上海晨光文具股份有限公司
SHANGHAI M&G STATIONERY INC.
2019年度企业社会责任报告2019 Corporate Social Responsibility Report
About This Report
The Board of Directors of the Company and all its directors guarantee that, thisreport does not contain any false information, misleading statement or materialomission, and severally and jointly accept responsibility for the truthfulness,accuracy and completeness of the contents of this report.
Dear stakeholders, this “Corporate Social Responsibility Report of Shanghai M&GStationery Inc. for the Year of 2019” (CSR report) is the second annual CSR openlyissued to the public by “M&G Stationery”. This report aims to truthfully present theCSR development and practice of the Company and reveal to our shareholders,employees, government agencies, customers and consumers, partners, localcommunities and other stakeholders of the Company’s CSR activities.Reporting Period: From 1 January 2019 to 31 December 2019Reporting Cycle: reported annuallyScope of ReportingThis report covers Shanghai M&G Stationery Inc. and its subsidiaries. For theconvenience of expression, they are referred to as “M&G Stationery”, “M&G”, “theCompany”, “we” or “us” etc. herein.Basis of PreparationThis report is prepared in accordance with National Standards on “Social ResponsibilityReport Preparation Guidelines” (GB/T 36001-2015), “Guidelines on Corporate SocialResponsibility Reporting for Chinese Enterprises”(CASS-CSR 3.0) as promulgated bythe Academy of Social Science of China and “Guidelines to Report Sustainability” (G4)of Global Reporting Initiative (GRI).Access to the ReportThe report is prepared and published in simplified Chinese, and is available in bothhardcopy and electronic versions. The latter may be downloaded from the website ofShanghai Stock Exchange (http://www.sse.com.cn).
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Report AssuranceThe report was approved through the twentieth meeting of the fourth session of theBoard of Directors and the thirteenth meeting of the fourth session of the Board ofSupervisors held on 10 April 2020.
本报告分别以中、英文编制，在对中外文文本的理解上发生歧义时，以中文文本为准。
This English version is converted from the Chinese version.In case of any discrepancy between the Chinese version and the English version, the
Chinese version shall prevail.
Contents
I. Company Profile ...........................................................................................................................................1
II. Compliance, the Cornerstone of Corporate Governance ...................................................................3
(I) Corporate governance ...... 3
(II) Compliance with laws and policies ...... 4
(III) Internal control ...... 5
(IV) Operation performance ...... 6
(V) Taxation obligation ...... 7
(VI) Awards to the Company ...... 7
III. Focus on Sustained Improvement of Stakeholders’ Satisfaction .............................................. 10
(I) Returns to shareholders ...... 10
(II) Investor relations ...... 11
(III) Information disclosure ...... 11
(IV) Consumer rights protection ...... 12
IV. Collaboration-Full Collaboration with Partners ................................................................................. 13
(I) Supplier's rights and interests ...... 13
(II) Distributor's rights and interests ...... 13
V. Innovation-development and manufacturing of better products ................................................. 15
(I) Research & development capacity ...... 15
(II) Manufacturing capability ...... 16
(III) Quality control ...... 17
(IV) Testing capability ...... 19
(V) Workplace safety ...... 20
VI. Employee Care- People Oriented, One for All and All for One .................................................. 21
(I) Protection of lawful rights and interests of employees ...... 21
(II) Talent training and development ...... 21
(III) Caring for employees and corporate culture ...... 23
VII. Sincerity-to Helping the Underprivileged, transmitting Love .................................................... 25
VIII. Mutual Benefits-Adhere to Green and Sustainable Development ........................................... 31
(I) Awareness of environmental friendliness ...... 31
(II) Action for environment protection ...... 34
IX. Outlook ................................................................................................................................................... 36
I. Company Profile
Shanghai M&G Stationery Inc. was incorporated on 18 July 2008 and was listed onShanghai Stock Exchange on 27 January 2015 with stock code 603899. As an integratedstationery products and service provider, the Company integrates the value ofcreativity into its products and service advantages, advocates fashionable stationerylifestyle, and provides solutions for study and work. The traditional core businessesinclude designing, developing, manufacturing and selling writing instruments, studentstationery, office supplies and other products of and its brands, whilenew businesses mainly focus on developing one-stop office service platform—M&GColipu, retail stores—M&G Life Museum and Jiumu Sundries Store, as well as theInternet and e-commerce platform—M&G Technologies.
With a sound, independent and complete operation system from design anddevelopment of brands and products, procurement of raw materials and accessories,product manufacturing, supply chain management and marketing networkmanagement to warehouse and logistics, the Company is capable of performingindependent operation of business in the market.As a highly recognized company in China’s stationery industry, the Company operatesin the following segments including children, students, office employees and lifestyle,with its extensive and “deep” product lines ranking top in the domestic stationeryindustry. For instance, with regard to pen manufacturing particularly, we haveremained first among top 10 pen manufacturers in China’s light industrial sector foreight consecutive years. During the recent years, stationeries bearing M&G brand canbe seen even on many national high profile conferences such as APEC conferences,Boao Forum for Asia and Global CEOs’ Conference.
Pursuing the mission of “making study and working more joyful and effective” andupholding the core value of “sincerity, collaboration, focusing and mutual success”, theCompany has been committed to developing premium stationery products andsharpening its leading competitive edge in terms of the design and function ofproducts through its advanced and international design team as well as by integratingthe sources from global creative team and external. Moreover, the Company has,through effectively integrating of essential resources such as raw materials, technology,capital, market, talents and creativity from a global perspective, endeavored topresent the whole world the product innovation and brand values of M&G Stationery.
