
|Related-party||Initial date|Due date|Explanation|
||loaned||||
|Borrowed|||||
|Foshan Huaxin|||||
||2,000,000.00|February 3, 2016|September 23, 2016||
|Development Co., Ltd.|||||
|Loaned|||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 (6) Related party asset transfer and debt restructuring
Unit: RMB Yuan
|||||
|-|-|-|-|
|Related-party|Content|Reporting Period|Same period of last year|

 (7) Rewards for the key management personnel
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Rewards for the key management|||
||5,128,714.50|5,600,281.00|
|personnel|||

(8) Other related-party transactions
According to the
1st
Meeting of the
5th
Board of Directors of 2013 on 18 April, 2013 and 2012 Annual General Meeting on 15 May, 2013, Financial Services Agreement signed by this Company and Chengtong Finance Co., Ltd. and related transaction bills for financial services were discussed and approved to conduct relevant financial services. The sum of daily maximum outstanding of deposits and interests on deposit of this Company in Chengtong Finance Co., Ltd. shall not be higher than5% of the total assets audited last year (outstanding of deposits excluding loans or settlement amount); the sum of credit extension and interests shall not be higher than RMB600,000,000; relevant settlement businesses shall also be conducted as required. Up to Dec. 31, 2016, outstanding of deposits of the Company in Chengtong Finance Co., Ltd. was RMB232,403,776.59 and notes discounted RMB4,392,243.22.
6. Receivables and payables of related parties
(1) Receivables
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
|||Closing balance||Opening balance||
|Name o f item|Related-party|||||
|||Book balance|Bad debt provision|Book balance|Bad debt provision|
||Guangdong Guanhao|||||
|Account receivable:||2,990,446.69|95.85|5,973.80|267.32|
||High-tech Co., Ltd.|||||
||Yueyang Forest & Paper|||||
|Account receivable:||5,321,659.50||839,714.61||
||Co., Ltd.|||||
||Yueyang Antai industrial|||||
|Account receivable:||5,302.10|2,651.05|5,302.10|1,590.63|
||Co., Ltd|||||
||Guangdong Chengtong|||||
|Account receivable:||||252,199.10|75,659.73|
||Logistics Co., Ltd.|||||
||China National Paper|||||
|Account receivable:||33,263.08|102.86|20,275,925.21||
||Industry Investment Corp.|||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||
|-|-|-|-|-|-|
||Foshan Huaxin Import &|||||
|Account receivable:||549,882.60|201,380.64|726,513.19|72,651.32|
||Export Co., Ltd.|||||
||Long Bond Investment|||||
|Account receivable:||2,755,688.24||168.21|8.41|
||Development Co., Ltd.|||||
||Zhanjiang Guanhao Paper|||||
|Account receivable:||1,545.27||||
||Co., Ltd.|||||
||China National Paper|||||
|Prepayment:||||27,884,562.96||
||Industry Investment Corp.|||||
|Other accounts|Guangdong Chengtong|||||
|||893,243.15|22,847.25|1,167,236.74|91,912.67|
|receivable:|Logistics Co., Ltd.|||||
|Other accounts|China National Paper|||||
|||||264,600.00||
|receivable:|Industry Investment Corp.|||||

(2) Payables
Unit: RMB Yuan
|||||
|-|-|-|-|
|Name o f item|Related-party|Closing book balance|Opening book balance|
||China National Paper Industry|||
|Account payable||87,600,898.59|5,727,471.54|
||Investment Corp.|||
||Guangdong Chengtong|||
|Account payable||1,973,769.75|3,257,342.93|
||Logistics Co., Ltd.|||
||Guangdong Guanhao Hi-tech|||
|Account payable||102,183.57|109,865.03|
||Industry Co., Ltd.|||
||Guangdong Guanhao Hi-tech|||
|Account payable||3,483.37||
||Co., Ltd.|||
||Yueyang Antai Industrial Co.,|||
|Account payable||127,312.00||
||Ltd.|||
||Guangdong Chengtong|||
|Other accounts payable||570,384.98|570,384.98|
||Logistics Co., Ltd.|||
||Foshan Huaxin Development|||
|Other accounts payable|||5,000,000.00|
||Co., Ltd.|||
|Interest payable|Chengtong Finance Co., Ltd.||44,458.33|

