股票代码：600346HENGLI PETROCHEMICAL2023 ANNUAL REPORT专注创新品质 创造美好生活Focus on innovative naturebuild a better life
Letter to shareholders, partners and employees
Dear shareholders, partners and employees:
Time is like one circle after another of annual rings, regardless of thickness, they are markers of ourgrowth process. Farewell to 2023, a year filled with both challenges and opportunities. Despite facingdifficulties and setbacks, we worked together to overcome various obstacles and successfully navigatedthrough them.The world is undergoing profound changes unseen in a century, with geopolitical competitionbecoming more intense, and history and human civilization standing at a crucial crossroads. Meanwhile,the global economy is still in the midst of recovery and reboot processes, while the external environmentremains fraught with uncertainty and risk. However, all the obstacles are just stepping stones for thesuccessful ones to move forward, and cannot deter the brave ones from forging ahead. As the oldChinese poem says, “Don't mind the sound of the wind whistling through the trees; why not walkleisurely while singing?” No matter what difficulties and challenges we face, even when barefoot orfacing strong enemies or arduous situations, we can maintain courage and determination, and persevereand move forward relentlessly. Hengli has consistently adhered to its core business while embracing apatriotic spirit rooted in industrial service to the nation. They have navigated through multiple economiccycles, continually moving forward. Now, Hengli maintains this unwavering commitment, staying true totheir original aspirations, and continues to advance towards deeper levels of industrial development.Mountains do not hinder our aspirations, and deep rivers do not prevent our actions.
This year, we have made progress day by day, regardless of the difficulties and challenges weencountered. The PTA project with an annual output of 5 million tons at Hengli (Huizhou) Industrial Parkhas been fully commissioned; the first phase of Hengli New Material Science and Technology Park andHengli Chemical Fiber's 400,000 tons per year intelligent industrial yarn production project are rapidlyadvancing and have been partially commissioned in stages. This year, we have worked diligently andinnovated with brilliant achievements. Hengli Chemical Fiber has won the China Patent ExcellenceAward and the "Jiangsu Science and Technology Award". Hengli New Materials has won the "CMAI SilverPrize for Outstanding Patents". Kanghui New Material's self-developed "ultra-thin carbon tape base film"became the first in China and unique in the industry, while its "solar back-sheet base film" receivedinternational authoritative certification. This year, we have made significant achievements through ourjourney. Hengli Chemical Fiber was recognized as a nationally certified "Industrial Product Green DesignDemonstration Enterprise". Hengli New Materials was awarded the title of a nationally recognized"Outstanding Scenario of Intelligent Manufacturing". Hengli Chemical was honored with the nationalaccolade of being a "Green Factory". Kanghui New Materials was designated as an "Intelligent Factory inLiaoning Province". This year, we have written the responsibility of a big enterprise with the heart of
"gratitude" and "responsibility". Hengli continues to be passionate about poverty alleviation, educationsupport, and disaster relief as well as other philanthropic projects. For those with determination,perseverance, and relentless effort, time will eventually reward them accordingly. In 2023, Hengliachieved revenue of 234.8 billion yuan, an increase of 5.61% year-on-year, net profit reached 6.9 billionyuan, an increase of 197.83% year-on-year. All business sectors of Hengli demonstrate strong vitality andresilience.
The achievement demonstrates a strong business resilience and development tenacity of ourcompany, the continuous efforts and hard work of the people at Hengyi during day and night, and thesupport from all shareholders and partners. Hengyi will continue to provide high dividends to investorsbased on reasonable management of the company's development, allowing everyone to share in thebenefits of the company's growth.The past is rich in splendor, and the future is even more promising.
A bright future awaits us to explore and cultivate. In pursuing our ideals, we must also focus onpractical operations. All of us need to deeply consider how to better save costs, to create benefits, tochange, to innovate, and to break through. Whether the road ahead of us is smooth or still fraught withdifficulties, we will face it with the determination and courage to win, moving forward without hesitation,never backing down. We will continue to answer the questions that are essential for our team andexplore ways to enhance the value of our team.
In the new year, we should always keep our original aspiration and be in sync with the country.
We will Fully implement the development philosophy of the Party Central Committee, acceleratethe construction of a new development pattern, promote high-quality development and balancedevelopment and security. We will also adhere to seeking progress while maintaining stability, usingprogress to maintain stability, establishing a new system before breaking down the old one, developingin a positive direction, and maintaining long-term stability. In the new year, we need to maintain ourdetermination and perseverance, working towards creating an enduring power that lasts for a century.We are going to continue to focus on one purpose, implement two major strategies, consolidate threefoundational pillars, specialize in four key industries, perfect six comprehensive systems, accelerateinnovation and development, increase innovative management, speed up technological advancement,and promote high-quality, steady progress in all Hengli operations. In the new year, we shouldcontinuously refine our professional skills and qualities, just like craftsmen carefully carving every detail,thus shaping a unique brand advantage. We are advocates for the craftsman's spirit, continuouslystudying and innovating to perfect our products. We are determined to take our products to the ultimatelevel, ensuring that their quality is outstanding, highlighting our advantage in quality, accumulating brandeffects, and consolidating our market position. In the new year, we will have unwavering faith, believingthat we can make new contributions in this era. We will have a clear goal and our steps must beconsistent. We need determination and courage - just as the old saying goes "If one does not defeat the
enemy, one will not return to their hometown." - to ensure that our work can proceed smoothly andachieve a good beginning. We need to fully leverage our comprehensive advantages, turn them into awinning edge in development, and break through time and space constraints to maximize benefits.
Behind every beautiful thing lies relentless effort and sacrifice.We believe that spring will eventually reward those who persevere and put forth effort in winter. Theiractions not only affect the present but also have a profound impact on the future. These actions are likeconstantly flickering, updating flames, which may disappear in an instant, yet contain immense power.We believe that despite the challenges and detours we may encounter in pursuit of our goals, theseexperiences are not meaningless, on the contrary, they are designed to help us grow and develop better,ultimately reaching higher targets. We believe that with unwavering faith and a spirit of persistence, onecan overcome obstacles and achieve one's goals. In the future, we will still choose to keep climbingupwards regardless of what difficulties and dangers we might face. The experiences of our struggles arearduous and challenging, but only through ultimate victory can our hearts be truly inspired.In the new year, let us ignite the fireworks of hope, hoist the sails of courage, and proceedunstoppable towards a vast blue horizon where we will meet again!
Chairman:
Important noticeI. The company's board of directors, board of supervisors, directors, supervisors, and seniormanagers guarantee that the content of the Annual report is true, accurate, and complete, andthat there are no false records, misleading statements, or major omissions, and assume individualand joint legal responsibilities.
II. All directors of the company attended the board meeting.
III. Zhonghui Certified Public Accountants (Special General Partnership) issued a standard unqualifiedaudit report for the company.
IV. Fan Hongwei, the person in charge of the company, Liu Xuefen, the person in charge of accounting
work, and Zheng Minxia, the person in charge of the accounting department (accountingsupervisor), declare that they guarantee the authenticity, accuracy and completeness of thefinancial report in the annual report.
V. Profit distribution plan for the reporting period approved by the board of directors or planfor capitalization of public reserve fundsThe company's profit distribution plan for 2023 is as follows: based on the total share capital(excluding the company's cash share repurchases) on the equity distribution registration date, acash dividend of 0.55 yuan per share (including tax) will be distributed to all shareholders.This profit distribution plan has been deliberated and approved at the nineteenth meeting ofthe ninth board of directors and the thirteenth meeting of the ninth board of supervisors of thecompany, and needs to be submitted to the company's 2023 annual general meeting ofshareholders for consideration.
VI. Disclaimer of Forward-Looking Statements
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Forward-looking descriptions such as future plans and development strategies involved in thisreport do not constitute the company's actual commitment to investors. Investors are requested tomaintain sufficient risk awareness and understand the differences between plans, forecasts andcommitments.
VII. Whether there is any non-operational occupation of funds by controlling shareholders and
other related partiesNo
VIII. Whether there is any external guarantee provided in violation of the prescribed decision-
making procedures
No
IX. Whether more than half of the directors cannot guarantee the authenticity, accuracy and
completeness of the annual report disclosed by the companyNo
X. Significant risk warning
During the reporting period, the company had no particularly significant risks that would havea substantial impact on production and operation.
XI. Others
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This annual report is prepared in Chinese and English respectively. If there is any discrepancybetween Chinese and English, the Chinese version shall prevail.