II. Compliance, the Cornerstone of Corporate Governance
(I) Corporate governanceDuring the Reporting Period, the Company, in strict compliance with laws andregulations such as Companies Law, Securities Law and Code of Corporate Governancefor Listed Companies, as well as regulatory documents issued by China SecuritiesRegulatory Commission regarding the governance of listed companies, hascontinuously optimized the corporate governance structure, established soundinternal control system, standardized the business operation and improved thecorporate governance practice, to ensure there are rules and policies to follow andtherefore prevent operation risks and effectively guarantee the legitimate rights andinterests of all shareholders of the Company.
In 2019, we held 5 board meetings, 4 supervisors' meetings and 2 general shareholders’meetings. The general shareholders’ meeting, Board of Directors, Board of Supervisors,
Management/monitoringMonitoring/guidance
Monitoring/guidanceManagement
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ReviewAccountability
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General shareholders’ meeting
Business activities
External auditor
Board ofSupervisors
Board of Directors
Audit Committee
Remuneration and AppraisalCommittee
Nomination Committee
Remuneration and AppraisalCommittee
Strategic Committee
Strategic Committee
Committees of the Board of
Directors
Committees of the Board of
DirectorsAccountability
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ReviewEmployment
| Employment | Election | Election |
the management as well as independent directors perform functions in a regulativemanner. By virtue of the strict segregation of powers and duties as well as the inter-collaboration amongst authority body, decision-making body, supervisory body andexecutive body, the general policies of the Company is very effective in preventing theabuse of power.Subordinated to the Board of Directors, the Strategic Committee, Audit Committee,Remuneration and Appraisal Committee and Nomination Committee perform theirrespective functions in strict compliance with respective implementing rules. In 2019,5 meetings were held by the Audit Committee, 1 meeting by the Strategic Committeeand 1 meeting by the Remuneration and Appraisal Committee. With their professionalexpertise, all these committees have played positive roles in improving the businessoperation and promoting best practice.The independent directors of the Company, in compliance with “Rules on theFunctioning of the Board of Directors”, “Guidelines on the Performance of Duties byIndependent Directors” and other applicable regulations, have exercised discretionaryreview over the deliberation and decision making procedures regarding theappointment of Company officer(s), the use of the raised funds and related partytransactions etc. and expressed their independent professional opinions. They haveeffectively fulfilled their duties, ensuring the Company operating in a regulativemanner and gaining quick growth.(II) Compliance with laws and policiesLegal compliance is fundamental to business operation. M&G Stationery highlyemphasizes risks management during operation and continuously promotes policyestablishment and culture building for compliance to ensure its stable operation. In2019, the Company held 9 training sessions for legal compliance, including 3 sessionsrelated to compliance in advertising activities, 1 session for employment contracts, 4sessions for intellectual property and 1 session for barcodes management.In addition to relevant workplace training, the Company has established sound anti-
fraud policies and encourages whistle blowing on any fraud. The Company has enteredinto “Procurement Integrity Agreement” with all suppliers during the year. Hyperlinksfor whistle-blowing on any frauds are available at the obvious place on the M&G Cloudintegration platform and OA information system. The Company makes posters topromote anti-fraud on a regular basis. Generally, the posters are publicized at a placewith large people flow in the Company as well as in each branch. After putting up, weusually have a regular checking for the situation of the poster. If missing, we willreplace it with a new one. Any employees and external interested parties with director indirect business connection with the Company may whistle-blow any actual orsuspected fraudulent behavior conducted by the Company and its employees bymeans of whistle blowing hot-lines, email, correspondence etc. Furthermore, theCompany promotes anti-fraud to all employees and suppliers by means of WeChatofficial account platform and corporate WeChat platform of the Company.(III) Internal controlThe Board of Directors of the Company has established sound and effective internalcontrol system in compliance with “General Guidelines on Enterprise Internal ControlSystem” and its interpretations as well as other regulatory requirements governinginternal control, with the Board of Supervisors overseeing the establishment andimplementation of internal control system by the Board of Directors. The managementshall be responsible for directing and coordinating the day-to-day running of theCompany. The Company has established sound and complete internal control policiesand procedures which give detailed specification on such issues as significant businessdecisions at corporate level, investing and/or financing activities, related partiestransactions, assets management as well as approval process, limits of approvingauthority and pertinent responsibilities pertaining to payments to third parties andexpense reimbursement.Meanwhile, instructed by the Audit Committee subordinated to the Board of Directors,the Audit Department of the Company has conducted independent audit and
appraised on the effectiveness and efficiency of the design and implementation ofinternal control system. There was no significant internal control deficiency detectedduring the year of 2019. The Company, upon the detection of other deficienciesthrough internal audit work, proactively analyzes the underlying reasons fordeficiencies and works out correction plans in which responsible employees anddeadlines for correcting deficiencies shall be specified for prompt follow-up andmonitoring on the correction, therefore ensuring the effectiveness of the internalcontrol system. Moreover, based upon the above, the Company continuously improvesthe internal control environment through sustained optimization of internal controlprocesses and pertinent supporting system. The Company continuously promotes themanagement team's awareness in compliance via various means to further ensure theeffective implementation of internal control system and processes. The Company fullydischarged its social responsibilities while maintaining sound business operation incompliance with laws and regulations.(IV) Operation performanceIn 2019, the Company recorded an operation revenue of RMB11,141,101,400,representing an increase of 30.53% as compared to the corresponding period of lastyear. The net profit attributable to shareholders of the listed Company amounted toRMB1,060,083,600, representing an increase of 31.39% as compared to thecorresponding period of last year, while net profit attributable to shareholders of thelisted company after deducting non-recurring profit and loss amounted toRMB1,005,188,000, representing an increase of 34.13% as compared to thecorresponding period of last year.As at the end of 2019, total asset of the Company amounted to RMB7,565,115,300,representing an increase of 33.25% as compared to the corresponding period of lastyear. The net asset attributable to shareholders of the listed company amounted toRMB4,201,500,400, representing an increase of 23.18% as compared to thecorresponding period of last year. The Company has maintained healthy and rapid
growth with sound operation in asset.
