CONTENTS
32

Fulfilling Responsibility
from Forest to Paper

38 | Sustainable Procurement Management

Message from Chairman

39 | Green Manufacturing
44 | Safety Management04

46 | Product Quality and Service Management04 | Company Profile

48

About APP China

07 | Industrial Layout and Development
08 | Shared Prosperity with Industry
09 | Achievements and Honors

17 | Green Forestry and Forest Conservation
20 | Green Mill Management
22 | Green Product Innovation
25 | Our Story: "Zero-Plastic" – From Zero to One

A Harmonious Future Driven
by Digital Innovation
27 | Developing a Digital Transformation Strategy

78

49 | Talent Retention and Development

83

59 | Our Story: Irrigating Hope with Love
– Ten Years of Foundation

26

Assurance
Statement

GRI Content Index

55 | Dedicated to Philanthropy

Post-Epidemic Era:
Proactively Creating Opportunities

75

Remaining People-Centered andBuilding a Better Tomorrow

54 | Our Story: MBOS Spirit,
Compass for APP People

14

Green and Eco-Friendly Papermaking

Performance in
Numbers

33 | Sustainable Forest Management

02

16

69

60

Governance and Management
60 | Risk Management
60 | Integrity and Compliance

29 | Accelerating Digitalization of Practices

62 | Sustainability Management

31 | Our Story: Improving Consumption
Experience Through Digital Means

64 | Stakeholder Engagement
66 | Materiality Analysis

UN Global Compact
Ten Principles Index

84

About this ReportMessage from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from Chairman

2020 is to be remembered as a year of historic significance. It is the critical year for China to secureplastic" food packaging more degradable and recyclable, we also strive for greater product diversity.

and other areas have all created positive impacts, making us more committed to philanthropic

society in all respects and the closing year of the 13th Five-Year Plan. In 2020, people have learned

and efficiency, water saving, "three wastes" treatment, etc. We continue to improve performance on apapermaking professionals and popularize the papermaking culture.

to adjust to the "new normal" imposed by COVID-19 after its catastrophic outbreak and embraced

an expanding array of digital transformations in life and work. Also in this year, China has pledged

to hit peak carbon emissions by 2030 and attain carbon neutrality by 2060, spurring the low-carbon
economic and social transformation to full speed.

Over the past three decades, the courage to face up to and initiate change has been engraved in

the operations of APP China. We have introduced the "Integration of Plantation-Pulp-Paper" model
since the early days of our foundation, putting us on a path to a sustainable future. We continue toincrease investment in environmental protection to minimize the impact of our business operations
on the environment and ensure that our environmental performance exceeds the requirements ofrelevant standards. Through forward-looking planning and implementation of intelligent and digitaltransformation, we are geared up for the arrival of the digital economy, which is approaching atfull speed. With the new Four-Wheel Drive strategy launched in 2020, we aim to further tap ourdevelopment potential by taking care of the four areas of culture, digital transformation, talent, andinnovation. As such, we will fulfill our responsibility in a more innovative and ever-evolving manner toboost economic, social, and environmental sustainability.

Lucid waters and lush mountains are invaluable assets. Ecological protection stands out as apolicy priority in the 14th Five-Year Plan, giving new significance to building a greener papermaking
industry. We have undertaken a forest carbon sink accounting of all our plantations, recording

approximately 42.395 million tons of total carbon sinks. Behind this number are the consistent effortsof our people in managing forest risks, conserving forests, and promoting forest certification since

we first began developing plantations back in 1995. As businesses face ever-heightened regulatory

scrutiny in reducing and limiting the use of plastic, we make an increasing investment in the researchand innovation of "Paper in Place of Plastic" products. Besides continuously making our "zero-/02

In terms of green manufacturing, we implement strict management in areas of energy conservation

variety of environmental indicators while complying with applicable policies and regulations. Gold East
Paper, Ningbo Asia, and Guangxi Jingui Pulp & Paper are among the fifth batch of national green
manufacturers announced by the Ministry of Industry and Information Technology.

Green development is essential for sustainability, and intelligence is the key to the future. As such,
digital transformation is the only path to high-quality development for the traditional manufacturingsector and also a key development strategy at APP China. Our new five-year digital development

plan sets out clearer objectives that will catalyze digital transformation across the Group. We haveautomated and upgraded existing manufacturing equipment and processes and apply cutting-edge

causes. In addition, we play our part in carrying on the papermaking culture with programs to train
A new chapter is about to begin. Looking forward, 2021 is the beginning year of China's 14th FiveYear Plan and the year for the country to start a new journey toward the second centenary goal.

APP China will continue to move with the times, accelerating digital and intelligent transformation
and working towards a greener value chain. In this process, we will build on our strengths tooptimize and upgrade the industrial structure, address future challenges and opportunities together
with industry partners, and be a strong endorser and practitioner of high-quality and sustainable
development.

technologies, such as 5G, artificial intelligence, and big data analysis, in the design and developmentof new bases and projects. We have implemented the digital Lean Management System at major mills
and sales companies, leading to notable improvements in business efficiency, refined management,
and work accuracy.

The very essence of innovation lies in people. A high caliber of talent has been at the heart of theinnovations and changes happening at APP China. We push forward the construction of the APP

Teguh Ganda Widjaja
Chairman and President of Sinar Mas Group

Learning and Development Center and continue to enrich the content and format of employee

training so that our employees can all find their strengths and apply what they learn. Living the MBOS
(Management by Olympic System) spirit, we continue to build a stronger corporate culture, bringout the highest passion and dedication of our employees, and motivate them to keep growing andexcelling at work.

Giving back to and sharing achievements with society have been the founding purpose of APP China.
2020 marks the 10th anniversary of the Huang Yicong Foundation. Small actions can make a big

difference. Our programs in education and poverty alleviation, training philanthropy professionals,/

a decisive victory in the fight to eradicate absolute poverty and build a moderately prosperous

03Message from
Chairman

Post-Epidemic Era:
Proactively Creating
Opportunities

About APP China

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

About APP China
Company Profile

Organizational Chart

With operations dating back to 1938, Sinar

paper, cultural paper, and tissues to various

prominent Indonesian Chinese Mr. Eka Tjipta

investing in China in 1992. With two seedling

Mas Group was officially founded by the

Widjaja in 1962. The Group currently has

hundreds of legal entities and owns sevenmain business pillars: Pulp & Paper, Financial
Services, Agri-business & Food, Real Estate,

Energy & Infrastructure, Telecommunications,and Healthcare.

As a core business sector of Sinar Mas, Asia

Pulp & Paper (APP) was set up in 1972 and its

A Future Built on the Four-Wheel Drive Strategy
Our Four-Wheel Drive strategy, proposed by Chairman and President of Sinar Mas Group Teguh Ganda

Shareholder Meetingtypes of paper products. APP started

Wijaya in 2020, is built on the four pillars of Culture & MBOS, Digital Transformation, Organization and Talent,
and Technological Innovation. It is designed to help the Company prosper and grow sustainably.

Supervisor

research centers, 17 forestry companies,

271,100 hectares of plantations, and sevenmajor pulp & paper mills, APP China

Board of Directors

implements green-cycle development basedon the concept of "Integration of PlantationPulp-Paper", where forests support paper,
the paper industry nurtures forests, andforests and paper are integrated.

line of business ranges from pulp, industrial

Decision-making
Committee

Management
Committee

Personnel Review
Committee

Culture & MBOS

Organization and Talent

Price Committee
The corporate culture and MBOS benchmarking mechanism

We push for organizational change and use digital means toserve to motivate our employees and shape a self-driven team.

improve efficiency; we have built a sound system for talentattraction and development.

Corporate Headquarters

in total assets

New ProjectBase

248 billion

Real EstateBusiness Unit

in annual sales revenue

RMB

TissueBusiness Unit

73.8 billion

China Paper
Business Unit

RMB

160 countries/regions across six continents

Pulp
Business Unit

Products marketed in overForestry
Business Unit

As of the end of 2020, APP China has

FourWheel
Drive
Digital Transformation
We use digital means to drive customer-centric restructuring ofIndustrial Paper

Cultural Paperand innovation in the business process, product and service,business model, customer experience, etc.; we engage innew manufacturing, new marketing, and new technologies toTechnological Innovation
Driven by R&D and technological innovation, we promote all-round innovation; we create an atmosphere where "everyone

wants to innovate and everything can be innovated".

meet the needs for business development and improve theefficiency of production and management.

/

/

04

05

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Industrial Layout and Development

1992

Ningbo Zhonghua was formed
through joint investment by APP
of Sinar Mas, China Strategic
Holdings Limited from Hong Kong,
Ningbo Duplex Board Factory, andChina Paper and Pulp Import andExport Co., Ltd. and is the first millinvested in and set up by APP in
China.

1995

APP started plantations in China,
embarking on a progressive
journey of modernizedpapermaking.

1996

Gold Huasheng Paper (Suzhou
Industrial Park) Co., Ltd. wasestablished, and has become oneof the largest diversified cultural
paper product providers in China
and Asia.

1997Gold East Paper was officiallyestablished. In the same year,
Yalong Paper Products (Kunshan)Co., Ltd. was officially put into
production and is now one of themost important paper productfine-processing companies in
China.

/

06

2010

With an annual chemi-mechanicalpulp (CMP) production of 300,000
tons, the first phase of Guangxi
Jingui "Integration of PlantationPulp-Paper" project started
operations, and its 600,000-ton
papermaking production line had agrand opening.

2005

Hainan Jinhai Pulp & Paper, APP
China's first pulp mill, was officially
put into operation.

2004

Ningbo Asia Pulp & Paper,
equipped with one of the world's
largest single-machine production
capacities and most advanced
industrial paperboard productionlines, was put into operation.

1998

Gold Hongye Paper Group Co.,
Ltd. located in Suzhou started
operation. Its BreezeTM Tissue(Qingfeng) has become a leading
brand in China's tissue market.
In the same year, APP China
Headquarters was established in
Shanghai.

2012

APP announced the Sustainability
Roadmap Vision 2020, placing
natural resources conservation at
the center of its business strategy.

2013

APP published the Forest
Conservation Policy (FCP),
imposing a moratorium on allnatural forest clearance acrossits supply chain. For forests thatare of high conservation valueand high carbon stock, APP would
take targeted protective measures
based on assessment results.

2014

APP China announced plans tomake full use of existing plantbuildings for rooftop photovoltaic(PV) power generation with an
overall capacity of over 200MW.

2015

APP China moved its headquarters
to Shanghai ARCH and in the same
year became a global partner of
the China Pavilion at the Milan
Expo 2015.

2020

Standing united with Wuhan
and the whole China, Sinar Mas
Group donated RMB100 million
and also RMB350,000 worthof Breeze™ hygienic cleansing
wipes to the Overseas Chinese
Charity Foundation of China to fightagainst COVID-19. It is thus the firstoverseas-Chinese-funded enterprise
to respond to the call of the All-China
Federation of Returned Overseas
Chinese to make donations to theaffected areas.

2019

The high-grade tissue industrial
base of Gold Hongye was officiallylaunched and will be built into aworld-leading paper base that is
intelligent and environmentallyfriendly. In the same year, APP
China Headquarters settled in the
Shanghai Magnolia Square, opening
a new era.

2018

APP appeared at the first China
International Import Expo with theconcept of green-cycle "Integrationof Plantation-Pulp-Paper".

2017

APP China responded actively to
the Belt and Road Initiative andsigned a strategic agreement tobuild intelligent production and R&D
bases by adopting Industry 4.0 and
artificial intelligence.

From inventing and evolving the papermaking
technology to still making advances inmodern days, every step forward in China's

papermaking industry is inseparable from thededication, innovation, and perseverance of
papermakers. Since introducing the modelof "Integration of Plantation-Pulp-Paper"in the 1990s, APP China has striven forcontinuous industrial upgrades and changes,
leading to enhancements in both the quality

and efficiency of our development. As China

starts to embrace "dual circulation", we moveto prioritize two things, namely industrial

restructuring and the quality of development,

to fulfill our pledge to "serve China". Our efforts

The ground-breaking ceremony of Sinar Mas

Sinar Mas Rudong High-Grade Tissue

Gold East Paper launched the A4 xerographic

Industrial Base was held on October 31,

of its production capacity in 2021. Adopting

annual processing capacity of close to 230,000

Group Yancheng Cellulose Fiber Integration
2020, marking the official launch of the

textile industry transformation and upgrading
and intelligent manufacturing strategic

development project jointly undertaken by

APP China and Jiangsu Province. The basewill host a textile industry cluster and provide
better-quality cellulose fiber and textile raw
materials for upstream and downstream

enterprises to boost the transformation andIndustrial Base will be able to operate at 50%"Industry 4.0 + Artificial Intelligence", thisintelligent base will fully automate everythingfrom storage and transportation to delivery,

paper processing line. With an anticipatedtons, it serves to meet a growing market
demand for xerographic paper.

personnel management, vehicle management,
and the material reservation system. This is alandmark project at APP China for integrating

the upstream, midstream, and downstream of
the industry chain.

upgrading of local textile industry.

fall into two areas: one is digital transformation,
where we work to create an intelligent industry
chain by using advanced technologies thatare efficient and environmentally friendly; theother is integrating ourselves into industrial andsocial development, seeking opportunities topromote industry transformation and upgrading
and regional development.

Sinar Mas Group completed the acquisition

Ningbo Asia has launched a chemi-

Guangxi Jingui Pulp & Paper has launched(hereinafter referred to as Bohui Paper)annual capacity of 300,000 tons, which willwith an annual output of 1.8 million tons andof Shandong Bohui Paper Industry Co., Ltd.
in 2020. APP China and Bohui Paper willleverage product complementarity to fuelfurther innovation in the white cardboard
product line and enhance its diversity.

mechanical pulp (CMP) project with an

replace the 306,000-ton waste paper deinking
line. The new project is resource efficient,enables cleaner manufacturing, and shows
good prospects in product structure, rawmaterial structure, environmental protection,and resource conservation.

a high-grade paperboard expansion projecta hydrogen peroxide (concentration: 27.5%)

project with an annual output of 300,000 tons

and is currently applying for a CMP expansion
project with an annual output of 750,000 tons,

with a view to building a world-leading industrial
base featuring "Integration of Plantation-PulpPaper". The three projects have been listed
in the "Double Hundred and Double New"

Industrial Projects in Guangxi Province and the"5+2" Major Industrial Projects in Qinzhou City.

/

Milestones

07About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
ChairmanShared Prosperity with Industry
Ningbo Asia and the China National Pulp

China has long been a strong source of support

technical service agreement for the nationalin the pulp and paper industry, collaboratingwith industry partners to promote its healthyand sustainable development. In 2020, APP
China participated in many meetings andseminars organized by the China Paper

Association and other industry associations,offering insights on industry integration,

innovative development, plastic ban, the 14th
Five-Year Plan of the papermaking industry,
etc. The Company has signed a strategiccooperation agreement with the China National
Pulp and Paper Research Institute to explore

new models of industrial development and theand Paper Research Institute also signed astandard-setting project "Basic Terminology for
Optical Properties of Paper, Paperboard, andPulp" hosted by Ningbo Asia.

APP China

The year 2020 saw us further explore andapply the nano/micron cellulose technology.
This cellulose is a cellulose crystal in thenanometer/micrometer range separated

from fiber raw materials by acid, physical, or
biological methods. It disperses in aqueous

APP China co-hosted the industry salon themed"Focusing on Green Ecology and Building a
Beautiful China"

APP China and the China National Pulp
and Paper Research Institute entered into a
strategic partnership

solutions to form stable colloids, which canbe used in the papermaking industry, foodindustry, pharmaceutical industry, etc.

digital transformation of traditional sectors.

The primary use of nano/micron cellulose
in the papermaking industry

Case

Participating in Standard Setting to Promote Industry Development

As a key member of the China National Paper Industry Standard Technology Association,
Gold Huasheng participated in the national papermaking industry standard meeting held
in November 2020, with a focus on drafting a new national standard for thermal paper.

Based on prior research that involved testing and analyzing a vast array of global thermal
Reducing energy
consumption in
beating/

08

Increasing the
proportion of
papermaking fillers
as a papermaking
enhancer, thus
bringing down the
production costs
and the use ofwood

Can be used as
an auxiliary agent,sizing agent, or
coating for foodpackaging

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Achievements and Honors

To achieve high-quality development would

require the collective efforts of all sectors. APP

About APP China

Can be used to
produce anticounterfeit paper,anti-counterfeit
labels, advanced
color-changing
anti-counterfeit
inks, specialty
paper, etc.

paper performance data, the Technology Department of Gold Huasheng offered insights

on the color development performance, preservation performance, and other key physicalproperties of thermal paper.

Hainan Jinhai
Pulp & Paper

Honors and Awards

Issuers

2020 Best Practice by Companies on Achieving SDGs

Global Compact Network China

Outstanding Contribution to Epidemic Response in 2020

The 10th China Charity Festival

2020 CSR Model AwardThe 9th China Finance Summit

2020 Responsible Enterprise

China News Service, China News Weekly

Ona Award – 2020 Most Influential Brand for Social Responsibility

The 3rd Social Responsibility Conference

Love Without Borders

CPC Yangpu Economic Development Zone Work Committee,
Yangpu Economic Development Zone Management Committee

Donating to Yangpu

Yangpu COVID-19 Response CommandAward for Overachieving 2019 Energy Conservation Targets

Development and Reform Commission of Hainan Province

Top 10 Papermaking Enterprises in China's Light Industry

China National Light Industry Council, China Paper Association

Top 200 Enterprises in China's Light Industry

China National Light Industry Council

Ranked 2nd among 2020 Top 100 Private Enterprises in Hainan Province

Federation of Industry and Commerce of Hainan Province

Top 500 Foreign Trade Companies in China

Statistical Society for Foreign Economic Relations and Trade of China

2020 Top 20 Papermaking Companies in China

China Pulp & Paper Industry

Model Enterprise in Hainan Province for Poverty Alleviation Through Technology

Hainan Science Technology Enterprise Federation,

Technology Industry Federation of Hainan Province, Sina Hainan

The environmental impact of thermal paper is a focus of the discussions. Gold Huasheng's

Award for Continuous Excellence in Quality Management ofGreen Raw & Auxiliary Materials

China Printing Technology Association

the company was able to offer strong support for new standards regarding the proposal

2020 Top 100 Enterprises (10th) in Hainan Province,
Top 35 Enterprises of China's Manufacturing Industry

Hainan Enterprise Confederation / Hainan Enterprise Directors Association

support, etc.