Content
Chapter 1 Definitions ...... 7
Chapter 2 Company Profile and Key Financial Indicators ...... 10
Chapter 3 Management Discussion and Analysis ...... 15
Chapter 4 Corporate Governance ...... 50
Chapter 5 Environmental and Social Responsibility ...... 70
Chapter 6 Important events ...... 83
Chapter 7 Share Changes and Shareholders ...... 93
Chapter 8 Information of Preferred Shares ...... 102
Chapter 9 Information of Bonds ...... 103
Chapter 10 Financial report ...... 106
| Reference File Directory | Financial statements signed and sealed by the legal representative, person in charge of accounting, and person in charge of the accounting organization (accounting supervisor). |
| Original audit report sealed by the accounting firm and signed and sealed by a certified public accountant. | |
| Original copies of all company documents and announcements publicly disclosed during the reporting period. |
Chapter 1 DefinitionsI. DefinitionIn this report, the terms listed below are defined as follows, unless the context otherwise implies:
| Definition of Frequently-Used Terms | ||
| Reporting Period | Refer to | From 1/1/2023 to 31/12/2023 |
| Company, the Company, or Hengli Petrochemical | Refer to | Hengli Petrochemical Co., Ltd. |
| CSRC | Refer to | China Securities Regulatory Commission |
| Ministry of Industry and Information Technology | Refer to | Ministry of Industry and Information Technology of the People’s Republic of China |
| SSE | Refer to | Shanghai Stock Exchange |
| 《Company Law》 | Refer to | 《Company Law of the People’s Republic of China》 |
| 《Securities Law》 | Refer to | 《Securities Law of the People’s Republic of China》 |
| 《Articles of Association》 | Refer to | 《Hengli Petrochemical Co., Ltd. Articles of Association》 |
| Hengli Group | Refer to | Hengli Group Co., Ltd., controlling shareholder of the listed company |
| Hailaide | Refer to | Hailaide International Investment Ltd., person acting-inconcert with controlling shareholder of the listed company |
| Tak Shing Li | Refer to | Tak Shing Li International Holdings Ltd., person acting-inconcert with controlling shareholder of the listed company |
| Hegao Investment | Refer to | Jiangsu Hegao Investment Co., Ltd., person acting-inconcert with controlling shareholder of the listed company |
| Hengneng Investment | Refer to | Hengneng Investment (Dalian) Co., Ltd., person acting-inconcert with controlling shareholder of the listed company |
| Hengfeng Investment | Refer to | Hengfeng Investment (Dalian) Co., Ltd., person acting-inconcert with controlling shareholder of the listed company |
| Hengli Chemical Fiber | Refer to | Jiangsu Hengli Chemical Fiber Co., Ltd., subsidiary to the listed company |
| Susheng Thermal Power | Refer to | Suzhou Susheng Thermal Power Co., Ltd., subsidiary to the Hengli Chemical Fiber, sub-subsidiary to the listed company |
| Hengke Advanced Materials | Refer to | Jiangsu Hengke Advanced Materials Co. Ltd., subsidiary to the Hengli Chemical Fiber, sub-subsidiary to the listed company |
| Deli Chemical Fiber | Refer to | Jiangsu Deli Chemical Fiber Co., Ltd., subsidiary to the Hengli Chemical Fiber, sub-subsidiary to the listed company |
| Kanghui New Material | Refer to | Kanghui New Material Technology Co., Ltd., subsidiary to the listed company |
| Kanghui Dalian New Material | Refer to | Kanghui Dalian New Material Technology Co., Ltd, subsidiary to the Kanghui New Material, sub-subsidiary to the listed company |
| Hengli Petrochemical Chemical | Refer to | Hengli Petrochemical (Dalian) Chemical Co., Ltd., subsidiary to the listed company |
| Hengli Investment | Refer to | Hengli Investment (Dalian) Co., Ltd., subsidiary to the listed company |
| Hengli Petrochemical (Dalian) | Refer to | Hengli Petrochemical (Dalian) Co., Ltd., subsidiary to the Hengneng Investment, sub-subsidiary to the listed company |
| Hengli Petrochemical (Huizhou) | Refer to | Hengli Petrochemical (Huizhou) Co., Ltd., subsidiary to the Hengneng Investment, sub-subsidiary to the listed company |
| Hengli Petrochemical Refining | Refer to | Hengli Petrochemical (Dalian) Refining Co., Ltd., subsidiary to the listed company |
| Crude Oil | Refer to | Crude oil is petroleum directly exploited from an oil well without being processed, and is a dark-brown or dark-green viscous liquid or semisolid flammable substance that is composed of various hydrocarbons. |
| Aromatic Hydrocarbon | Refer to | A hydrocarbon containing a benzene ring structure in its molecule。Aromatic hydrocarbons, mainly including benzene, methylbenzene, xylene, etc., are one of the most important basic raw materials for the production of petrochemicals。 |
| Ethylene | Refer to | A compound consisting of two carbon atoms and four hydrogen atoms. It is the basic chemical raw material of synthetic fiber, synthetic rubber, synthetic plastic- (polyethylene and polyvinyl chloride), synthetic ethanol (alcohol), and also used in manufacturing chloroethylene, styrene, ethylene oxide, acetic acid, acetaldehyde, ethanol, and explosives, etc. |
| Polyethylene | Refer to | A thermoplastic resin obtained by polymerization of Ethylene. Polyethylene is odorless, non-toxic, feels like wax, has excellent low temperature resistance, good chemical stability, and is resistant to most acids and alkalis. |
| POLYPROPYLENE (PP) | Refer to | A semi-crystalline synthetic resin material with strong acid and alkali resistance, excellent electrical insulation performance, harder and higher melting point than PE. |
| Styrene | Refer to | An organic compound, usually a colorless, aromatic liquid, used primarily in the production of plastics, resins, and rubber. |
| Butadiene | Refer to | An organic compound, a colorless gas with a special smell, the main raw material for the production of synthetic rubber. |
| PARAXYLENE (PX) | Refer to | A kind of Aromatic Hydrocarbon, a colorless transparent liquid, is one of the raw materials for the production of purified terephthalic acid (PTA), which is used to produce plastics, Polyester Fiber and films. |
| PURIFIED TEREPHTHALIC ACID (PTA) | Refer to | It is white crystal or powder at normal temperature, non-toxic, flammable, if mixed with air within a certain limit, it will burn when exposed to fire. |
| METHYLENE GLYCOL (MEG OR EG) | Refer to | Colorless, odorless, sweet, viscous liquid, mainly used in the production of Polyester Fiber, antifreeze, unsaturated polyester resin, lubricants, plasticizers, non-ionic surfactants and explosives. |
| BDO, 1, 4-Butanediol | Refer to | Colorless oily liquid, flammable, miscible with water. Soluble in methanol, ethanol, acetone, slightly soluble in ether. |
| Acetic Acid | Refer to | Organic compound, a colorless liquid with a pungent odor. It is the raw material for the manufacture of rayon, film, aspirin, etc. |
| Polyester, Polyester Chip or PET | Refer to | Polyethylene terephthalate (referred to as polyester) is a fiber-forming high polymer prepared from PTA and MEG as raw materials through transesterification or esterification and polycondensation reactions. Fiber-grade polyester chips are used to make polyester staple fiber and Polyester Filament Yarn (PFY), and film-grade chips are used to make various film products. |
| PBAT | Refer to | Polybutylene terephthalate-adipate, a petrochemical-based biodegradable plastic, has excellent biodegradability. It is very active in the research of biodegradable plastics and one of the best degradable materials in the market. |
| PBS | Refer to | Polybutylene succinate, polymerized from succinic acid and 1, 4-butanediol (BDO), has good thermal performance and mechanical processing performance, and is easily destroyed by various microorganisms in nature or animals and plants. Enzyme decomposes, metabolizes, and finally decomposes into carbon dioxide and water, which is a typical fully biodegradable material. |
| Polyester Fiber | Refer to | Synthetic fiber obtained by spinning polyester obtained by polycondensation of organic dibasic acid and dibasic alcohol. |
| Industrialized mass-produced Polyester Fiber is made of polyethylene terephthalate, and the trade name in China is polyester. It is the largest variety of synthetic fibers at present. | ||
| Polybutylene Terephthalate (PBT), PBT | Refer to | Also known as polytetramethylene terephthalate, it is a condensation polymer of terephthalic acid and 1, 4-butanediol. It can be obtained by polycondensation through transesterification or direct esterification. Together, PBT and PET are known as thermoplastic polyesters. |
| Biaxially-Oriented Polyethylene Terephthalate (BOPET), BOPET | Refer to | Biaxially-Oriented Polyethylene Terephthalate (BOPET) has the characteristics of high strength, good rigidity, transparency, high gloss, excellent wear resistance, folding resistance, pinhole resistance and tear resistance, etc.; heat shrinkage is extremely small and has good antistatic properties. |
| Denier (D) | Refer to | A fiber of 9, 000 meters in length weighs 1 gram and is called 1 Denier (D). |
| Polyester Filament Yarn (PFY) | Refer to | Filament with a length of more than one kilometer, the filament is wound into a ball. |
| PFY for Civil Use, Textile Yarn | Refer to | Polyester Filament Yarn (PFY) for apparel or home textiles. |
| PFY for Industrial Use, Industrial Yarn | Refer to | It is a polyester long fiber with high strength, high modulus and large denier used in industrial fields. |
| Differential Fiber | Refer to | Through chemical modification or physical deformation, mainly to improve the wearing performance, there are great innovations in technology or performance, or new fiber varieties with certain characteristics that are different from conventional varieties. |
| POY | Refer to | Polyester pre-oriented yarn, full name PRE-ORIENTED YARN or PARTIALLY ORIENTED YARN, is an incompletely drawn Polyester Filament Yarn (PFY) obtained by high-speed spinning with an orientation degree between the unoriented yarn and the drawn yarn. |
| DTY | Refer to | Stretched textured yarn, also known as polyester stretched yarn, full name DRAW TEXTURED YARN, is made of POY as raw yarn, stretched and false twisted, and often has a certain degree of elasticity and shrinkage. |
| FDY | Refer to | Full drawn yarn, also known as polyester drawn yarn, full name FULL DRAWN YARN, is a synthetic fiber filament further prepared by spinning and drawing process. The fiber has been fully drawn and can be directly used for textile processing. |
Chapter 2 Company Profile and Key Financial IndicatorsI. Company information
| Company's Chinese Name | Hengli Petrochemical Co., Ltd. |
| Abbreviation of Chinese Name | Hengli Petrochemical |
| Company's Foreign Name | HENGLI PETROCHEMICAL CO., LTD. |
| Abbreviation of Foreign Name | HLSH |
| Legal representative of the Company | Fan Hongwei |
II. Contacts and contact information
| Secretary of the Board | Securities Affairs Representative | |
| Name | Li Feng | Wang Shan, Duan Mengyuan |
| Contact address | Floor 31, Building B, Victoria Plaza, No. 52 Gangxing Road, Renmin Road Street, Zhongshan District, Dalian City, Liaoning Province | Floor 31, Building B, Victoria Plaza, No. 52 Gangxing Road, Renmin Road Street, Zhongshan District, Dalian City, Liaoning Province |
| Telephone | 0411-39865111 | 0411-39865111 |
| Fax | 0411-39901222 | 0411-39901222 |
| lifeng@hengli.com | wangshan@hengli.com duanmengyuan@hengli.com |
III. Basic information