| Key financial indicators | 2019 | 2018 | Year-on-year increase or decrease in the current period (%) |
| Basic earnings per share (Yuan/share) | 1.1523 | 0.8770 | 31.39 |
| Basic earnings per share, net of non-recurring gains and losses (Yuan/share) | 1.0926 | 0.8146 | 34.13 |
| Weighted average ROE (%) | 28.17 | 26.16 | Increase of 2.01 percentage points |
| Weighted average ROE, net of non-recurring gains and losses (%) | 26.71 | 24.30 | Increase of 2.41 percentage points |
(V) Taxation obligationTaxation compliance has always been considered by the Company as basicrequirement of performing social responsibility and reciprocating local community.The Company has, in strict compliance with applicable taxation laws and bylaws,performed its legal obligation of timely and full settlement of tax liabilities arising frombona fide business activities. In 2019, the total tax payment amounted to RMB676million in compliance with applicable taxation laws and its tax credit rating was GradeA.(VI) Awards to the Company
| Number | Description | Issued by |
| 1 | Model corporate for safety operation for 2018 | Political and Legal Affairs Sub-Commission to CPC Committee in Shanghai |
| 2 | Fortune top one hundred entities within Fengxian District of Shanghai for the year of 2018 | People’s Government of Fengxian District of Shanghai |
| 3 | Title of “Outstanding Employment Enabler” of Qingcun Town for the year of 2018 | CPC Committee of Qingcun Town of Fengxian District of Shanghai/People’s Government of Qingcun Town, Fengxian District of Shanghai |
| 4 | Title of “Top Ten Taxpayer in Terms of Average Tax Amounts per Mu” of Qingcun Town for the year of 2018 | CPC Committee of Qingcun Town of Fengxian District of Shanghai/People’s Government of Qingcun Town, Fengxian District of Shanghai |
| 5 | Title of “Top Ten Taxpayer in Terms of Total Tax Amounts” of Qingcun Town for the year of 2018 | CPC Committee of Qingcun Town of Fengxian District of Shanghai/People’s Government of Qingcun Town, Fengxian District of Shanghai |
| 6 | Title of “Social Charity Award” of Qingcun Town for the year of 2018 | CPC Committee of Qingcun Town of Fengxian District of Shanghai/People’s Government of Qingcun Town, Fengxian District of Shanghai |
| 7 | Title of “Extraordinary Innovation Award” of Qingcun Town for the year of 2018 | CPC Committee of Qingcun Town of Fengxian District of Shanghai/People’s Government of Qingcun Town, Fengxian District of Shanghai |
| 8 | The Second Prize for State Science and Technology Progress Award issued by China National Light Industry Council for the year of 2018 | China National Light Industry Council |
| 9 | The Third Prize for State Science and Technology Progress Award issued by China National Light Industry Council for the year of 2018 (in connection with the development and commercialization of mechanical pencils) | China National Light Industry Council |
| 10 | Top one hundred enterprises in China’s light industry | China National Light Industry Council |
| 11 | Documented into the book of “Finding the Invisible Champion among Chinese Manufacturers” (Shanghai volume) | The People’s Publishing House Liberal Arts Division/Shanghai Municipal Commission of Economy and Informatization |
| 12 | Top ten enterprises within the sub-sector of cultural and education supplies pertaining to light industry sector in China | China National Light Industry Council/China Stationery & Sporting Goods Association |
| 13 | Top ten pen manufacturers in light industry of China | China National Light Industry Council/China Writing Instrument Association |
| 14 | The Gold Medal for China International Stationery Exhibition (CISE) within China’s cultural and education sub-sector for the year of 2019 | China Stationery & Sporting Goods Association |
III. Focus on Sustained Improvement of Stakeholders’
Satisfaction
(I) Returns to shareholdersEmphasizing reasonable returns to our investors, the Company maintains ongoing andstable dividends policies to fully safeguard the benefit of minor investors. Pursuant to“Notice Regarding Further Implementation of Cash Dividend Distribution by ListedCompanies” and “Regulatory Guidance No.3 of Listed Companies — Cash DividendDistribution of Listed Companies” issued by the China Securities RegulatoryCommission, the Company has formulated a “three-year dividend distribution plan(From 2017 to 2019)”. The Company distributes dividends in cash or shares, or cash-and-shares, and if the Company satisfies the conditions for cash dividends, priorityshould be given to profit distribution by means of cash dividends. During the recentthree years, the cash dividends paid by the Company have accounted for over 34% ofnet profit attributable to the ordinary shareholders of the listed company in theconsolidated financial statements, which ensured the investors sharing the businessresults.