2020 A-Rated Unit for Corporate Labor Security Law Compliance and Integrity

Yangpu Economic Development Zone Bureau of Labor

BPA-free thermal products have been commercialized since the end of 2018. Therefore,of "BPA-free thermal products" in terms of concept promotion, technical support, product/Message from
Chairman09

About APP China

Gold East Paper/

10

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Honors and Awards

Issuers2019 Golden Mountain Award

CPC Zhenjiang Municipal Committee, Zhenjiang Municipal People' s
Government

Model Enterprise for High-Quality Development

CPC Zhenjiang New Area Work Committee, Zhenjiang New Area
Management Committee

Top 10 Papermaking Enterprises in China' s Light Industry

China Paper Association

Water Efficiency Leader

Ministry of Industry and Information Technology, Ministry of Water
Resources, National Development and Reform Commission, State
Administration for Market Regulation

National Green Factory

General Office of the Ministry of Industry and Information Technology

Top 500 Enterprises of China's Manufacturing Industry

China Enterprise Confederation / China Enterprise Directors Association

Key Internationally Renowned Brand for Cultivation and Development
in Jiangsu Province (2020-2022): Space Shuttle

Department of Commerce of Jiangsu Province

Green Raw & Auxiliary Material Product

China Printing Technology Association

Advanced Customs-Certified Enterprise

Nanjing Customs of the People's Republic of China

2020 Top 100 Enterprises of Yangtze Delta's Manufacturing Industry (85th)

The Enterprise Confederation of Shanghai, Jiangsu, Zhejiang, andAnhui; the Enterprise Directors Association of Shanghai, Jiangsu,
Zhejiang, and Anhui

Unit with Outstanding Charitable Contributions

Zhenjiang New Area Charity Federation

High-Tech Enterprise Certificate

Jiangsu Province Science & Technology Department, Department of
Finance of Jiangsu Province, and Jiangsu Provincial Tax Service, State
Taxation Administration

2020 Top 100 Jiangsu Enterprises (52nd), 2020 Top 100
Enterprises of Jiangsu's Manufacturing Industry (35th)

Jiangsu Enterprise Confederation

Top 200 Enterprises in China' s Light Industry (34th)

China National Light Industry Council

Message from
ChairmanGold Huasheng

Guangxi Jingui
Pulp & Paper

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Honors and Awards

Issuers

2nd Batch of Water Efficiency Leaders in Jiangsu Province

The Water Resources Department, Development and Reform Commission,
Industry and Information Technology Department, Department of Finance,
Department of Housing and Urban-Rural Development, Administration forMarket Regulation, Government Affairs Administration, and Office of Water
Conservation of Jiangsu Province2020-2022 Key Brands for Cultivation and Development in Jiangsu Province (Golden
Ball, Gold Butterfly, Li Kede)

Department of Commerce of Jiangsu Province

Certificate for China Environmental Labeling (Type II)

China Environmental United Certification Center (CEC)

2020 Outstanding Economic Contribution Award (Top 30 Tax Contributions)Suzhou Industrial Park Administrative Committee

National Green Design Products

General Office of the Ministry of Industry and Information Technology

Green Factory and Green Design Products in Guangxi Zhuang Autonomous Region

Office of the Ministry of Industry and Information Technology of Guangxi
Zhuang Autonomous Region (GZAR)

2019 Industrial Water-Saving Enterprise of Autonomous Region

Office of the Ministry of Industry and Information Technology of GZAR

2018 A-Rated Unit for Corporate Labor Security Law Compliance andIntegrity in Port of Qinzhou

Human Resources and Social Security Bureau of Port of Qinzhou Economic
and Technical Development Zone

2019 Enterprise for Outstanding Utilization of Foreign Capital

Qinzhou Municipal Commerce Bureau

First batch of pilot enterprises integrating manufacturing and education in
Guangxi Zhuang Autonomous Region

Development and Reform Commission of GZAR, Industry and Information
Technology Department of GZAR, Department of Education of GZAR,
Science and Technology Department of GZAR, Department of Finance of
GZAR, Human Resources and Social Security Bureau of GZAR, Stateowned Assets Supervision and Administration Commission of the StateCouncil of the People's Government of GZAR; GZAR Tax Service, State
Taxation Administration

2019 Publicly Posted Contract Abiding and Trustworthy Enterprise of Guangxi
Zhuang Autonomous Region

Administration for Market Regulation of GZAR

Employment Internship Base in Qinzhou Port Area

China (Guangxi) Pilot Trade Zone, Human Resources and Social Security
Bureau of Qinzhou Port Area/

Message from
Chairman11

About APP China

Ningbo Asia

Suzhou Gold Hongye/

12

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Honors and Awards

Issuers

2020-2022 Ningbo Foreign Trade Enterprise with Outstanding Strength andEfficiency, 2019 Top 50 Manufacturing Enterprises in Ningbo by Tax Paid

Ningbo Municipal People's Government

Ranked 34th among Top 100 Comprehensive Enterprises in 2020, 21st among
Top 100 Manufacturing Enterprises, and 67th among Top 100 Competitive
Companies in Ningbo

Ningbo Enterprises Confederation / Ningbo Enterprise Directors Association,
Ningbo Federation of Industrial Economics

National Green Factory

General Office of the Ministry of Industry and Information
Technology

Outstanding Member of Ningbo Association of Enterprises with Foreign
Investment in 2020

Ningbo Association of Enterprises with Foreign Investment

Among the 6th batch of Charity Models in Beilun District, Ningbo

Ningbo Beilun Charity Federation

Award for Environmental Friendliness

Ningbo Association of Enterprises with Foreign Investment

2019 Unit for Blood Donation

Ningbo Office of the Leading Group for Blood Donation

2020 "Star" Vibrant Grassroots Trade Union

Ningbo Industry and Information Industrial Unions

Water-saving Enterprise of Zhejiang Province

Economy and Information Technology Department of Zhejiang

Top 10 Papermaking Enterprises in China's Light Industry

China National Light Industry Council, China Paper Association

2020 Outstanding Economic Contribution Award – Top 30 Tax Contributions, Top 30
Headquarters Economy

CPC Suzhou Industrial Park Work Committee, Suzhou Industrial Park
Management Committee

2020 Advanced Unit of Statistical Work in Suzhou Industrial Park

Suzhou Industrial Park Office of Statistics

Pioneer Company in Epidemic Response

CPC Shanghai Hongqiao Linkong Economic Zone Committee

2020 Award for Industry-Leading Tissue Brand of Influential Brand List

Committee of the 7th China Industry Influence Brand Summit

Trusted Brand in Jiangsu Province

Jiangsu Brand Promotion Association, Quality Inspection Center of
Jiangsu Province, Rights Protection, Complaint Supervision, and Follow-up
Investigation Office of Jiangsu Province

Message from
Chairman

Hainan Gold Hongye

Hainan Jinhua
Forestry

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Honors and Awards

Issuers

2020 Top 100 Enterprises and Top 35 Enterprises of Hainan's Manufacturing Industry

Hainan Enterprise Confederation / Hainan Enterprise Directors Association

2020 Top 100 Private Enterprises in Haikou

Haikou Federation of Industry and Commerce

Outstanding Enterprise for Technological Innovation in Hainan Province

Hainan Science Technology Enterprise Federation, Technology Industry
Federation of Hainan Province, Sina Hainan

AAAAA Credit Enterprise in China's Forestry and Grassland Industry, Award for"Outstanding Topic" of Films and Videos for China's Forestry and Grassland Industry
Caring for Health

China Forestry Industry Association, National Innovation Alliance for Forestry
and Grassland Health Industry/

Message from
Chairman13

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Focusing on Sustainability to Find
Opportunities in Challenges

Post-Epidemic Era:
Proactively Creating Opportunities

Following the outbreak of COVID-19, Gold

To meet the rapidly growing demand for

COVID-19 has spotlighted sustainability moremanufacturing sector, digitization will enable

The outbreak of COVID-19 makes 2020 an unforgettable year. Amidst the battle against COVID-19,

dialysis paper. While it was a brand-new

has launched a series of antibacterial tissues,change, tackling plastic pollution, protecting

and efficiency as well as reductions in carbon

huge efforts to ensure early resumption of work and production and help restore normal economic

team managed to complete the laboratory

Huasheng quickly began developing medical
we are hearing moving stories of help and support. Donations are made by companies, as well as

medical area for the company, the R&D

and social order.

tests within three days drawing on extensive

research on product standards, patents, andliterature, based on which it developed aproduction plan together with the production

On January 26, 2020, Sinar Mas Group announced RMB100 million in monetary relief

team. To go from an idea to fruition, it took

and RMB350,000 worth of Breeze™️ hygienic cleansing wipes to the Overseas Chinese

the team less than a month. Once COVID-19

Charity Foundation of China. It is thus the first overseas-Chinese-funded enterprise to

eased slightly in April, Gold Huasheng began

respond to the call of the All-China Federation of Returned Overseas Chinese to donate

communicating with the customers, adjusting

to affected areas.

and optimizing product quality based on theirneeds. In 2020, its dialysis paper passed

Of the RMB100 million donation, RMB10 million was earmarked for the care andrelevant safety inspections and were put intodevelopment of COVID-19 response personnel and the public health emergency

mass production to be used for the packaging

response enhancement project at Huashan Hospital.

of masks and medical devices, etc.

protective products, Suzhou Gold Hongye

which eliminates over 99% of bacteria. The

Ultra-Mini Royal Herbal Antibacterial Wipes,
Ultra-Mini Children's Antibacterial Wipes,

and Ultra-Mini Toilet Wipes are very popular
for they can kill 99.9% of bacteria and areconvenient for use on the go. Suzhou Gold

Hongye also quickly began producing medical
masks following COVID-19 and obtained theregistration certificate and production license
for disposable medical masks issued by the

Jiangsu Medical Products Administration at theend of 2020.

than ever around the globe. Addressing climate
biodiversity, encouraging responsible

consumption…a long list of sustainability

issues is being increasingly incorporated into

government agendas, corporate responsibility,and grassroots initiatives. Companies arebound to experience short-term pains as the

economic model undergoes a transformation,
but they also have immense opportunities.

APP China thinks over changes to be madeto the business model after COVID-19 andsignificant improvements in effectivenessemissions, and is therefore an important way
to achieve carbon neutrality. Therefore, weare pushing for Group-wide digitization so that
we can move the entire industry chain online

and deliver end-to-end operations to achievelean development. Innovation is another focus
area. We have made major breakthroughsin environmentally friendly technologies andproducts, delivering resource-efficient and"Paper in Place of Plastic" solutions.

prioritizes digital transformation as an important

We will continue to embed sustainability deeply

company to respond more quickly to market

partners, we will make further innovations anddevelopment strategy. Going digital allows achanges and the challenges brought about by

uncertainties like COVID-19. For the traditional

into our operations. Together with industry

explore ways of high-quality development forthe papermaking industry.

APP China mills all promptly set up a COVID-19 response working group, taking
measures to ensure employee safety, timely communication, material supplies,

coordination with the government, etc. With the health and safety of our employees
protected, we resumed nearly 100% of work and production within two months.

at the 10th China Charity Festival.

Turning Risks into Opportunities
The impact of COVID-19 was felt across all

COVID-19 has created a greater demand

papermaking industry is on the supply chain

and wrapping paper, as well as a heightened

sectors in 2020. The biggest impact for theand logistics, putting to the test a company's
ability to mobilize resources during an

emergency. On the whole, the papermaking
For more information on our COVID-19 response efforts,
please see pages 12-15 of the APP China Sustainability Report 2019.

/14industry has more "opportunities" than "risks".

R&D investment in 2020:
RMB

for paper products, such as tissues, wipes,

public awareness of health and hygiene. This
prompted us to speed up the resumption of

production and start developing more functional
products.

Breeze™️ ultra-mini antibacterial tissue product series

Breeze™️ mask

1.919 billion

102 patent applications,
including 40 invention patents,
42 utility model patents,
and 20 design patents/

APP China was awarded for Outstanding Contribution to Epidemic Response in 202015

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and Eco-Friendly
Papermaking
Green development has become a common currency around theglobe. As China establishes goals of "carbon peak" and "carbon

neutrality", green, low-carbon, and circular development is taken asa national strategy. In this context, it has become an important andurgent task for papermaking companies to optimize sustainability

management systems and speed up green transformation. Having
proposed and started to implement the green cycle model of"Integration of Plantation-Pulp-Paper" back in the 1990s, APP China
is firmly committed to green and sustainable development. We have

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Green Forestry and Forest Conservation
Plantation is the starting point of APP China's

peak and neutrality" goals, we conducted acycle. We manage our plantations in a

our forestry bases, setting the groundwork forharmonious manner and promote sustainable

We also continued to undertake sustainableeconomic, social, and environmental growth.

labeling to promote the conservation and1995. Against the backdrop of China's "carbon

across the value chain.

"Integration of Plantation-Pulp-Paper" green

carbon sink accounting and assessment of

lawful, technology-based, eco-friendly, andpushing ahead with climate-related initiatives.

forest management to contribute to balanced

forest certification and product sustainable

We started building forestry bases back insustainable development of forest resources

Summary meeting for carbon sink inspections

established a development model where "forests support paper, theOn-site inspection and veriﬁcation of forestlandand push for green transformation across the wider industry.

Forest Carbon Sink Accounting

paper industry nurtures forests, and forests and paper are integrated",

Governance andManagement

In 2020, APP China continued to strive for a greener industry chain.

improve forestry management; we made the forward-looking move ofconducting a carbon sink accounting; we strengthened comprehensive
environmental management of our mills and further enhanced carbon
emissions management in step with the construction of the national
carbon trading market; we extensively explored "Paper in Place of
Plastic" products to continue to bring high-quality and diversified
innovative products to the market.

Forests absorb carbon dioxide from theForest Carbon Sink Project Team in September

making them the largest "carbon reservoir"

party to conduct an aggregate carbon sinkatmosphere and fixate it in vegetation or soil,in the terrestrial ecosystem. Thus, forests ascarbon sinks have become a key component of

global climate change mitigation and adaptation
actions and will also play a significant role inhelping China realize the carbon neutrality goal.
Since 1995, APP China has been investingheavily in plantations in Guangdong, Hainan,

Guangxi, and Yunnan, pioneering the conceptof "Integration of Plantation-Pulp-Paper" in

China. By the end of 2020, APP China owned
271,100 hectares of plantations. APP China

Forestry launched the forest carbon sink projectin November 2019 under the leadership of theGroup headquarters and set up a dedicated/16

2020. We commissioned a professional third
accounting of our forestlands in accordancewith the Carbon Sequestration Afforestation
Project Methodology. The results showedthat APP China plantations had absorbed

approximately 42.395 million tons of carbon
dioxide by the end of 2020, including 4.624

million tons absorbed in 2020. The accounting
allowed us to fully appreciate the value of

APP China's "green DNA" and provided an

opportunity for the project team to gain an in-

depth knowledge of forest carbon sinks, which
would facilitate further implementation andinnovations of climate-related practices in the
future.

/We continued with the CFCC/PEFC sustainable forest certification to17

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

Case

Consolidating Foundation of Carbon Sinks ThroughSustainable Forest Management

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

are instrumental in promoting forest

Yunnan forest area underwent the CFCC

preparation and thoughtful daily work, theLancang Sub-BU of APP China Forestry has planted 540,000 mu of forestry bases sincemanagement and ensure the market access for

For years, APP China has been actively

Guangxi, Guangdong, and Hainan forest areas

China Forestry's history in 2020. APP China

Menglian, and Ximeng County. The forests are mainly eucalyptus and also include somecertification process helps forest managers

area of about 77,000 mu. None of them have experienced large-scale logging. According

Custody (CoC) certification is an effective

and forest coverage rate under the jurisdiction of the three counties have increased by 6.46

the raw materials for forest products. Bothway to effectively promote sustainable forest

2003 in three frontier counties of Yunnan Province in Southwestern China, namely Lancang,

forest products. The Forest Management (FM)

Betula alnoides Buch.-Ham. ex D.Don, alnus nepalensis D.Don and a green reservation

identify and solve problems; the Chain of

to the forest coverage survey conducted by local forestry authorities, the total forest area

way to prove the legality and traceability ofconservation and responsible consumption.
carrying out CFCC/PEFC-FM and -CoC

certifications and forest-certified productlabeling to continuously improve sustainable
forest management in the value chain,

while working with industry partners andconsumers to protect forests.

audit in the second quarter of 2020 andconduct an on-site inspection and assessment of the carbon sink contributions of ourforestry bases in the Lancang Sub-BU in December 2020. It showed that as of the end of
2020, those forestry bases had absorbed 21.647 million tons of carbon dioxide in total,
accounting for about 51.01% of APP China's total forest carbon sinks.

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

underwent the CFCC audit in Q3. Experts fromthe third-party certification agency carefully

inspected the forest areas in terms of logging,afforestation, tending, management andprotection, storage, etc. Thanks to thoroughforest areas set the best audit record in APPForestry reported performance highlights andexpert suggestions to the management teamand quickly replicated and promoted bestpractices across the organization.

percentage points and 3.5 percentage points respectively since we started that plantation
As part of our forest carbon sink accounting, we contracted a third-party institution to

Fulfulling
Responsibility from
Forest to Paper

Promoting Forest Certification
Forest certification is a globally recognized

operation in those areas.

A Harmonious
Future Driven by
Digital Innovation

Forestland on-site audit

Tip
The Programme for the Endorsement of Forest Certification (PEFC) is one of the world's

To better communicate the idea andtissue and several products under our high-the highest governing body of forest certification systems in China, representing leading

to consumers, we strongly endorse forest

promote CFCC/PEFC labeling to graduallyleading forest certification systems, and the China Forest Certification Council (CFCC) isinternational and domestic sustainable forest certification systems respectively. CFCC andPEFC reached mutual recognition in 2014, signifying that China's own forest certification
was officially aligned with international standards.

conducted a comprehensive internal audit on

ISO 14001 Environmental Managementin Hainan, Guangdong, Guangxi, and Yunnan

Systems (EMS) certification every year.

Combining external and internal audits, itfacilitates progress in sustainable forestry
through a repeated "audit-improvement-

audit" process. In the first half of 2020, theSustainability Team at APP China Forestry

certification labeling, printing the CFCC/

PEFC joint logo on our product packaging

and continuing to enrich our lineup of labeledproducts. Following the Breeze™️ Touchcare

APP China Forestry undertakes audits for the
CFCC/PEFC forest certification and theimportance of sustainable forest management

end tissue brand EMPORIA, we continued tocover more products in 2020. As of the endof 2020, the CFCC/PEFC joint logo had

been applied to over 100 APP China productcategories, including all of our tissue products.

244,382 hectares
Percentage of CFCC/PEFC-FM-certified plantations: 90.12%
Number of CFCC/PEFC-CoC-certified subsidiaries: 15

Area of CFCC/PEFC-FM-certified plantations:

Note: For more detailed information, please refer to the Sustainability

all the departments, forest farms, and nurseries

Certification section.

forest areas in accordance with the CFCC/

PEFC-FM and ISO 14001 standards as well as

policies, international conventions, and nationallaws and regulations relating to forestry, andaddressed the identified problems in time.

All APP China tissue products carry the CFCC/PEFC joint logo

/

/

18

19

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
Chairman

APP China aspires to be a modern and green
papermaking company, and increasingly

invests in building high-efficiency and lowemission production bases. In response

to China's green development goals andgovernment requirements in recent years, suchas "fully implementing green manufacturing","winning the battle against pollution", andBuilding an Eco-Friendly Cellulose Fiber
Integration Industrial Base"carbon peak and neutrality", APP China mills
have been actively implementing government
requirements, intensifying investment intechnological upgrading and clean production
and accelerating the deployment of carbon

management, aiming at going green and lowcarbon at full force.

in manufacturing and operations at our mills.
They have all established an environmental

management system based on the ISO 14001

standard and continue to strengthen regulations
and measures in this regard. They ensure

requirements of the latest national policies

and standards and keep moving forward. With

years of hard work and progress, the mills havebeen highly recognized for their environmental

environmental hazards in the rainwater

system, wastewater pipe networks, solid
waste management, etc. to prevent

environmental incidents from occurring. At

Hainan Jinhai Pulp & Paper, 19 environmental
emergency plans are put in place together
with regular drills and training to improve

employees' preparedness in the event ofGreen manufacturing is one of the five major tasks of the Made in China 2025 strategy.

Green manufacturing means green development across the industry chain and throughout
the product life cycle. Green mills feature intensive land use, clean production, waste

hazards at the source. Guangxi Jingui Pulp &Paper developed the Environmental Hazard
Inspection and Management Measures in/20

Fulfulling
Responsibility from
Forest to Paper

The "carbon peak and neutrality" goals havebrought China's green development to a newlevel, and this unprecedented wave of low-of our "cellulose fiber integration" upgrading strategy. Viscose fiber is one of the main

across all sectors. As an energy-intensive

and is a green renewable alternative to polyester and cotton. Once put into production,

proactively shoulder the responsibility of

It will integrate technology, advanced manufacturing, circular economy, and the shared

Over the years, APP China mills have been

local textile industry.

conduct carbon accounting and auditing, and

The Yancheng Industrial Base will uphold standards beyond the Specifications forfor carbon emissions monitoring, reporting,referred to as the "Yancheng Industrial Base") in October 2020 as an important step

carbon, green transformation is set to sweep

products produced at the base. It uses natural cellulose pulp as the basic raw material

industry, the manufacturing industry should

the base will be one of the largest cellulose fiber production and R&D bases in China.

reducing greenhouse gas (GHG) emissions.

prosperity of the industry chain, effectively driving the transformation and upgrading ofworking with relevant government authorities to

Leveraging a reasonable combination of electricity and steam use, energy-efficientequipment, and increased recycling of energy and resources, it is set to realize
sustainable manufacturing that produces more with less.

Governance andManagement

Comprehensive Management of Carbon Emissions

We started building the Yancheng Cellulose Fiber Integration Industrial Base (hereinafter

Viscose Fiber Industry (2017 Edition), which is the most stringent regulation in China.

Remaining PeopleCentered and Building
a Better Tomorrow

have established the management mechanism
and verification. As one of the first eight major
sectors included in China's national carbon

trading market, the papermaking sector has

a particularly significant role to play in energy

conservation and consumption reduction during

have been systematically planning our futurecarbon management efforts at the Group level.
In 2020, our mills initiated a phased elemental
carbon measurement program, independently
testing the calorific value of energy used

and the carbon content per unit of calorificvalue, with the intention of improving thequality of the carbon emissions data andlaying the groundwork for future participationin carbon trading. Besides transforming andupgrading existing production equipment,
they also adopted more advanced eco-friendly equipment and technologies in new

projects and actively explored energy structuretransformation. Ningbo Asia launched aphotovoltaic power plant to gradually increase
the use of renewable energy.

the 14th Five-Year Plan period. As such, we

2020, Ningbo Asia and Gold East Paper were both named "National Green Factory", andGuangxi Jingui Pulp & Paper was named "Green Factory" in Guangxi Zhuang Autonomous
Region, representing new levels of green manufacturing at APP China.

environmental emergencies.

Setting Up Carbon Emissions Management Committee

Hainan Jinhai Pulp & Paper has set up a Pulp & Paper Carbon Emissions Management
Committee led by its general manager and with representatives from multiple

and industry associations.

risk management to address environmental

A Harmonious
Future Driven by
Digital Innovation

recycling, and low-carbon energy, and they are where green manufacturing takes place. In

performance by national and local governments
Our mills continue to strengthen environmental

Green and
Eco-Friendly
Papermaking

Casethat all the environmental indicators meet the2020, checking for and addressing potential

Building Green Mills

Case

Improving Environmental Management
Environmental protection takes a front seat

Post-Epidemic Era:
Proactively Creating
Opportunities

Case

Green Mill Management

About APP China

In 2020, we continued to increase investment
in environmental protection, with APP China

mills within the reporting scope investing a totalof RMB

731million.

Digital transformation has enabled the mills to track the environmental indicators of production

and operations in real time, further streamlining our environmental management. Moreover, moreadvanced green manufacturing technologies and equipment are being adopted in new bases andprojects under construction, such as the Yancheng Cellulose Fiber Integration Industrial Base andthe Ningbo Asia 1.5-million-ton high-grade eco-friendly cardboard project. Our goal is to set an

departments, including technical, production, maintenance, energy, alkali recovery,
logistics, accounting, etc., with specified responsibilities and accountabilities. The

committee is responsible for coordinating the development of goals and policies relating
to carbon emissions management, the collection, sorting, verification, and analysis ofenergy consumption data, reviewing carbon emissions management, etc.

example for the industry for balancing ecological and economic benefits.