| Place of registration of the Company | OSBL Project-Public Office Building, No. 298, Changsong Road, Lingang Industrial Zone, Changxing Island, Dalian City, Liaoning Province |
| Historical changes of the Company's place of registration address | When the company was established, the place of registration address was: No. 1 Zhoushuizi Square, Ganjingzi District, Dalian; On June 8, 2009, the place of registration was changed to: No. 18, Yinghui Road, Ganjingzi District, Dalian; On May 27, 2016, the place of registration was changed to: OSBL Project-Public Office Building, No. 298 Changsong Road, Lingang Industrial Zone, Changxing Island, Dalian City, Liaoning Province |
| Company office address | Floor 31, Building B, Victoria Plaza, No. 52 Gangxing Road, Renmin Road Street, Zhongshan District, Dalian City, Liaoning Province |
| Postal code of the Company's business address | 116001 |
| Company website | hengliinc.com |
| hlzq@hengli.com |
IV. Information disclosure and location
| Media name and website of the Company’s annual report disclosure | China Securities Journal, Shanghai Securities News, Securities Times, Securities Daily |
| Website of the stock exchange where the company discloses the annual report | www.sse.com.cn |
| The place where the Company's annual report is ready for inspection | Office of the Company's board of directors |
V. Company stock profile
| Company stock profile | ||||
| Stock category | Stock exchange | Stock name | Stock code | Stock abbreviation before change |
| A share | Shanghai Stock Exchange | Hengli Petrochemical | 600346 | Hengli Stock |
VI. Other relevant information
| Accounting firm engaged by the Company (Domestic) | Name | Zhonghui Certified Public Accountants (Special General Partnership) |
| Office address | Room 601, Building A, Hualian Times Building, No. 8 Xinye Road, Jianggan District, Hangzhou | |
| Name of signing accountant | Han Jian, Fang Sai |
VII. Key accounting data and financial indicators in the past three years(I) Key Accounting Data
Unit: ten thousand yuan Currency: RMB
| Key Accounting Data | 2023 | 2022 | Increase/decrease (%) | 2021 |
| Revenue from operations | 23, 479, 067.24 | 22, 232, 358.40 | 5.61 | 19, 797, 034.49 |
| Net profit attributable to shareholders of listed company | 690, 460.39 | 231, 830.32 | 197.83 | 1, 553, 107.67 |
| Net profit attributable to shareholders of listed company after deduction of non-recurring gains and losses | 599, 723.27 | 104, 528.51 | 473.74 | 1, 452, 069.80 |
| Net cash flows from operating activities | 2, 353, 579.01 | 2, 595, 397.08 | -9.32 | 1, 867, 017.37 |
| Key Accounting Data | 2023 | 2022 | Increase/decrease (%) | 2021 |
| Net assets attributable to shareholders of listed company | 5, 999, 240.10 | 5, 286, 254.36 | 13.49 | 5, 723, 138.30 |
| Total assets | 26, 059, 902.09 | 24, 143, 047.46 | 7.94 | 21, 029, 622.56 |
(II) Key Financial Indicators
| Key Accounting Data | 2023 | 2022 | Increase/decrease (%) | 2021 |
| Basic earnings per share (Yuan/Share) | 0.98 | 0.33 | 196.97 | 2.21 |
| Diluted earnings per share (Yuan/Share) | 0.98 | 0.33 | 196.97 | 2.21 |
| Basic earnings per share after deducting non-recurring gains and losses (Yuan/Share) | 0.85 | 0.15 | 466.67 | 2.07 |
| Weighted average return on equity | 12.24 | 4.30 | Increase by 7.94 | 30.07 |
| (%) | percentage points | |||
| Weighted average return on equity after deducting non-recurring gains and losses (%) | 10.63 | 1.94 | Increase by 8.69 percentage points | 28.11 |
Note of the key accounting data and financial indicators of the company in the prior three years atthe end of the reporting period
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VIII. Differences in accounting data under domestic accounting standards(I) Differences between net profit and net assets attributable to shareholders of listed companyin financial reports disclosed in accordance with International Accounting Standards andChinese accounting standards
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(II) Differences between Net profit and net assets attributable to shareholders of listed company
in financial reports disclosed in accordance with Overseas Accounting Standards and ChineseAccounting Standards
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(III) Note on differences in accounting standards between domestic and overseas:
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IX. Main financial data by quarter in 2023
Unit: ten-thousand-yuan Currency: RMB
| First quarter (January to March) | Second Quarter (April-June) | Third quarter (July-September) | Fourth quarter (October-December) | |
| Revenue from operations | 5, 614, 445.19 | 5, 328, 498.67 | 6, 368, 288.06 | 6, 167,835.32 |
| Net profit attributable to shareholders of listed company | 101, 969.79 | 202, 931.44 | 265, 151.32 | 120, 407.84 |
| Net profit attributable to shareholders of listed company after deducting non-recurring gains and losses | 58, 390.96 | 169, 108.31 | 270, 208.58 | 102, 015.42 |
| Net cash flows from operating activities | 1, 192, 172.54 | 21, 629.14 | 1, 181, 809.09 | -42, 031.76 |
Explanation of differences between quarterly data and disclosed periodic report data
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X. Non-recurring gains and losses items and amount
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Unit: yuan Currency: RMB
| Item of non-recurring gains and losses | 2023 | Not | 2022 | 2021 |
| e | ||||
| Gain or loss on disposal of non-current assets, Including the write-off portion of the provision for asset impairment | -4, 564, 909.89 | -8, 794, 093.17 | 1, 788, 290.01 | |
| Government subsidies included in the current profit or loss, except for government subsidies that are closely related to the company's normal business operations, comply with national policies and regulations, and are continuously enjoyed in accordance with certain standards or quantities | 638, 569, 056.98 | 1, 594, 250, 334.30 | 760, 570, 495.82 | |
| Except for the effective hedging business related to the Company's normal business operations, gains and losses on fair value changes arising from non-financial enterprises holding financial assets and financial liabilities, as well as gains and losses on disposal of financial assets and financial liabilities | 431, 893, 116.94 | -46, 001, 895.50 | 375, 366, 888.97 | |
| Gain on investment costs in acquisition of subsidiaries, associates and joint venture less than the fair value of identifiable net assets of the investees | 79, 415, 493.16 | |||
| Other non-operating income/(expenses), net | -25,075,119.31 | 10,695,487.35 | -5,096,728.57 | |
| Other gain or loss items met the definition of non-recurring item | 7,339,987.53 | 3,692,791.90 | 45,080,477.29 | |
| Less: Impact on income tax | 140,790,996.05 | 360,240,063.26 | 183,394,674.73 | |
| Impact on minority interests (after tax) | - | -16, 064, 003.29 | ||
| Total | 907,371,136.20 | 1,273,018,054.78 | 1,010,378,752.08 |
XI. Items measured at fair value
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Unit: ten-thousand-yuan Currency: RMB
| Item | Beginning balance | Closing balance | Changes in the period | Impact on profit for the current period |
| Debt instruments investments | 200.00 | 13, 126.55 | 12, 926.55 | - |
| Equity instrument investments | 4, 698.39 | 8, 102.24 | 3, 403.85 | -35.13 |
| Derivative financial assets | 49, 043.06 | 4, 865.22 | -44, 177.84 | 37, 090.17 |
| Wealth management products and structured deposits | 6, 500.00 | 3, 789.00 | -2, 711.00 | - |
| Receivable financing | 228, 727.12 | 417, 004.76 | 188, 277.64 | - |
| Derivative financial liabilities | 34, 602.07 | 19, 032.43 | -15, 569.64 | -18, 828.23 |
| Total | 323, 770.64 | 465, 920.20 | 142, 149.56 | 18, 226.81 |
XII. Others
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Chapter 3 Management Discussion and Analysis
I. Business discussion and analysisIn 2023, the global economy will enter a recovery process, with developing economies showingstrong performance and becoming an important force supporting the global economy's positivedevelopment. At the same time, global geopolitical conflicts continue to escalate, internationaltrade frictions continue, risks accumulate and challenges increase, energy and commodity pricesand major product prices continue to fall, economic recovery is weak, and economic growth stillfaces multiple risks and challenges. The International Monetary Fund predicts that the worldeconomy will grow at a rate of 3% in 2023."The basic trend of our country's economic recovery and long-term improvement has notchanged and will not change." Faced with complex and severe internal and external environment,China adheres to the general tone of "seeking progress while maintaining stability" and fully,accurately and comprehensively implements the new development concept. The main goals andtasks of economic and social development for the whole year have been successfully completed,and high-quality development has been solidly promoted. The overall economic recovery of ourcountry is good and the growth momentum continues to increase. In 2023, the gross domesticproduct exceeded 126 trillion yuan, with a year-on-year growth rate of 5.2%, ranking among the topin the world's major economies. The Central Economic Work Conference proposed that in 2024,economic work should adhere to the principle of seeking progress while maintaining stability,promoting stability through progress, and establishing first and then breaking down. We shouldactively advance in transforming the mode, adjusting the structure, improving quality, andincreasing efficiency, and constantly consolidate the foundation of stability and improvement. Weshould focus on expanding domestic demand, stimulating potential consumption, expandingprofitable investment, and forming a virtuous cycle of mutual promotion between consumption andinvestment. As the country implements a comprehensive package of policies and follow-upmeasures to stabilize the economy, the advantages of the super-large market and domestic demandpotential will continue to provide broad development space for the chemical industry. Promotingindustrial innovation through technological innovation and vigorously developing new productivitywill add new momentum to the steady growth of the chemical industry.Returning to the industry, due to the impact of external environment, macroeconomicslowdown, insufficient domestic market demand and other factors, the industry still faces greatdifficulties and challenges in 2023, showing a situation of "increasing production and sales withoutincreasing profits". The overall industry benefit in the whole year shows a trend of low in thebeginning and high in the end. From the perspective of sectors, the refining sector has achieveddouble growth in operating income and profit due to the low base in 2022. The chemical sector hasachieved double decline in operating income and profit due to the significant price decline of crudeoil, natural gas and most chemical products. According to the National Bureau of Statistics, therefining sector achieved operating income of 4.96 trillion yuan, with a 2.1% year-on-year growth;realized profit of 65.6 billion yuan, with a 192.3% year-on-year growth; the chemical sector achievedoperating income of 9.27 trillion yuan, with a 2.7% year-on-year reduction; realized profit of 486.26billion yuan, with a 31.2% year-on-year reduction.