| Year for dividend distribution | Amount of dividends distributed per 10 shares (RMB) (inclusive of tax) | Amount of cash dividends (RMB) (inclusive of tax) | Net profit attributable to the ordinary shareholders of the listed company in the consolidated financial statements for the year (RMB) | Percentage of the net profit attributable to the ordinary shareholders of the listed company in the consolidated financial statements (%) |
| 2019 | 4 | 368,000,000 | 1,060,083,625.03 | 34.71 |
| 2018 | 3 | 276,000,000 | 806,847,308.41 | 34.21 |
| 2017 | 2.5 | 230,000,000 | 634,040,991.46 | 36.28 |
(II) Investor relationsInvestor relations are vital to a public listing company. Firstly, a listed company usuallyactively manages the relations with investors through ongoing communication ofinformation to investors, which allows the investors to keep up with the developmentof the Company and coordinate with and support its development. Secondly, proactiveinvestor relations management may, to the greatest extent, avoid the undervaluationof the share price of a listed company and reflect its true value in the market. Last butnot least, proactive investors relations management may help to improve the goodwillof a listed company and build trust with the investors, thus facilitating the businessdevelopment.In 2019, the Company cooperated with institutional investors' survey, includingthrough on-site manner, telephone conferences and WeChat Group, on a regular basis.The Company has filed with Shanghai Stock Exchange as required and publicized at SSEE-Interaction. The Company each year holds two survey reception sessions, duringwhich the management usually answer queries relating to the market in order toenhance transparency and creditability of the Company. All queries raised byshareholders via Internet platform were appropriately replied. Moreover, theCompany has, in consecutive years, held public reception conferences to deliveranswers to questions concerned by the investors for safeguarding the interests ofCompany’s shareholders as a whole.(III) Information disclosureThe Company has, pursuant to “Rules Governing the Listing of Stocks on ShanghaiStock Exchange” and other relevant regulatory requirements, actively discharged itsobligation of disclosures, promptly disclosing relevant information fairly and ensuringthe correctness and completeness of the disclosed information. Any significant eventsand resolutions shall be promptly released by the Company, and disclosed at thedesignated press media, including “China Securities Journal”, “Shanghai SecuritiesNews”, and “Securities Times”.
In 2019, 31 interim announcements were released and 4 regular announcements wereofficially released in professional due care. We regularly report the insider registrationand promptly file, therefore eliminating any insider trading and ensuring that all theinvestors can access the information of the Company equally. The Company was valuedas “A” level in terms of disclosure of company information during 2018 and 2019.(IV) Consumer rights protectionThe Company has formulated a series of strict, internal policies on quality control andmanufacturing procedure control, including the procurement of raw materials,product manufacturing as well as after sales service. Furthermore, the Companystrictly complies with national standards and/or industrial standards in controllingmanufacturing procedures. In the absence of applicable national or industrialstandards, the Company will adopt the internal standards to ensure that the quality ofthe product can meet applicable standards and continuously improve customers’experience. Through pre-sale market research and guided by customer orientationpolicy, we follow up the demands of customers to understand their requirements onthe products and thus improve customer satisfaction. Meanwhile, the Companyactively regulates its behavior when competing with its competitors so as to protectthe consumers’ rights and interests while preventing unfair competition andcombating fake and shoddy products.In order to improve its consumer services, the Company has formulated relatedprocedures, including (1) appraisal for customer satisfaction procedures whereby pre-defined and effective appraisal methods are employed to identify the extent ofcustomers’ satisfaction and evaluate the performance of quality control system, whichshall be subject to subsequent improvement based upon the result of appraisal; (2)Procedures of monitoring the responsiveness to customer needs whereby anycomplaints filed by customers can be effectively controlled to eliminate recurringtroubles and cater for customers’ needs.
IV. Collaboration-Full Collaboration with Partners
(I) Supplier's rights and interestsBy taking advantage of unique supply chain, the Company can act quickly to thechanging market in every link, including data collection, R&D and product design,procurement, manufacturing and distribution. The Company was the first in theindustry to introduce a scientific supplier evaluation and grading system and toestablish a professional supplier management team as well as SQE team, with a viewto constantly boosting suppliers’ performance and developing strategic partnership.The Company maintains long-term partnership with suppliers by respecting theirlawful rights and interests as well as preserving their intellectual property, confidentialand proprietary information. Moreover, the Company has continuously optimized theprocurement process and system and implemented fair and unbiased supplierappraisal system to nurture a positive business environment for suppliers. Last but notleast, the Company has appropriately performed its contractual obligations in ordernot to prejudice the lawful rights and interests of suppliers. In order to preventcommercial bribery and other forms of unfair competition in part with the suppliers,the Company has entered into “framework agreement on the transparency topreserve financial probity during procurement cycle” with suppliers whereby thelawful rights and interests of both parties are preserved and business partnershiprelations are not prejudiced.(II) Distributor's rights and interestsThe Company has, through years of research and practice in establishing marketingchannels, set up a distinct marketing regime named as “M&G partner pyramid stylemarketing”. By taking advantage of powerful influence of M&G brand, extensivestationery product lines, ongoing training of business management mode as well asthe unique system of regional exclusive dealership, the Company has further
strengthened business partnership with distributors of all tiers.By adhering to the core value of “top-down input of resources” and “top-down sharingof operating profit”, M&G Stationery has cemented a stable business ecosystemwhereby both distributors and M&G Stationery can achieve win-win outcome.“Top-down input of resources” shall refer to the business mode whereby distributorsof each tier shall, under the umbrella of the centralized marketing system of theCompany and within the scope of their responsible regions, be responsible for theadministering of the distributors of lower tier, expansion and maintenance of endmarketing channels, as well as investing on manpower, capital, hard and software etc.In that case, M&G has dramatically reinforced the control over and penetration intomarketing channels. Moreover, through centralized training, implementation ofappropriate control mechanism, KPI management, establishment of corporate culture,standard marketing procedures, M&G Stationery has forged a very competent andhigh-performing sales team.“Top-down sharing of operating profit” shall refer to the business mode wherebybusiness partners of each tier can earn all guaranteed operating profits under themechanism of uniform pricing strategy channeled down from the Company. In thatcase, distributors of all tiers are motivated to develop the markets within the scope oftheir authority and responsibilities.As at the end of 2019, the Company has 35 tier-one distributor partners (provinciallevel), approximately 1,200 tier-two and tier-three distributor partners, covering over85,000 retail stationery shops.