/

Message from
Chairman21

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
Chairman

The deteriorating environment and improving

megatrend. APP China puts the needs of

The National Development and Reformpumped up R&D in food packaging, suchthe environmental awareness of Chineseheavily in technological innovation and R&D toEnvironment issued the Opinions on Further

paperboard, and white kraft paper, andconsumers and their demands for green

products. Exploring innovations and upgradesin green products is the right thing to do for

papermaking companies in order to ride thisconsumers and customers first and invests

keep supplying the market with better-quality
and more environmentally friendly products

and make our industrial paper, cultural paper,and tissue products greener.

Commission and the Ministry of Ecology andStrengthening the Control of Plastic Pollution

in January 2020, introducing a phased ban onplastic. Paper products play a crucial role in

the replacement of plastic. In 2020, APP China

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Upgraded "Zero-Plastic" Food Packaging

Pushing Forward "Paper in Place of Plastic"
living standards together have increased

Post-Epidemic Era:
Proactively Creating
Opportunities

Case

Green Product Innovation

About APP China

as straw base paper, grease-resistant

The food and beverage industry is a major consumer of disposable plastic packaging. The

eco-friendly "zero-plastic" food packaging technology will help reduce the use of plastic in the
packaging for takeaways, fast food, beverages, etc.

developed more "Paper in Place of Plastic"

The Foopak Bio Natura biodegradable food paperboard released by Sinar Mas Group at thecommunication with industry partners, such

inside and is compostable, repulpable, and resistant to high temperatures up to 220°C. The

solutions based on market research andfirst China International Import Expo (CIIE) in 2018 has water-based plastic-free laminate

as degradable food packaging paper.

product has been widely recognized by our customers, securing several potential orders at

the first and second CIIE. With two years of optimization, the Foopak products have acquired
much higher degradability and recyclability and can fully biodegrade in household soil within

Case

Championing "Plastic-Free" Labeling

24 weeks. They have been certified as home-compostable by TÜV Austria.

"Zero-plastic" product series independently developed by Ningbo Asia

Ningbo Asia launched the "zero-plastic" cup paper in 2020. A water-based barrier coating

In 2020, APP China Paper Business Unit attended the Labelexpo South China 2020 as an

is added on the surface of the paper cups to prevent liquid from soaking through the baseexhibitor for the first time, where it displayed a series of paper label materials of superior

paper, with an extra layer of heat-seal coating to make the cups heat resistant. Free of plastic,

quality and performance. They included single-sided coated paper, thermal paper, wood-

the product is repulpable, recyclable, industrially degradable, and compostable.

free printed paper, white kraft paper, etc., which could all be widely used in label substrate

The product can be reused about six times before it can be completely recycled at the end

and liner as alternatives to plastic, helping customers in the label industry achieve "plastic-of its service life. About 0.9 tons of high-quality paper fiber can be recovered from each ton

free" development.

Single-sided coated paper

Thermal paper

Suitable as substrate and liner for self-

Suitable as supermarket labels,

single-sided coated paper, which does

industrial labels, etc.

not contain fluorescent agent, makes

degrade basically within eight weeks and about 100 days if mixed with compost. It has beencertified by TÜV DIN CERTCO and European Bioplastics (EUBP) for industrial composting.

In terms of food safety, the product uses 100% virgin pulp without any fluorescent whitening

logistics labels, medical labels,

agent, which is fully compliant with national requirements on food safety.

The cup paper is among APP China's wide selection of "zero-plastic" food packaging

products that facilitates a green and low-carbon life. Others include the OPB greaseproof

for more eco-friendly label products.

/

22White kraft paper

Wood-free printed paper

Suitable as liner for lamination.

Suitable as single- and doublesided lamination.

food paperboard, OPBs antibacterial wrapping paper for fresh foods, WXS straw paper, etc.

Foopak Bio Natura biodegradable food paperboard product lineup/

adhesive paper; the non-fluorescentof cup paper, equivalent to saving fifteen 12-meter-tall trees. The product can completely

23

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Our Story
Product R&D
and Innovation
As people go after a more premium

consumption experience, their demands forpaper products have also diversified. Our

response is a continuously optimized andenriched product lineup achieved throughtechnological R&D and innovation.

Aiming for our tissue products to meet

consumers' needs for health, portability, andquality, we have launched a range of multi-

functional paper products and intensified the
R&D of antibacterial products. For cultural"Zero-Plastic" – From Zero to One
Unsized Composite Embossed
Products

Improving Surface Properties of White
Kraft Paper

Paper for High-Grade Color-Printed
Corrugated Boxes

Paper towel embossing can be not onlyGold East Paper has optimized the surface

Based on in-depth market research, Guangxi

well. With increased thickness, toughness,processes like pulp grinding and calendering,

the Jinbei coated white kraft, a paper productdecorative but property-enhancing as

absorbency, etc., embossed towels havebetter functionality, appearance, and touch.
Suzhou Gold Hongye launched unsizedcomposite embossed products in 2020.
Without chemical compound glue as alaminating agent, they are greener and lessprone to mildew while boasting enhanced feeland functionality.

and industrial paper products, we adjust

properties of its kraft paper through refined

making it smoother for better prints, and alsostronger, stiffer, and more burst-resistant.

Compared with the traditional coated paperwith plastic coating, this new white kraft
paper is easily degradable and free offluorescent agents. It is therefore suitablefor producing food packaging products suchas paper bags for food and takeaways, tray
paper, and bread bags.

our product structure in step with the latest

Jingui Pulp & Paper developed "DV1", namely
specifically for high-grade corrugated boxes,

to echo customers' growing demand for high-grade color-printed corrugated boxes. To fully
assess whether "DV1" met the requirementsof different customers, we conducted trial

tests covering the main processes at several
manufacturers. The results show that it wellmeets customer requirements in terms ofprinting, laminating, gluing, box folding, andbursting, among other aspects.

APP China officially launched the "zero-plastic" cuppaper in 2020. Being 100% free of plastic, this eco-friendly product is recyclable, industrially degradable,
and compostable. Outstanding waterproofing andimpermeability also make it a good alternative to
traditional plastic-coated paper cups.

Behind this small paper cup are numerous innovations
and breakthroughs. How to ensure the safety of foodcontact? How to choose the right coating materials?
How to improve the recyclability of the paper cups?
The "zero-plastic" paper cup has been the result of

unremitting efforts of the R&D team and the hard workof internal and external stakeholders. Those valuable
experiences lay a solid foundation for the future

demands of our customers, launching white

development and application of "Paper in Place ofkraft paper with a better printing performance,
more environment- and eye-friendly paper
for printing learning materials, and whitecardboard better suited for high-grade colorprinted corrugated boxes, among other

Natural-Whiteness Paper for Printing
Learning Materials

Eco-Friendly Bio-Latex

Fluorescent agents are often added in theLatex is needed in the production of coated"whiter", but it may also cause health issues

printability, and other properties, and thepapermaking process to make the paper

products.

Breeze™️ Primary Wood Black-Gold Embossed
Soft Tissue Series

and eye fatigue. The natural-whiteness paper
for printing learning materials developedby Gold East Paper has a warmer color for
it does not contain fluorescent agents. It isgood for easing eye fatigue and discomfort

after long-time reading and therefore can be
widely used for printing teaching materials,
test papers, books, and magazines.

paper to improve its strength, gloss,

commonly used styrene-butadiene latex ismainly made from petrochemicals. To makethe product healthier, safer, and greener,

Hainan Jinhai Pulp & Paper developed theeco-friendly starch-based bio-latex and adigitally connected continuous supporting biolatex preparation system. As the performanceof the bio-latex continues to improve, thecompany is gradually using it to replace morestyrene-butadiene latex. At present, 20,000
tons of styrene-butadiene latex is replaced
every year.

Plastic" technologies and products at APP China.

Achieving Technological Breakthroughs

Becoming an Industry Benchmark"Paper in Place of Plastic" is an emerging trend in

As a brand-new product, when the "zero-plastic" cupexperience to learn from. The R&D Team at Ningbo

standard or a unified performance assessment

China, so there is not yet much mature technicalAsia met numerous technical challenges whendeveloping the "zero-plastic" products, and thebiggest one was finding the right coating. The coatingmust have good liquid (hot water, coffee, milk tea, etc.)
resistance, as well as degradability and recyclability.

Together with professional coating material suppliers,
the team repeatedly tested the performance of thecoatings and optimized the formulations accordingly.
Given the differences in the lab equipment and thecoating machines at the mills, they undertook multiple

paper was launched, there was not yet an industry
in China. As such, Ningbo Asia joined hands withindustry colleagues and initiated the China Paper
Association Group Standards for "Plastic-Free
Cup Paper and Finished Cups". It thus led theindustry in standardization by creating the first set ofassessments and having dialogues with standardsetting organizations and government authorities.
Over 50 tons of the "zero-plastic" cup paper wereordered within two months of its release.

processing adaptability tests. The efforts paid off,

By launching the "zero-plastic" cup paper, we went

coating with good resistance, sealing, printability, andexploration of "Paper in Place of Plastic" products.

and they successfully developed a water-based

from zero to one. It is only the starting point of ourrecyclability properties.

We will continue to live the spirit of craftsmanship andContinuing to Innovate and Excel

further explore the possibilities of paper products tocontribute to building an ecological civilization.

During product development, the team always thinks

creatively and looks to innovate. For example, working
with biodegradability experts, they had developed
a new technology combining base coating andtop coating that balances a product's resistanceproperties with recyclability, heat seal, and anti-

stickiness. The newly developed chemical additives

are a breakthrough in the application of corn starch,an environmentally friendly material, in paper sizing,
increasing the proportion of corn starch used inlatex from 20% to 50%. The team will work to further
enhance the safety and environmental friendlinessof the cup paper by exploring the possibility of using
vegetable oil as a coating material.

/

/

24

25

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Developing a Digital Transformation Strategy

China places a heightened focus on the digital economy in recent

years, pushing for its deep integration with the real economy. While
the outbreak of COVID-19 in 2020 has dealt a heavy blow to theglobal economy, it also presents new opportunities for profounddigital transformation of the economy and society. The digital

economy especially requires manufacturing companies to breakaway from the old development pattern that focuses on the mere
growth of production and scale and to leverage digital tools tocreate new models, new values, and new business opportunities.
APP China was an early adopter of digital and intelligent

transformation. From introducing such concepts as Industry
4.0, automation, and intelligence, to automating equipment,

redesigning processes, and building big data platforms, and tocreating the pathway from production to consumption using digitalmeans, we have worked out a path of digital transformation suited
to our development. We incorporate digital transformation into

the Group's Four-Wheel Drive strategy and have formulated theGroup-wide digital transformation strategy for 2025. We believethat the digitization trend will bring many important changes to the

traditional manufacturing sector and that acting proactively will help
the industry realize high-quality development in a much shortertime span.

Digital transformation is a key strategy at

APP China, having been prioritized since

APP China Digital Development Plan

2017. Such a forward-looking move hashelped us achieve rich innovations andhands-on experience in implementing
automated and information-based

processes, systems, and manufacturing.
We launched a new digital development
plan in 2020, aiming to leap from Digital

1.0 to 3.0 within five years and fully ramp

Full digitization and intelligentization
Stage: Building digitalfoundation

up the efficiency of the value chain and

Digital 1.0

innovating our business processes, products
experience, intelligent manufacturing, andintelligent management. The Group Digital

Standardization, end-to-end integration,
visualization

Office is newly set up to coordinate theStandardization: The standardization of businessstrategy, system reconstruction, businesstaking into account the differences in theand digital intelligence, ensuring that ourbusiness departments.

overall planning and design of the digitalrules and processes, master data, and systems,

process design, data asset management,

processes and systems of different mills anddigital strategy is successfully delivered.

Digital 2.0
Intelligence and efficiency

management through restructuring andand services, business models, customer

Digital 3.0

Stage: Generating profits
with data

End-to-end integration: Moving management
operations online, breaking the businessbarriers between departments, and realizing
end-to-end integration of sales, production,

logistics, warehousing, procurement, equipment
management, inspection and testing, and thefinancial system.

Visualization: Connecting with suppliers andcustomers. For example, after customers place
an order on the platform, they, as well as themills, can track the entire process of production,
warehousing, and transportation.

/

26

Stage: Maximizing
profitability

Based on years of work, we have nearly completed the construction

and restructuring of the digital framework for Digital 1.0 and set up ahighly connected digital management system. In 2020, we launched the
APP China Online Lean Management System at Ningbo Asia, Hainan
Jinhai Pulp & Paper, Gold East Paper, Guangxi Jingui Pulp & Paper,and industrial paper and cultural paper sales companies. Our next stepis to further optimize its functions and apply it in more subsidiaries. We
will soon start building Digital 2.0, with a focus on big data analysis, totranslate the large volume of data accumulated during stage 1.0 into
more valuable applications and use data to drive decision-making,management, and innovation.

/

A Harmonious Future
Driven by Digital
Innovation

27

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Procurement

Sales
Enhancing efficiency of order processing,integrating the order centers at all mills,
and improving customer experience.
Improving logistics and transportationplans and the efficiency of orderprocessing.
Realizing self-service ordering on thecustomer platform and real-time query oforder status, invoicing status, etc.

Realizing automatic calculation andassessment of raw material inspection
results and automatic customer complaint
submission, thus avoiding humanintervention and the risk of errors.

CapitalRealizing fully online, automated, andconnected management between
payments made and received and sales,purchase orders, and accounting, andautomatically generating payment plans.
Directly connecting banks with theCompany and the bills.

By applying the Online Lean Management System in its A4 electrostatic copying paper

production line, Gold East Paper enabled information exchange and data transfer between
the production system and the equipment system, thus improving the production efficiency
and environmental benefits at the same time.
Lean management of production

we combine talent attraction with development to form a strong pipeline of digital talent; second,

we have all of our subsidiaries provide training on management system operations and application
under the leadership of the Group, including special training on digital skills that match thecharacteristics of different positions, thus building stronger digital awareness and abilities across theorganization.

/

28

mills, and forestry BUs have implemented a series of digital innovation projects and achieved
remarkable results.

and makes optimal production plans

and upload of product information; theAutomated warehousing is a key feature of the Rudong Base. The automated finishedvehicles and automatically shelved andand warehousing to exit and face sheet labeling; the automated e-commerce warehousebased on the sales orders; during paperroll slitting, the system conducts data

analysis of the date and quantity, etc.
of order delivery and automaticallyfinished products are loaded directly into

product warehouse automates everything from product labeling and scanning, palletizing,

scanned.

automates day-to-day sorting and shipment and can expand to a shipment volume of

150,000 boxes per day during sales promotions. The application of 5G technology andcalculates the slitting amount based on

Automated Guided Vehicles (AGVs) enables automated and unmanned material-carrying

scanning the bar code.

Technologies like Radio-Frequency Identification (RFID), unattended weighing system,

such as inventory storage and retrieval, assembly line feeding, and empty stack recycling.

the paper roll information obtained by

Optimized quality control

and parts barcode scanning have enabled automatic tracking of the entire logistics
Resource and environmental management

The production process inspection is

The Lean Management System has

inspection equipment automaticallygenerated in production, such as paper

down to each process and part; thecollects inspection data, which is helpful

throughout the process.

substantially reduced all kinds of waste

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Intelligent Automated Weighing System
Hainan Jinhai Pulp & Paper launched the intelligent automated weighing system in

Automatic warehousing

packaging line to enable automatic entry

Fulfulling
Responsibility from
Forest to Paper

Guided by strategies around intelligent and digital transformation, APP China's new bases,

Logistics Automation at the New Base

automatically analyzes the inventory

A Harmonious
Future Driven by
Digital Innovation

Accelerating Digitization of Practices

An automatic scanner is installed on thecustomer complaint handling is traceablea heightened focus on the training and capacity building of digital talent in two main ways. First,

Green and
Eco-Friendly
Papermaking

The Lean Management Systemfor comprehensive quality risk control;
People are the key in implementing the digital transformation strategy. The year 2020 saw us place

Post-Epidemic Era:
Proactively Creating
Opportunities

Case

Digitizing everything from supplierregistration, bidding, and authorization to
making reservations for goods entering
into the mills, invoicing, and customer
complaint handling.

Building an all-mobile maintenanceterminal, improving the preventive
maintenance efficiency and management
granularity, assigning accountability toindividuals, and reducing unplanned
downtime.

About APP China

Case

Improving the order processing efficiency
of procurers and realizing automatedordering.

Manufacturing

Building Intelligent Production Workshops

Case

Current Achievements of the Online Lean Management System

Message from
Chairmanprocess at the Base from the transportation of materials into the mill to production, andto the transportation of finished products out of the mill. We will continue to explore

October 2020. It has multiple functions, such as vehicle entry/exit management, access

control material checking, automatic weighing and error rectification, data collection andsharing, and remote monitoring and management. With technologies such as RFID andautomation, the system can accurately track the loading and transportation of materials,
thus avoiding mixing or misloading. Besides preventing non-compliance and cheating, italso enhances the work efficiency and level of automation.

Gold East Paper has applied the intelligent weighing system in ten weighbridges following
the launch of the Lean Management System. With the old weighing system, the operator
had to identify the name of the goods, the license plate number, the driver's name, etc.
and manually log everything into the system, which was time-consuming and prone tomistakes. The new intelligent weighing system has shortened the average weighing timefrom 2 minutes and 15 seconds to 1 minute and 30 seconds, improving the efficiency by
33%. While the number of weighbridges has increased from four to ten, the number ofoperators has dropped from seven to four, equivalent to a 42.8% reduction in labor.

innovations such as unmanned trucks and automatic finished product loading systems to
make the logistics at the Rudong Base increasingly automated.

roll loss during slitting; all the trimmings

and waste paper generated in production
are returned to the pulp-making process

in a timely manner; laser coding, which isa green and non-polluting technology, isused for packaging barcoding; the digital
dashboards provide environmental data,such as changes in energy consumption,and inform timely analysis.

Automated e-commerce warehouse at Rudong BaseRemote monitoring room for the intelligent weighing system/

Message from
Chairman29

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
Chairman

Post-Epidemic Era:
Proactively Creating
Opportunities

About APP China

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Our Story
Developing Smart Forestry

The loading and unloading of bulk cargoes such as coal and ore at the docks can easily

APP China Forestry has set up information systems such as the Forestry Information

process so that dust does not build up. This inflicts labor costs and may also cause

it officially launched a system integration program based on the APP China digitalcause dust. Usually, someone is assigned to apply on-site water sprays throughout thesafety hazards. Gold East Paper designed an automatic linked intelligent cleaning device
that can be directly superimposed on the existing bridge crane equipment. The PLC(Programmable Logic Controller) system on the bridge crane links the operational signals
with the water inlet solenoid valve of the device and automatically sets the mode andangle of spraying water based on the actual needs. This has led to enhanced safety andless use of materials such as protective equipment and water hoses. The device has
passed the preliminary review for utility model patent by the State Patent Office.

Case

案Case
例

Automatic Cleaning Device at the Dock

Platform more than ten years ago, which it continues to update and optimize. In 2020,
transformation strategy. The program is intended to highly integrate the information

involved in the various processes of forestry management and radically boost its efficiency.
Another important aspect of APP China Forestry's development of smart forestry is

the application of the UAV (Unmanned Aerial Vehicle) aerial photography technology.

The technology can be used in a wide spectrum of scenarios such as forestland area
measurement, forestry quality review, and monitoring of disasters or illegal logging. It

provides a more straight-forward and comprehensive reference for forestland management
decision-making. For example, foresters can identify and map out forested land, thinly

forested land, and non-forested land before logging based on the aerial images taken by
the UAV, which serves as a more accurate reference for the logging operations. In 2020,
the aerial photography team from APP China Forestry completed aerial photography of

approximately 1.254 million mu of forestland using 13 UAVs, at more than three times theefficiency of the traditional approach with handheld manual GPS measurement.

APP China Forestry is also introducing all types of mechanized equipment to promote theautomation of seedling tending, planting, fertilization, weeding, logging, etc.

Improving Consumption Experience Through Digital Means
The outbreak of COVID-19 has boosted the demand for digital products and services. APP China responds by actively
exploring opportunities for digital consumption and continuing to innovate in products and online marketing.

The Ofﬁce Paper Team of APP China Paper

Business Unit has also delivered outstandingachievements in short-video marketing. Since

Accommodating Consumer Demand and Using Data to
Drive Product Innovation
Suzhou Gold Hongye has built an online shopping mall called theLive Streaming + Short Videos:
Exploring New Ways of Consumer
Engagement

Breeze™️ Picks, which can be easily accessed on the WeChat Mini-

Livestreaming e-commerce and shortthe Social Customer Relationship Management (SCRM) systemof online sales, give consumers a more

Program. Besides the various tissue products, the platform also hoststhat Suzhou Gold Hongye develops for product evaluation. The

company uses the system to collect and track consumers' needs

and feedback throughout the four stages of product idea generation,
product development, before launch, and after launch. The SCRM

system thus supports a closed-loop product development process

involving consumer engagement, where the company takes ideas fromconsumers and turns them into finished products that then go backto consumers. By constantly repeating this process, the company

brings its products increasingly closer to consumers' real needs andbecomes truly "consumer-centric". In 2020, the company evaluated thedevelopment of six new products in the SCRM system and developed
some of them based on the results of the evaluation.

videos, which represent the latest trend
intuitive and vivid shopping experience. We

joining the Douyin platform in 2019, the team has
continued to create and post short videos, withelaborately designed storylines, pictures, andlines. The videos are intended to communicate

the features of every ofﬁce paper product to the
public in a clear and interesting way and havegarnered a large number of likes and followers.

see livestreaming as not only an emerging
marketing tool but also an important movefor companies in order to keep pace with thechanging market trends, fulfill customers'

needs, and fundamentally transform theirbusiness models and mindsets.

