Shandong Chenming Paper (HKG:1812) has published an indicative announcement in respect of the receipt of subsidies and incentive funds.

On 12 December 2011 and 28 December 2011, the company received a document named "Shou Cai Yu Zhi Zi [2011] No. 1104 Notice Regarding Granting of Reform Subsidies to Chenming Group" from Financial Bureau of Shouguang City, and a document named "Shou Cai Yu Zhi [2011] No. 297 Notice Regarding Payment of Incentive Funds to Shandong Chenming Paper" from Financial Bureau of Shouguang City, which granted subsidies of RMB20 million and incentive funds of RMB32.843 billion respectively to the company for the development of enterprise reform as well as for supplementing the current capital.

According to the relevant requirements of Accounting Standards for Business Enterprises, the subsidies and incentive funds received by the company on this occasion will be taken as financial subsidy income and accounted for as non-operating income through profit or loss of the company in the fourth quarter of 2011.