 7. Related party commitment
Reviewed and approved by the
4th
Meeting of the
6th
of the Board of Directors, the Company provided no more than RMB 2.6 billion guarantee for loan to its subsidiaries Zhuhai S.E.Z. Hongta Renheng Paper Co., Ltd., Zhuhai
Huafeng Co., Ltd., Jinji Chemicals Co., Ltd. and the wholly-owned Foshan Color Printing Co., Ltd., and allowed
Zhuhai S.E.Z. Hongta Renheng Paper Co., Ltd. to provide its two subsidiaries with the maximum guarantee RMB
400,000,000, in total of RMB 3 billion. When applying for integrated Credit/Loan to the bank within line of
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 guarantee, the Company will provide the joint liability guarantee, and the guarantee amount for each deal and the guarantee period will be agreed in the specific contract. Up to December 31, 2016, the above guarantee amount was not completely used.
8. Others
XIII. Stock payment
1. The Stock payment overall situation
□ Applicable√ Not applicable
2. The Stock payment settled by equity
□ Applicable√ Not applicable
3. The Stock payment settled by cash
□ Applicable√ Not applicable
4. Modification and termination of the stock payment
None
5. Others
XIV. Commitments
1. Significant commitments
Significant commitments on balance sheet date
Up to 31 Dec. 2016, there were no significant commitments to be disclosed.
2. Contingency
(1) Significant contingency on balance sheet date
Pending action, contingency formed by arbitration and its financial influence
(1) TheCompany’s sub-subsidiary Zhuhai Jinji Chemicals Co., Ltd. signed a loan contract with Guangzhou Hong He Gu Kang Ti Leisure Co., Ltd. (hereinafter referred to as―Hong He GuCompany‖) on Dec. 12, 2011, stating that Hong He Gu Company borrowed RMB 500,000 from Zhuhai Jinji Chemicals Co., Ltd. from Dec. 12, 2011 to May 31, 2012. When the contract expired, Hong He Gu Company shall take the initiative to repay the loan principal and interest. The legal representative Wang Renhe served as the guarantee of Hong He Gu Company, but Hong He Gu Company did not paid the loan as agreed when the contract expired. According to (2015)
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 ZJFPMCZ No. 20 Civil Judgment, Hong He Gu Company shall repay RMB500,000 to the Company and Wang Renhe shall bare the joint liability for satisfaction. Upon to Dec. 31, 2016, Zhuhai Jinji Chemicals Co., Ltd. withdrawn100% bad debt provision for the said RMB 500,000 payable by Hong He Gu Company in other accounts receivable.
(2)Up to Dec. 31, 2016, Guangdong Regall Group Co., Ltd. (hereinafter referred to as―RegallGroup‖) owed the goods payment of RMB 9,919,562.58 to theCompany’s subsidiary Zhuhai S.E.Z Hongta Renheng Paper Co., Ltd. (hereinafter referred to as―HongtaRenheng‖) (with an account age over three years). On Mar. 28, 2008, the said two parties signed an agreement on repayment with wood pulp. According to the said agreement, Regall Group shall repay wood pulp as the consideration, which shall be executed before May 15, 2008. However, Regall Group did not perform the said agreement. Up to Oct. 31, 2008, only RMB 3,099,200.00 was executed as consideration for the debt. On Oct. 29, 2008, Hongta Renheng sent a Notice on Terminating Agreement to Regall Group, but Regall Group asked to continue the execution of the Agreement. On Dec. 6, 2008, Hongta Renheng submitted a bill of compliant on the goods payment dispute to Guangzhou Huangfu DistrictPeople’s Court, requesting the Court to terminate the agreement on repayment with wood pulp and asking Regall Group to repay the goods payment of RMB 10,047,398.58 and take all resulting responsibilities. On Jun. 28, 2009, the Court issued (2009) HMEC Zi No.72 Civil Judgment, stating that theCompany’s Notice on Terminating Agreement was invalid. Hongta Renheng appealed to Guangzhou IntermediatePeople’s Court against the decision and Guangzhou IntermediatePeople’s Court ruled that the case shall be remanded for retrial in the Court of the first instance. On Jun. 12, 2010, the Court issued (2010) HMEC Zi No.1 Civil Judgment, stating that the Agreement on Setting Debt off with Pulp Payment was legal and effective. However, as Regall Groupwasn’t able to supply pulp, it shall pay RMB 9,786, 596.96 back to Hongta Renheng. Regall Group appealed to Guangzhou IntermediatePeople’s Court against the decision. On Nov. 25, 2010, in accordance with (2010) SZFMEZ Zi No. 1851 Civil Judgment Letter, the Court rejected the appeal and maintained the original judgment. Up to December 31, 2016, RMB 127,836.00 was received by Hongta Renheng. Hongta Renheng has withdrawn100% bad debt provision for the said uncollected amount.
(3)Up to Dec. 31, 2016, Zhuhai Eastern Zhengtai Power Equipment Co., Ltd. owed the goods payment of RMB 2,925,825.54 to thecompany’s subsidiary Hongta Renheng. In line with (2010) XMEC Zi No.641 Civil Judgment, Hongta Renheng won the appeal and Zhuhai East Zhengtai Power Equipment Co., Ltd. shall pay loans of RMB 2,405,789.44 and corresponding penalty back to Hongta Renheng. Zhuhai East Zhengtai Power Equipment Co., Ltd. filed an appeal against the judgment. The court rejected the appeal in the second trial and the decision was upheld on Oct. 12, 2010. Since such payment was difficult to be collected back, Hongta Renheng withdrew100% bad debt provision for the said amount.