Suzhou Gold Hongye set up the Livestream
Team in early 2020 and has gradually

expanded it into a team of 60, to try its

hands at digital marketing. Ms. Zhai Jingli,
Vice President of APP China, appeared in

the livestream on June 4, 2020, where she

explained to the viewers APP China's greenDemand re-output

Closed-loop socialization;
collaboration between
followers and products

R&D

The use of UAV aerial photography in forestland survey

Concept review/
Product sample
distribution

SCRM Evaluation Model/

30

Continuous upgrading;meeting consumption
expectations

Feedback
tracking

AfterlaunchBeforelaunchdevelopment concept of "Integration of

Plantation-Pulp-Paper" and the features of our
tissue products. With over 600,000 views, thendmaDe kingtrac

de Conma su
nd mp
sc tionreeningIncubation

live broadcast on that day won the first place(Warm-up/
Recommendation)
Engagement &feedback review

in the Jingdong Aces Competition – Paper
Product Category.

Douyin account of the Office Paper Team of thePaper BU/

Idea collection
and verification

31

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

Sustainable Forest Management

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Forest Risk Management
Fire hazards and wind hazards are the main threats facing APP China in forest management,

and the increasingly frequent occurrence of extreme weather events, such as high temperatures,

Paper products come from trees, and this process in between iswhere sustainability is put into action. Today, stakeholders are moreconcerned than ever about a company's environmental and social

impacts. To proactively manage the environmental and social risks
and create positive impacts has become the key for companies to
set their brands apart in the marketplace today. From forestland

management, procurement, and manufacturing to customer service,
we continue to strengthen responsibility management and explore
opportunities of innovation across the value chain as we workrelentlessly to build a sustainable industry chain.

Yunnan, and other places. It is our responsibility to keep an eye on and manage the impact offorestland operations on the environment and surrounding communities. We continue to promotesustainable forestry and be a catalyst for positive change in our industry and the community.
We do so by strengthening forest risk management, promoting sustainable innovation in the
eucalyptus industry, identifying and protecting high conservation value (HCV) forests, andparticipating in community dialogues and development.

droughts, typhoons, and heavy rains, has also increased the safety hazards for the forests. With
forest safety risk management as a key priority, APP China Forestry continues to conduct risk

monitoring and dynamic risk factor analysis. It actively manages risks through multiple measures
and works to ensure the safety of forest resources.

Forest Fire Prevention and Control
Preventing forest fires is a top priority inteams to conduct random patrols and shared

The new law lays out regulations on forest resources protection and management, and for thehas designated a command for forest

the forestry systems to minimize fire risks;at APP China Forestry compiled learning materials analyzing changes in the new law andaccording to different risk levels, and set up alearning materials were carried out at all of our forest areas to ensure that relevant requirements

Team has prepared a number of guiding

a lawful and sustainable manner.

Establishing Firebreaks.

The new Forest Law of the People's Republic of China was officially enacted on July 1, 2020.

forest management. APP China Forestry

first time, "Forest Certification" is written into the law. In response, the Sustainability Teamfire prevention, classified its forest areas

assessing the associated opportunities and risks. Training and study sessions around thefire control team; and its Asset Management

were implemented in the employees' day-to-day work and that the forestlands were managed in

documents including the Guidebook to
In 2020, our forest areas planned anddeployed fire prevention and control tasks

based on previous experience and organizedfire drills and training together with local

governments; participated in the firefighting

missions of local forestry systems; organized

APP China Forestry conducted joint patrols, fire prevention, and training with forest police/

32

fire information with local governments andstrengthened the fire prevention mechanismwith the "five-network" system, including theobservation and monitoring network, thecommunication network, the joint patrol andprevention network, the forest fire blocking

network, and the prediction and forecasting
network. Our forest areas also worked withlocal forestry authorities to educate people
from surrounding villages about fire safety

through publicity vehicles, boards, banners,
posted or sprayed slogans, notices, etc. toraise their safety awareness.

Fire prevention banner/

Fulfilling Responsibility
from Forest to Paper

APP China operates over 270,000 hectares of plantations in Guangdong, Guangxi, Hainan,

33

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

In 2020, the Guangxi Forest Area of APP China Forestry visited surrounding villages

Case

Forest Fire Prevention Education in Communities

A Harmonious
Future Driven by
Digital Innovationand communities, educating people about fire prevention and anti-theft, recording 6,221
participations. They also distributed 29,452 leaflets, put up 1,118 banners, and posted
1,341 slogans on fire prevention.

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Addressing Natural Disasters
Natural threats to forests mainly include

winds, frosts, droughts, etc. The major risk
facing APP China's plantations in 2020

was typhoon, which affected 16,424 mu ofplantations, accounting for 84.44% of the total
area, followed by frost, which affected 2,284
mu, or 11.8%, of our plantations. Our forest

areas have formulated and implemented the

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Promoting Innovation and Upgrading
Natural Disaster Emergency Plan, carryingout timely relief efforts as suited to theparticular disasters experienced. They also
summed up the experience afterwards toinform a risk management plan for the nextstage, continuing to consolidate forest safetymeasures.

A long-standing commitment to the R&D

system with the release of the APP China

In May 2020, APP China Forestry had

industrialization. The APP China Forestry

and to working with research institutes andManagement Measures in August 2020 andof National Forestry and Grassland

university-research integration, initiating theand innovation of quality seedling varieties
universities allows APP China Forestry to

evolve with cutting-edge research and deliver
more innovations.

In 2020, its Sustainability Team and R&D

Team jointly initiated a project on the region-

based deployment and management of high-

Key Measures to Address Wind Hazards

productivity, high-resistance, and high-pulp-yield varieties. With several monthsof surveys, analyses, and measurements,
Developing typhoon-resistant varieties

the project team developed a scientificand standardized variety management

Forestry Optimal Asexual Eucalyptus Variety
the replacement of several old varieties withnew ones. The project takes into consideration
both the production factors of forestry, suchas resistance to wind, pest, and frost, and an

in-depth research and analysis of their pulping
performance parameters, as well as cooking
pulp yields, conducted in close collaboration

with our pulp and paper mills. The selection of
seedling varieties through this process results
in not only high pulp yields, but also more
efficient utilization of forest resources.

an exchange with the Eucalyptus Center
Administration and the Leizhou Forestry

Bureau, and introduced 22 and three newvarieties from the China Eucalypt Industrial

Technology Innovation Strategic Alliance andthe Leizhou Forestry Bureau respectively

for experimental cultivation. It also signed astrategic cooperation framework agreementwith the Eucalyptus Center on forest breeding,pest monitoring and treatment, soil testing andfertilization, improvement of soil fertility, etc.
to deliver both research results and productSustainability Team also pushed for industrycooperation together with Hainan Jinhai Pulp &Paper and the Eucalyptus Center, signing thecooperation agreement on the Systematic

Evaluation of New Eucalyptus Varieties on

Pulping and Papermaking Performance, toselect new eucalyptus varieties with high pulp

yield. This is also the first time that APP China
Forestry has collaborated with a research
institute in the area of the "Integration of
Plantation-Pulp-Paper".

Avoiding planting during typhoon seasons to ensure the survival rate of sprout forests
Enhancing forests' wind resistance by increasing plant density and implementing deep
planting in affected areas

Placing a heightened focus on protecting young therophytes, which are more prone todamagePruning in advance according to early warnings of incoming typhoons to mitigate winddamage and carrying out immediate forest patrols right after
Forest fire prevention publicity in communities

Maintaining sound records of wind damages, including the progress of disaster relief

APP China Forestry actively pushes for industry-university-research integration

efforts and forest growth after disasters

In October 2020, APP China Forestry established its Technology Center and formed a thinktank composed of internal and external experts to strengthen innovative research in the areas ofgenetic breeding, forest culture, forest protection, etc.

/

/

34

35

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

Case

Collaborating with College to Combine Teachingwith Production

A Harmonious
Future Driven by
Digital Innovation

Founded in 1953, Guangdong Eco-Engineering Polytechnic is the cradle of forestry talent
in south China and has over the years supplied APP China Forestry Guangdong BU withover 100 forestry professionals. APP China Forestry Guangdong BU met with leaders of

the college on September 15, 2020. They discussed opportunities for in-depth collaborationin areas such as industry-university-research practice bases, order class talent training,
forestry resource investigation, and ecological monitoring, and signed a cooperation

framework agreement. Mr. Li Chen, the general manager of Guangdong BU, delivered an

engaging speech titled Embracing Digital Economy and Building Intelligent Forestry to over
80 teachers and students on that day. Guangdong BU also set up the Sinar Mas GroupAPP China Forestry Scholarship in the college to reward high-achieving students. The

two sides will each play to their strengths to further the integration between industry andeducation.

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Ecological Impact Monitoring
In managing forestry, APP China closely

produce monitoring reports. The results

environment. Self-inspections are combined

the biodiversity of APP China's eucalyptus

scrutinizes its impact on surrounding

with commissioned third-party monitoring

to keep track of the ecological impact of ourplantations and prompt timely changes tothe management measures.

APP China Forestry has been carrying out
joint ecological monitoring with research
institutes since 2007. Monitoring points

are set up in areas with different climaticand ecological characteristics to collectand record data on biodiversity, soil

erosion, plant growth, water quality, soilof past ecological monitoring show thatplantations is second only to natural forests
but better than secondary forests and nonwood forests. In 2020, APP China Forestry

signed a five-year partnership program with
Hainan University and Guangxi Academyof Sciences respectively to monitor theplantations' ecological and environmental

impact. They will continuously monitor andMessage from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

High Conservation Value Management
Tipsoil erosion to water quality.

and climate, among other areas, andFulfulling
Responsibility from
Forest to Paper

High conservation value (HCV) forests are forests that are important because of their highenvironmental, social, economic, biodiversity, or landscape values. HCV forests have

six attributes, namely biodiversity, landscape-level ecosystems and ecosystem mosaics,

ecosystems and habitats, basic ecosystem services, necessities of local communities, andcultural significance. Responsible forest managers need to determine the high conservation
values that exist within the boundaries of the forests under their management, monitor theeffectiveness of management, and make corresponding behavioral improvements so thatthose values are better conserved.

example, the small classes are required to

impact survey in local counties and towns toresident representatives before logging solearn about the feedback and suggestionsof local stakeholders on them. The survey

covered a wide range of topics, including theimpact of forestry activities on the livelihoodsof local communities and residents, thesafety of contractors and workers, the levelof local income, etc. The results showed thatstakeholders for creating positive impacts

always preceded by research, monitoring, andand the Determination and Protection ofand HCVs and that protection is in place.

Conservation Value Management Measures
HCV Forests and Traditional Rights and set
up an HCV working team. Based on datacollection and analysis, on-site forest surveys,
and stakeholder engagement, the teamassesses the HCVs of forests and implements
protective measures. The small classes all

make sure that their operational activities arerecording of the animal and plant diversity

After the protected plant Alsophila spinulosa

in terms of guaranteeing employee welfare,driving community harmony, boosting local
employment, and ensuring operationalsafety, among other aspects.

was discovered in the Huimin Forest Farm

We respect and have been actively protecting

members made markings and set up buffer

or indirectly affected by our forestry activities

and Nuozhadu Forest Farm in 2020, staff

zones to provide protection and made plans
for follow-up monitoring and protection.

Governance andManagement

In 2020, the forestry companies under

the companies were all recognized by local

APP China Forestry has formulated the High

Remaining PeopleCentered and Building
a Better Tomorrow

Building Harmonious Community Relations
APP China Forestry conducted a social

make improvements in areas ranging frombiodiversity, soil fertility, forest growth, and

A Harmonious
Future Driven by
Digital Innovation

the traditional rights of communities directly
and solicit their opinions on our activities
in an open and transparent manner. For

engage with local resident committees orthat markings can be made in places involving
traditional rights or of special cultural,

ecological, economic, religious, or spiritualsignificance, together with a 2-meter buffer

zone. The protection of those places will bemonitored and evaluated on a continual basis
during subsequent forestry activities.

APP China Forestry also hires local villagers
as forest rangers responsible for protecting

the forests from fires, theft, or encroachment,
providing them also with household supplies
such as oil, rice, and tissues. The forestry

areas actively seek to understand local needs,
making donations to aid local children's

education and improve infrastructure anddonating masks to nearby partners during
COVID-19 to contribute to a harmonious
community.

Ecologic monitoring of plantations

In respect of biodiversity, APP China Forestry

species. Every small class at the forest farms

photo albums and wallcharts of wild animals

once a year, based on which the biodiversity

Guangdong BU and Guangdong Eco-Engineering Polytechnic entered into partnershipand plants that need to be protected andregularly trains foresters to improve theirbiodiversity knowledge and ability to identify

carries out a biodiversity survey at least

database is continuously updated to keep

track of and protect the animals and plants in
those areas.

Community communication/

36

Providing villagers with household supplies

Donating masks during COVID-19/

has produced learning materials such as

37

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
ChairmanGreen and
Eco-Friendly
Papermaking

Green Manufacturing

Our suppliers mainly provide the raw materials, energy,

Accelerating green transformation is the gateway to high-quality development for the manufacturing industry.

construction, etc. We start to expressly communicate ouranti-corruption regulations when we select supplies towork with. Our supplier contracting also includes signing

the Anti-Corruption and Code of Business Integrity and theCSR Statement and Pledge, requiring suppliers to makecommitments in respect of upholding business ethics,
protecting environment, respecting human rights, andpositively impacting the community.

We have three lines of risk control in place to ensure thatIn 2020, we strengthened the monitoring of supplier risks,
conducting due diligence and continuous risk monitoringof new suppliers and randomly reviewing the due diligenceassessments of our major suppliers. We set up the Supplier
Development Team to promote the management of supplierperformance evaluation and the development of new

In 2020, Gold East Paper revised a number of policy

the supplier management system, connecting it with the basic

Procedures, the Raw Material Inspection Rules, and thefurther digitized the procurement system to facilitate a more

System. It also built an anti-fraud system for raw

suppliers in a more targeted manner. We also further evolved

documents, including the Incoming Material Control

information on external information inquiry platforms; weIncoming Material Inspection Work Quality Assurance

transparent procurement process.

material acceptance and an automatic testing result

supplier risks are managed fully, namely quality, compliance,

We continued to increase the procurement of internationallyauthenticity and legality and put high-risk supplies identified

procured approximately 2.357 million tons of certified woodand audit. We evaluate all the suppliers on measures ofunder a further compliance audit. We also have a supplier

blacklist and watchlist to reinforce timely identification andmonitoring of risks. We subject our timber suppliers to acomplete due diligence process, ensuring that the sources

Strictly Inspecting Raw
Materials from Suppliers

Case

Sustainable Procurement Management

technical services, equipment manufacturing, engineeringcertified wood fiber and wood pulp. In 2020, APP China

fiber and approximately 1.516 million tons of PEFC-certified
wood pulp, accounting for 26.9% and 24.2% of total woodfiber and wood pulp procurements respectively.

collection system, further tightening the already strict

control of raw materials. The company asks suppliers toprovide an improvement report if their supplies are foundsubstandard and continuously tracks the quality of theirnext five batches of raw materials. If similar problems

appear again, the company may consider reducing theirvolume of supply.

Our mills are highly mindful of the impact of their business operations on the environment. They invest

heavily in promoting clean manufacturing and continue to improve management in energy conservation andconsumption reduction, air pollution treatment, water management, waste treatment, etc., to contribute to agreen and recyclable sustainable papermaking industry chain.

For a traditional manufacturing company, the key

to achieving low-carbon green development lies intransforming its energy structure, reducing energyuse, improving energy efficiency, and making

technological breakthroughs. In 2020, we actively
implemented a number of pilot energy saving

and emissions reduction equipment upgrading

projects at the Group level. The magnetic levitationcommit to only non-controversial sources of raw materials.

Jingui Pulp & Paper's new project saved up to 10-

blowers used in the wastewater plant of Guangxi
20% on electricity compared with the traditional

multistage centrifugal blowers. We also replaced

%
17.1

17.2

14.2

19.8

24.2

electric compression refrigeration with lithium%
21.9

bromide-based absorption refrigeration in our new

26.9
16.9

17.5

bases and projects, which, driven by vapor, led to

19.4

higher energy efficiency and lower energy use at

the thermal power plants. For each kilowatt-hour ofrefrigeration, there would be a 50-gram reduction
in coal consumption compared with electric

2016

2017

2018

2019

2020

Proportion of certified wood pulp procured

2016

2017

2018

2019

2020

Proportion of certified wood fiber procured

Full-process monitoring of raw material sampling

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

25,146 MWh
Proportion of renewable energy: 18.49%
Solar power generation:

Promoting Energy Conservation andConsumption Reductionof raw materials are legal, compliant, and traceable throughresearch, risk assessment, etc. and requiring suppliers to/38

Post-Epidemic Era:
Proactively Creating
Opportunities

About APP China

compression refrigeration. With the refrigeration

units estimated to run 8,400 hours per year, theseprojects could lead to a reduction of 15,888 tons ofcoal each year. If the pilot projects work well, we will
promote them across the Group.

2020 Energy Mix of Mills Within Reporting Scope
46.35%

Industrial companies have come under increasingly

0.05%

heightened government scrutiny in the use of energy

0.07%

and resources. Our mills respond by continuously

0.09%

optimizing energy management policies andsystems, tapping the potential for energy saving

0.71%

and carbon emissions reduction, and strengthening

1.89%

the tracking and assessment of the performancetargets. Gold Huasheng revised the Energy

32.39%

Baselining and Benchmarking Procedures in 2020,
optimizing the ways in which energy managementtargets, indicators, and performance were

Coal

determined and evaluated. It set up a working group

Biomass fuels*

dedicated to energy conservation and consumption

Natural gas

reduction and one dedicated to coal saving toPurchased electricity

regularly track and analyze the achievement ofrelevant targets, award team performance points
for achieving the targets, and urge remediation
measures for underachieved targets.

18.45%* Biomass fuels include black liquor (accounting for approximately 94%),
wood chips, etc.; other energy sources include solar energy, gasoline,
and kerosene.

Purchased steam
Liquefied Petroleum
Gas (LPG)
DieselOther */

Message from
Chairman

39

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Case

Progressively Promoting Energy
Saving and Consumption Reduction

Guangxi Jingui Pulp & Paper carried out a special energy-saving
program in the production workshops in the second half of 2020.
A joint working group was formed among the Energy Department,
Pulp Production Department, Paper Production Department,
Environmental Safety Department, etc. They worked to identify
energy saving opportunities for various production stages, including
power generation, papermaking, pulp making, pulp beating, alkali
recovery, and wastewater treatment, and developed specificenergy saving targets and action plans accordingly. As a result,the company successfully achieved a combined steam andelectricity energy-saving target of 101.97% and a total saving ofapproximately RMB5.667 million within six months.

/

40

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
Chairmanevolving water management system and strictly aligning
the withdrawal, use, and drainage of water with applicablenational laws and policies. They also implement internalmonitoring, set water management targets, and regularly
track and evaluate their implementation. Our mills strive
to be water-saving and do so by continuously upgrading
the pulp and paper technologies, processes, facilities, andequipment to minimize the use of water in manufacturing.
In 2020, the average water reuse rate of APP China mills
within the reporting scope reached 95.63%.

Water Efficiency Leader

Through efforts to save, reclaim, recycle, and reusewater in recent years, Gold East Paper has reduced
the annual use of clean water by approximately 6.5
million cubic meters. In 2020, the company wasamong the second group of companies in China to
be named a national Water Efficiency Leader for its
outstanding performance in water management.

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

ensure that all the wastewater discharge indicators are within the national standard limits.

have resulted in remarkable reductionsand Hainan Jinhai Pulp & Paper have all

Indicators

the end of 2019. Meanwhile, they continue

standard* limit: 20 tons)

and technology to continuously drive

standard limit for pulp companies: 50 tons; national standard limit forpulp & paper companies: 40 tons)

Paper, Ningbo Asia, Gold East Paper,completed ultra-low emission retrofitting atin the emission of pollutants relating
to coal combustion. However, theto optimize and upgrade their equipment

overall atmospheric conditions remain
worrisome, with regional compound

down air pollutant emissions. Keeping

pollution being a prominent issue. This
is why air pollution control remains an

up with the latest national and local

important environmental issue in the 14th

policies, we will continue to improve our
performance while meeting compliance

have been deeply engaged in managing

Governance andManagement

by introducing advanced wastewater treatment systems, improving the treatment processes, etc. andexhaust gases. Guangxi Jingui Pulp &controlling air pollution in recent years

Remaining PeopleCentered and Building
a Better Tomorrow

In terms of wastewater management, our mills continue to increase their wastewater purification capacity

China's efforts in preventing andFive-Year Plan. Over the years, our mills

Gold East Paper has prioritized water saving since its
inception in 1997. It has established an organizational
structure for water conservation management led
directly by the general manager and a continuously
improving water management system. The company
has taken a variety of measures to strengthen water
management, such as promoting standardized
operations, improving the networks for water use
calculation and measurement, carrying out sciencebased water balance tests, instituting a performance
evaluation system, arranging for special inspections,and strengthening internal publicity.