Specifically, in the "aromatics-PTA-polyester chemical fiber" industrial chain, aromatics stilloccupy the vast majority of profits in the entire industrial chain, and the overall operation isrelatively strong throughout the year. Due to the impact of supply and demand, the processing feeof PTA is generally low. Polyester chemical fiber shows a positive trend, with production and salesbasically stable, the market relatively stable, and export volume continues to grow. The profitabilityis gradually restored. According to the National Bureau of Statistics, in 2023, the retail sales ofclothing, shoes and hats, and needle textile products of units above the national quota increased by
12.9% year-on-year, with a significant increase of 19.4 percentage points compared with 2022. With
the recovery of domestic demand in the downstream and the gradual recovery of export orders, theprice difference of various products in the polyester industrial chain is gradually improved.
| Figure 1 Average profit of POY150D/48F in East China (unit: yuan/ton) | Figure 2 Average profit of FDY150D/96F in East China (unit: yuan/ton) | |
| Data source: Wind Hengli Futures Research Institute | Data source: Wind Hengli Futures Research Institute |
In the olefin chemical industry chain, which important end-consumers are real estate andinfrastructure, carry a huge consumption volume. Affected by multiple factors, the deep adjustmenttrend of the real estate market has not changed. According to the National Bureau of Statistics, thenational real estate development investment in 2023 was 11.0913 trillion yuan, decrease 9.6% fromthe previous year (calculated on a comparable basis). Chemical products such as polyethylene,styrene, and polypropylene have difficulty in boosting prices, with narrowing price differences anddeclining gross margins. As the domestic economic recovery trend continues to improve, measuressuch as "actively and steadily resolving real estate risks" and "promoting the exchange of oldconsumer goods for new ones" are gradually implemented, which are expected to support thedemand for upstream chemical products and drive the gradual repair of product price differences.Enterprises with integrated whole industry chain can achieve self-sufficiency in raw materials,and can absorb the boom and bust of intermediate chemicals within the enterprise, which has arelatively considerable cost advantage and risk resistance ability. The synergy of the whole industrychain plays a core role in smoothing fluctuations, resisting risks, and stabilizing profits. The basicsupport of the domestic super-large-scale market and the continuous empowerment of high-qualityindustry development also provide enterprises with a broad space for maneuvering and sustaineddevelopment momentum in response to increasing macroeconomic uncertainty.2024 is a crucial year for achieving the goals and tasks of the 14th Five-Year Plan. "High-qualitydevelopment is the primary task in the comprehensive construction of a modern socialist country."As an important pillar industry of the national economy, the petrochemical industry is also aresource-based energy industry and an important supporting industry for basic industries. In theprocess of accelerating the transition to high-quality development, technological innovation, digitalupgrading, green and low-carbon transformation, and other measures will be taken to acceleratethe cultivation and expansion of new productivity, bringing new development opportunities forstructural optimization and sustainable transformation and upgrading of the industrial structure.With the continuous promotion of the "dual carbon" strategy, the rapid development ofstrategic emerging industries such as new energy vehicles, new generation information technology,energy conservation and environmental protection, smart grid, 3D printing, green and low-carbonconsumption transformation, and downstream industry demand, the demand for high-performanceresins, high-performance synthetic rubber, high-performance fibers, functional membranematerials, degradable materials, high-end specialty chemicals, electronic chemicals and other newchemical materials continues to grow. Leading enterprises in the industry, represented by Hengli,have implemented the vertical and horizontal integration development of the entire industrial chain.Relying on the rich basic chemical raw material warehouse of the refining and chemical integration
| 元/吨 | -600-400-20002004006008001,0001,20020192020202120222023元/吨 |
project, they have rapidly extended their layout to downstream new material fields such as high-end polyolefin, lithium battery materials, engineering plastics, petroleum-based degradable plastics,etc., strengthening the efforts to extend, supplement and strengthen the chain, improving the levelof product refinement, specialization and serialization, enhancing product added value, enrichingproduct supply varieties, and cultivating new driving forces for enterprise development.
In recent years, the company has closely focused on the development of innovation chain withthe transformation of national industrial strategic, and on the layout of the industrial chain aroundthe innovation chain, focusing on "supplementing and strengthening the chain" and "research anddevelopment innovation". Based on the unique advantages of the "oil, coal, and chemical" deepintegration of the "big chemical platform" in the industry, relying on the fine chemical park project,it has accelerated the construction of high-end fine chemical industry clusters, further expanded theindustrial support and development foundation role of high-end chemical raw materials, andcontinuously consolidated the platform role and operational efficiency of upstream "big chemical"industries. It actively targets the downstream new material application demand generated by theintegration of new consumption, new energy and new intelligent manufacturing, consolidates theadvantages of traditional markets, benchmarks key new material breakthrough areas, and focuseson creating PBS/PBAT degradable materials, functional polyester materials, high-performance resinmaterials, high-end fiber materials, new energy materials, etc. It deeply anchors the high-techbarriers and high-value-added high-growth tracks, actively builds the "Dalian Changxing Island" finechemical and new material industry chain ecosystem, and strives to build a platform-based chemicalnew material research and development and manufacturing industry chain leading enterprise. OnJuly 24, 2023, the US Chemical and Engineering News (C&EN) released the list of the top 50 globalchemical companies for 2023, and Hengli Petrochemical was listed for the fourth consecutive year,ranking 11th on the list.
During the reporting period, facing the complex and volatile market environment, under thecorrect leadership of the company's board of directors, the company's management made plansaccording to the situation, acted in response to the situation, and followed the trend. Theymaintained strategic focus, made steady progress, and went all out to take the high-qualitydevelopment path. They continued to strengthen their strengths, fill their weaknesses, and cultivatenew strengths. They successfully completed the annual business performance goals and keydevelopment indicators, and achieved phased results in all aspects of work. In 2023, the company
achieved operating revenue of 234.791 billion yuan, an increase of 5.61% year-on-year; net profitattributable to shareholders of listed companies was 6.905 billion yuan, an increase of 197.83%year-on-year. The company's profitability improved significantly compared to the previous period.
During the reporting period, the company's key work is as follows:
I.We will implement cost reduction and efficiency improvement, strengthen the potential ofthe entire industry chain, and constantly consolidate the advantage of cost moat.As a "new productivity" in the domestic refining and chemical industry, the core advantage ofprivate large-scale refining and chemical industry lies mainly in the cost leadership of super-largerefinery units and the product management of "oil for oil, olefin for olefin, and aromatic foraromatic". The company has built industry benchmarks and achieved industrial excellence on thisbasis, continuously building the cost moat advantage of core competitiveness in the industry,implementing continuous cost improvement and endogenous growth based on internal costreduction and efficiency improvement. This has also become one of the key driving forces for HengliPetrochemical to achieve performance recovery last year.As the earliest "private large-scale refining and chemical" enterprise in China to put intoproduction, the scale of super-large plants, the synergy of integrated layout, and the aggregation ofupstream and downstream production capacity have created a synergistic advantage, which is themain support for Hengli Petrochemical's "cost moat". Hengli Petrochemical was the first in China toimplement the concept of "component refining and molecular refining", selecting internationaladvanced technical standards, adopting world-leading and maturely applied process packages, andusing the best professional green environmental protection sewage treatment technology in theworld. The equipment selection requirements are significantly higher than the level of refineries inthe same period, and the energy and material consumption, green environmental protection,intrinsic safety, and long-term operation of the plant are effectively guaranteed.During the reporting period, the company made full use of its operational advantages of"quality, cost, rapid response, and maximizing profits" as well as its flexible, efficient, and flexiblemechanism characteristics to actively adapt to market conditions and quickly respond to marketchanges. The company strengthened resource planning, optimized production and salescoordination, and timely combined with fluctuations in raw material prices and changes in marketdemand to flexibly adjust raw materials, equipment, and product structures, giving priority toincreasing production of high-benefit products, achieving "oil when oil is suitable, olefin when olefinis suitable, aromatic when aromatic is suitable, and chemical when chemical is suitable". Thecompany made every effort to ensure efficient collaborative operation of major industrial parks inthe refining, petrochemical, chemical, and new material industries, maintain a balance betweenproduction and sales, smooth operation, and ensure the company's high-quality, endogenousgrowth with benefits.From the perspective of integrated production capacity layout, the listed company has a unique"oil, coal, chemical" deep integration platform in the industry. For the first time in the industry, thefour major production capacity clusters of 20 million tons of refining, 5 million tons of coal chemical,
1.5 million tons of ethylene and 12 million tons of PTA are arranged in the same industrial park.Various large-scale oil, coal and chemical plants are coupled through pipeline integration in the parkto achieve upstream and downstream connectivity, significantly optimizing the redundanttransportation, storage and cooling processes, saving a lot of intermediate operating costs andlogistics transportation costs. At the same time, the company has built the largest domestic coal-to-hydrogen plant in the park, which can supply 250,000 tons of scarce pure hydrogen raw materialsat low cost every year. It has also built a high-power self-contained power plant with a total capacityof 520MW, which is leading in energy efficiency in the industry. It provides a large amount of cheapelectricity and steam at all levels for refineries. It has self-operated two 300,000-ton crude oilterminals, 6 million tons of self-contained crude oil tank farms, and other various complete rawmaterial, finished product terminals, tank farms, storage and other public works facilities,significantly reducing various production and operating costs.
The meticulous management of daily operations has led to continuous improvements in energyand material consumption, as well as sustainable cost-effectiveness. The company focuses onreducing costs in key elements, strengthening research and judgment on the market trend of rawmaterials, and continuously improving its raw material procurement capabilities through domesticand international resource integration, strategic and opportunistic combination, and othermeasures. It also reasonably controls raw material inventory and reduces financial costs. In termsof equipment management, it strengthens daily maintenance and repair of equipment, implementsregular monitoring and testing, and conducts systematic analysis and evaluation to timely identifyand eliminate potential risks, ensuring the long-term stable operation of production equipment.Through continuous optimization and innovation of product technology, upgrading andreconstruction of equipment, repairing old and utilizing waste, optimizing evaluation indicators, andother measures, the company achieves product quality improvement, cost control, and benefitincrease. Starting from the second half of 2024, the company will basically end the peak period ofinvestment construction and capital expenditure, and the focus of subsequent operations will bemore on "optimizing operations, reducing liabilities, and strengthening dividends" under refinedcost control, continuing to build a value-added "growth + return" listed company.II.Relying on the "big chemical industry" platform, the company has implemented theexpansion of fine chemical industry and new material industry,high efficiency opens up newtracks and spaces.The construction of major projects is the "stabilizer" and "ballast" for the high-qualitydevelopment of enterprises. In recent years, relying on the "big chemical industry" platform, thecompany has continued to empower and develop new materials for many years, accelerating thelayout of downstream high-end chemical new material production capacity, realizing the"optimization, extension, and supplement" of the industry chain, optimizing the company'sindustrial structure, and enhancing the company's comprehensive competitiveness. After nearlythree years of careful organization, hard work, and efficient planning, the company's major projectswill gradually enter the peak production period in the first half of this year, and the company willalso achieve a significant increase in the production capacity of downstream chemical new materialproducts including high-end fine chemicals, optical films, electronic films, lithium battery separators,battery electrolytes, composite current collector base films, and photovoltaic backplane base films.During the reporting period, the progress of the company's key projects is as follows:
——The 1.6 million tons/year high-performance resin and new material project is expected tobe fully operational in the second quarter of 2024. As an important carrier for implementing thecompany's development strategy of "improving the upstream and strengthening the downstream"and accelerating the upgrade to the "platform + new material" development model, this finechemical project focuses on the downstream extension of the C2 industrial chain and theimprovement of coal chemical related production capacity, mainly including bisphenol A,polycarbonate, electronic grade DMC, propylene glycol, ethanolamine, ethylene amine,polyoxymethylene, acetic acid and other products, achieving efficient penetration and deepconnection from raw material supply to process technology to consumer market, reducing theproportion of bulk chemical products in the company, improving the output of fine chemicals andnew material products, further consolidating the collaborative depth and industrial thickness of thelisted company's chemical new material business sector, and optimizing market coverage.