(4) Up to Dec. 31, 2016, Zhuhai Gongbei Ronghui Trade Co., Ltd. owed the goods payment of RMB 1,016,655.73 to thecompany’s subsidiary Hongta Renheng. Hongta Renheng won the appeal at the first instance in accordance with (2009) XMEC Zi No. 2174 Civil Judgment, but Zhuhai Gongbei Ronghui Trade Co., Ltd. owned nothing to execute the judgment. Therefore, the company withdrew100% bad debt provision for the said amount.
(5) Up to Dec. 31, 2016, Shenzhen Xieji Industry Co., Ltd. owed the goods payment of RMB 3,760,350.10 to Hongta Renheng, in accordance with (2011) SZFMEZ Zi No. 1318 Civil Judgment, Hongta Renheng won the appeal. Therefore, it continued to withdraw100% bad debt provision for the said account receivable.
(6) Up to Dec. 31, 2016, Qingdao Donglu Packing Development Co., Ltd. owed the goods payment of RMB 450,000.00 to Hongta Renheng. Hongta Renheng won the appeal at the first instance in accordance with (2010) NSC Zi No. 20678 Civil Judgment. Although Hongta Renheng won the first instance, there were no properties to execute the judgment. Therefore, the company withdrew100% bad debt provision for the said account receivable. (7) Up to Dec. 31, 2016, Foshan Jiahe Paper Trading Co., Ltd. owed the goods payment of RMB 4,902,239.70 to
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Hongta Renheng. Hongta Renheng won the appeal at the first instance in accordance with (2011) FCFMEC Zi No. 852 Civil Judgment. Since Hongta Renheng won the first instance, and collected RMB 1.75 million in total. Therefore, the balance of RMB3,152,239.70 shall be withdrawn100% bad debt provision.
(8) Up to Dec. 31, 2016, Kaifeng Boke Printing Co., Ltd. owned the goods payment of RMB4,635,249.60 to Zhuhai Huafeng Paper Co., Ltd.. In line with (2015) ZJFMECZ No. 609 Civil Judgment, Kaifeng Boke Printing Co., Ltd shall repay RMB4,635,249.60 and relevant interests. However, Zhuhai Huafeng Paper Co., Ltd. applied to the court for property attachment prior to lawsuit, freezing corresponding bank deposits owned by the respondent and closing down therespondent’s land and equipment. Up to Dec. 31, 2016, RMB1.75 million in total was taken back, and the full amount was predicted to be recovered. Corresponding bad debt provision shall be withdrawn for the account receivable based on the aging.
(9) Zhuhai Bidao Energy Co., Ltd. occupied an area covering 3,535.34 m2 of thecompany’s subsidiary Hongta Renheng, and ignored the notice issued by Hongta Renheng about its infringement act. In 2016, Hongta Renheng prosecuted Zhuhai Baidao Energy Co., Ltd. in Zhuhai Xiangzhou DistrictPeople’s Court, requiring the other party to stop its infringement act and pay RMB 2.68 million as the land occupation fee. Up to December 31, 2016, the court put it on record, pending for trial.
(10) Yunnan Jiuzhou Fangyuan Law Firm prosecuted Hongta Renheng in Zhuhai Xiangzhou DistrictPeople’s Court, requiring Hongta Renheng to pay corresponding agency service fees resulting from the case related to Regall Group Company and Xieji Company (RMB 1, 611,500 in total). According to (2015)ZXWME Zi No. 1201 Civil Judgment, Hongta Renheng was obliged to pay relevantlawyer’s expenses amounting to RMB 425,523.53 to Yunnan Jiuzhou Fangyuan Law Firm. Therefore, Hongta Renheng shall withdraw RMB 425,523.53 as the compensation based on such judgment.
(11) Hengyang Feier Cultural Goods (Electrical Appliances) Co., Ltd. prosecuted Zhuhai Huafeng due to the dispute in product quality in Zhuhai Jinwan DistrictPeople’s Court, requiring the compensation of RMB 2.96 million. According to (2016) Y0404MC No. 1227 Civil Judgment, such claim was rejected.
(12) Thecompany’s subsidiary Jinji Chemicals and Hunan Henghan Hi-tech Co., Ltd. (hereinafter referred to as Hunan Henghan) developed mutual business relationship in October 2013. However, Hunan Henghan delayed the payment for goods. According to (2015) NMCZi No. 05988 Civil Meditation Document, Hunan Henghan agreed to pay RMB 290,500.00 for goods and RMB 10,000.00 as the penalty for overdue payment at one time to Jinji Chemicals before April 30, 2016. Up to December 31, 2016, Hunan Henghan paid RMB 50,000.00, but the rest payment for goods amounting to RMB 240,500.00 and RMB 10,000.00 as the penalty for overdue payment remained unpaid. Jinji Chemicals has withdrawn20% bad debt provision based on the aging for RMB 240,500.00 that shall be paid by Hunan Henghan.
(2) In despite of no significant contingency to disclose, the company shall also make relevant statements. There was no significant contingency in the Company.
3. Others
XV. Events after balance sheet date
1. Significant non-adjusted events
Unit: RMB Yuan
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||
|-|-|-|-|
|||Number under influence to the||
||||Reason of unable to estimate|
|Item|Content|financial position and operating||
||||influence number|
|||results||