Green and
Eco-Friendly
Papermaking"Three Wastes" Management

Saving Water Resources
The convergence of economic development, population
growth, environmental pollution, climate change, etc. isexacerbating global water scarcity. The Chinese government
has increasingly intensified its focus on saving water,
making it a strategic priority. The National Development andReform Commission and the Ministry of Water Resourcesof the People's Republic of China issued the China National
Water Conservation Action in 2019, endorsing a watersaving society. We work to reduce the water footprint ofour business operations, with our mills all setting up an

Post-Epidemic Era:
Proactively Creating
Opportunities

About APP China

requirements.

Wastewater discharge per ton of paper produced (National
Wastewater discharge per ton of pulp produced (National

COD emissions per ton of paper produced (National standard

limit: 1.6kg)

COD emissions per ton of pulp produced (National standard limit
for pulp companies: 5kg; national standard limit for pulp & paper
companies: 3.6kg)

Unit

2020

2019

2018

tons

6.20

6.37

6.79

tons

12.50

11.62

12.68

kg

0.22

0.29

0.23

kg

0.85

0.63

0.94

* Discharge Standard of Water Pollutants for Pulp and Paper Industry (GB3544-2008)

Emission permit limit

Water saving

Emissions in 2019

Emissions in 2018

Procuring high-quality raw materials so that cleaning is
not needed.

Emissions in 2020

Strictly Abiding by New "Zero Direct Wastewater
Discharge" Requirements

5,302

Adjusting paper machine operations to reduce the useof cooling water.
Modifying the vacuum condenser so that clean water isonly used as a heat exchange medium and can createa cooling effect without being mixed with white water*.

2,831

Water recycling and reuse
Adding a white-water sand filter system to recoverultra-clear white water.
Recycling sand filter pool backwash water*.
Using treated wastewater* for greening and roadwashing at the mills.
Separating mud from water in wastewater sludge andreusing the recovered water for manufacturing.

* "White water" is wastewater produced in the papermaking process. It contains fine fibers and fillers that look white to the naked eye, hence thename "white water". "Sand filter pool backwash water" refers to the sewage produced during regular sand filter pool backwash at the sand filter
section of the clean water production process. "Wastewater" refers to water discharged into the external water environment after it is treated tomeet relevant standards.

The Department of Ecology and Environment, the Economy and Information Technology Department,
and the Water Treatment Office of Zhejiang Province jointly launched the Zero Direct Wastewater
Discharge Area initiative in 2020 in industrial parks across Zhejiang province. The initiative is intended
to increase the wastewater collection capacity of and build a rainwater/wastewater diversion system in
key industrial parks and industrial companies to maximize their ability to intercept and treat wastewaterand provide a solid support for continuously improving water quality.

3,457

2,983

718

2,440

878
322

SO2 (ton/year)268

74
NOx (ton/year)

Case

Case

Reducing Energy Consumption ThroughInterdepartmental Cooperation

A Harmonious
Future Driven by
Digital Innovation

Case

Based on a comprehensive assessment of the energy use at themills, Hainan Jinhai Pulp & Paper invested a total of RMB26.5
million in 2020 in a number of projects, such as the pulping
workshop energy-saving retrofitting and the waste heat recovery
project. This led to annual energy savings of 30,903 tons ofstandard coal. The company also realized refined tracking andmanagement of the energy performance by adopting the Lean
Management System while continuously checking for leaking anddripping in the equipment. In 2020, together with a third-party
agency, the Development and Reform Commission of Hainan
Province conducted an energy audit and assessed key energyconsuming units for the energy saving targets. The results showedthat the company overachieved the "dual control" targets set by
the Development and Reform Commission of Hainan Province in
2020, namely the total energy consumption and comprehensive
energy consumption per unit of output.

Green and
Eco-Friendly
Papermaking

179

151

Soot (ton/year)

Hainan Jinhai Pulp & Paper Air Pollutant Emissions
Hainan Jinhai Pulp & Paper has achieved a decline in air pollutant emissions for three consecutive years; itsemissions in 2020 are well below the limits of the emission permits.

In response to the policy, Ningbo Asia formulated the rainwater/wastewater diversion plan basedon the assessment points laid out in the "Zero Direct Wastewater Discharge" requirements forpapermaking companies. To realize "zero drainage on sunny days and zero wastewater on rainydays", the company investigated its rainwater/wastewater pipeline networks, separated the entry points
for rainwater and wastewater, and replaced damaged pipelines; added rainwater and wastewater flow
signages to the manhole covers; revised the rainwater and wastewater pipeline diagrams; moved all
wastewater pipelines aboveground to ensure transportation through "open channels and open pipes";and built rainwater harvesting manholes at the mills with shut-off valves to ensure zero drainage on
sunny days. Ningbo Asia was certified for "Zero Direct Wastewater Discharge" at the end of 2020 by
the Beilun Branch of Ningbo Bureau of Ecology and Environment and the Qijiashan Sub-district.

/Message from
Chairman41

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

The mills classify hazardous waste based on

Hazardous Waste (2021 Edition) and standards

Control of Solid Waste Pollution and has formulated the Solid Waste

standards for hazardous waste identification.

further standardizing the management ofwith the Law of the People's Republic of China on the Prevention andManagement Procedures. We classify the major waste generated in
manufacturing into general industrial solid waste, hazardous waste,

and domestic waste, which are disposed of properly and separately.

The mills also take measures to reduce the amount of waste generated
and actively explore its recycling. The comprehensive utilization rateof general solid waste of APP China mills within the reporting scope
reached 74.32% in 2020.

the national hazardous waste list or relevant
They ensure that hazardous waste ishandled in a proper and compliant manner byimplementing a strict process encompassing
declaration and registration, accounting,and bases for hazardous waste management,

hazardous waste at the mills and ensuring thatthe operations met the requirements of thelatest regulations and policies.

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

From raw material sourcing, manufacturing, and processing to the sale of finished products,

logistics and transportation run through every link of the value chain, enabling the circulation of
products and goods. The process of logistics and transportation, however, consumes a lot ofenergy and resources through the use of vehicles and packaging and leaves a footprint on theenvironment. We work to build a green, efficient, and economical logistics model with optimized

collection, transfer, transportation, storage,transportation routes, enhanced packaging recycling and vehicle loading rate, greater digitization,and utilization. In carrying out the special

etc. that reduces the environmental impact of our logistics and transportation.

action for hazardous waste disposal in 2020,
Guangxi Jingui Pulp & Paper achieved

36.86%
0.31%
25.36%

by optimizing the production equipment

Building Green Ports

and processes, procuring high-quality raw

materials, etc. The company also provided
operations personnel with training on

standardized hazardous waste management
based on the latest National Catalogue ofGuangxi Jingui Pulp & Paper provided training on
standardized management of hazardous waste

Selling to external parties for reuse

Recycling and reuse*

Incineration

Other (including centralized treatment bylocal sanitation departments)* "Recycling and reuse" refers to the recycling and reuse of waste through directprocessing by APP China mills or through special cooperation with third-party agencies,
such as making by-products from waste.

Case

Promoting the Reduction and Reuse
of Papermaking Waste
37.46%

Case

Methods of Solid Waste Disposal at Mills Within Reporting
Scope in 2020

The lime mud and green mud are mainly generated in the alkali recovery process at paper
mills. If not properly disposed of, their accumulation not only takes up a lot of land space
but causes pollution to air, soil, and water as well. By streamlining processes towards
waste reduction and recycling and deepening external cooperation, Hainan Jinhai Pulp &Paper was able to treat green and lime mud with much higher effectiveness in 2020. The
company made process improvements to the alkali recovery causticizing workshop andset an average daily discharge limit of 160 tons for green mud. Through collective efforts ofthe staff members, the workshop kept the total discharge of green mud in 2020 at 41,140
tons, averaging 135 tons daily and meeting the target. The company also worked withprofessional technical companies to recycle green and lime mud and use them to makeconstruction materials such as eco-friendly walls. In 2020, a total of 31,421 tons of lime
mud was comprehensively utilized.

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Building Greener Logistics

reductions in hazardous waste generation/

42

Green and
Eco-Friendly
Papermaking

Gold East Paper is located in Dagang, Zhenjiang, Jiangsu Province, the third largest portof the Yangtze River. Its exclusive terminal has a 40,000-ton multipurpose berth and a
35,000-ton bulk berth connecting it to more than 130 ports in over 40 countries/regions.
Undertaking environmental initiatives at the terminal would have important implications
for both the company itself and the entire value chain. Gold East Paper is a longstanding endorser of building green docks and has carried out a number of environmental
improvement activities around the management of ship pollutants and exhaust.

Wastewater treatment

Exhaust treatment

The company follows the requirementof Jiangsu Province for "terminal
operators to receive domestic
garbage and sewage free of charge
when inland vessels stay in port",
formulating and implementing
the Vessel Sewage Management
Process. It requires inland vessels
to be equipped with a domestic
sewage compartment and dispose ofdomestic sewage and garbage whenarriving at the port to ensure that they
are properly handled.

To promote the development ofelectric ships and reduce the exhaustpollution caused by diesel generators
used in traditional ships, the company
designed and built a 1000kVA hybrid
high- and low-voltage frequencyconversion shore power system
to provide shore-based power for
docking ships that can be adapted to
the various power systems of electric
ships.

Case

In respect of solid waste management, APP China strictly complies

Message from
Chairman

Improving Utilization of Pallet Resources

The high humidity during the rainy season in south China easily causes mold and damages
to the wooden pallets for the packaging materials, resulting in waste of resources. Ningbo
Asia has made a dedicated effort in this regard, facilitating improvements in R&D, fullinspection, in-process inspection, exit-mill management, etc., thus extending the service
life of the pallets.

R&D

Full
inspection

In-processinspection

Exit-millmanagement

Succeedingin theexperimental
developmentof anti-moldeco-glueplanks.

Organizing
multiple
departments to
conduct a fullinspection of thewooden pallets instock.

Conducting
in-processinspections onwooden pallets
entering thewarehouses
and isolating or
rejecting thosefound moldy.

Spraying hydrogen
peroxide on moldfree wooden pallets toprevent mold;Thoroughly cleaningor polishing moldy
wooden pallets thatcan still be used andspraying hydrogen
peroxide; making
markings for easy
traceability in the
future.

Guangxi Jingui Pulp & Paper contributes to resource recycling by reusing starch pallets for the
shipment of finished paper products. A total of 16,603 starch pallets were recycled in 2020.

Guangxi Jingui Pulp & Paper recycles and reuses starch pallets/

Message from
Chairman43

About APP China

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Highlighting Prevention
in Production Safety

Production safety is a cornerstone of a

We set 2020 SHE targets for our mills

We continue to strengthen safety risk

vital to individuals and the happiness ofevaluating such key performance indicators

awareness through meetings, themedcompany's sustainable development andtheir families. This is why companies should
always stay vigilant about it. In 2020, theState Council issued the Three-Year Action

Plan for Special Management of Nationwide
Production Safety, requiring companies

to firmly implement safe development andstrengthen bottom-line thinking and red-line
awareness, improve the responsibility andmanagement systems for production safety,
and work to "eliminate the root causes ofaccidents".

APP China approaches production safety by
putting safety first, highlighting prevention,and managing comprehensively. We continue

to strengthen production safety management,with our Safety, Health & Environment (SHE)

management system covering all the workers,
business operations, and workplaces

under APP China, and fully implement the

production safety accountability system toprevent and minimize all kinds of production
safety accidents.

engaged in paper business, with a focus on(KPIs) as the number of fatalities, number oflost-time injuries per million hours worked,

injury severity rate*, number of fire incidents,
number of employees with occupational

diseases, average employee safety training

hours, and administrative penalties. We also

include the performance of our contractors in

the evaluation. The CEO of APP China Paper
Business Unit signed the 2020 SHE Target
Responsibility Statement with the generalmanagers of its mills, encouraging them tomake improvements to their vulnerabilities

in SHE management. We have a reward andpunishment system at the headquarters level,
where we cancel all SHE-related bonuses incase of any negative events such as fatalities,
and failure to achieve the annual targets

adversely affects the SHE performance of themills. To add to that, we have a cross-mill SHE
MBOS competition platform, which, throughbenchmarking, prompts the mills to identify

their inadequacies in management and adjust
the management strategy in a timely manner.
* "Injury severity rate" refers to the average lost working
hours per million working hours, used to measure theseverity of accident injuries.

management. Regularly, we raise safety
training, case sharing, etc. and ensure oursafety measures are fully implemented

through hazard identification and mitigation,

special inspections, and emergency drills. In

2020, APP China held a monthly SHE meetingfor all the mills, where we reviewed theirmonthly SHE performance, communicated thelatest SHE laws and regulations and industry

standards, and provided incident case studies
to drive continuous improvement in safety
management.

The management of contractors is a weaklink in production safety management asthey approach safety differently in terms ofphilosophy and operating specifications.
Therefore, strengthening the unified andstandardized management of contractors is

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Improving Safety Awareness of
Employees and Contractors
SHE-related regulations and operatingprocedures to prevent safety accidents.
The hazard rectification rate* of mills within
the reporting scope remained above 95%

throughout 2020, with that of Gold Huasheng,
Hainan Gold Hongye, Guangxi Jingui Pulp &Paper, Ningbo Asia, and Suzhou Gold Hongye
standing at 99% and above.

*"Hazards" refer to the dangerous state of things, theunsafe behavior of people, or flaws in managementthat may cause accidents in production and businessactivities due to violations of production safety laws,
regulations, rules, standards, and codes, the provisionsof production safety management systems, or any otherfactors. The calculation of "hazard rectification rate":(Number of rectifications completed within reporting
period / number of hazards detected within reporting
period) × 100%.

Green and
Eco-Friendly
Papermaking

Ningbo Asia organized extensive corporate production safety training in 2020 to improve
employees' safety and emergency response skills. The training covered everything fromproduction safety laws and regulations, risk identification, processes and specifications,and fire safety to the study of experience and lessons drawn from safety accidents. The
company designated employees from relevant departments as safety "nannies" andsupervisors for new employees of its own and from the contractors. They are responsible
for passing on their experience in production safety, teaching newcomers positionspecific operating standards and specifications, and correcting non-compliant operations
in time. Newcomers who commit three violations during the "nanny" period would fail the
probationary review, as well as those who fail the company's random checks.
In 2020, Guangxi Jingui Pulp & Paper organized 96 safety training sessions for employees
and contractors, including safety inspection, electrical safety, machine safety, operationalsafety in restricted spaces, etc., recording 12,461 participations. It also has a safetysection in the internal magazine, which includes prize quizzes and can be accessed onlineby all the employees.
Hainan Jinhai Pulp & Paper has built a safety accident warning education base at its
safety training center. The company compiles safety accidents in recent years into text
passages or pictures and displays them in prominent places at the mill. It organizes safety
education activities for employees on a regular basis, urging them to learn lessons frompast accidents, gain a deep understanding of the importance of production safety, andremain vigilant at all times.

essential to production safety management.

A Harmonious
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Fulfulling
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Continuing to Strengthen Safety
Hazard Checking

Gold East Paper and Ningbo Asia developed a safety hazard tracking information systemthat enabled closed-loop tracking of safety hazards from reporting to rectification andconfirmation, to further standardize the identification and rectification of safety hazards
and ensure they are eliminated in a timely manner.

Occupational Health and Safety
Our mills have all established an occupational

to help prevent occupational diseases.

management system, and implementation rules

implementation plans for occupational

health and safety management structure, aand continuously evolve the system basedon practical experience. By the end of 2020,

Suzhou Gold Hongye, Guangxi Jingui Pulp &the APP China SHE management system

Paper, and Hainan Jinhai Pulp & Paper had all

and strengthen the safety awareness ofcompleted the transition from OHSAS 18001 to

contractors with management throughout

the ISO 45001 Occupational Health and Safetybidding, contract signing, qualification review,

Management Systems (OHSMS). We now

factory access control, operations process

use the ISO 45001 to guide our internal audits

management, safety performance evaluation,and inform timely corrections to the problems

etc. We push our contractors to strictly enforce

identified.
Production safety training

Contractor safety meeting

The mills have also set up an Occupational

Health and Safety Management Committee/

44

Governance andManagement

Guangxi Jingui Pulp & Paper works to minimize safety hazards and risks through a mixtureof day-to-day inspections, fire inspections, special inspections, pre-holiday inspections, 6S
joint inspections, weekly inspections by departmental heads, etc. In 2020, a total of 3,830
problems were identified, with 3,815, or 99.6%, rectified.

Ningbo Asia, Gold East Paper, Gold Huasheng,

We include contractor management into

Remaining PeopleCentered and Building
a Better Tomorrow

Case

Continuing to Strengthen
Safety Monitoring

Governance andManagement

Case

SafetyManagement

Post-Epidemic Era:
Proactively Creating
Opportunities

It does so by designing programs anddisease prevention and control, establishing
employee health monitoring files, providing
employees with protective equipment, andorganizing physical checkups, among othermeasures. The committee holds meetings
regularly to communicate and discuss

the main issues and problems relating to

occupational health and safety and institutetimely improvement measures. There were

zero cases of occupational diseases at APP
China in 2020 and one employee deathcaused by traffic accident on the way homefrom work.

/

Message from
Chairman45

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
Chairman

Product Quality and Service Management

Strengthening Quality Control of
Product Processwith products and services that meettheir needs. We implement an "All-Hands

Marketing" strategy among the employees

Guangxi Jingui Pulp & Paper has formulated a quality planand quality control standards to further strengthen the quality
control of the product process and ensure that "substandard
products are not accepted, manufactured, or distributed". It
also implements control measures before, during, and after
production and guarantees product quality with strict operating
specifications.

while continuing to strengthen product quality

management and track customer satisfaction.
Those are the pillars of a powerful service

guarantee system at APP China that allows

us to promptly respond to customer demands
and needs and solve the problems they havewith our products. Moreover, our "Little A

activities have become high-quality platforms

We check and manage raw materials

strictly according to the ISO 9001 Quality
Management Systems (QMS) andauthoritative testing methods and work toeliminate quality issues at the source by

actively identifying quality risk factors throughself-inspections. By implementing the Lean

Management System across the Group, we

A Harmonious
Future Driven by
Digital Innovation

Hainan Gold Hongye and Hainan Gold Shengpu have set up
a quality improvement team. The team worked out a scientificquality control plan based on in-depth on-site research andproblem analysis, identifying two key areas of improvementin production management, namely target management andprocess management. According to the plan, the companies
assigned all the assessment targets to small teams and createda team management accountability system to fully bring quality
management to bear. Relevant efforts also included joint
inspections by multiple departments, quality quizzes, quality
awareness training for supervisors, theoretical and practicalexaminations, competitive product benchmarking, etc. which
greatly improved the ability of employees of all levels to identify
and address quality problems.

Control before production Establishing an orderly
production quality system covering production control
procedures, process inspection procedures, etc.; confirming
production process parameters, process plans, key processes,
etc. to ensure the integrity of the process system; checking
the raw materials, the quality of semi-finished products, andthe conditions of equipment before production begins; training
frontline employees regularly to strengthen their quality
awareness.

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Helping Customers Grow

services can be made through the service hotline,

APP China shares industry developments and insights with customers

themselves, such as how they are used or produced,

We categorize and analyze the complaints and bringand customized training sessions on technical issues that the customers areproducts relate to factors other than the products

or the processing equipment used. Since APP China

launched the "All-Hands Marketing" strategy in 2018,

our mills have continued to deepen technical marketing,and the various departments of R&D, production,

procurement, logistics, customer service, etc. would

come together to study and solve the problems raisedby customers as soon as possible to improve theirexperience with our products. Guided by the "All-Hands Marketing" strategy, employees of the tissue

of sales to obtain first-hand feedback on the products,

thus prompting continuous improvements of the productquality.

We highly value customer complaints and have set up
an evolving customer complaint handling mechanism.
Complaints and suggestions about our products orcustomer relationship management system, email, etc.
together multiple departments to develop solutions andimprovement plans. Depending on the specific issues

raised, we also sometimes visit customers to understandtheir needs and concerns more deeply. With thoroughanalysis and a series of improvements, the customer

complaint rate for raw paper at Hainan Gold Hongye andHainan Gold Shengpu continued on a downward trend,
standing at 0.064% in 2020, down 18% from 2019.

through different kinds of communication meetings and provides engagement
concerned about. The "Little A Classroom" is a popular customer engagement
program launched by APP China Paper Business Unit in 2018, with all kindsof activities such as information sharing, product introduction, technicalexchange, and strategic thinking. After the outbreak of COVID-19 in 2020, the"Little A Classroom" started to offer online classes, which provided a more

flexible way for customers to participate and communicate. As of the end of
2020, the "Little A Classroom" had recorded over 2,000 attendances.

Our mills have all set up their own customer satisfaction
survey system and track and analyze the survey results

every year through visits, online surveys, letter surveys,
etc. The customer satisfaction survey in 2020 included

issues related to product quality, sales service, logistics
service, technical service, customer expectations, etc.
Based on the results, the mills were able to develop
detailed improvement plans.