V. Innovation-Development and Manufacturing of better
products(I) Research & development capacityThe Company has developed “entire design system” covering the whole processranging from consumption value design, product design, product mold developmentto brand image design, and adopted trend-, theme- and experience-orienteddevelopment model to develop new products from all categories based on consumerinsight.Boasting a powerful research lab subordinated to technology center, the Company hastaken the lead in tackling various technical difficulties, including those incorporated inthe “thirteenth five-year plan” project. Meanwhile, M&G industrial park is also thehome to China writing instrument industry base, China writing instrument center,national industry design center and China key laboratory of light industry and writinginstrument engineering technology.The Company each year pours into approximately RMB 100 million in the design andR&D of new products and technology currently possessing over 700 patents. M&GStationery has been awarded with such heavyweight product design medals as GoldIdeas Medal and Red Star Medal. In 2019, M&G Stationery was awarded threeinternational product design honors, including 2019 German iF Product Design Awardand Good Design Award (G-Mark) awarded to the design of “Enjoy Writing” gel penand German Red Point Medal awarded to metal bookmark bearing quintessence ofChinese culture.
(II) Manufacturing capabilityThe Company uses the brand manufacturing model that combines sales-basedproduction, independent production and OEM outsourcing production, developsindependent systems for raw material procurement, as well as product manufacturingand selling, and has established its brands in the market with advantages of the wholeindustry chain in designing, researching and developing, manufacturing and sellingstationery.With large-scale manufacturing experience accumulated over the past few years,independent mold research and development capability, stable supply chain system,sound quality control system and adoption of several information managementsystems, the Company has reached sound manufacturing and quality control levelunder large-scale manufacturing with product qualification ratio as high as 99.96%.Moreover, the Company has grasped the core technology of writing instrument in nib,ink and its matching, developed self-owned mold development technology, andparticipated in preparation of national standard and industry standard for severalproducts. The product design center of the Company was acknowledged as a “statelevel industrial design center”.
(III) Quality controlThe Company always highly valued the quality of products to achieve greater customersatisfaction. By consistently adhering to requirements as prescribed in ISO9001:2008quality control mechanism, the Company has upgraded the quality of products andsupporting service on an ongoing basis.
1. Establishment of quality control mechanism
Both production quality control department and OEM quality control department havebeen established and subordinated to the production center of the Company to jointlyconduct the control and inspection of the products. The Company has set up qualitysurveillance network throughout the whole business cycle covering suppliermanagement, raw material procurement, manufacturing process, finished goodsinward as well as control over OEM products.The Company has, in strict compliance with the requirements of ISO9001:2008,compiled and maintained 40 types or so of quality control documentations, includingquality control manuals, program files, regulatory documents, quality control plans,authentication documents and records etc. By availing itself to all these procedures,the Company has enabled the effective implementation of the quality control systemand strengthened the monitoring of the quality control system.
2. Standard quality control process
The Company has constructed well-defined quality inspection mechanism, mainly
including:
(1) Control over the received raw materials, i.e. to inspect on the quality of thereceived raw material, parts and accessories. Moreover, in consideration ofparticular nature of the materials and under certain circumstances, the Companymay appoint third party quality inspectors to conduct quality inspection on samplebasis in compliance with GB2828.
(2) The Company has, in compliance with quality standards prescribed inISO9001:2008, formulated process quality inspection policies to incorporate allworkshops and production procedures into the total quality management regime.
(3) The quality control process on the finished goods comprises the inspection on thereceived finished goods and OEM products manufactured by third party(ies).
① Inspection on in-house made finished goods: The Company shall conduct 100%full inspection on the exterior appearance and function of all in-house made goods.
② Inspection on OEM products manufactured by third party(ies): All OEM third partymanufacturers are required by the Company to supply pre-batch productionsamples for comprehensive inspection by both the products quality controldepartment and craftsmanship departments. Trial production in small batchesshall not commence until the samples have passed the inspection. Finally thebatch production in large quantity shall commence once the trial productionproducts have passed the inspection by the products quality control departmentof the Company. Once the production is over, formal sign-off upon inspection shallbe conducted in compliance with pre-defined standards set by the Company. Onlythe finished goods that have met the quality standards can be received and laterdelivered by the Company.The quality inspectors’ team of the Company shall not only inspect, monitor andcontrol the quality of products along the industrial chain, but also conduct PDCAinspection on the whole quality inspection system itself so as to harness continuousimprovement in the quality of both in-house products and outsourced products as wellas the effectiveness of the quality control system itself. By adopting the foregoingquality assurance system, the Company is well ahead of its majority of its counterparts
within the sector in terms of product deficiency ratio.(IV) Testing capabilityAfter approximately one year of deliberation, the testing laboratory of M&G Stationeryhas been officially awarded the accreditation certificate of China NationalAccreditation Service for Conformity Assessment (CNAS), which indicates that thetesting capacity and testing results of and from the testing laboratory of M&GStationary has gained mutual multi-laterally acknowledgment by its counterparts in101 countries worldwide. As the unique accreditation body that issues the mostauthoritative certificates to inspection labs, CNAS also tops its counterparts in termsof timelines of review and demanding standards applied during review.Upon the acknowledgment from the CNAS, M&G Stationery has not only possessedthe testing capacity of the highest standards at home, but also will be eligible forconducting accreditation jobs and having access to bi-lateral and/or even multi-lateralinternational exchange with its overseas counterparts. The test report issued by M&GStationery will, within its capacity of accreditation, can be deemed internationallybinding and authoritative.