——Functional film project: The 12-line functional film project at the Suzhou Fenhu base hasbeen put into production one after another, and the other 12-line functional film project at theNantong base is also under construction in full swing. The project is expected to be put intoproduction in the second half of 2024. The full production of the Fenhu base and Nantong base willlay a solid foundation for Kanghui New Materials to become the world's largest functional filmmaterial enterprise with the largest production capacity and the most advanced technology.
——Lithium battery separator project: Yingkou base's annual output of super-strong wetlithium battery separator 440 million square meters’ project (including 220 million square meters
of lithium battery separator coating film), after one year, the first production line was fullycompleted in early June 2023, and the company officially entered the lithium battery separator field,achieving an important layout in the fields of new energy and new materials. The project is expectedto reach its production capacity by the first half of 2024.The Nantong factory has an annual output of 1.2 billion square meters of wet lithium batteryseparators and 600 million square meters of dry lithium battery separators. The project has alreadybeen put into trial production on one production line, which is expected to reach its productioncapacity in the first half of 2024. The remaining production lines are expected to start trialproduction in succession in 2024.—— The launch of new PTA production capacity further consolidates the leading edge ofupstream production capacity: Hengli (Huizhou) Industrial Park's 5 million tons/year PTA project hasachieved full production. The project adopts industry-leading green and intelligent PTA productiontechnology, focusing on the construction of two 2.5 million tons/year PTA plants and auxiliaryfacilities, with characteristics of "large investment scale, strong production capacity, high processlevel, and low energy consumption". It will further consolidate the company's scale and costadvantages in the PTA field.III. Innovation leads, intelligent manufacturing upgrades, and high standards create newadvantages and new driving forces.The company always adheres to the strategy of "innovation-driven development",continuously promotes the deep integration of innovation chain and industrial chain, and leads theaccelerated development of technological innovation in the company. The company adheres to thedevelopment ideas of high technology, marketization, sustainability and greening, and hasestablished a technology innovation system covering the entire industrial chain. By continuouslydeepening the cooperation of industry, academia and research, forming an alliance of industry,academia and research, the company increases its investment in research and development,strengthens the protection of intellectual property rights, cultivates innovative talent teams, andovercomes many "choke point" technologies. It has obtained a large number of international anddomestic core patents and effectively promoted the transformation, application and production ofscientific and technological achievements. During the reporting period, the company's investmentin research and development was 1.371 billion yuan, a year-on-year increase of 15.73%. As ofDecember 31, 2023, the company has obtained 1,331 domestic and foreign patent licenses,including more than 200 authorized patents in 2023.Leveraging the company's meticulously built research and development platform over theyears, and focusing on the development path of market differentiation, high-end technology, andbusiness integration, the company has concentrated its advantageous resources and achievedbreakthroughs in the research and development of cutting-edge technologies and products fordifferentiated functional materials. For instance, the "high uniformity super soft polyester fiber"product's overall technology is at the leading level in China, filling a domestic gap. Kanghui NewMaterials has successfully developed and mass-produced a 3.9-micron ultra-thin carbon ribbon basefilm with an annual production capacity of 6,000 tons, becoming the first and only domesticmanufacturer using the melt direct-drawing method to produce 3.9-micron ultra-thin films. HengliChemical Fiber has developed three new products, including "elastic cotton-like polyester filament","non-dyeable gray polyester filament", and "low shrinkage flame retardant polyester industrialyarn", which have passed provincial-level appraisal. The first two of these products are at the leadinglevel in China and are pioneering in the industry. During the reporting period, Hengli ChemicalFiber's invention patent for "a method for improving the quality of polyester industrial yarn" wonthe China Patent Excellence Award; Hengke New Materials' invention patent for "a method forpreparing cationic dyeable polyester fiber" won the Silver Award for Excellent Patents of the ChinaNational Textile and Apparel Council; Kanghui New Materials' solar backplane base film obtainedthe German TüV Rhine certificate, marking the product's performance and quality have beenrecognized by international authorities. Hengke New Materials and Kanghui New Materials have
been recognized as "National Intellectual Property Advantage Enterprises", becoming anothermajor honor after Hengli Chemical Fiber was recognized as a "National Intellectual PropertyDemonstration Enterprise".Continuously deepening the "transformation of intelligence and data", upgrading intelligentmanufacturing, and striving to achieve lean production. By deeply integrating intelligent innovationand data management, the company has achieved digital control of the entire process ofmanufacturing resources, production processes, quality tracking, and production operations,effectively improving quality control levels, reducing production costs, and improving productionefficiency. For example, Hengke New Materials vigorously promotes the deep integration of digitaltechnology and the real economy, making full use of information systems such as DeltaV-DCSdistributed control system, ERP, MES, WMS, etc., accelerating the construction of data assets,mining data value, providing strong data support for benefit optimization, and improving productquality and production efficiency. For example, Kanghui Dalian New Materials' newly built PBSbiodegradable material project adopts digital production workshop standards for the entire process,with automation, digitalization, and intelligent equipment accounting for over 99% of the workshop,all of which are connected to achieve collaborative operations.During the reporting period, Hengke New Materials made significant achievements inpromoting the deep integration of industrialization and informatization, and was awarded the AAA-level two-level integration management system evaluation certificate. Hengke New Materials hasbeen awarded the "National Excellent Demonstration Scenario of Intelligent Manufacturing","Advanced Enterprise of Intelligent Manufacturing in Chemical Fiber Industry", "IntelligentManufacturing Demonstration Factory in Jiangsu Province" and other honors; Kanghui NewMaterials was awarded the "Intelligent Factory in Liaoning Province".IV. Build a solid foundation, green and low-carbon, and achieve sustainable leadership in theindustry with high quality.Based on high-starting point design planning, construction and operation, and detailmanagement, implementing high-standard intrinsic safety operation and green low-carbonoperation is the lifeline, benefit line, and scenic line to promote the stable, efficient, and sustainabledevelopment of listed companies.Firmly and steadily, we will build a strong safety production line. The company adheres to theprinciple of "safety first, prevention first, comprehensive management", adheres to systematicthinking, and consistently implements it to improve the level of intrinsic safety and build a strongsafety production line. We will fully implement the safety and environmental protectionresponsibility system, implement the HSE management objectives one by one, and sign the safetyproduction target responsibility agreement with all employees. We will continue to improve andperfect the safety standardization and HSE system management work, strengthen safety riskassessment, carry out in-depth investigation and management of hidden dangers, organize regularsafety and environmental protection training, fire emergency evacuation drills, etc., to ensure thestable situation of the company's safety production.Green and low-carbon development, highlighting the distinctive background of high-qualitydevelopment. "Green development is the foundation of high-quality development, and new-qualityproductivity itself is green productivity." The company fully implements the concept of "greendevelopment, circular development, and low-carbon development across the entire industrialchain", integrating green development into all aspects of project design, process package selection,equipment procurement, installation, and operation to achieve essential energy conservation. Itcontinues to promote energy conservation and consumption reduction. Through measures such assystem optimization and transformation, optimizing production processes, and fine management,the company makes full use of the joint efforts of upstream and downstream processes, mutualsupply of materials, and energy coupling across the entire industrial chain to rationally utilizeresources and promote clean production, thereby improving resource utilization efficiency andachieving energy conservation and sustainable development throughout the entire production
process. During the reporting period, Hengli Refining and Chemical implemented the PSA hydrogendeep utilization and improvement project to recover hydrogen-rich gas produced by two sets ofethylene and coal-to-hydrogen plants, increasing hydrogen production and effectively enhancingmaterial value. In order to fully recover and utilize oxygen-containing waste gas from ethylene glycolplants, Hengli Chemical introduced oxygen-containing waste gas discharged into the flare systemand TO furnace for combustion treatment into the styrene plant steam superheater for combustion,reducing natural gas consumption and saving fuel. After being put into operation, it reduced naturalgas consumption by 0.56 t/h, saving 4,704 tons of natural gas annually, equivalent to 7,940 tons ofstandard coal. The company vigorously promoted the construction of photovoltaic projects. After thefourth phase of photovoltaic projects were put into operation, the fifth phase of photovoltaicprojects of Hengke New Materials was put into operation in 2023, with a capacity of 12.5 MW andan area of nearly 70,000 square meters, achieving an annual power generation capacity of 13.44million kWh. The total installed capacity after operation is approximately 76.5 MW. Kanghui NewMaterials utilized idle resources such as factory roofs and parking sheds to integrate photovoltaicpower generation and buildings according to local conditions, achieving "effective utilization ofresources". Currently, the first and second phases of distributed photovoltaic power generationprojects have been completed and put into operation, with a power generation capacity of 30.4MW, making it the largest single-unit distributed photovoltaic project in Liaoning Province. After thefirst and second phases of projects were put into operation, the current average daily powergeneration capacity is 160,000 kWh. It is estimated that standard coal can be saved by 11,646.67tons per year, reducing carbon dioxide emissions by 31,083.24 tons.During the reporting period, the Ministry of Industry and Information Technology and otheragencies jointly released the "List of Key Water-Using Enterprises and Water Efficiency Leaders inParks in 2022" and the "List of Energy Efficiency 'Leaders' Enterprises in Key Energy-Using Industriesin 2022". Hengli Refining and Chemicals and Hengli Chemicals achieved "double leadership", andHengli Petrochemical (Dalian) was awarded the title of "Energy Efficiency Leader". Hengke NewMaterials was awarded the title of "Leading Enterprise in Green Development in 2023" jointly issuedby the Jiangsu Provincial Department of Ecology and Environment and the Jiangsu ProvincialFederation of Industry and Commerce. Five companies under the company have been awarded thetitle of "National Green Factory".The company is committed to the future development trend of "carbon neutrality" and willcontinue to transition to a green and low-carbon development path. It will focus on high-endmanufacturing and continue to promote enterprise innovation, intelligence, and greendevelopment. It will also make great efforts in environmental, social, and governanceresponsibilities, and embark on a high-quality, green and sustainable development path thatemphasizes both industrial development and ecological environmental protection, as well aseconomic and social benefits.