"Little A Classroom" offers online lectures

In-process control Prioritizing prevention, strengthening
the tracking and inspection of key processes and weak links;
guiding employees to detect problems, give feedback, andsolve problems in time.

Remaining Customer-Oriented and Creating Win-Win

Control after production Conducting timely first inspectionof the quality of semi-finished and finished products to prevent
mass production of substandard products; organizing thetechnical, production, quality, equipment, and other related
departments to jointly analyze the quality problems that ariseand develop improvement plans; finding the root causes ofquality problems together with employees.

The wood-free printed paper produced by Gold Huasheng has been a popular product, but some customers
may run into problems during printing due to a limited understanding of its properties and the printing process.
To help solve such problems, experts from the Technical Department of Gold Huasheng provided training on
printing for 12 customers in 2020, totaling 139 people, which covered the basic knowledge of printing, potential
abnormalities in printing, the relationship between paper and printing, etc. The training was highly acclaimedby the customers.

Case

Strengthening ProductQuality Control

Case

technologies.

Implementing Quality Management
Through Multiple Measures

Green and
Eco-Friendly
Papermaking

A lot of the problems with cultural and industrial paper

unit engage with consumers in person at the frontlines

Classroom", training sessions, and otherthe latest developments of products andCasementality, striving to provide customersof communication for customers to obtain

Post-Epidemic Era:
Proactively Creating
Opportunities

Understanding Customer Concerns
Through Multiple Channels

APP China operates with a customer-centricindustry-leading information and understand

About APP China

also ensure stronger control over fraud risks.

/

/

46

47

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Talent Retention and Development

physical and mental well-being to make them feel delighted at work; we continuously improve the education and training

system and develop customized training lessons for different positions. Those training lessons enable employees to build
better career paths by accessing a wealth of resources.

built, created, and shared by all the stakeholders. Our employees

Protecting Employee
Rights and Interests

Promoting Talent
Growthdevelopment at APP China and a core dimension of our corporate

Strictly complying with Chinese laws and

APP China attaches great importance totrainers has also been implemented inby optimizing their career development paths, fostering theirPeople's Republic of China, the Labor Law

multi-level systematic training for employees

Suzhou Gold Hongye, Gold East Paper, andlong-standing supporter of philanthropy, carrying out diversified

Provisions on Collective Contracts, APP China

protection, poverty alleviation, paper culture transmission, etc. andemployees' freedom of association and

APP China is dedicated to working towards a community that is
are the most valuable asset for achieving long-term, sustained
strategy. We help our employees realize their personal values

regulations such as the Civil Code of theengagement, and enriching their benefits. We have also been aof the People's Republic of China, and theprograms and activities in the field of education, environmental

ensures equal pay for equal work, respects

making positive impacts on the community.

collective bargaining rights, and prohibits childlabor and forced labor. We adjust the salarystrategy every year according to the market
level to ensure that our compensation andbenefits plan stays competitive. We seek toenhance the retention of high-achieving andhigh-potential talent by offering incentives andfavorable living conditions, etc. We are working
on an employee housing project in Hainan thatwill enable the employees' children to go toschool in close proximity to their workplace.

employee training and provides targeted andof different positions and levels to fully meettheir needs for career development. The
APP Learning and Development Centerorganized a rich collection of training

and hands-on programs in 2020 to give

employees more opportunities to participate
and rapidly enhance their well-rounded
work abilities. We also invest heavily inthe management trainee program, which

has been successfully launched in Ningbo

Asia, Guangxi Jingui Pulp & Paper, Hainan
Jinhai Pulp & Paper, Hainan Gold Hongye,

Hainan Gold Shengpu, Gold East Paper, andSuzhou Gold Hongye. The program provides
systematic theoretical and practical training

for management trainees and plays a big partin building a strong pipeline of talent for theCompany. A program for developing internal/

48

Hainan Gold Hongye, Hainan Gold Shengpu,
Ningbo Asia, to fully motivate employees
and involve them in the important job ofcultivating talent for the Company.

With respect to enhancing employees'

professional skills, we have implemented
the technical competence model ofproduction positions for six consecutive

years, covering positions in pulp production,
paper production, energy, environment,
safety, quality assurance, engineering,

digital innovation, etc. In 2020, a total of
600 supervisors from APP China mills

participated in the technical competence
training and certification for production
management positions, showing

improvements in the review results comparedwith previous years.

/

Remaining PeopleCentered and Building
a Better Tomorrow

We create a pleasant working environment for our employees and continue to improve employee benefits and care for their49

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Looking into Future – APP Case Competition

It is an online learning program organized for 40 grassroots managers from Hainan

Close to 70 employees enrolled in the competition. Three live-streaming classes

two out of the 16 management courses offered on the APP Online Learning

systematically learn the process and methodology of case development. They

execution, conflict management, problem solving, etc. The trainees produced 640
learning notes in total and held 40 sharing sessions.

and two case development workshops were held, allowing participants to
produced 60 business cases and a booklet titled Top 20 Selected Cases.

A total of 150 employees enrolled in the competition. Two live-streaming classes

and five workshops on micro-class development were held, allowing participants tosystematically learn the process and methods of micro-class development and short

30-days after-school tutoring", leading 60 middle and grassroots managers fromthe headquarters and mills to understand and practice the essence of coaching
techniques.

video editing and production. They produced 139 high-quality micro-classes in total.

Facilitation and Coaching Technical Training Program/

50

Team Leadership Special Training Camp

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Hainan Gold Hongye and Hainan Gold Shengpu have developed training courses around the two themes of "four steps to developing quality courses for internal trainers" and "two stages ofteaching by good lecturers" to improve the ability of supervisors from different positions at the Hainan mills to develop training courses and give lectures. The trainees are required to develop acourse within two months of finishing the training and do their best to pass the course review and the internal trainer certification. Hainan Gold Hongye and Hainan Gold Shengpu held an internal
trainers' competence contest at the end of 2020 to select outstanding lecturers for follow-up training.
Gold East Paper regards the training of internal lecturers as a key part of talent cultivation, with a dedicated training mechanism that includes such modules as TTT (Train the Trainer) Training,
Theoretical Study, Practical Exercises, and Interaction and Communication. In September 2020, it held an appointment ceremony for internal lecturers, where the general manager presented 47
employees with an offer as internal trainers, along with teaching tools, and encouraged them to nurture more professionals for the company while doing their own jobs.

Facilitation and Coaching Technical Training Program
Two training sessions were held in 2020 in the form of "a 2-day workshop plus

The 2nd "Wisdom Cup" Micro-Class Competition

Post-Epidemic Era:
Proactively Creating
Opportunities

Case

Flying Amid Headwinds – Team Leadership Special Training CampManagement System (LMS), covering leadership thinking, decision-making and

About APP China

Putting Lecturers First and Passing Down the Torch

Series Training Programs at APP Learningand Development Center

Jinhai Pulp & Paper and Guangxi Jingui Pulp & Paper. Every week, they studied

Message from
ChairmanMicro-Class Competition

TTT Training
Internal trainers can obtainknowledge and skills in curriculum
design, language and expression,
on-site control, etc. by taking
professional trainer courses
and get the TTT Certificate ascorporate trainers.

Theoretical Study
The company provides internal trainers
with relevant training and learningmaterials from time to time to facilitate
their further study.

Practical Exercises

Interaction and Communication

The company would have internal
trainers serve as lecturers for
its annual planning and training
programs and give random lecture
demonstrations.

The company promotes communication
between internal trainers and improves
the comprehensive capabilities of theinternal trainer team by organizing sharing
sessions and seminars and offering Groupor external training opportunities.
Internal trainer appointment ceremony at Gold East Paper/

Message from
Chairman51

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Fulfulling
Responsibility from
Forest to Paper

Governance andManagement

Gold East Paper has a scientific talent selection andemployment mechanism. The company makes sure that
top talent stands out based on an open, fair, and just review
process that combines a mix of open recruitment and internal
competition with a scientific assessment method. The company
created 13 internal recruitment vacancies in 2020 and, withover 50 employees applying, succeeded in filling all of themwith internal candidates. The company also covers core
employees with the Successor Plan and creates clearer careerdevelopment paths by improving the talent pool information,
standardizing the talent evaluation system, and tracking theimplementation of the Successor Plan every month.

The company created

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

Caring for Employees' Life
We organize a variety of activities, such as fun sports meets, outreach programs, book sharing
sessions, and family open days, to create a positive, healthy, and engaging working atmosphere forour employees.

Caring for Employees with Actions

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Creating a Vibrant Living Environment

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Case

Strengthening Talent Development
Management

Message from
Chairman

Guangxi Jingui Pulp & Paper provides accommodation for the employees, equipping itwith gyms, table tennis halls, badminton halls, dance rooms, basketball courts, and otherfacilities, making them feel motivated in a comfortable environment. In 2020, the company
organized a number of activities, such as tug-of-war and fun sports meet, to enrichemployees' life and build stronger rapport.

Case

Opening ceremony of trainee training camp

Remaining PeopleCentered and Building
a Better Tomorrow

Case

Hainan Jinhai Pulp & Paper held the first management trainee training
camp in 2020, divided into the two stages of intensive training andinterdepartmental rotation learning. The intensive training courses
covered a broad array of general topics such as personnel-related
rules and regulations, corporate culture, MBOS management
system, pulp and paper production processes, industrial safety,
and accounting, as well as military training and outreach activities.
They were designed to acquaint trainees with the workflow, enhanceteam cohesion, and quicken their transition from school to work.
The training was followed by practical rotation learning in different
departments such as pulp production, paper production, processing,and technology. The company will continue with the trainee program
to contribute to building a strong talent pipeline.

A Harmonious
Future Driven by
Digital Innovation

Case

Building a Talent Pipeline

Green and
Eco-Friendly
Papermaking

Hainan Jinhai Pulp & Paper is concerned about the education of employees' children.
Through active communication, the company was able to get the employees' children toattend nearby primary and middle schools, which solved a big problem for the employees
and was highly appreciated. The company also held the 2019-2020 employees' children
scholarship award event, where 46 employees received scholarships for their children.
It also hosts an open day every year, when it welcomes employees' families to visit theworkplace so that they develop a better understanding and stronger support for their work.

Fun sports meet

13 internal

recruitment vacancies in 2020 and, with over

50 employees applying, succeeded infilling all of them with internal candidates.

/

52

Employees were presented with scholarships
for their children

Employee family open day

Tug-of-war/

Trainee outreach activity

53

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Our Story
Dedicated to Philanthropy"Perseverance and the courage to face difficulties

per minute and for over 24 hours without interruption,

While the outside world keeps changing, thecountless papermaking companies and individuals

paper machines set by itself. This is an example ofof APP China's development. We look forward tohead-on" are the "craftsmanship spirit" forged bythrough a process of continuous refinement. A

most important part of APP's corporate culture is
to carry on the craftsmanship spirit, push limits,and live the "MBOS spirit", which leads us forwardin the changing times.

MBOS was formed when APP first set up mills in
China and has grown alongside APP China fornearly three decades. The essence of MBOS is

not only the craftsmanship spirit of papermaking
people but also the mission of APP China topass on the traditional Chinese civilization,and it is the key to APP China's success in

becoming bigger, stronger, and richer. On theimplementation side, the MBOS spirit is about

setting and breaking down the Company's overall
operational goals and helping the departments
better achieve the goals with improved teamefficiency. Instituting benchmarking throughout theprocess, APP people constantly push limits andmake outstanding achievements. Amid a global

economic slowdown in 2020 caused by COVID-19,
some good news came from Gold East Paper. Its
PM3 was operating at a speed of 1,800 meters

tying the world record for the speed of large cultural
what our employees can collectively achieve led by
the MBOS spirit.

Culture & MBOS and Organization & Talent are

MBOS spirit remains the soul and real soft power
working with our employees to create meaningfulexperience on the MBOS stage and helping themrealize their career dreams and thrive.

two key dimensions of our Four-Wheel Drive

In 2020, Hainan Gold Hongye and Hainan Goldpotential, by continuing to carry out improvement

Shengpu received

keep pushing boundaries and innovate. Hainan Gold
Hongye and Hainan Gold Shengpu received 3,216

improvement proposals from different departments

in 2020, including highly innovative and duplicatableones. 100% of Gold East Paper employees

participated in the proposal initiative, averaging

the Company today. We have been actively

engaged in philanthropic undertakings since

day one, doing our part to give back to society.

construction, helping disadvantaged groups,
etc. Meanwhile, we play to our strengths

as a papermaking company and help train

professionals and transmit the papermaking
culture.

APP Charitable Youth Internship is ain planning and organizing activities

college students to take internships atorganizations. Over the past 11 years,

charitable program that encourages

local non-profit organizations during thesummer vacation. It gives the students
the opportunity to work at a charitableorganization, where they can learn how
they work and participate in charitable

events. From 2010 to 2020, the projectplaying to the best of their abilities. MBOS provides

proposal competitions and encouraging employees tosociety". This is the philosophy that still guides

infrastructure construction, and community

billion in aiding disaster relief, educational

competitiveness of a business lies not in talents

employees with such a mechanism to unlock their"What is taken from society is used forOver the years, we have donated over RMB1.1

strategy proposed in 2020. We believe that the core
themselves but in bringing talents together andSupporting the Cultivation of Young Charity Professionals
支持青年公益人才培养

3,216 improvement

proposals from different departments.

The goal of the Huang Yicong Foundation (the100% of Gold East Paper employees"Foundation") is to "support the development

4.81 proposals per person.

young, and build a harmonious society".

participated in the proposal initiative, averaging

has been held on 11 occasions in

Building a Better Societyof philanthropy in China, help the poor andthe needy and the elderly and the very

It has programs in education assistance,

poverty alleviation, and disaster relief and4.81 proposals per person. Throughout the year, thesupports charities in the areas of scientific

MBOS competition, MBOS conference, and MBOS

environmental protection, etc., which areplatform for employees from different units and teams

2020, the Foundation carried out 21 projects

company organized a number of events such as theresearch, culture and sports, medical care,regular performance reviews, which served as a

crucial to national and social development. In

to engage with each other.

intended to promote equity in education,different localities including Shanghai,

Nanjing, Beijing, the Pearl River Delta,
cultivate philanthropy professionals, andspeed urban-rural integration, with efforts toassist students and the disabled, help highschool student build abilities, train charity

professionals among college students, etc.
The Foundation has established a soundproject management system and visits thebeneficiaries every year to understand theirneeds. Meanwhile, it continuously improvesand deepens the mechanism and mode of the

projects so that they can create a more lastingand sustainable impact on the people in need.

Case

MBOS Spirit, Compass for APP People

Chengdu, and Wuhan.

The project mainly works with officiallyregistered non-profit organizations thathave made an impact in their own fields.
The organizations provide internshipand promote the development of the
512 top-performing college students
have become APP Charitable YouthInterns and completed their internships
with an outstanding performance.

The Foundation will get more non-profit
organizations and college students

to engage in the project, making it abroader platform that allows more young
people to understand and experiencephilanthropy more deeply and shapes

them into high achievers who also havea strong sense of social responsibility
and leadership skills.

positions and tutors, and the Foundation
provides subsidies and platforms. They
openly recruit interns in colleges anduniversities who are enthusiastic andaspiring about philanthropy for a two-month summer internship. The interns
need to complete certain tasks under
the supervision of instructors fromthose organizations. They also needabilities and creativity to engage directly/

54

Philanthropy interns participate incharitable programs/

to leverage their own professional55

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

Case

Supporting Visually Impaired Students
支持青年公益人才培养

A Harmonious
Future Driven by
Digital Innovation

In 2020, the Foundation continued to implement the APP Lights Up Dreams program.
The program works with the OPO Disability Group to hold the Pre-College Class for

Visually Impaired Students, helping them better adapt to college life by improving theirvarious skills.

camp in China to prepare visually impaired college-students-to-be for the future.

Campers are primarily high school graduates about to enter college, with some alreadyin college. With skill-enhancing courses like Independent Travel, TechnologicalRemaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

Since its inception in 2018, the Dream Plan

Outstanding students enrolled in the program

Our mills maintain close communication with the communities all year round and carry out aGuangxi Vocational and Technical Instituteaccommodation fees and partially subsidized

harmonious communities.

program has set up classes jointly withof Industry and the Mechatronics major of

Nantong Vocational University and offeredcourses on pulp-making and papermaking

collaboratively with College of Light Chemical
Engineering and Food of Guangxi University
and Zhejiang University of Science andTechnology. The 3rd Dream Plan in 2020
shifted its focus to rural middle schools
in remote areas, enrolling 66 students.

Empowerment, and Youth Salon, the class is designed to help visually impaired

are eligible for fully subsidized tuition andliving and transportation expenses when they

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

wealth of philanthropic activities based on their actual needs for development, contributing to

are in college and offered jobs by APP China

after graduation. The Dream Plan will continue
to grow both in the breadth and depth ofcooperation with schools. While helping

students realize their dreams in college, itwill also supply the papermaking industry

with more professionals adept at applying
knowledge to real-world scenarios.

Building a Harmonious Community
支持青年公益人才培养
Ningbo Asia has been implementing the Harmonious Community
initiative for ten consecutive years since 2011. In 2020, thestudents adapt to college life and study more quickly; courses like Knowing Yourself

company donated nearly 600 new civilian masks with aand Career Planning encourage the students to break through boundaries and limits

replaceable filter to three surrounding communities to show

and have the courage to explore more possibilities so that more visually impaired

support and appreciation for workers at the frontlines of COVID-19

students can "see" the future.

and care for community residents; donated picture books to the

In 2020, 20 visually impaired students from 16 provinces/regions across China

Qijiashan Central Kindergarten, totaling 2,300 in 6 years, tochildren served as volunteers and accompanied the campers during the final

communities by visiting the elderly, thanking the fire department,completed the training camp. Twelve APP China employees and three employee

promote reading habits among children. The company also aided

examination.

transmitting knowledge of garbage sorting, etc., which were widely
praised by community residents.

Volunteers from Ningbo Asia gave away masks to community
residents

Gold East Paper started to implement the Employee Volunteer

Since 2015, Hainan Jinhai Pulp & Paper has responded

actively volunteer. The company has set up several volunteer

Communist Youth League (CYLC) and the Yangpu

Management Measures in 2008, encouraging employees tostations with different types of posts in places like welfare homes,
hospitals, train stations, youth support centers, museums, andlibraries to accommodate employees' different needs in terms ofwork content and length. As of the end of 2020, Gold East Paper

had clocked over 380,000 hours of employee volunteerism in total.

Volunteers accompanied visually impaired students in training
Guangxi APP 2020 Dream Plan Class

Ningbo Asia donated books to kindergarten

to the call of the Yangpu Work Committee of Chinese

Bureau of Social Development to support the Education
Assistance initiative to pair up with impoverishedstudents. In 2020, the company sponsored five

impoverished college students in Yangpu, solving theirfinancial difficulty in obtaining schooling. In the past six
years, the company has invested a total of RMB95,000

in supporting 30 impoverished high school graduates in
Yangpu to enter college.

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56

A Harmonious
Future Driven by
Digital Innovation

Case

The Pre-College Class for Visually Impaired Students is the first charitable training

Fulfulling
Responsibility from
Forest to Paper

Hainan Jinhai Pulp & Paper undertook paired education
assistance/

Message from
Chairman57

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
Chairman

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Our Story
Irrigating Hope with Love – Ten Years of Foundation

Papermaking Civilization" charitable lecturecommunity residents, teachers and students,

to campuses across Ningbo. The company

open their doors from time to time to welcome
the media, and other stakeholders. This

provides a window for people to learn about
manufacturing in the papermaking industry.
Gold Huasheng and Ningbo Asia have both

built a paper culture experience center, wherevisitors can systematically learn about thedevelopment and characteristics of ancientand modern papermaking industry.

from surrounding communities and schools

donated five small papermaking machines to

the Qijiashan Central Kindergarten in 2020 sothat the children could experience the fun ofmaking paper by hand, thus enhancing theirknowledge while exposing them to the charmof papermaking, one of China's four great
inventions.

Green Paper Culture Center
The Ningbo Asia Green Paper Culture Center covers an area of about 350 square

meters and is divided into three parts, namely Hall 1, Hall 2, and the Experience Area.
Hall 1 is mainly green, presenting the history of paper culture and the environmental

good exuberate kindness from within and become

approachable to other people". This is how Mr. Eka
Tjipta Widjaja, founder of the Sinar Mas Group,

described his commitment to philanthropy. While

Hall 2 displays on LED screens the history of APP China and its subsidiaries such as

Chinese since 1957 to help improve the education in

In the Experience Area, visitors can personally participate in papermaking processes

receive an education in school. His enthusiasm for

papermaking culture and the concept of green papermaking in a straightforward way.

nearly 900 visits from primary and middle

a consistent donation together with other overseas

his home country in the hope that children could all

supporting charities in his home country also subtly

influenced his children. In 2006, Mr. Jackson Wijaya

Limantara, together with his wife Ms. Olivia Yu, set up

school students. It was named the "Suzhou

a foundation in the name of his grandfather, Mr. Eka

New Era Labor Education Practice Base forTjipta Widjaja, to carry on the family and corporate

Minors" and "Outstanding Experience Base"philanthropic undertakings. With over three years

by the Publicity Department of CPC Suzhou

of preparation, the Huang Yicong Foundation was

Municipal Committee, the Office of theofficially registered as a national non-public foundation

Guidance Commission on Building Spiritualon May 4, 2010 with the Ministry of Civil Affairs.

Civilization in Suzhou, and the Suzhou
Municipal Education Bureau.