2. Profit distribution
Unit: RMB Yuan
|||
|-|-|
|Profits or dividends planned to be allocated|13,141,050.00|
|Reviewed and approved Profits or dividends allocation|13,141,050.00|

 3. Sales return
4. Notes of other significant events after balance sheet date
XVI. Other significant events
1. The accounting errors correction in previous period
(1) Retrospective restatement
Unit: RMB Yuan
|||||
|-|-|-|-|
|||Name of the influenced report||
|Content|Processing program||Cumulative impact|
|||items during comparison period||

(2) Prospective application
||||
|-|-|-|
|Content|Processing program|Reason of adopting prospective application|

 2. Debt restructuring
3. Replacement of assets
(1) Non-monetary assets exchange
(2) Other assets replacement
4. Pension plan
Approved in the
9th
meeting of the
6th
of Board of Directors in 2016, the company could participate in the corporate pension plan of China Chengtong Holdings Co., Ltd., and formulate its own pension plan
implementation rules under the framework of China Chengtong Holdings Co., Ltd. in line with China National
Paper Industry Investment Corp. Pension Plan Implementation Rules and the actual situation. However, relevant
pension plan implementation rules were subject to the discussion of thecompany’s congress of workers and staffs
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 and would come into effect and be implemented upon approved by China Chengtong Holdings Co., Ltd. and Ministry of Human Resources and Social Security.
5. Discontinuing operation
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|||||||Termination of|
|||||||the business|
|||||Income tax||profits|
|Item|Revenue|Expense|Total profits||Net profit||
|||||expense||attributable to the|
|||||||parent company|
|||||||owner|

 Other Notes:
6. Segment information
(1) Recognition basis and accounting policies of reportable segment
(2) The financial information of reportable segment
Unit: RMB Yuan
||||
|-|-|-|
|Item|Offset in segment|Total|