M&G Stationery has as always advocated research, development and innovation on itsown. The in-house testing laboratory is the critical success factor of quality assurancein terms of its technical capacity. What’s more, the testing laboratory is shoulderedwith the responsibilities of formulating applicable standards in a bid to usher Chinese
stationery products into a new era. M&G Stationery will remain committed toreinforcing the strength and capacity of the laboratory while optimizing the qualitycontrol regime on an ongoing basis. In addition to ensuring the quality of products, thelaboratory will help to drive further research, development, and innovation by takingadvantage of its cutting-edge testing capacity in pursuit of the goal of carving the nameof “China made refills” with more pride.(V) Workplace safetyIn order to ensure workplace health and effectively respond to unsolicited accidents,the Company has formulated such institutionalized workplace guidelines as “ControlPolicies on Workplace Safety”, “Policies on Workplace Safety Related Training”,“Control Policies on Fire Prevention Practice” and “Precautionary Plans againstTyphoon, Flood and Lightning Strike” etc. Moreover, the Company has taken suchinitiatives to prevent any potentially hazardous risks from impacting the workplacesafety as including pre-employment orientation on workplace safety, upgrade of suchfire-fighting and fire prevention devices as well as ad hoc or recurring inspection onworkplace safety etc.In 2019, there were no accidents in connection with workplace safety reportedpursuant to “Ordinance on the Investigation and Reporting of Workplace SafetyRelated Accidents” issued by the State Council.
VI. Employee Care- People Oriented, One for All and All for
One(I) Protection of lawful rights and interests of employeesIn strict compliance with the “Labor Law” and other relevant laws and regulations aswell as social security laws and bylaws, the Company covers old-age insurance, medicalinsurance, work injury insurance, unemployment insurance, maternity insurance aswell as housing provident funds, so as to provide a healthy and safe working and post-job environment for employees and effectively safeguard their lawful rights andinterests. In addition, the Company has formulated its control policies on workplacesafety. We conduct training with regard to safety to increase safety awareness, andregularly conduct safety inspection, fire-fighting rehearsals to identify and avoidpotential safety hazards..(II) Talent training and developmentGenerally, M&G Stationery aims to build a world-class team with highly ethical,dedicated, and high-quality employees. To support the rapid growth and effectiveoperation, the Company has built a mechanism for selecting and developing self-motivated and self-disciplined talents.M&G Stationery offers competitive remuneration package to its employees within theindustrial sector, and is also consistent in promoting and facilitating the promotion ofthose highly competent employees who match the culture of M&G Stationery and takethe ownership of responsibilities. By establishing multiple channels of vocationaldevelopment and forging an employees’ team of different skill levels, M&G Stationeryhas remained an enabler of outstanding professionally competent employees whilefocusing on the development of generic management talents, multi-savvymanagement talents as well as highly professional technocrats playing a leading role.
1. Development of talents
A slew of workplace training modes are available to employees of the Company,including new staff orientation, pre-employment training, workplace site training,special skills training and other forms of training whereby:
(1) Mechanism of training the potential executives will enable the managers of alllevels to receive trainings on the improvement of management skills so as to assistthe Company in forging an executive team boasting combined skill sets in businessoperation, management and leadership, who will in future direct the Company ina more institutionalized, orderly and effective way while reflecting the Company’sculture in terms of uniform management semantics, management style andmanagement philosophy.
(2) Mechanism of professional skills development will enable the backbones of themanufacturing team of M&G Stationery to receive complete vocational trainingand improve their professional acumen. By nurturing the corporate culture ofcoaching, the technical expertise handed down from years of businessdevelopment can be passed to less experienced employees, who will in futureform integral part of technocrats’ team boasting excellent professionalcompetence and official recognition.
(3) The “M&G Sailing to Future MT” project will enable new graduates to be
developed into a competent talent boasting the potential of future leaders, whowill be aligned to the development objectives of the Company with respect totheir strength. The operation of the MT project is very instrumental to attractingtalents who possess the potentials of the most competent future leaders tomaintain sustained competitive edge of M&G Stationery. Moreover, the MTproject will have strategic impact on the Company’s business whereby theCompany will be able to identify, develop and retain competent talents at lowercosts and spawn employees’ strong sense of affiliation to the Company arisingfrom reciprocation.
2. Vocational development
Diversified channels and tools of vocational development are available to employees
of the Company according to their job functions categorized into executive, functionaland technical gateways.(III) Caring for employees and corporate cultureCozy and joyful working environment and relaxation facilities are made available toeach employee of M&G Stationery. One can find within the Company’s premises suchfacilities as fabulous office buildings, book bars, gym, indoor basketball square,training classroom, employees’ dormitory, canteen etc. Moreover, the Company willregularly hold such inter-employees recreational activities as sports events, artfestivals, weekend parties etc. for employees to choose according to their personalinterest so as to enable employees to balance between work and life.
1. During the M&G sporting season, sizeable sports events are held amongst all M&Gemployees where the value of “joyful sporting activities make healthy life” isadvocated. By holding sports events amongst all employees, they will be given achance to put into full play their physical potential while interacting with otherteam members so as to highlight their team cohesion and collective sense of pride.
2. M&G art festivals enable employees to showcase their soft art-related skills. Artfestivals are held in-house to promote M&G culture while enriching the spare-time life of employees whereby employees are able to enhance their taste of artand culture and lubricate cross-department communication. Moreover, artfestival is a theatre at which M&G Stationery and soft talents of employees areshowcased to enhance cohesion.
3. As a vital form of holding recreational activities amongst employees, the M&G
Society is also a theatre for nurturing sense of ownership and affiliation ofemployees towards M&G Stationery. Summarily, employees are enabled toshowcase their alternative skills via such a wonderful theatre of M&G Society,which in turn helps to put forward M&G culture of harmony and health.