V. Take the initiative to strengthen returns and promote value creation andrealization in multiple dimensionsActively promote the spin-off and listing of Kanghui New Material. In order to optimize thebusiness structure and focus on the development of the main business, the company decided tospin off Kanghui New Material and achieve listing through restructuring. Through the spin-off andlisting, Kanghui New Material will achieve direct connection with the capital market, give play to thedirect financing function and advantages of the capital market, broaden financing channels, improvefinancing flexibility, and enhance financing efficiency, thereby effectively reducing capital costs andproviding sufficient financial support for Kanghui New Material to enhance its marketcompetitiveness. At the same time, it is beneficial for the capital market to rationally evaluatedifferent businesses of the company, so that the value of the company's high-quality assets can befully reflected in the capital market, thereby improving the overall market value of the company andmaximizing the interests of all shareholders. Up to now, the relevant work is being carried out in anorderly manner.
The company attaches great importance to reasonable investment returns for investors. Sinceits restructuring and listing, the company has always maintained a high proportion of cash dividends,and has maintained continuity and stability in profit distribution while taking into accountsustainable development. After consideration by the board of directors, the company's profitdistribution plan for 2023 is: cash dividends of 0.55 yuan per share (including tax). The amount ofcash dividends accounts for 56.07% of the net profit attributable to shareholders of the listedcompany in the consolidated statement. This matter still needs to be considered by theshareholders' meeting. After completing this dividend, the company has accumulated dividends of
22.371 billion yuan since its restructuring and listing in 2016, accounting for 41.08% of theaccumulated net profit attributable to shareholders, which significantly exceeds the matching fundsraised by the company from the capital market.
In the future, as the projects under construction are completed and put into operation, thecompany will combine the actual business situation and development plan, balance the dynamicbalance of business development, performance growth and shareholder returns, continue toimprove the "long-term, stable and sustainable" shareholder value return mechanism, and allowshareholders to fully enjoy the company's development achievements and enhance the sense ofgain of the majority of investors.
II. Industry situation of the company during the reporting period
See the relevant content of "I. Discussion and Analysis of Business Situation " in this section fordetails.
III. Business situation of the company during the reporting period
The company's main business includes the production, research and development, and salesof materials products in the fields of refining, aromatics, olefins, basic chemicals, fine chemicals, andvarious downstream application areas from "one drop of oil to everything". At the same time,relying on the upstream "oil, coal, and chemical" integrated large chemical platform, it deeplyanchors the rigid consumer market of "clothing, food, housing, transportation, and use" as well asthe high-tech barrier and high-value-added high-growth new material track. It continuouslystrengthens its internal integration advantages, cost moats, and refined management and control,and continues to build a value-growth listed enterprise of "platform + new materials"
The company has 20 million tons/year crude oil processing capacity, 5 million tons/year coalprocessing capacity, 1.5 million tons/year ethylene plant, with an annual production capacity of 5.2million tons of PX and 850,000 tons of acetic acid in the upstream. It has 16.6 million tons of PTAproduction capacity and 1.8 million tons of fiber-grade ethylene glycol production capacity in themidstream. The self-produced PTA and ethylene glycol products are partially used for self-consumption, while the rest are sold. The downstream chemical new material products are rich invariety and complete in specifications, targeting the mid-to-high-end market demand, coveringpolyester and chemical new material products such as civilian polyester filament, industrialpolyester filament, BOPET, PBT, PBS/PBAT, etc., which are applied in textile, medicine, automotiveindustry, environmental protection and new energy, electronic and electrical, photovoltaic industry,optical equipment and other large-scale, differentiated and high value-added industrialmanufacturing and civilian consumption fields.
With the full production of world-class refining and ethylene key production capacity and thecontinuous consolidation and expansion of the advantages of the entire industrial chain in theupstream of the company, the company has accelerated the development of a "big chemical"platform supporting and raw material supporting conditions for the downstream high-end newmaterial market, which is long-term, deep-going and refined. Based on internal technology researchand development and external industrial cooperation, the company continues to extend the valuechain of chemical materials and accelerates its entry into the market demand for "domestic
substitution" and "rigid consumption" represented by advanced manufacturing, new energy, newconsumption, new materials and other end-use demand.
IV. Analysis of Core Competitiveness in Reporting Period
√适用 □不适用
1. Strategic Leadership in Full Industry Chain Development
The company is the industry leader in implementing the strategy of full industry chaindevelopment for polyester new materials in China. It actively promotes the coordinated andbalanced development of various business segments and vigorously expands high-end capacity inthe upstream and downstream. The company is committed to building a world-class integratedplatform for the entire industry chain, from "crude oil-aromatics, olefins-PTA, ethylene glycol-polyester-civil filament, industrial filament, films, plastics." The Hengli Integrated Refining andPetrochemical Project with an annual capacity of 20 million tons and the Ethylene Project with acapacity of 1.5 million tons have been fully put into operation, achieving strategic breakthroughs inthe refining, aromatics, and olefins segments. The company has become the first enterprise in theindustry to achieve integrated operation and development of the entire industry chain from "crudeoil-aromatics, olefins-PTA, ethylene glycol-polyester new materials." With the sequentialconstruction and operation of newly built capacities, such as PTA, chemical new materials,PBS/PBAT biodegradable new materials, the company continuously upgrades and optimizes itsindustrial model, consolidates and expands the advantages of each link's production capacity,promotes the quantitative change in business scale, and the qualitative change in business structure.It establishes a strategic leadership advantage in adapting to the high-quality competitive situationof the industry's full industry chain collaboration, production capacity structure quality, equipmentscale cost, technological process accumulation, project start-up speed, and the development oflisted platforms.
2. Comprehensive Operation Advantage of Scale, Technology, and Support
The company continuously introduces internationally leading production equipment andmature technology packages, digests, absorbs, and utilizes them, and continuously innovates andimproves technology and processes. It has established a high-quality and efficient productioncapacity structure and supporting public engineering in the upstream, midstream, and downstreamof the polyester new materials industry chain, characterized by "large-scale equipment, large-scaleproduction capacity, integrated structure, advanced technology, green and environmentalprotection, and comprehensive supporting facilities." Whether it is individual equipment, totalproduction capacity, or production processes, the company is at the industry's leading processingscale and technological level. This ensures the company's advantages in unit investment cost,material and energy consumption saving, unit processing cost, product delivery cycle, productquality, and diversification. Moreover, the company has the most comprehensive supportingcapabilities in the industry, including power supply, energy, ports, terminals, tank farms, storage,and transportation. It stands out in terms of comprehensive cost savings, service qualityperformance, and operational efficiency improvement. The complementary relationships amongrefining, petrochemicals, and coal chemicals in the industrial park form an efficient synergy ofoperations and costs. The refining business has the largest coal-to-hydrogen unit in the country,producing low-cost coal chemicals such as pure hydrogen, methanol, acetic acid, and synthesis gas.In addition, the advantages of raw material and product storage and transportation systems greatlyenhance the operational flexibility and comprehensive cost advantages of projects.
3. Market Competition Advantage Driven by High-end Research and Development
The company follows a development path that emphasizes market differentiation, high-endtechnology, and large-scale facilities while integrating business operations. It has a long-termaccumulated market-technology innovation mechanism and has established an international R&Dteam and a high-level scientific research platform. Its technological research and developmentstrength and innovation capability in new products are leading in the industry. The company can
quickly respond to the latest market consumption demand changes and has a stable reserve of mid-to-high-end customer resources. The four main operating entities of the company, Hengli Fibre, DeliFibre, Hengke New Materials, and Kanghui New Materials, are all national high-tech enterprises.Through fine management of the production process and continuous improvement of technologyand processes, the company has independently developed and accumulated a series ofdifferentiated and functional products, holds numerous production patents for various products,and has gained wide market recognition. The company's products are superior to competitors interms of quality and stability. It is the only company in China that can produce specification 5DFDYproducts on a large scale. Its market share in MLCC separator films exceeds 65% domestically. It isalso the only domestic and the second global enterprise capable of producing 12-micrometersilicon-coated stacked lithium battery protection films online. The company has absolutetechnological advantages and process accumulation in functional films and civil polyester filament,forming a competitive moat that is difficult to replicate in the industry in the short term.
4. Efficient Management Advantage of Intelligence and Lean ManufacturingThe company strives to promote the deep integration of "Internet, big data, artificialintelligence, and the real economy" and develop advanced manufacturing capacity to regenerateinternal growth momentum. It regards "intelligent interconnection" as an important entry point forindustrial upgrading and transformation. By gradually implementing methods such as "machinereplacing human, " "automatic equipment change, " "complete set replacement of single machine," and "intelligence replacing digitization, " the company transforms its development model fromrelying on "population dividends" to "technology dividends." Through the integration andapplication of intelligent manufacturing, the Internet, and the Internet of Things, the companycontinuously improves the level of intelligent manufacturing throughout the entire process. Itseamlessly integrates key links such as control, research and development, manufacturing, businessmanagement, and finance through self-developed product testing systems, automatic barcodesystems, intelligent warehousing systems, and sales systems, and interfaces with ERP systems toachieve product traceability and full-process control. This promotes the company's transformationfrom "manufacturing" to "intelligent manufacturing" and from single business management tohighly synergistic operation of the industrial chain.