(3) If there was no reportable segment, or the total amount of assets and liabilities of each reportable segment could not be reported, relevant reasons shall be clearly stated.
(4)Other Notes:
7. Other important transactions and events having an impact oninvestors’ decision-making
1. In accordance with the Resolution Made at the
6th
meeting of the
5th
Board of Directors on Dec. 16, 2012, and the Resolution Made at the First SpecialShareholders’ General Meeting for 2012 on Jan. 4, 2012, as well as the approval of CSRC with the Reply on Approving the Public Issuance of Corporate Bonds for Foshan Huaxin Packaging Co., Ltd. (ZJXK[2012] No. 725) on May 28, 2012, the Company publicly issued 8 million pieces of corporate bonds with the par value of RMB 100 per piece by adopting the way of online public issuance for the public investors and off-line inquiry placing for the institution investors, with the nominal rate of5.8%, and the term of bonds was five years from the date of issuance. The issue amounts of bond pre-set online and offline were RMB100, 000,000.00 and 700,000,000.00. Up to Nov. 29, 2012, the total raised capital from the public issuance of corporate bonds in this time was RMB 800,000,000.00, and the actual raised capital after deducting the bond issuance underwriting fees and custodian fees was RMB 791,700,000.00.
2. In line with the Second Special Meeting of the General Shareholders on Nov. 10, 2014, the meeting reviewed
and approved the Proposal of the Issue of Medium-Term Notes, agreeing to issue no more than RMB five hundred
million of the medium-term note used for the supplement of the Company's cash flow and working capital. On Jun.
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 12, 2015, the Company received the Acceptance of ZSXZ[2015] No. MTN253 Registration Notice approving the Company's registration of Medium-Term Notes issued by NAFMII. On Jul. 29, 2015, the Company's total issue amount was RMB200, 000,000.00 with the coupon rate5.28%, and the term of Medium-Term Notes was 3 years. The raised capital after deducting the bond issuance underwriting fees and custodian fees was RMB199, 100,000.00.
(3) On Dec. 29, 2015, the company disposed75% stock equity held by Foshan Chengtong Paper Co., Ltd., and Japanese company shall collect RMB 490,240,600.41 from Foshan Chengtong Paper Co., Ltd.. On Dec. 31, 2015, the company signed Credit and Debt Settlement Agreement with the transferee that shall become effective from Jan.1, 2016 on. Meanwhile, based on the benchmark interest rate for the 3-year fixed loan, corresponding capital occupation interest shall be collected from Foshan Chengtong Paper Co., Ltd., and be paid quarterly. Before Dec. 31, 2019, the principal and interest shall be completely settled. Up to the date of report, Japanese company collected all interests back based on the agreement, but the principal RMB 490,240,600.41 was not returned. 8. Others
XVII. Notes of main items in the financial statements of the Parent Company
1. Accounts receivable
(1) Accounts receivable classified by category
Unit: RMB Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|||||Withdra|||||||
|Category|||||Book||||||
|||Proportio||wal|||Proportio||Withdrawal|Book Value|
||Amount||Amount||value|Amount||Amount|||
|||n||proportio|||n||proportion||
|||||n|||||||
|Accounts receivable|||||||||||
|withdrawal of bad|||||||||||
|||||||12,775,||||12,775,461.|
|debt provision by|||||||100.00%||||
|||||||461.68||||68|
|credit risks|||||||||||
|characteristics:|||||||||||
|||||||12,775,||||12,775,461.68|
|Total|||||||||||
|||||||461.68|||||

 Accounts receivable with significant single amount for which bad debt provision separately accruedat the end of the period
□ Applicable√ Not applicable
Among these groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
□ Applicable√ Not applicable
Among these groups, accounts receivable adopting balance percentage method to withdraw bad debt provision:
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016□ Applicable√ Not applicable
Among these groups, accounts receivable adopting other methods to withdraw bad debt provision:
(2) Bad debt provision withdrawal, reversed or recovered in the report period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMBXXX; the amount of the reversed or collected part during the Reporting Period was of RMBXXX.
Significant amounts of reversed or recovered bad debt provision:
Unit: RMB Yuan
||||
|-|-|-|
|Name of the entity|Amount|Method|

(3) Particulars of the actual verification of accounts receivable during the Reporting Period
Unit: RMB Yuan
|||
|-|-|
|Item|Amount|

Of which: significant actual verification of accounts receivable
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
||||||Whether occurred|
|Name of the entity|Nature|Amount|Reason|Procedure|because of related|
||||||party transactions|