VII. Sincerity-Helping the Underprivileged and Transmitting
LoveM&G Stationery has, since the commencement of business, incorporated socialresponsibilities into the development of business activities and committed itself totapping on such public welfare activities as public education, charity events andfinancial support to poverty relief etc. Kicking off in September 2015 as endorsed byShanghai Charity Foundation, the special fund of M&G rainbow public welfare(hereinafter as “M&G rainbow charity”) financed a slew of public welfare projectsfeatured by the brand of M&G Stationery, including the “Gold Seeds Plan” to focus oncaring for juveniles whose parents are migrant workers, “Greatest Love under theAzure Sky” to draw public concern with such special group as those suffering fromautism, “M&G Hearts Plan” to care for in-house employees and “Rainbows are ComingPlan” to advocate charity and public welfare in collaboration with NGOs.
1. “Gold Seeds Plan” to finance the public education of the underprivilegedThe “Gold Seeds Plan” project v. 2.0 experienced a takeoff during the year of 2019when the charity activities purporting to promoting M&G brands take in new formsother than mere donation of supplies, including the donation of M&G rainbow creativeclassroom, renovation of village school campus etc.
(1) Donation of stationery kits: more than 11,000 stationery kits were distributed under the “GoldSeeds Plan” for the year to enable more than 500 teachers to receive indispensable pedagogictools.
(2) M&G rainbow creative
classroom plan: during the yearof 2019, M&G donated creativeclassrooms for 10 village schoolsand over 12,000 books, 50student’s desks, 300 student’schairs, 50 book cabinets andmore than 10 types of children’sfine art creative supplies coupledby both online and classroomtraining sessions for teachers.
(3) Financial assistance to the
underprivileged teachers andstudents: 50 teachers receivedfinancial aids amounting toRMB100, 000 and 128 studentswere awarded with scholarshipfor outstanding studentsamounting to RMB58,400 duringthe reporting year.
2. “Greatest Love under the Azure Sky” plan
Debut of charity project titled as “The Kids of the Stars: Coordinated by ShanghaiPromotion Center for City of Design, the articles hand made by the “Kids of the Stars”were on display at the 24th International Hand-made Articles Exhibition held in Milanof Italy in 2019 and applauded by international children and their parents. Moreover,during the 40th anniversary of Shanghai-Milan design education forum, the charitablestationery kits were exchanged between the representatives of the two cities as atoken of heralding a new era of friendship between Shanghai and Milan.
3. “M&G Heart Plan” to care for in-house employees
In 2019, “M&G Rainbow Charity” continued to financethe study support and scholarship of employees’ minoroffspring and provide financial aids to employeesuffering from serious diseases to resolve and relieve theproblems of further studies of the underprivilegedemployees’ kids and poverty arising from unsolicitedserious diseases contracted by in-house employees.Aggregate RMB140,000 of financial aids and charitablescholarship were disbursed to qualifying employees.Moreover, 6 charitable medicare service events wereaccessed by qualifying employees for the benefit ofapproximately 300 headcounts.
4. Charitable activities under “Rainbow is Coming Plan”
Initiated and sponsored by “M&G Rainbow Charity”, both the employees and businesspartners of the Company participated in various charitable activities to showcase thepositive energy of M&G peers.
(1) Three-hour charitable donation in petty cash simply from your fingertips: Acharitable activity was held by the Company in Songjiang District of Shanghaiamongst in-house employees where 300 employees donated petty cash to charitygroup and collect the token of loving hearts; (2) The journey of an egg: TheCompany officers and employee volunteers etc. launched a charitable walk withinShanghai to collect the token of loving hearts and conducted charitable auctionon charitable supplies at the final destiny 50 kilometers away from the startingpoint of the walk; (3) Village based education commissioner of Jack Ma plan wasattended by M&G staff to study the current status of village based education bysite visit to village school in collaboration with partners of Alibaba and withoutdisturbing the day-to-day full-time jobs. (4) Public welfare course: Employees, bytaking advantage of their specialties, voluntarily offered interesting arts coursesfor children in remote rural area.
In addition to launching various charitable activities, “M&G Rainbow Charity” donated50,000 pieces of oil pastel packed in charitable kits in collaboration with Shenzhen ONEFoundation during the year of 2019. “M&G Rainbow Charity” will, in continuedpartnership with Shenzhen ONE Foundation, extend partnership in donating charitablestudents’ bags and colored pens to reinforce the influence of M&G Brand. We firmlybelieve that we will be even more socially responsible in terms of charity with moreparties partnering with us.
VIII. Mutual Benefits-Adhering to Green and Sustainable
Development
(I) Awareness of environmental friendlinessBearing in mind the awareness of sustainable development, the Company highlyvalues and advocates green policy, making sure it is effectively implemented in itsbusiness activities. The Company endeavored to forge an environmentally friendlymanufacturing plant and took active part in and coordinated the environmentpreservation activities to respond to state strategy of sustainable development.Moreover, the Company advocated sustainable consumption to nurture the culture ofbeing green and endeavored to reduce the emission of carbon dioxide so as topreserve our mother earth.
1. Green production
The environmental design and the recurring use of environmentally friendly materialsare encouraged.
(1) Environmental design
① Simplified design: simplified parts, reduced mechanic procedures, reduced energyconsumption and lowered emission of carbon dioxide;
② No tinting in design cycle: application of color-free plastic while doing best toavoid the use of colored printing, reduced application of polluting color powderto preserve earth.
(2) Recurring use of
① Such consumables as replaceable refills;
② Ink and refill in large volume due to their extended durability to reduce depletion.
(3) Pollution-free material
① Breakthrough in the development of fully edible colored ink has significantlyenhanced the health and safety of the fine art supplies used by children.
② The development of lead-free materials and their application in making pen points
has ensured the health and safety of essential raw materials so as to contribute tothe course of environment protection.
