Securities code: 600963 securities abbreviation: Yueyang Forest & Paper Co.Ltd(600963) Announcement No.: 2022-012 Yueyang Forest & Paper Co.Ltd(600963)
Announcement on the signing of forestry carbon sink resource development contract for greenhouse gas voluntary emission reduction projects by subsidiaries
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents.
Important content tips:
Contract performance period: two monitoring periods in one emission reduction period are 10 years
Impact on the current performance of listed companies: if the contract can be implemented smoothly, it will have a positive impact on the annual operating performance of the company.
Special risk tips:
1. At present, the opening hours and trading rules of CCER approval and trading are not clear. The project is affected by policies, markets and other factors, and there is some uncertainty whether the promotion progress is in line with the planned progress. At the same time, the estimated amount of the project is affected by force majeure factors of natural disasters (such as flood, earthquake, etc.), which may lead to the reduction of area and carbon sequestration.
2. The duration of this cooperation project is long, such as the lower transaction price in the carbon sink market and the intensification of market competition, which may have an adverse impact on the expected income. For the projects developed according to the forest management methodology, due to the influence of funds, policies and other factors, the measures such as tending, supplementary planting and fertilization are not in place, which may lead to the lower than expected carbon sequestration.
3. The carbon sequestration of the project is calculated according to the actual standards of the company’s early development projects. The carbon sequestration generated in the actual project may be affected by climate, upbringing and other factors, which may be less than expected.
4. The company expects that the overall income of the project has little impact on the company, and there is great uncertainty about when to realize the income.
1、 Review procedure
Recently, Hunan Senhai carbon sequestration Development Co., Ltd. (hereinafter referred to as “Senhai carbon sequestration” or “Party B”), a wholly-owned subsidiary of the company, and Yongxing Yindu investment and Development Group Co., Ltd. (hereinafter referred to as “party a”) signed the forestry carbon sequestration resource development contract for voluntary greenhouse gas emission reduction project, which belongs to the daily operation contract of Senhai carbon sequestration, The review and decision have been made in accordance with the articles of association and the company’s procedures, and it is not necessary to submit it to the board of directors for deliberation.
2、 The subject matter of the contract and the situation of the other party
(I) subject matter of the contract
The subject of this contract is the forestry carbon sequestration development project in Yongxing County. Yongxing Yindu investment and Development Group Co., Ltd. entrusts Senhai carbon sequestration to develop the forestry carbon sequestration project by stages for the forest / forest land it has the ownership or use right or has obtained other legal authorization. The development area of the first phase is 500000 mu. The two sides cooperate first, and one emission reduction is included in the two monitoring periods for 10 years.
(II) information of the other party to the contract
Counterparty: Yongxing Yindu Investment Development Group Co., Ltd
Nature of enterprise: limited liability company (solely state-owned)
Registered address: No. 491, Yongxing Avenue, Bianjiang street, Yongxing County, Hunan Province
Legal representative: Zhou Bixiang
Registered capital: 880391900 yuan
Main business: investment, development, construction and operation of infrastructure such as cities and towns, parks, transportation roads, agriculture and forestry, water conservancy and water affairs, tourism, education, science, sports and health. (except those prohibited by the state and subject to special examination and approval, those requiring administrative license shall operate with license)
Shareholder: Yongxing County State owned assets affairs center
Yongxing Yindu Investment Development Group Co., Ltd. has no relationship with the company and Senhai carbon sink, and has no business dealings with the company in the last three fiscal years.
3、 Main terms of the contract
Party A: Yongxing Yindu Investment Development Group Co., Ltd
Party B: Hunan Senhai carbon sequestration Development Co., Ltd
(I) form of cooperation
Party A entrusts Party B to develop the forestry carbon sequestration project by stages with the ownership or use right or other legally authorized forests / woodlands. The development area of the first phase is 500000 mu. Party B is responsible for the project initiation, material preparation, declaration, realization, management, transaction and appreciation of the forestry carbon sequestration assets of the project, as well as the capital investment and all expenses incurred in the above process, Including project feasibility assessment and preliminary design, project investigation fee, project design document (PDD) preparation and review fee, project certification fee, emission reduction verification fee, etc.
(II) term of cooperation
1. Reporting period
Within one year from the date of signing and coming into force of this contract, Party B shall complete the first phase of project initiation and forestry carbon sequestration asset declaration (except for Party A’s failure to timely provide the application project materials, policy changes, methodological changes and those not accepted by the national competent department, the declaration period shall be postponed accordingly for one year).
2. Term of cooperation
The two sides cooperate first, and one emission reduction is included in the two monitoring periods for 10 years. On the basis of good cooperation in the first emission reduction period, under the same conditions, Party A shall give priority to cooperating with Party B in the second emission reduction period, and perform the relevant rights and obligations in the second emission reduction period according to the contract. The third and fourth emission reduction periods, and so on.
(III) rights and obligations and risk bearing
1. Rights and obligations of Party A
(1) During the application period and cooperation period, Party A promises not to develop the forestry carbon sequestration project under this contract by itself or cooperate with other third parties in the development of forestry carbon sequestration;
(2) Party A has the ownership and use right of carbon sequestration assets. Party A shall cooperate with Party B to do a good job related to the project. From the date of signing and coming into force of the contract, Party A shall provide the overall planning scheme for afforestation and forest management, recent class II resource investigation report, forest land information data Topographic map and other relevant materials with legal ownership effect of all forest lands that meet the conditions for applying for forestry carbon sequestration projects.