 Notes:
(4) Top five of account receivable of closing balance collected by arrears party
(5) Derecogniziton of account receivable due to the transfer of financial assets
(6) The amount of the assets and liabilities formed by the transfer and the continued involvement of accounts receivable
Other Notes:
2. Other accounts receivable
(1) Other account receivable classified by category
Unit: RMB Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Category||||Withdra|Book||||||
|||Proportio|||||Proportio||Withdrawal|Book Value|
||Amount||Amount|wal|value|Amount||Amount|||
|||n|||||n||proportion||
|||||proportio|||||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||||
|-|-|-|-|-|-|-|-|
||||n|||||
|Other accounts|979,766,646.61|||||||
|receivable withdrawn||||||||
|||||979,766,6|964,414||964,414,17|
|bad debt provision||100.00%||||100.00%||
|||||46.61|,178.70||8.70|
|according to credit||||||||
|risks characteristics||||||||
||979,766,646.61|||979,766,646.61|964,414||964,414,178.70|
|Total||100.00%||||100.00%||
||||||,178.70|||

 Other accounts receivable with significant single amount for which bad debt provision separately accruedat the end of the period□ Applicable√ Not applicable
Among these groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Not applicable
Unit: RMB Yuan
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Other accounts receivable|Bad debt provision|Withdrawal proportion|
|Subentry within 1 year||||
|1-3 months|21,131.24|||
|4-12 months||||
|Subtotal within 1 Year|21,131.24|||

Notes:
Among these groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable√ Not applicable
Among these groups, other accounts receivable adopting other methods to withdraw bad debt provision:
□ Applicable√ Not applicable
(2) Accounts receivable withdraw, reversed or collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMBXXX; the amount of the reversed or collected part during the Reporting Period was of RMBXXX.
Significant amount of reversed or recovered bad debt provision;
Unit: RMB Yuan
||||
|-|-|-|
|Name of the entity|Reversed or collected amount|Method|

(3) Particulars of the actual verification of other accounts receivable during the Reporting Period
Unit: RMB Yuan
|||
|-|-|
|Item|Amount|

Of which: significant actual verification of other accounts receivable
Unit: RMB Yuan
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||||
|-|-|-|-|-|-|
||||||Whether occurred|
|Name of the entity|Nature|Amount|Reason|Procedure|because of related|
||||||party transactions|

 Notes of write-off other accounts receivable:
(4) Other accounts receivable classified by the nature
Unit: RMB Yuan
||||
|-|-|-|
|Nature|Closing book balance|Opening book balance|
|Pretty cash, etc.|21,131.24|457,276.86|
|Payment on behalf||163,917.24|
|Amount of equity transfer||105,000,000.00|
|Intercourse fund within the consolidated|||
||979,745,515.37|858,792,984.60|
|scope|||
|Total|979,766,646.61|964,414,178.70|

 (5) Top 5 of the closing balance of the other accounts receivable collected according to the arrears party Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
||||||Closing balance of|
|Name of the entity|Nature|Closing balance|Aging|Proportion%||
||||||bad debt provision|
|Zhuhai Hongta||||||
|Renheng Packaging|Loan and Interest|784,169,466.84|1-3 years|80.04%||
|Co., Ltd.||||||
|Zhuhai Huafeng||||||
||Loan and Interest|77,308,601.68|1-3 years|7.89%||
|Paper Co., Ltd.||||||
|Huaxin (Foshan)||||||
|Color Printing Co.,|Loan and Interest|115,978,654.67|1-3 years|11.84%||
|Ltd.||||||
|Zhejiang Hongta||||||
|Renheng Packaging|Loan and Interest|2,288,792.18|Within 1 year|0.23%||
|Technology Co., Ltd.||||||
|Total|--|979,745,515.37|--|100.00%||

(6) Account receivable involving government subsidies
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Project of government|||Estimated recovering|
|Name of the entity||Closing balance|Closing aging||
||subsidies|||time, amount and basis|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 (7) Other accounts receivable derecognized due to the transfer of financial assets
(8) Amount of assets and liabilities due to the transfer of other account receivable and continued involvement
Other Notes:
3. Long-term equity investment
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|Investment to the|1,070,107,442.||||||
||||1,070,107,442.14|1,058,107,442.14||1,058,107,442.14|
|subsidiary|14||||||
|Investment to joint|||||||
|ventures and|||||||
||244,408,251.27||244,408,251.27|254,253,797.80||254,253,797.80|
|associated|||||||
|enterprises|||||||
||1,314,515,693.||1,314,515,693.41|||1,312,361,239.94|
|Total||||1,312,361,239.94|||
||41||||||