Ten years into its establishment, the Foundation has

Ningbo Asia built the Green Paper Culture
Center in 2020, focusing on creating an
engaging presentation of history andknowledge and using multimedia images

Ningbo Asia Green Paper Culture Centerand digital technology to deliver a high-techand interactive experience. The company

practice base and extended the "Carrying on

which will illuminate every corner. Those who doliving overseas, Mr. Eka Tjipta Widjaja had madesuch as beating, papermaking, and drying and have fun with this ancient craft.

organized 43 events in 2020, recording"A lit candle can ignite thousands of candles,

protection facilities for "Three Wastes Management". It allows visitors to learn about the

APP China Forestry, the Pulp BU, the Industrial Paper BU, and the Cultural Paper BU.

The Gold Huasheng Paper Culture Centerhas also built an extracurricular education

Case

All of our mills have an Open Day, when they

Papermaking experience activity at Gold
Huasheng Paper Culture Center

Little Sun Kindergarten
The project provides preschool education for children aged three to six

The Huang Yicong Foundation celebrates

a preschool education model suited to local conditions and promote thedecade, the Foundation has been dedicatedin remote rural areas and helps train local kindergarten teachers to build
long-term development of rural communities. As of the end of 2020, theFoundation had supported 37 kindergartens in Ximeng, Funing, andLancang, Yunnan Province, benefiting 3,631 children.

Paired Assistance
The Foundation has teamed up with APP China employees in Shanghai
since 2012 to aid schools in remote areas. The employees pair up withand provide financial assistance for elementary and junior high school
students from impoverished families by making monthly donations,and the Foundation sets up supporting funds to improve the schools'

facilities and teaching resources. In 2020, 100 employees participatedin the project, funding 189 students.

High-school Scholarship and Teaching
Fellowship Programs

to philanthropic undertakings, bringing hope

to children in many villages and towns. It has
also been a decade of budding and growing

hopes and of moving stories. We have cometo the gradual realization that the purposeof the Foundation is not only to provide

financial assistance for students, but more
importantly, to cultivate students' sense ofsocial responsibility and encourage them togive back to society.

Huang Yuqing, Secretary of CCYL Committeeof Qinzhou No.1 Middle School

I had the honor of participating in the APP

Charitable Youth Internship program in thesummer of 2018. There, I learned to makecarved out its own path in philanthropy: to focus on

The Foundation has launched a number of programs in eight highhandicrafts, develop complete event planning,that is, people. Of the 20 plus projects currently

Yicong Scholarship, the Jinchen Scholarship, the Yicong Scholarshipmore effectively with others, etc. Inspired

for years and some have been established in the pastand teachers, those programs are designed to improve the quality

have come to understand many austereThrough these projects, we see the inheritance of thepromoting educational equity in China. The Foundation also encourages"simple happiness" and what constitutes

beneficiaries.

to visit eco-friendly mills, provides remote vocational courses, andfocus on philanthropy myself. It is going to beother methods. The goal is to equip the students with a broader andworking harder.

changing the most important component of society,schools in Guangxi, Gansu, and Fujian Province, including the

make elaborate PowerPoints, communicate

operated by the Foundation, some have been ongoing

and Teaching Fellowship Fund. By awarding outstanding students

by the people devoted to philanthropy, I

two years following the latest trends in philanthropy.

and liveliness of teaching in high schools in remote provinces, thus

conceptions, for example, what constitutes

spirit of philanthropy and the positive changes in thethe students to participate in philanthropy on campus, invites graduates"contentment". I have taken a career turn toselects outstanding students for the Yicong Research Camp, among

a long and bumpy road ahead and I will keep

forward-looking vision and improve their overall qualities, ability to learn,

Xing Qiuyue, an intern in the 2018 APP

and creativity.

/58

its 10th anniversary this year. Over the lastCharitable Youth Internship program/

Spreading Papermaking Culture59

Post-Epidemic Era:
Proactively Creating
Opportunities

About APP China

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
Chairman

About APP China

In 2020, we standardized and deepened

but is not limited to sexual harassment,

commitments in our commercial contracts

bribery, embezzlement, and conflict ofclauses relating to anti-bribery and integrity

Risk Management

and fully inspected and verified commercial

the effectiveness of corporate governance,various mandatory guidelines issued by theInstitute of Internal Auditor (IIA), such as theCode of Ethics and the International Standards

risk management, and internal control tofor the Professional Practice of Internal

identify potential major risks, continuously

improve risk management, and ensure that

the Company maintains sustained and robust
operations. Based on the lines of defense

system of internal control that offers three linesof defense, we work to strictly prevent any

potential risks in our operations. Our internal
audits are conducted in accordance with the

Auditing. They cover all the organizations andIn 2020, we formed an IT Audit Team in

analysis (DA) technology and data-based

the Internal Audit Department, improving

and intelligent applications and further

the accuracy, coverage, and response of

improving the Group's ability to identify andinternal audits through the use of the data

manage risks.

independent internal or external technicalexperts to assist in the audits when necessary
to ensure that our internal audits remain
effective and professional.

Third lineof defense

The Internal Audit Department at the headquarters
conducts independent audits according to risk-based audit
plans and special requirements

Second lineof defense

The business or project leaders formulate relevant control
policies and procedures and conduct self-examinations
and evaluations on the implementation of the first line ofdefenseFirst lineof defense

Frontline employees implement risk control inaccordance with the internal audit manual and standard
operating procedures, which is inspected and approvedby the supervisors

employment contracts signed internally. We

did so to ensure that all the contracts included
integrity and anti-bribery clauses such asof gifts and hospitality, protection of trade

secrets, prevention of conflicts of interest, andchannels for reporting concerns or complaints.

Integrity and Compliance
The set of moral values built on thecornerstones of "Integrity and Commitment"is the foundation of the corporate culture

and a key driver of sustainable development

APP China's Three Lines of Defense for Internal Control

contracts signed with external partners andcompliance with business ethics, prohibition

processes in the forestry, pulp, paper, andother related fields of the Group. We appointat APP China. Under the guidance of the

APP China Integrity Management Framework,
we embed integrity and compliance acrossall levels of the Company to fully promotemanagement and practices in this regard.

We encourage the reporting of misconduct
in good faith and have established smoothreporting channels. Both internal and external
personnel can file a report through thewhistleblower mailbox (GRW@app.com.cn)
or the 24-hour whistleblower hotline (021-22839763). The content of the report includes

APP China Integrity Management Framework
Resolutions and commitments by top management

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Bribery and Embezzlement and Integrity Risk Evaluation and Monitoring
Prevention
Employee Code of Ethics

Personnel
Procedures
Data
Systems

Discovery
Active, good-will whistleblowing;keeping

Response
Event management

Relevant policies,
standards, and control
procedures

Due diligence; sunshine declaration

Personnel selection andappointment, supervision,and motivation

Self-examination, compliance review
and audit

Stop-loss measures

Education and training,and culture building

Data analysis

Corrective actions

Investigation and casemanagement

Internal and external communication; reporting and feedback

corruption, fraud, theft, forgery, commercial
interest. Meanwhile, we regularly evaluate
the reporting response mechanism andrepeatedly publicize the reporting channels

and reward policies to encourage compliancesupervision by employees. Our existing

reporting channels all keep the reporters andthe content of the reports strictly confidential.
We record and archive all the reported

cases and report them to the Company's

Becoming aworld-classbenchmarkfor corporate
integrity
culturepractices

APP China management participated in the Integrity Monthsenior management. We ensure that people
involved are treated fairly and justly with theclosure meeting mechanism. The Company

also reviews and improves relevant standard

operating procedures based on past cases toprevent similar cases from recurring.

Building a Culture of Integrity

Committee for Moral Disciplines and functional compliance department

Keeping everyone involved. Shouldering responsibilities

Employees took an oath of integrity

Employees studied integrity before the publicity
board

We make a point of drawing experience froman oath, study clauses relating to integrity andbetween business units, etc., ensuring

We continue to promote regulations regarding

to improve relevant work procedures, weparticipate in integrity and anti-fraud training,

employees at APP China. We also provided

the APP China Code of Ethics and Integrity

past compliance cases. While using themalso include those incidents as cases in thecompliance training so that employees canunderstand the consequences of bribery

and corruption in a straightforward way anddevelop a stronger awareness of compliance.
In the 2020 Sunshine Integrity Month, weorganized all employees of the Group to take/

60

Green and
Eco-Friendly
Papermaking

Integrity and Compliance Management

Governance and Management

APP China continues to examine and evaluate

Post-Epidemic Era:
Proactively Creating
Opportunities

self-discipline in the Employee Handbook,take integrity awareness tests, and sign

the Pledge of Integrity online. Our training

took more diverse forms in 2020 as a resultof COVID-19 and the digital transformation
across the Group, which included email

and corporate WeChat articles, case board
display, layer-by-layer communicationthat integrity education reached all the

special training on integrity for middle-level
employees. With short videos and casestudy, we analyzed the causes of fraudulent

behaviors for employees and underlined theimportance of integrity and self-discipline andthe Company's integrity values.

business ethics among employees, such as
for Employees and the Provisions on theProhibition of Accepting Gifts and Hospitality,
and incorporate such publicity work as animportant focus area in building a culture of
integrity.

/

Message from
Chairman61

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
Chairman

Post-Epidemic Era:
Proactively Creating
Opportunities

About APP China

Sustainability Management

Sustainability Certificates

APP announced the "Sustainability Roadmap:

In 2020, APP announced "Sustainability

CFCC/PEFC-FM Certification* at APP China

targets to be achieved by 2020 focusing on

specific actions in three main areas, namely

Vision 2020" in 2013, which set forth 19

ten key impact areas such as fiber sourcing,reforestation, conservation & biodiversity,

human rights & indigenous people, community
empowerment, climate change, emissions,water management, solid waste, and employee
welfare. 18 targets had been achieved by the

Roadmap: Vision 2030", which will focus on

will formulate its own sustainability strategy
and action plans based on the 2030 VisionRoadmap as well as China's sustainability
trends and policy requirements.

end of 2020. The target of zero safety incident
for employees and contractors had not beenachieved.

Sustainability Roadmap: Vision 2030
Target Area

Production

ForestOverall Target- 30% reduction incarbon footprint- Over half a million
hectares of naturalforests conserved

PeopleScan the QR code tolearn about the detailed
progress of 2020 targets

Scan the QR code tosee 2030 vision andtargets

Certificate No.

- Fiber Sourcing- Sustainable Livelihood- Innovate Products- Forest Protection- Workforce
Management- Integrated Fire
Management/62- Business Ethics &Conduct

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

No. APP China Affiliates

Certificate No.

Hainan Jinhua Forestry Co., Ltd.

CFCC/PEFC-FM-ZTFC-000003

1Gold East Paper (Jiangsu) Co., Ltd.

SGS-CFCC/PEFC-COC-001002

2

Heyuan Jinmei Science & Technology Forestry Co., Ltd.

CFCC/PEFC-FM-ZTFC-000030

2Gold Huasheng Paper (Suzhou Industrial Park) Co., Ltd.

SGS-CFCC/PEFC-COC-001026

3

Leizhou Jin-taiyang Science and Tech Forestry Ltd.

CFCC/PEFC-FM-ZTFC-000030

3

Ningbo Asia Pulp and Paper Co., Ltd.

SGS-CFCC/PEFC-COC-001031

4

Yangjiang Jin-taiyang Science and Tech Forestry Ltd.

CFCC/PEFC-FM-ZTFC-000030

4

Hainan Jinhai Pulp & Paper Co., Ltd.

SGS-CFCC/PEFC-COC-001058

5

Jin-Qingyuan Timberland (Paper mill) Ltd.

CFCC/PEFC-FM-ZTFC-000007

5Gold HongYe Paper Group Co., Ltd.

SGS-CFCC/PEFC-COC-001032

6

Shaoguan Jin-Shaoguan First Quality Timberland (Paper mill) Ltd.

CFCC/PEFC-FM-ZTFC-000008

6

Hainan Gold Hong Ye Paper Co., Ltd.

SGS-CFCC/PEFC-COC-001084

7

Guangxi Jin Gui Forestry Co., Ltd.

CFCC/PEFC-FM-ZTFC-000005

7Gold Hongye Trading (Hong Kong) Co., Ltd.

8

Guangxi Jin Qinzhou High-Yield Forestry Co., Ltd.

CFCC/PEFC-FM-ZTFC-000006

8

Guangxi Jingui Pulp & Paper Co., Ltd.

9

Guangxi Xing Guilin Agriculture Technology Co., Ltd.

CFCC/PEFC-FM-ZTFC-000031

9

Hainan Jinhai Trading (Hong Kong) Co., Ltd.

SGS-PEFC/COC-1467

10

Guangxi Jin Taiyang Forestry Co., Ltd.

CFCC/PEFC-FM-ZTFC-000031

10Gold East Trading (Hong Kong) Co., Ltd.

SGS-PEFC/COC-0249

11

Wenshan Jin Wenshan High-Yield Forestry Co., Ltd.

CFCC/PEFC-FM-ZTFC-000017

11Gold Shengpu Paper Products (Suzhou Industrial Park) Co., Ltd.

SGS-CFCC/PEFC-COC-001037

12

Simao Jin Lancang High-Yield Forestry Co., Ltd.

CFCC/PEFC-FM-ZTFC-000018

12

Yalong Paper Products (Kunshan) Co., Ltd.

SGS-CFCC/PEFC-COC-001059

13Gold Huasheng Trading (Hong Kong) Co., Ltd.

SGS-PEFC/COC-1464

14

Ningbo Yajiang Trading (Hong Kong) Co., Ltd.

SGS-PEFC/COC-1465

15

Jinxin (Qingyuan) Paper Industry Pte.,Ltd.

- Improving the livesof millions- Low Carbon ProductFulfulling
Responsibility from
Forest to Paper

1*CFCC/PEFC-FM certification refers to CFCC/PEFC Forest Management certification.

Specific Issues

A Harmonious
Future Driven by
Digital Innovation

CFCC/PEFC-CoC Certification* at APP China

No. APP China Forestry Companies

production, forest and people. APP China

Green and
Eco-Friendly
Papermaking

2020 Sustainability Management System
Certification at APP China

SGS-PEFC/COC-1463
SGS-CFCC/PEFC-COC-001013

SGS-CFCC/PEFC-COC-001098*CFCC/PEFC-CoC certification refers to CFCC/PEFC Chain of Custody certification.

ISO9001

ISO14001

ISO45001

ISO50001

CFCC/PEFC-CoC

Gold East Paper

Periodic audit

Periodic audit

Periodic audit

Certiﬁcate renewal

Periodic audit

Gold Huasheng

Periodic audit

Certiﬁcate renewal

Periodic audit－

Periodic audit

Suzhou Gold Hongye

Periodic audit

Certiﬁcate renewal

Certiﬁcate Transition audit－

Periodic audit

Ningbo Asia

Certiﬁcate renewal

Certiﬁcate renewal

Certiﬁcate renewal & Certiﬁcate Transition audit－

Periodic audit

Hainan Jinhai Pulp & Paper

Re-certiﬁcate audit

Re-certiﬁcate audit

Re-certiﬁcate audit

Certiﬁcate audit

Periodic audit

Guangxi Jingui Pulp & Paper

Re-certiﬁcate audit

Re-certiﬁcate audit

Re-certiﬁcate audit－

Periodic audit/

Message from
Chairman63

About APP China

Post-Epidemic Era:
Proactively Creating
Opportunities

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Stakeholders

Stakeholder Engagement
Based on a series of internal informationcollection, interviews, communication, survey
and other work, we have identified ten key
stakeholder groups. Each of APP China's

functional departments has established multiple

Message from
ChairmanGovernment
agencieschannels for communication with different

stakeholders, to timely and fully understandstakeholder expectations and concerns, andtake their opinions as an important reference

About APP China

Top Concerns- Air pollutant emissions- Governmental inspection andsupervision- Environmental compliance- Water management- Employment

Top Concerns

Employees- Occupational healthand safety- Employment- Corporate
governance andbusiness ethics- Human rights- Sustainable forest
management

Engagement Channels- Company intranet, internal magazine- Employee representative meetings

Stakeholders
Suppliers/
Contractors- Employee communication meetings

Top Concerns- Supplier/Contractor meetings- Employment- Supplier/Contractor training- Corporate governance andbusiness ethics- Executive mailbox- MBOS proposal competition /conference- Employee training anddevelopment- APP Online Learning Management
SystemEngagement Channels- Occupational health andsafety- Cooperative R&D mechanism- Regular supervision andinspection

Community
representatives- Sustainability reports- Win-win cooperation- Family opening day, book club, etc.
- Sustainability reports

Customersandconsumers- Product quality andsafety- Occupational healthand safety- Customer service
quality- Human rights- Environmental
compliance/64- Community representatives'supervision and engagement- Water management

Banks

Industry
associations- Product quality and safety- Daily communication meetings- Product quality and safety- Cooperative agreement- Industry conferences/events- Customer service quality- Sustainability reports- Addressing climate change- Customer satisfaction surveys- Win-win cooperation- Company website- Waste management- Customer service hotline/mail- Compliance management- Engagement meetings/activities- Company website- Sustainability reports

and risk control- Customer service quality- Win-win cooperation- Air pollutant emissions- Community opinion processing
and feedback

Fulfulling
Responsibility from
Forest to Paper

Top Concerns

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Engagement Channels- Product quality and safety- Cooperative R&D- Occupational health andsafety- Joint talent cultivation- Environmental compliance- Sustainability reports- Water management- Company website- Addressing climate change- Air pollutant emissions- Waste management- Sustainability reports- Company website- Product quality and safety- Economic performance- Customer visits, store visits

Academic
institutions- Awards and recognition- Environmental compliancecultural popularization

Stakeholders- Regular visits- Frequent visits- Community relations and- WeChat Official Account

A Harmonious
Future Driven by
Digital Innovation- Information disclosure andreporting- Supporting philanthropy
and epidemic prevention
and control- Win-win cooperation- Environmental complianceEngagement Channels- Government communication
meetings- Biodiversity

Stakeholders

Green and
Eco-Friendly
Papermaking- Sustainable forest
management- Addressing climate change

for future work improvement and innovation.

Post-Epidemic Era:
Proactively Creating
Opportunities

NGOs- Product quality and safety- Sustainable forest
management- Communication on specifictopics- Biodiversity- Charity projects donation andcooperation- Mill visits- Occupational health andsafety- Company website- Community charitable activities- Air pollutant emissions- WeChat Official Account- R&D and innovation- On-site participation in events- Addressing climate change- Meetings, exhibitions, forums,etc.

and volunteer activities- Sustainability reports- Papermaking culture

popularization activities- Industry communication
meetings, exhibitions and forums- Regular visits- Awards and recognition- Research and cooperation- Industry publications- Sustainability reports

Media- Water management- Product quality and safety- Digital transformation- Waste management- Company website- WeChat Official Account- Executive interviews- WeChat Official Account/Message from
Chairman65

Post-Epidemic Era:
Proactively Creating
Opportunities

About APP China

Green and
Eco-Friendly
Papermaking

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

Message from
Chairman

IssuesMateriality Analysis
Drawing reference from the GRI Standards,

an important trend of national and industry

Management standard and the Pulp & Paper

the merging of certain issues and refining

the Global Compact Ten Principles, the Forest
Products standard issued by the Sustainability
Accounting Standards Board (SASB), thelatest national and industry policies, as wellas sustainability trends, we identified 22
issues closely related to the Company's

transformation" is added to the material issues
list. This issue is one of the company's current
core development directions, and it is alsoHigh Materiality Issues
4

Product quality and safety

15 Occupational health andsafety8

Environmental
compliance

13 Sustainable forest
management
16 Employment
12 Water management
22 Corporate governanceand business ethics
10 Air pollutant emissions

conducted surveys regarding the significanceorder of materiality based on discussions withinternal and external experts.