5. Accumulated Talent Management Advantage
The company has formed a multidisciplinary and multi-professional scientific research team,including disciplines such as refining, petrochemicals, polymer materials, chemical fiber engineering,textile engineering, electrical engineering, etc. Its scientific research and development capabilitiesare ahead of domestic peers. While introducing external talents, the company attaches greatimportance to the cultivation of internal talents and provides a good career development path foremployees. The company has also established a sound internal training system, covering researchand development, production, sales, management, and other aspects, and has cultivated a largenumber of backbone personnel.
V. Main operating information in the reporting period
As of the end of 2023, the company's total assets were 260.599 billion yuan, a year-on-yearincrease of 7.94%, and the net assets attributable to shareholders of listed companies were 59.992billion yuan, a year-on-year increase of 13.49%.
In 2023, the Company recognised a revenue from operations of 234.791 billion yuan, a year-on-year increase of 5.61%; a net profit attributable to shareholders of listed company of 6.905 billionyuan, a year-on-year increase of 197.83%.(I) Analysis of Primary operations
1. Analysis of changes in items related to income statement and cash flow
statement
Unit: ten-thousand-yuan Currency: RMB
| Item | Amount in the reporting period | Amount in the same period of last year | Variance (%) |
| Revenue from operations | 23, 479, 067.24 | 22, 232, 358.4 | 5.61 |
| Cost of sales | 20, 838, 385.19 | 20, 407, 759.71 | 2.11 |
| Selling expenses | 29, 347.30 | 39, 276.92 | -25.28 |
| Administrative expenses | 199, 736.80 | 188, 929.87 | 5.72 |
| Financial expense | 536, 476.39 | 428, 737.15 | 25.13 |
| Research and development expenses | 137, 102.85 | 118, 471.10 | 15.73 |
| Net cash flows from operating activities | 2, 353, 579.01 | 2, 595, 397.08 | -9.32 |
| Net cash flows from investing activities | -3, 881, 449.94 | -2, 629, 706.99 | Not applicable |
| Net cash flows from financing activities | 990, 970.42 | 1, 040, 541.64 | -4.76 |
Detailed description of major changes in the company's business type, profit composition or profitsource in the current period
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2. Revenue and Cost Analysis
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(1). Segmentation of Main Business by Sector, Product, Region, and Sales Model
Unit: ten-thousand-yuan Currency: RMB
| Segmentation of main operations by sector | ||||||
| By sector | Revenue from operations | Cost of sales | Gross margin (%) | Year-on-year change of revenue(%) | Year-on-year change of cost of sales(%) | Year-on-year change of gross margin(%) |
| Petrochemical industry | 22, 668, 414.46 | 20, 189, 829.10 | 10.93 | 8.23 | 5.41 | 2.38% pts |
| Other industries | 651, 548.82 | 570, 713.93 | 12.41 | -46.75 | -53.71 | 13.16% pts |
| Segmentation of main operations by product | ||||||
| By product | Revenue from operations | Cost of sales | Gross margin (%) | Year-on-year change of revenue(%) | Year-on-year change of cost of sales(%) | Year-on-year change of gross margin(%) |
| Refining products | 11, 996, 139.48 | 9, 773, 674.08 | 18.53 | -3.00 | -6.69 | 3.22% pts |
| PTA | 7, 260, 732.58 | 7, 359, 322.54 | -1.36 | 28.20 | 22.02 | 5.13% pts |
| Polyester products | 3, 411, 542.41 | 3, 056, 832.48 | 10.40 | 17.09 | 15.38 | 1.33% pts |
| Others | 651, 548.82 | 570, 713.93 | 12.41 | -46.75 | -53.71 | 13.16%pts |
| Segmentation of main operations by region | ||||||
| By region | Revenue from operations | Cost of sales | Gross margin (%) | Year-on-year change of revenue(%) | Year-on-year change of cost of sales(%) | Year-on-year change of gross margin(%) |
| Domestic | 21, 752, 029.48 | 19, 295, 205.41 | 11.29 | 6.37 | 3.16 | 2.76% pts |
| Overseas | 1,567,933.80 | 1,465,337.62 | 6.54 | -8.78 | -12.93 | 4.45% pts |
Description of main business by industry, by product, by region, and by sales modelRevenues, costs and gross margins for refined products, PTA and polyester products include salerevenues, purchase costs and gross margins.
(2). Production and sales volume analysis
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| Main products | Unit | Production volume | Sales volume | Inventory quantity | Year-on-year change of production(%) | Year-on-year change of sale(%) | Year-on-year change of inventory(%) |
| Refining products | 10, 000 tons | 2, 465.42 | 2, 164.27 | 71.88 | 5.41 | 1.33 | -22.93 |
| PTA | 10, 000 tons | 1, 444.37 | 1, 422.20 | 47.58 | 25.22 | 33.99 | 76.29 |
| New material products | 10, 000 tons | 429.00 | 409.04 | 40.18 | 19.94 | 25.4 | -4.79 |
Explanation of production and sales volume:
1. Refining and chemical products include all products of Hengli Refining and Hengli Petrochemical;
2. New material products include polyester new materials, engineering plastics, functional films,and biodegradable materials;
3. The sales volume of refining and chemical products and PTA includes trade volume but excludesinternal consumption within the company.
(3). Performance of Major Procurement Contracts and Major Sales Contracts
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(4). Cost Analysis
Unit: ten thousand yuan
| By Sector | |||||||
| By sector | Cost composition | Amount in the reporting period | Proport ion in total costs of the reporting period (%) | Amount in the same period of last year | Proportion in total costs of the same period of last year (%) | Year-on-year change (%) | Explanation |
| Petrochemical industry | Direct materials | 18, 644, 485.10 | 89.81 | 17, 435, 956.16 | 85.52 | 6.93 | |
| Direct labor | 147, 931.07 | 0.71 | 168, 283.79 | 0.83 | -12.09 | ||
| Power fuel | 668, 913.47 | 3.22 | 703, 924.33 | 3.45 | -4.97 | ||
| Manufacturing expenses | 728, 499.46 | 3.51 | 673, 959.64 | 3.31 | 8.09 | ||
| Other industries | Direct materials | 535, 657.18 | 2.58 | 1, 154, 573.45 | 5.66 | -53.61 | |
| Direct labor | 8, 957.68 | 0.04 | 176, 343.65 | 0.86 | -94.92 | ||
| Power fuel | 880.36 | - | 64, 379.42 | 0.32 | -98.63 | ||
| Manufacturing expenses | 25, 218.71 | 0.12 | 9, 756.32 | 0.05 | 158.49 | ||
| By Product | |||||||
| By product | Cost composition | Amount in the reporting period | Proport ion in total costs of the reporting period (%) | Amount in the same period of last year | Proportion in total costs of the same period of last year (%) | Year-on-year change (%) | Explanation |
| Refining products | Direct materials | 8, 881, 184.28 | 42.78 | 9, 574, 213.92 | 46.96 | -7.24 | |
| Direct labor | 64, 564.35 | 0.31 | 56, 910.15 | 0.28 | 13.45 | ||
| Power fuel | 335, 907.95 | 1.62 | 327, 732.97 | 1.61 | 2.49 | ||
| Manufacturing expenses | 492, 017.50 | 2.37 | 440, 075.17 | 2.16 | 11.80 | ||
| PTA | Direct materials | 7, 101, 089.02 | 34.20 | 5, 681, 885.50 | 27.87 | 24.98 | |
| Direct labor | 8, 834.21 | 0.04 | 24, 616.91 | 0.12 | -64.11 | ||
| Power fuel | 127, 750.10 | 0.62 | 143, 261.15 | 0.70 | -10.83 | ||
| Manufacturing expenses | 121, 649.21 | 0.59 | 113, 145.96 | 0.55 | 7.52 | ||
| Polyester products | Direct materials | 2, 662, 211.80 | 12.82 | 2, 179, 856.74 | 10.69 | 22.13 | |
| Direct labor | 74, 532.51 | 0.36 | 86, 756.73 | 0.43 | -14.09 | ||
| Power fuel | 205, 255.42 | 0.99 | 232, 930.21 | 1.14 | -11.88 | ||
| Manufacturing expenses | 114, 832.75 | 0.55 | 120, 738.51 | 0.59 | -4.89 | ||
| Others | Direct materials | 535, 657.18 | 2.58 | 1, 154, 573.45 | 5.66 | -53.61 | |
| Direct labor | 8, 957.68 | 0.04 | 176, 343.65 | 0.86 | -94.92 | ||
| Power fuel | 880.36 | - | 64, 379.42 | 0.32 | -98.63 | ||
| Manufacturing expenses | 25, 218.71 | 0.12 | 9, 756.32 | 0.05 | 158.49 | ||
Explanation of cost analysis and other situationsNone
(5). Changes in Consolidation Scope Due to Significant Equity Changes in Subsidiaries during theReporting Period
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(6). Significant Changes or Adjustments in Business, Products, or Services during the ReportingPeriod
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(7). Key Sales Customers and Key Suppliers Situation
A. Overview of Key Sales Customers
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The sales revenue from the top five customers amounted to 21.28 billion yuan, accounting for
9.07 % of the total annual sales. Among the sales revenue from the top five customers, there wereno sales made to related parties, representing 0% of the total annual sales.
During the reporting period, the proportion of sales to a single customer exceeded 50% of thetotal, and among the top five customers there were new customers or heavy reliance on a smallnumber of customers
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B. Overview of Key Suppliers
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The purchasing amount from the top five suppliers amounted to 64.12 billion yuan, accounting for
28.23 % of the total annual procurement. Among the purchasing amount from the top five suppliers,there were no purchases made from related parties, representing 0% of the total annualprocurement.