(1) Investment to the subsidiary
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||||||Withdrawn||
|||||||Closing balance|
||Opening||||impairment||
|Investee||Increase|Decrease|Closing balance||of impairment|
||balance||||provision in the||
|||||||provision|
||||||Reporting Period||
|Huaxin (Foshan)|||||||
|Color Printing Co.,|122,536,745.03|||122,536,745.03|||
|Ltd.|||||||
|Zhuhai Hongta|||||||
|Renheng Packaging|927,570,697.11|||927,570,697.11|||
|Co., Ltd.|||||||
|Kunshan Focai|||||||
|Packaging &|5,000,000.00|||5,000,000.00|||
|Printing Co., Ltd.|||||||
|Zhejiang Hongta|||||||
|Renheng Packaging|3,000,000.00|12,000,000.00||15,000,000.00|||
|Technology Co., Ltd.|||||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||
|-|-|-|-|
||1,058,107,442.14||1,070,107,442.14|
|Total||12,000,000.00||

(2) Investment to joint ventures and associated enterprises
Unit: RMB Yuan
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||Increase/decrease in Reporting Period||||||||||
||||||Investme|||||||Closing|
|||||||Adjustme|||||||
|||Openi|||nt profit||||Withdraw|||Balance|
||||Additiona|||nt of||Declarati|||||
|||ng||Negative|and loss||Other||n||Closing|of|
|Investee|||||||||||||
||||l|||other||on of cash|||||
|||balanc||investmen|recognize||equity||impairme|Others|Balance|impairme|
||||investmen|||comprehe||dividends|||||
|||e||t|d under||changes||nt|||nt|
||||t|||nsive||or profits|||||
||||||the equity||||provision|||reserves|
|||||||incomes|||||||
||||||method||||||||
|I. Joint ventures|||||||||||||
|II. Associated enterprises|||||||||||||
|Chengton|||||||||||||
||254,253,7||||14,902,80|||24,748,35|||244,408,2||
|g Finance|||||||||||||
||97.80||||9.13|||5.66|||51.27||
|Co., Ltd.|||||||||||||
||254,253,7||||14,902,80|||24,748,35|||244,408,2||
|Subtotal|||||||||||||
||97.80||||9.13|||5.66|||51.27||
||254,253,797.80||||14,902,80|||24,748,35|||244,408,251.27||
|Total|||||||||||||
||||||9.13|||5.66|||||

(3)Other Notes:
(1) On acquisition date as Jun. 30, 2009, the Company gained40.176% shares of Hongta Renheng by the way of capital and share increase, there were five directors in the Board of Directors of Hongta Renheng, of which the Company sent three directors, Yunnan Hongta Group Co., Ltd. and Renheng Industrial Co., Ltd. sent one director respectively. The Chairman of the Board (Legal representative) was sent by the Company, General Manager and Chief Financial Officer were also sent by the Company, so as to control the routine producing and operating activities of Hongta Renheng. Therefore, the company was consolidated into the consolidated statement of the Company since Jul. 2009.
On Feb. 1, 2010, Hongta Renheng finished the change procedures for capital increase in industry and commerce, so shares of Hongta Renheng held by the Company increased to41.9653%. Meanwhile, the company revised the contract and Articles of Association of Hongta Renheng according to the resolutions of the Board of Directors of Hongta Renheng on Feb. 25, 2010, after which the directors of the Board of Directors changed from five to seven, as the Company sent four directors (originally three), Yunnan Hongta Group Co., Ltd. sent two directors
(originally one), Renheng Industrial Co., Ltd. sent one, Dragon State International Limiteddidn’t send any
directors. The Company still can decide the financial and operating policies of Hongta Renheng. Therefore,it’s
still within the consolidated scope during this Reporting Period.
(2) According to the
4th
meeting of the
5th
Board of Directors held on Jun. 28, 2013, which received and approved
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 the Proposal on Related Transaction of Purchasing Equity of Huaxin (Foshan) Color Printing Co., Ltd. Owned by Longbon International Co., Ltd., the Company purchased25% equity of Huaxin (Foshan) Color Printing Co., Ltd. owned by Longbon International Co., Ltd. through the Equity Transfer Agreement with the base day of the equity protocol transfer on Jun. 30, 2013. The transfer price took the net assets through assessment of Huaxin (Foshan) Color Printing Co., Ltd. of RMB 199,450,300 as reference, and both parties agreed to transfer25% equity with the price of RMB 49,862,600. Relevant equity alternation procedures were completed in September 2013. In October 2013, the Company had completely paid the equity purchasing account of RMB 49,862,600. After the equity transfer, Huaxin (Foshan) Color Printing Co., Ltd. became the wholly-owned subsidiary of the Company.
(3) On Dec. 23, 2013, theCompany’s Third Special General Meeting of Shareholders reviewed and approved the Proposal on purchasing the20% equity related transaction of Chengtong Finance Co., Ltd. held by China National Paper Industry Investment Corp. On Jan. 23, 2014, Chengtong Finance Co., Ltd. signed Equity Transfer Agreement with China National Paper Industry Investment Corp., planing to transfer20% of equity to China National Paper Industry Investment Corp. After friendly negotiation, both parties agreed that the transfer price was RMB 231.4502 million, and Chengtong Finance Co., Ltd. changed its shareholder registration on Jun. 23, 2014. Therefore, from July 2014 on, Chengtong Finance Co., Ltd. held20% equity of Chengtong Finance Co., Ltd. calculated based on the equity method.
4. Revenues and operating costs
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Reporting Period||Same period of last year||
|Item|||||
||Revenue|Operating costs|Revenue|Operating costs|
|Main operations|||255,247,489.31|255,247,489.31|
|Total|||255,247,489.31|255,247,489.31|