2. Rights and obligations of Party B
(1) Party B has the right to obtain the tax included income share after forestry carbon sequestration transaction in the proportion agreed in this contract. (2) Entrusted by Party A, Party B is responsible for the due diligence of forestry carbon sequestration, preparation of project design documents, project approval and project filing, testing, certification and filing, sales of carbon sequestration assets, and bears the expenses of project development and relevant risks in the process of project development. Party A does not bear the expenses and risks of project development. If Party B fails to declare successfully within two years, this contract will be terminated automatically, Party A shall not bear any expenses for project development.
(IV) income distribution and payment method
If the project is successfully developed, the revenue sharing is as follows:
In the first emission reduction period, Party A and Party B agree to distribute the income according to the specific agreed proportion, and give priority to the distribution of the income of carbon sink asset transaction.
1. Distribution of trading income of carbon sink assets
(1) Within 15 days after the issuance of forestry carbon sequestration assets (CCER and VCS) by the national competent department, Party A and Party B shall negotiate and determine the transaction time and price, and Party B shall assist Party A in trading all forestry carbon sequestration assets. (2) Party A and Party B shall enjoy the benefits of trading forestry carbon sequestration according to the specific contract.
(3) Party A shall distribute the tax included income share to Party B within 15 days after receiving the tax included income of each forestry carbon sequestration asset (CCER and VCS) (the forestry carbon sequestration income reaches the bank account designated by Party A and Party B or the joint bank account of both parties).
(4) The taxes payable for the transaction and distribution of taxable income shall be borne by Party A and Party B in accordance with the provisions of national laws and regulations. All taxes must be paid in the tax department where Party A is located.
2. Allocation of carbon sequestration assets
Within 15 days after the issuance of forestry carbon sequestration assets, if Party A and Party B fail to negotiate the transaction time and price of forestry carbon sequestration, both parties agree to allocate forestry carbon sequestration assets according to the agreed proportion.
(V) liability for breach of contract
1. If either party terminates this contract without the written consent of the other party, it shall compensate the observant party for the actual losses.
2. Party A shall timely, truly and effectively provide Party B with all data, information, materials and documents required for the declaration and management of forestry carbon sequestration assets of the cooperation project (except those prohibited by relevant national regulations). If the project cannot be approved, registered and issued outside China due to Party A’s responsibility, Party B has no right to require Party A to repay any development expenses paid.
3. Party B shall complete the development of the cooperation project in time and adjust and modify the work tasks in time. If the project development is delayed due to Party B’s intentional or gross negligence, and the adjustment and modification are not carried out in time, which eventually leads to the failure of the project development and the failure to complete the China external approval registration and emission reduction certification of the project, no carbon sink index has been formed within two years, Party A has the right to terminate this contract and may carry out cooperative development of forestry carbon sequestration assets by itself or by selecting a third party.
4. If Party A and Party B have fulfilled their respective responsibilities and the forestry carbon sequestration project has not been successfully developed, neither Party A nor Party B shall be liable for breach of contract and compensation.
5. If Party A fails to distribute the carbon sequestration assets to Party B according to the agreed time of carbon sequestration transaction, in addition to the actual loss caused by the overdue payment of carbon sequestration assets to Party B according to the agreement.
6. Party A shall perform the payment obligations as agreed with the relevant obligees. In case of disputes and responsibilities caused by Party A’s failure to pay the income of the relevant obligees, Party A shall bear all the responsibilities by itself, which has nothing to do with Party B.
(VI) effectiveness of the contract: it shall take effect from the date of signature and seal by both parties.
4、 The impact of contract performance on Listed Companies
Taking advantage of the opportunity of the country to achieve the goal of “3060” and “carbon peak and carbon neutralization”, the company actively arranges the carbon sink trading business. If the contract can be successfully implemented, according to the current carbon trading price in China, it is expected that the net profit in the contract implementation year will be at least 20 million yuan, which will have a positive impact on the annual operating performance of the company’s projects, It will further improve the company’s carbon sink market influence and enhance the company’s brand image. The performance of this contract will not affect the independence of the company’s business and operation, and the company will not form business dependence on the other party of the contract.
5、 Risk analysis of contract performance
(I) at present, the opening hours and trading rules of CCER approval and trading are not clear. The project is affected by policies, markets and other factors, and there is some uncertainty whether the promotion progress is in line with the planned progress. At the same time, the estimated amount of the project is affected by force majeure factors of natural disasters (such as flood, earthquake, etc.), which may lead to the reduction of area and carbon sequestration.
(II) the duration of this cooperation project is long, such as lower transaction price in carbon sink market and intensified market competition, which may have an adverse impact on the expected income. For the projects developed according to the forest management methodology, due to the influence of funds, policies and other factors, the measures such as tending, supplementary planting and fertilization are not in place, which may lead to the lower than expected carbon sequestration.
(III) the carbon sequestration of the project is calculated according to the actual standards of the company’s early-stage development projects. The carbon sequestration generated in the actual project may be affected by climate, upbringing and other factors and may be less than expected. (IV) the company expects that the overall income of the project has little impact on the company, and there is also great uncertainty about when to realize the income.
The company will pay close attention to the progress of follow-up cooperation and fulfill the obligation of information disclosure as required. Please pay attention to investment risks.
It is hereby announced.
Yueyang Forest & Paper Co.Ltd(600963) board of directors February 13, 2002