③ With the smooth progress of R&D project on New Environmentally FriendlyMaterials for Writing Instrument enshrined under the state thirteenth five-yearplan, quite a few sub-topics have passed the research stage.Due to the increased demand for enhanced environmental friendliness and quality ofpens imposed by overseas nations, pens of enhanced environmental friendliness anddiversified functions are bound to be the darling of the market in future. Hence thepen manufacturing sector will no doubt call for the rollout of nascent environmentallyfriendly materials in making pens. With the progress in research and development oflead-free materials, the Company is endeavoring to enhance the overall technicality ofour pen manufacturing sector, which will be translated into increased profitability andadded value of products. In that case, we will be able to accelerate our speed oftransformation from a mass pen manufacturer to a premium pen manufacturer. Withthe commercialization of nascent lead-free materials, the Company will place lessreliance on non-environmental friendly raw materials in the upcoming years. In thatcase, any harm to human health arising from such heavy metal as lead will be broughtunder control and the volume of VOC emission will be reduced to reap both social andecological benefits.Moreover, botanic plants abound within the factory premises, indicating that theCompany highly values environment preservation. During the production process, theplastic raw granular edges did not produce solid waste or environmental pollutionafter going through smashing, re-granulating and recycling process; paperboard edgesfor package was recycled and sold to local recycle stations for recycled paper. TheCompany has not admixed any harmful recycling waste in its production, so no volatilegas that is harmful to the health of human beings was produced. Besides, domesticwastewater was disposed in accordance with sewage treatment regulations set by thelocal government.
2. Business activities under the green policies
The roles and responsibilities of each department of the Company in terms ofenvironment preservation are that:
(1) Production center shall be responsible for continuous control of energy
consumption, clean production as well conducting “6S” control procedures so asto maximize the usage of natural resources.
(2) R&D center shall be responsible for the research, development and marketing ofnascent energy-saving craftsmanship and technology.
(3) Equipment and engineering department shall be responsible for monitoring andadministering the consumption of energy by means of energy related datacollection, analysis and comparison with those provided by the production centerso as to help to improve craftsmanship. The Company shall, based upon the dataof energy consumption, work out proposal for energy saving and emissionreduction for further implementation.
(4) The infrastructure construction department shall be responsible for conductingenvironmental feasibility studies against new construction projects in a bid toensure that any resources to be inputted into the new project shall meet therequirements of environment preservation.The Company has from time to time instilled into employees the awareness ofenvironment protection and advocated the application to workplace. For example,employees are encouraged to turn off the light after work, use both sides of each sheetof paper as well as use voice-controlled and/or sensors energy saving facilities for thepurposes of energy saving. Moreover, the Company has also encouraged consumersat large to take steps to preserve environment by instilling into the public its awarenessof environment preservation via such media as newspapers, magazines and Internetand by holding onsite environment preservation events.
(II) Action for environment protectionIn 2019, the Company successfully acquired Axus Stationery (Shanghai) Company Ltd.(hereinafter as “Shanghai Axus”). As an enterprise awarded with the title of state levelhi-tech company, Shanghai Axus boasts prominent competitive edge within the sub-sector of wooden pencil and cutting edge advantage in technical research anddevelopment in segmented products with overseas distribution channels coveringover 80 countries and region(s). Shanghai Axus currently owns more than 50 patentscovering the formula of pencil lead, formula of paint coating, timber production andprocessing and equipment of pencil production and a domestically and internationallyprestigious wooden pencil brand named MARCO.Shanghai Axus has as always pursued the belief of understanding, cherishing andcaring trees, which has been translated into the production of wooden pencils underMARCO brand. It has been well acknowledged by the public that Shanghai Axus hasspared no effort promoting environment protection. Improvements have been madewith respect to craftsmanship of manufacturing MARCO pencils so as to mitigate theconsumption of resources and maximize the usage of readily available resourceswithout compromising the safety and quality of products.No tropical timber is applied during the production of MARCO pencils withoutappropriate authentication. Moreover, in order to reduce the consumption ofsatinwood (a type of scarce wood under state protection of the second level) duringthe production of pencils, Shanghai Axus trail blazed the industry sector through theintroduction of nascent craftsmanship whereby the Company could replace satinwoodwith fast-growing poplar in producing pencils and put the new technology intoproduction in 2009. Shanghai Axus has established three timber processing centers toharness the supply of raw material for pencils production adjacent to each of the threefast-growing poplar forest zones at Yili of Xinjiang Autonomous Region, ChangbaiMountain of Jilin Province and Siyang of Jiangsu Province. Shanghai Axus has fullytranslated the awareness of environment preservation into the entire industrial chainstarting from logging to the cultivation of forest.
IX. OutlookAs indicated in report of the 19th CPC National Congress, China’s economy has shiftedfrom a high-speed growth stage to a high-quality development stage with innovationas the main driver. Facing the consumption upgrade and the change in demand amongthe young generation, M&G Stationery will embrace these challenges, upgrade itsbranding, products and channels, as well as maintain momentum for high-qualitygrowth. At present, M&G Stationery is a pioneer on the innovation path in Chinesestationery industry, completed a stunning transformation from Made in China toCreated in China.Looking ahead, M&G Stationery will, as always, focus on premium quality and pursueconstant innovation in response to the changing demand of consumers. The Companywill also develop itself into a well recognized brand with global competitiveness andboost the healthy and sustainable development in the industry, helping a sustainableand high-quality growth in China.Strive for greatness through a small pen. As a socially responsible company in China,M&G Stationery has actively fulfilled social responsibilities since its beginning,combined social responsibilities with corporate development. During 2019, M&GStationery has made efforts to boost various patriotic activities, online and offline, like“Young Pioneers Gathering” and “Travel with the National Flag” and other events.Furthermore, its efforts to improve public welfare also involve education, charity,poverty alleviation and other fields. Looking forward in 2020, M&G Stationery willcontinue to fulfill our public value, as always care about and support the developmentin public interests, culture and education.