 Other Notes:
5. Investment income
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Long-term equity investment income|||
||16,988,226.64|19,796,783.06|
|accounted by cost method|||
|Long-term equity investment income|||
||14,902,809.13|15,735,223.61|
|accounted by equity method|||
|Investment income arising from disposal of|||
|||-75,000,000.00|
|long-term equity investments|||
|Total|31,891,035.77|-39,467,993.33|

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 6. Others
XVIII. Supplementary materials
1. Non-recurring Gains and Losses during this Reporting Period
√ Applicable□ Not applicable
Unit: RMB Yuan
||||
|-|-|-|
|Item|Amount|Explanation|
|Gains/losses on the disposal of non-current|||
||-690,044.71||
|assets|||
|Tax rebates, reductions or exemptions due to|||
|approval beyond authority or the lack of|26,022,524.47||
|official approval documents|||
|Fund possession expenses collected from|||
|non-financial business that included in gains|22,334,467.56||
|and losses during this period|||
|Gain/loss from change of fair value of|||
|transactional assets and liabilities, and|||
|investment gains from disposal of|||
|transactional financial assets and liabilities|5,536,398.42||
|and available-for-sale financial assets, other|||
|than valid hedging related to the Company’s|||
|common businesses|||
|Other non-operating incomes and expenses|||
||-263,588.90||
|other than the above|||
|Less: Income tax effects|2,645,887.81||
|Minority interests effects|16,790,647.74||
|Total|33,503,221.29|--|

Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Extraordinary Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item.□ Applicable√ Not applicable
2. Return on equity (ROE) and earnings per share (EPS)
|||||
|-|-|-|-|
|||EPS（Yuan/share）||
|Profit Up to Reporting Period|Weighted average ROE (%)|||
|||EPS-basic|EPS-diluted|
|Net profit attributable to common||0.12|0.12|
||3.13%|||
|shareholders of the Company||||

Foshan Huaxin Packaging Co., Ltd. Annual Report 2016
|||||
|-|-|-|-|
|Net profit attributable to common||||
|shareholders of the Company after||||
||1.42%|0.06|0.06|
|deduction of non-recurring profit||||
|and loss||||

3. Differences between accounting data under domestic and overseas accounting standards
(1) Differences of net profit and net assets disclosed in financial reports prepared under international and Chinese accounting standards
□ Applicable√ Not applicable
(2) Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards
□ Applicable√ Not applicable
(3) Explain reasons for the differences between accounting data under domestic and overseas accounting standards; for any adjustment made to the difference existing in the data audited by the foreign auditing agent, such foreign auditingagent’s name shall be clearly stated.
4. Others
Foshan Huaxin Packaging Co., Ltd. Annual Report 2016 Section XII Documents Available for Reference
Investors and relevant departments can refer to the following materials in theCompany’s office for Board of Directors:
1. Financial statements signed and sealed by legal representative, principal of accounting work, and manager of finance department; 2. Original document of audit report stamped by the accountant firm, signed and sealed by the certificated accountant;
3. Texts of all theCompany’s documents disclosed via http://www. cninfo.com.cn during the Reporting Period, and the originals of public notices.
4. The Annual Report for 2016 with the signature of the Chairman of the Board of Directors.