Low Materiality Issues
Win-win cooperation

9

Addressing climate change

75

Customer service quality

20 Supporting philanthropy
and epidemic prevention
and control

18 Human rights
2

Digital transformation

11 Waste management
1

Economic performance

Digital transformation

R&D and innovation- Industrial Layout and Development- Shared Prosperity with Industry- Post-Epidemic Era: Proactively Creating Opportunities- Green Product Innovation- Sustainable Forest Management

Product quality and safety- Post-Epidemic Era: Proactively Creating Opportunities- Green Product Innovation- Product Quality and Service Management

Customer service quality- Product Quality and Service Management

Responsible supply chain- Sustainable Procurement Management- Green Manufacturing- Sustainability Certificates- Performance in Numbers

Win-win cooperation- Shared Prosperity with Industry- Sustainable Forest Management- Product Quality and Service Management

Environmental compliance- Green Mill Management- Green Manufacturing- Performance in Numbers

Addressing climate change- Green Forestry and Forest Conservation- Green Mill Management- Green Manufacturing

Air pollutant emissions- Green Manufacturing- Performance in Numbers

19 Community relations andcultural popularization

Low

Significance to APP China

High

17 Employee training anddevelopment
6

Responsible supply chain

14 Biodiversity
21 Compliance management
and risk control

Contents in report- Company Profile- Industrial Layout and Development- Post-Epidemic Era: Proactively Creating Opportunities- Green Mill Management- Developing a Digital Transformation Strategy- Accelerating Digitization of Practices

valid questionnaires were collected online

and offline. The issues have been arranged inGreen and
Eco-Friendly
Papermaking- Company Proﬁle- Performance in Numbersof the issues to stakeholders. A total of 1,237

Moderate Materiality
Issues3/

66

taken place in issue boundaries. In 2020, we

Post-Epidemic Era:
Proactively Creating
Opportunities

Economic performancethe description. No significant changes have

Significance to stakeholders

development. Compared to 2019, "Digitaldevelopment. Other adjustments are mainlyHigh

About APP China

R&D and innovation

A Harmonious
Future Driven by
Digital Innovation

Internal boundaries

Fulfulling
Responsibility from
Forest to Paper

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

External boundaries
Customers and consumers

Suppliers

Community/

Message from
Chairman67

About APP China

IssuesGreen and
Eco-Friendly
Papermaking

Contents in report

Waste management- Green Manufacturing- Performance in Numbers

Water management- Green Manufacturing- Performance in Numbers

Sustainable forest
management

A Harmonious
Future Driven by
Digital Innovation

Fulfulling
Responsibility from
Forest to Paper

Internal boundaries

Remaining PeopleCentered and Building
a Better Tomorrow

Governance andManagement

External boundaries
Customers and consumers

Suppliers

Community

Performance in Numbers
Economic performance

Indirect economic impact

Indicator

Unit

2020

2019

2018

Indicator

Unit

2020

2019

2018

- Green Forestry and Forest Conservation- Sustainable Forest Management- Sustainability CertificatesTotal assets

RMB100 million

2,480

1,914

1,726

Employee volunteer time

Hours

15,544

18,61831,018

Total taxes paid

RMB100 million

35

30

30

Donations*

RMB10,000

14,579

3,197

3,207

Biodiversity- Sustainable Forest Management

Sales revenue

RMB100 million

738

651

590

*Data scope includes APP China Headquarters, the Foundation, Gold East Paper, Ningbo Asia, Ningbo Zhonghua, Gold
Huasheng, Gold Hongye, Guangxi Jingui Pulp & Paper, Hainan Jinhai Pulp & Paper, and APP China Forestry.

Occupational health and safety- Safety Management- Performance in Numbers

Total profit

RMB100 million

73

48

30

Net profit

RMB100 million

62

39

23

Employment- Talent Retention and Development- Performance in Numbers

Employee training anddevelopment- Talent Retention and Development- Performance in Numbers

Human rights/

68

Post-Epidemic Era:
Proactively Creating
Opportunities- Sustainable Procurement Management- Talent Retention and Development- Safety Management- Dedicated to Philanthropy

APP China sources of pulp procurement*
2020

2019

2018

North America

18.49%

25.7%

23.9%

South America

4.23%

1.1%

2.8%

RegionMaterials
Indicator

Unit

Total volume of pulp purchased

2020

2019

2018

10,000 tons

626.41564.94534.38

Total volume of certiﬁed pulp purchased

10,000 tons

151.60111.8876.07

Proportion of certiﬁed pulp in total pulp
purchased

%

24.20

19.80

14.23

Community relations andcultural popularization- Dedicated to Philanthropy

Europe

5.01%

2.8%

1.1%

Supporting philanthropy andepidemic prevention and control- Post-Epidemic Era: Proactively Creating Opportunities- Dedicated to Philanthropy- Performance in Numbers

Other Asian regions

28.69%

26.6%

22.7%

China

43.25%

43.8%

49.4%

Proportion of certiﬁed wood ﬁber in total
wood ﬁber purchased

%

26.95

19.41

17.45

Compliance management andrisk control- Risk Management- Integrity and Compliance- Sustainability Management

Oceania

0.32%

—

0.1%

Volume of waste paper purchased

10,000 tons

10.39

19.81

38.19

Corporate governance andbusiness ethics- Company Profile- Sustainable Procurement Management- Risk Management- Integrity and Compliance* The change in the proportion of different locations mainly resulted from the quality and market price of pulp.

/

Message from
Chairman69

Water resources and waste water*
2020

2019

2018

4,692,593.29

4,999,054.08

5,035,063.85

382.15464.35581.74

4,721.00

10,306.70

0.00

Water reuse

Indicator

Unit

2020

2019

2018

Total water withdrawal**

Tons

120,215,643

125,397,098

130,935,175

Total waste water discharge***Tons

89,726,593

88,160,320

90,097,689

10,065.11

Waste water discharge per ton of paper produced

Tons

6.20

6.37

6.79

846.51144.35

Waste water discharge per ton of pulp produced

Tons

12.50

11.62

12.68

186,805.47

21,396.76

21,859.78

COD emission per ton of paper produced

Kg

0.22

0.29

0.23

3,072.64

10,985.74

9,126.50

COD emission per ton of pulp produced

Kg

0.85

0.63

0.94

0.44

0.96

2.24

111,190.99

133,309.85

157,975.17

1,502,787.00

1,490,357.25

2,455,775.16

2,760,861.37

2,735,798.96

2,592,609.55

331,960.35

295,426.22

240,512.46

2,514.60

2,604.05

2,964.05* Not including data from APP China Headquarters. Not including data from APP China Forestry except for the indicatorof total water withdrawal.
** 98.42% came from surface water, 1.56% from third-party facilities, and 0.02% from underground water.

* The data of Gold Huasheng include those of Suzhou Gold Hongye.

*** In 2020, there were zero incidents of major water body pollution at APP China.

Annual average discharge
concentration*

Unit

COD

NH3-N

Total
Phosphorous
(TS)

Total
Nitrogen(TN)

Suspended
SolidsGold East Paper

mg/L

41.81

1.55

0.12

2.87

13.00

Hainan Jinhai Pulp & Paper

mg/L

68.79

0.73

0.013

4.19

18.26

Ningbo Asia

mg/L

42.20

1.00

0.05

2.35

13.00

Gold Huasheng

mg/L

22.82

0.19

0.063

4.33

5.00

Guangxi Jingui Pulp & Paper

mg/L

61.25

0.66

0.07

3.31

0.28

*Waste water discharged by Hainan Gold Hongye and Hainan Gold Shengpu was treated by Hainan Jinhai Pulp & Paper.
Waste water discharged by Suzhou Gold Hongye was treated by Gold Huasheng. Therefore, the data of the three mills
are not disclosed separately. The annual pollutant discharge concentration of each mill is lower than the limit set in the
Discharge Standard of Water Pollutants for Pulp and Paper Industry (GB3544-2008).

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70

Air pollutant emissions*

Waste* Not including the data of APP China Headquarters and APP China Forestry.
** The data of Hainan Jinhai Pulp & Paper include those of Hainan Gold Hongye and Hainan Gold Shengpu.
*** The data of Gold Huasheng include those of Suzhou Gold Hongye.

Environmental investment

Environmental compliance/

Energy71

Employee composition by gender

Employee turnover rate

2020

2019

2018

Percentage of female employees

%

25.95

25.97

27.38

Number of female employees in management

Number

571

573

560

Percentage of female employees in management

%

27.29

26.69

25.85

Indicator

Unit

2020

2019

2018

Indicator

Unit

2020

2019

2018

Female employees who took maternity leave

Number

239

373

530

Percentage of employees aged 30 and below

%

14.13

16.33

20.66

Female employees who returned to work aftermaternity leave

Number

212

340

479

Percentage of employees aged between 31 and 50

%

81.05

79.27

75.79

Female employees who resigned aftermaternity leave

Percentage of employees aged 51 and above

%

4.82

4.40

3.55

Number20

31

44

Male employees who took paternity leave

Number

437

447

808

Employee training

Male employees who returned to work after
paternity leave

Number

418

425

756

Indicator

Unit

2020

2019

2018

Male employees who resigned after paternity leave

Number5

20

41

Total training investment

RMB10,000

391.81475.42523.14

Total employee training time

Hours

619,287762,701

717,135

Number of employees who participated in company-paid diploma programs

Number11

35

78

Total investment in company-paid diploma programs for employees

RMB10,000

3.30

11.20

12.77

Average training time for senior-level managers

Hours

11.23

29.53

21.08

Average training time for middle-level managers

Hours

17.54

46.03

41.82

Average training time for line-level employees

Hours

35.34

39.79

35.43

Employee composition by level

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72

Unit

Employee composition by age

Employee retention after maternity/paternity leave*The employment data are within the reporting scope.

Indicator

Indicator

Unit

Percentage of senior-level managers

2020

2019

2018

%

1

1

1

Percentage of middle-level managers

%

11

10

10

Percentage of line-level employees

%

88

89

89

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Employment*73

Occupational health and safety*
Indicator

Unit

2020

2019

2018

Employee safety training time

Hours

300,011.50

333,033.00

294,354.45

Total investment in protective gears

RMB10,000

634.58578.74630.35

Lost hours per million working hours

Hours

924.79854.70830.61

Work-related injuries of employees

Person-times

45

51

50

Number of work-related fatalities of employees

Number0

0

1

Work-related injuries of contractors

Person-times

3

3

—

Assurance
Statement* The 2019 and 2020 data do not include those of APP China Forestry.

Anti-corruption** During supplier registration, APP China requests suppliers to sign an anti-corruption statement. The percentage of suppliers that APP China's anti-corruption policies have been communicated to is 100%.

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74

75
75

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76

77

GRI Content Index
GRI Standards

Disclosure

Page numbers/Reasons for omission

External Assurance

GRI Standards

Organizational Profile

GRI 102: General disclosures 2016

Disclosure

Page numbers/Reasons for omission

External Assurance

General Disclosures

General Disclosures

Reporting practice102-1 Name of the organization

4；84

√

102-45 Entities included in the consolidated financial statements

84√102-2 Activities, brands, products, and services

4√102-46 Defining report content and topic boundaries

67-68；84√102-3 Location of the headquarter

6；back cover√

102-47 List of material topics

66-68

√

102-4 Location of operations

4；6-7

√

102-48 Restatements of information

None

√

102-5 Ownership and legal form

4√102-49 Changes in reporting84√

102-6 Markets served

4√102-50 Reporting period

84√

102-7 Scale of the organization

4；6；69；72√

102-51 Date of most recent report84√

102-8 Information on employees and other workers

72√102-52 Reporting cycle

84√102-9 Supply chain

38；69

√

102-53 Contact point for questions regarding the report84√102-10 Significant changes to the organization and its supply chain

4；6-7；84√102-54 Claims of reporting in accordance with the GRI Standards

84√102-11 Precautionary principle or approach

38；60-61√

102-55 GRI content index

78-82

√

102-12 External initiatives

8；63

√

102-56 External assurance

75-77

√

102-13 Membership of associations

8-13

√

102-14 Statement from senior decision-maker

2-3√

5；7；14-15√

102-15 Key impacts, risks, and opportunities

2-3；14-15；62-63；66-68

√

4；69

√

5；7；14-15；22-28；32-34；37；55；62√

14-15；22-28；37；55；59；69

√

38

√

69

√

38；60-61√

74√

Strategy

Ethics and integrity

GRI 102: General disclosures 2016

Materiality Issues
Economic Performance
GRI 103: Management approach 2016
GRI 201: Economic performance 2016

Indirect Economic Impacts

102-16 Values, principles, standards, and norms of behavior

60-61

√

102-17 Mechanisms for advice and concerns about ethics

61

GRI 103: Management approach 2016√

GRI 203: Indirect economic impacts 2016

4√

GRI 103: Management approach 2016

Governance102-18 Governance structure

Stakeholder engagement
64-65

√

102-41 Collective bargaining agreements

49√

102-42 Identifying and selecting stakeholders

64-65

√

102-43 Approach to stakeholder engagement

64-66

√

102-44 Key topics and concerns raised

64-68

√

203-2 Significant indirect economic impacts

Procurement Practices
GRI 204: Procurement practices 2016

102-40 List of stakeholder groups

201-1 Direct economic value generated and distributed

204-1 Proportion of spending on local suppliers

Anti-corruption
GRI 103: Management approach 2016
GRI 205: Anti-corruption 2016205-2 Communication and training about anti-corruption
policies and procedures

Materials
GRI 103: Management approach 2016
GRI 301: Materials 2016

38；43

√

301-1 Materials used by weight or volume69√

301-2 Recycled input materials used

69√

EnergyGRI 302: Energy 2016/78

20-21；39-40；62-63√

302-1 Energy consumption within the organization

39；70

√

302-4 Reduction of energy consumption

39-40

√

/

GRI 103: Management approach 201679

Disclosure

Page numbers/Reasons for omission

External Assurance

Materiality Issues

Occupational Health and Safety
GRI 103: Management approach 201644-45；62-63√

303-1 Interactions with water as a shared resource

40-42

√

403-1 Occupational health and safety management system45√

303-2 Management of water discharge-related impacts

41-42

√

303-3 Water withdrawal

70√403-2 Hazard identification, risk assessment, and incident
investigation

44-45

√

303-4 Water discharge

41；70

√

403-3 Occupational health services

45√

303-5 Water consumption

40；70

√

403-4 Worker participation, consultation, andcommunication on occupational health and safety

45√

17；33；36-37；62-63√

403-5 Worker training on occupational health and safety

44-45；74√304-1 Operational sites owned, leased, managed in, or adjacent to,protected areas and areas of high biodiversity value outside protected areas403-6 Promotion of worker health

45

√

36-37

√

√

36-37

√

44-45

304-2 Significant impacts of activities, products, and services on biodiversity403-7 Prevention and mitigation of occupational health andsafety impacts directly linked by business relationships

44-45；63√

20-21；39；41-42；62-63√

403-8 Workers covered by an occupational health andsafety management system

305-5 Reduction of GHG emissions

21；39-40√

403-9 Work-related injuries

74√

305-7 Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant
air emissions

71√

GRI 103: Management approach 2016

GRI 403: Occupational health and safety 2018

Emissions
GRI 103: Management approach 2016

Effluents and Waste
20-21；39；41-42；62-63√

306-1 Water discharge by quality and destination

70√306-2 Waste by type and disposal method

42；71

√

306-3 Significant spills

None

√

GRI 103: Management approach 2016
GRI 306: Effluents and waste 2016

Environmental Compliance
GRI 103: Management approach 2016
GRI 307: Environmental compliance 2016

307-1 Non-compliance with environmental laws and regulations

20-21；41-42

√

71

√

Supplier Environmental Assessment
38√308-1 New suppliers that were screened using environmental criteria

38√308-2 Negative environmental impacts in the supply chain and actions taken

38√49；62-63√

401-1 New employee hires and employee turnover72√

401-2 Benefits provided to full-time employees that are not provided totemporary or part-time employees

49；52-53√

401-3 Parental leave72√

GRI 103: Management approach 2016
GRI 308: Supplier environmental assessment 2016

GRI 103: Management approach 2016/

80

Training and Education
GRI 103: Management approach 2016
GRI 404: Training and education 2016

28；49

√

404-1 Average hours of training per year per employee

73√404-2 Programs for upgrading employee skills and transition
assistance programs

49-52；73

√

49

√

73

√

38；49

√

No such incidents occurred

√

38；49

√

38

√

38；49

√

38

√

Diversity and Equal Opportunity
GRI 103: Management approach 2016
GRI 405: Diversity and equal opportunity 2016405-1 Diversity of governance bodies and employees

Non-discrimination
GRI 103: Management approach 2016
GRI 406: Non-discrimination 2016406-1 Incidents of discrimination and corrective actions taken

Child LaborGRI 103: Management approach 2016
GRI 408: Child labor 2016408-1 Operations and suppliers at significant risk for incidents ofchild labor

Forced or Compulsory Labor

Employment

GRI 401: Employment 2016

External Assurance√

Biodiversity

GRI 305: Emissions 2016

Page numbers/Reasons for omission

20-21；39-41

GRI 103: Management approach 2016

GRI 304: Biodiversity 2016

Disclosure

Materiality Issues

Water and EffluentsGRI 303: Water and effluents 2018

GRI Standards

GRI 103: Management approach 2016
GRI 409: Forced or compulsory labor 2016409-1 Operations and suppliers at significant risk for incidents offorced or compulsory labor/

GRI Standards

81Disclosure

Page numbers/Reasons for omission

External Assurance

Materiality Issues
Local Communities
33；37；55；62-63√

No.

413-1 Operations with local community engagement, impact
assessments, and development programs

37；55-58√

Human Rights

413-2 Operations with significant actual and potential negative
impacts on local communities

33；36-37√

GRI 103: Management approach 2016

GRI 413: Local communities 2016

Principle

Page Numbers

Principle 1

Businesses should support and respect the protection of internationally proclaimed human rights

37-38；44-45；49-53；55-58；62-63；72-74

Principle 2Make sure that they are not complicit in human rights abuses

37-38；44-45；49-53；62-63

Principle 3

Businesses should uphold the freedom of association and the effective recognition of the right tocollective bargaining

49

Principle 4

The elimination of all forms of forced and compulsory labor

38；49

Principle 5

The effective abolition of child labor

38；49

Principle 6

The elimination of discrimination in respect of employment and occupation

38；62-63

Principle 7

Businesses should support a precautionary approach to environmental challenges

17-25；33-43；62-63；69-71√

Principle 8

Undertake initiatives to promote greater environmental responsibility

17-25；27-30；33-43；62-63

Principle 9

Encourage the development and diffusion of environmentally friendly technologies

22-25；39-43

18-19

√

Anti-corruption

18-19；63√

Principle 10

Businesses should work against corruption in all its forms, including extortion and bribery

38；60-61；74

Labor

Supplier Social Assessment
GRI 103: Management approach 2016
GRI 414: Supplier social assessment 2016

38；44；61√414-1 New suppliers that were screened using social criteria

38；61

√

414-2 Negative social impacts in the supply chain and actions taken

38；44-45√

14-15；24；46-47√

14-15；24；46√

Customer Health and Safety
GRI 103: Management approach 2016

GRI 416: Customer health and safety 2016416-1 Assessment of the health and safety impacts of product andservice categories
416-2 Incidents of non-compliance concerning the health and safety
impacts of products and services

No such incidents occurredMarketing and Labeling
GRI 103: Management approach 2016
GRI 417: Marketing and labeling 2016/82

UN Global Compact Ten Principles Index

417-1 Requirements for product and service information and labeling

Environment/

GRI Standards

83About this Report
This is the 14th Sustainability Report issued by Sinar Mas Paper (China) Investment Co.,To meet the needs of municipal development and social public interest, Ningbo Zhonghua

as APP China). The report is released in both Chinese and English. The English report isand data in the 2020 report do not involve Ningbo Zhonghua, unless otherwise stated.

Ltd. and the group of companies under its direct investment in China (herein referred totranslated from the Chinese report. If there is any discrepancy between the two reports,
the Chinese version shall prevail.

Pulp & Paper Co., Ltd. (Ningbo Zhonghua) was shut down as scheduled in 2020. The cases
In July 2020, APP China completed the acquisition of Bohui Paper. Due to the impactof the epidemic, the handover and integration between APP China and Bohui Paper isstill in progress. APP China will include Bohui Paper in the future report according to theReporting Boundary and Scope
The time span of this report is from January 1, 2020 to December 31, 2020. Our last

Sustainability Report was published in November 2020. Data in "Company Profile" and"Economic Performance" relate to Sinar Mas Paper (China) Investment Co., Ltd. and thegroup of companies under its direct investment in China; data in "APP China sources ofpulp procurement" and "Materials" do not include those of Bohui Paper. Cases and otherdata in the report are collected from APP China Headquarters, eight pulp & paper mills,
and APP China Forestry Business Unit, unless otherwise stated.

integration progress.

Reporting Framework
The report has been prepared in accordance with the core option of the GRI Standards(2018) issued by the Global Sustainability Standards Board (GSSB). Additionally, thereport refers to the Global Compact Ten Principles, the Forest Management standard andthe Pulp & Paper Products standard issued by the Sustainability Accounting Standards
Board (SASB), and papermaking industry clean production and emissions standards.

- APP China Headquarters

Content and Indicator Selection- Gold East Paper (Jiangsu) Co., Ltd. (Gold East Paper)This report was prepared in accordance with the GRI principles of materiality, stakeholder- Hainan Jinhai Pulp & Paper Co., Ltd. (Hainan Jinhai Pulp & Paper)

inclusiveness, sustainability context, and completeness, etc. At the preliminary stage,- Guangxi Jingui Pulp & Paper Co., Ltd. (Guangxi Jingui Pulp & Paper)and field visits to our headquarters and pulp & paper mills to collect the management- Ningbo Asia Pulp & Paper Co., Ltd. (Ningbo Asia)- Gold Huasheng Paper (Suzhou Industrial Park) Co., Ltd. (Gold Huasheng)- Gold Hongye Paper Group Co., Ltd. (Suzhou Gold Hongye, including Suzhou Mill andSales & Marketing)- Hainan Gold Hongye Paper Co., Ltd. (Hainan Gold Hongye)- Hainan Gold Shengpu Paper Co., Ltd. (Hainan Gold Shengpu)- APP China Forestry Business Unit (APP China Forestry, including Forestry Business
Headquarters, Hainan, Guangxi, and Guangdong BUs, and Lancang, Wenshan,
Ganzhou and Henan Sub-BUs)

our work group conducted policy analysis, industry issues analysis, stakeholder surveys,
approaches, specific practices and performance indicators on sustainability issues most
relevant to APP China.

Report Assurance
APP China commissioned Technischer Überwachungs-Verein (TÜV) to assess thereliability, objectivity, and transparency of this report. Please refer to the AssuranceStatement for further details.

Contact Us
We sincerely welcome readers' comments and suggestions regarding this report and ourwork. Readers can contact us by email: csr@app.com.cn.

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