The proportion of purchases from a single supplier in the Reporting Period exceeds 50% of the total,and there are new suppliers among the top 5 suppliers or heavy reliance on a small number ofsuppliers
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Other noteNone
3. Expenses
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4. Research and Development Investment
(1). Table of Research and Development Investment Status
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Unit: ten thousand yuan
| Expensed research and development investment in the current period | 137, 102.85 |
| Capitalized research and development investment in the current period | - |
| Total R&D investment | 137, 102.85 |
| Percentage of research and development investment to operating revenue (%) | 0.58 |
| Percentage of capitalized research and development investment to total research and development investment (%) | - |
5. Cash flows
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(II) Explanation of Significant Profit Changes Due to Non-Core Business
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(III) Analysis of Asset and Liability Situation
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1. Asset and Liability Status
Unit: ten thousand yuan
| Item | Closing balance of current period | Ratio of closing balance of current period to total assets (%) | Closing balance of previous period | Ratio of closing balance of previous period to total assets (%) | Percentage change in closing balance compared between current period to previous period(%) | Explanation |
| Financial assets held for trading | 29, 883.01 | 0.11 | 60, 441.44 | 0.25 | -50.56 | Mainly due to a decrease in fair value of derivative financial instruments held during the current period. |
| Accounts receivable | 53, 841.53 | 0.21 | 37, 244.59 | 0.15 | 44.56 | Mainly due to an increase in unsettled receivables for sales within the closing accounting period |
| Receivable financing | 417, 004.76 | 1.60 | 228, 727.12 | 0.95 | 82.32 | Mainly due to an increase in the amount of holding of bank acceptance bills at the end of accounting period. |
| Other current assets | 679, 449.79 | 2.61 | 446, 872.66 | 1.85 | 52.05 | Mainly due to an increase in investment in construction in progress during the period, and an increase in VAT retention at the end of accounting period. |
| Construction in progress | 4, 882, 413.77 | 18.74 | 2, 728, 749.15 | 11.30 | 78.92 | Mainly due to an increase in investment in the current period for the 1.6 million |
| tons per year high-performance resin and new material project and the second phase of the new material industrial park project | ||||||
| Deferred tax assets | 27, 632.52 | 0.11 | 89, 222.72 | 0.37 | -69.03 | Mainly due to a decrease in deferred tax assets recognized as a result of the provision for decline in value of inventories made at the beginning of the accounting period, because of the written off of the inventory. |
| Other non-current assets | 338, 328.79 | 1.30 | 632, 724.84 | 2.62 | -46.53 | Mainly due to a decrease in long-term asset purchase payments related to construction in progress made during the current period. |
| Financial liabilities held for trading | 19, 032.43 | 0.07 | 34, 602.07 | 0.14 | -45.00 | Mainly due to a decrease in fair value of unsettled derivative financial instruments at the end of the accounting period |
| Bills payable | 1, 200,245.36 | 4.61 | 2, 060,377.59 | 8.53 | -41.75 | Mainly due to a decrease in letters of |
| credit issued that have not yet expired at the end of the accounting period | |||||||
| Accounts payable | 1, 559, 866.76 | 5.99 | 886, 931.00 | 3.67 | 75.87 | Mainly due to an increase in purchase payable of material and long-term assets at the end of the accounting period | |
| Taxes payable | 143, 960.17 | 0.55 | 103, 601.37 | 0.43 | 38.96 | Mainly due to an increase in payable of enterprise income tax and value-added tax at the end of the accounting period | |
| Non-current liabilities due within one year | 1, 349, 807.17 | 5.18 | 934, 902.82 | 3.87 | 44.38 | Mainly due to an increase in the amount of long-term loans payable that will mature within one year. | |
| Other current liabilities | 471, 835.39 | 1.81 | 338, 212.76 | 1.40 | 39.51 | Mainly due to an increase of Hengli Futures that received from currency margin of client with its operation. | |
| Long-term payables | 208, 546.03 | 0.80 | 85, 883.33 | 0.36 | 142.82 | Mainly due to the addition of new financing leases payable during the current period. | |
| Specific reserve | 10, 935.81 | 0.04 | 160.22 | - | 6, 725.50 | Mainly due to a | |
decrease ofinput ofsafetyproductionduring thecurrentperiod.
Other noteNone
2. Overseas Asset Situation
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(1) Assets Scale
Including: Overseas assets 54.57(Unit: hundred million yuan Currency: RMB), accounting for 2.09 %of the total assets.
(2) Explanation of a higher proportion of overseas assets
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3. Major assets under restriction at the end of the reporting period
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Unit: ten thousand yuan Currency: RMB
| Item | Carrying value at year end | Reason of restriction |
| Cash and bank balances | 525, 289.58 | Pledge cash and bank balances to obtain financing credit from financial institutions |
| Cash and bank balances | 7, 026.95 | Security deposits for trading in futures and financial derivatives |
| Cash and bank balances | 11, 960.00 | Freezing funds involved in litigation |
| Receivable financing | 287, 353.51 | Pledge notes receivable to obtain financing credit from financial institutions |
| Fixed assets | 10, 829, 453.36 | Mortgage fixed assets to obtain financing credit from financial institutions |
| Fixed assets | 464, 743.62 | Mortgage is used to provide security for the sale and leaseback contract |
| Intangible assets | 506, 712.06 | Mortgage intangible assets to obtain financing credit from financial institutions |
| Construction in progress | 2, 401, 409.53 | Mortgage construction in progress to obtain financing credit from financial institutions |
| Total | 15, 033, 948.61 |
4. Other note
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(IV) Analysis of Industry Operating Information
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Analysis of Operating Information in the Chemical Industry1 Overview of the Industry
(1). Industry Policies and Their Changes
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①《Work Plan for Stable Growth in Petrochemical and Chemical Industry》The "Work Plan for Stable Growth in the Petrochemical and Chemical Industry" jointly issuedby the Ministry of Industry and Information Technology and other six departments in 2023 pointedout that we should vigorously implement the goals and tasks of the "Guiding Opinions on PromotingHigh-quality Development of the Petrochemical and Chemical Industry in the 14th Five-Year Plan".The Plan proposed that we should support key enterprises to create an original technology sourcefor the industry, which is mainly based on the needs of strategic emerging industries and thetransformation and upgrading needs of traditional industries, to enrich the supply of new chemicalmaterials and specialty chemicals, and increase the supply of key generic technology innovationsolutions, so as to effectively play a leading role in supporting and demonstrating the industrial chain.
②《Guiding Opinions on Promoting the High-Quality Development of the Petrochemical andChemical Industry During the "14th Five-Year Plan"》In March 2022, the Ministry of Industry and Information Technology and five otherdepartments jointly issued the Guiding Opinions on Promoting High-Quality Development of thePetrochemical and Chemical Industry during the 14th Five-Year Plan. It proposed that by 2025, thepetrochemical and chemical industry should establish a high-quality development patterncharacterized by strong independent innovation capability, rational structural layout, green andlow-carbon practices. The industry's ability to ensure the supply of high-end products should besignificantly improved, core competitiveness should be noticeably enhanced, and substantialprogress should be made in achieving self-reliance at a high level.
③《Action Plan for Energy Conservation and Carbon Reduction Driven by Strict EnergyEfficiency Constraints in the Petrochemical and Chemical Industry (2021-2025 years) 》
In October 2021, the National Development and Reform Commission, the Ministry of Industryand Information Technology, and other departments jointly issued the "Opinions on Strict EnergyEfficiency Constraints to Promote Energy Conservation and Carbon Reduction in Key Sectors" andthe "Action Plan for Energy Conservation and Carbon Reduction Driven by Strict Energy EfficiencyConstraints in the Petrochemical and Chemical Industry (2021-2025 years) ". The plan aims topromote green and low-carbon transformation in the refining, ethylene, and synthetic ammoniaindustries and ensure the timely achievement of carbon peak targets.
《The "Action Plan" clearly puts forward the action goals of achieving a capacity ratioexceeding 30% at benchmark levels for the refining, ethylene, synthetic ammonia, and calciumcarbide industries by 2025 through the implementation of energy conservation and carbonreduction measures. It aims to significantly improve the overall energy efficiency level, reducecarbon emissions intensity, and significantly enhance the capabilities for green and low-carbondevelopment. Key tasks outlined in the plan include formulating a general implementation plan fortechnological transformation in key petrochemical industries, guiding the orderly phasing out ofinefficient production capacity, promoting energy-saving and low-carbon technologies andequipment, and driving collaborative and clustered development in the industry. This includesselecting advanced and applicable energy-saving technologies for the refining, ethylene, andsynthetic ammonia industries, as well as guiding technological transformation in enterprises withlow energy efficiency. The plan also promotes the elimination of refining units with a capacity of 2million tons/year and below, ethylene units with a capacity of 300, 000 tons/year and below, andimposes strict restrictions on the construction of certain types of units with limited capacities.Additionally, the plan encourages the promotion of low-carbon deep processing of heavy and poor-quality residual oil, one-step method for ethylene production from synthesis gas, and crude oildirect cracking to produce ethylene. It emphasizes the integration of refining and petrochemical
industries, coal conversion and electricity heating integration, and the development of multiple co-production. The aim is to establish interconnected industrial chains where enterprises areconnected from upstream to downstream, with mutual supply and demand and interconnectivityof production facilities. This will improve the level of comprehensive resource utilization, reduceenergy consumption in logistics and transportation, and promote the recognition of chemicalindustrial parks.
④《The "14th Five-Year Plan" for the ecological economic development of Liaoning Province》In January 2022, the General Office of the People's Government of Liaoning Province issuedthe "14th Five-Year Plan" for the ecological economic development of Liaoning Province. The planhighlights the following key points:
Extending the Petrochemical Industry Chain: The plan aims to maintain the scale advantage ofbulk basic chemical raw materials such as ethylene, propylene, PX (paraxylene), and PTA (purifiedterephthalic acid). It also seeks to promote the development of the petrochemical industry towardshigher value-added products, focusing on the olefin, aromatic hydrocarbon, new materials, and finechemical industrial chains.
Promoting the "Reduction of Oil and Increase of Chemicals" in the Petrochemical Industry: Theplan aims to transform the refining and chemical production towards safe, clean, green, andefficient practices. The goal is to achieve intensive, high-end, green, and integrated development ofthe refining and chemical industry. Key areas of focus include the development of high-endpolyolefins, specialty resins, specialty engineering plastics, high-end membrane materials, and otherchemical new materials.
(2). Basic information on the main industrial segment and industrial status of theCompany
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①In the petroleum refining and chemical sector
The company has established a processing capacity of 20 million tons of crude oil and 5 milliontons of raw coal in the upstream and midstream business sectors, with a main annual output of 5.2million tons of PX, 1.8 million tons of ethylene glycol, 1.2 million tons of pure benzene, 850,000 tons of polypropylene, 720, 000 tons of styrene, 400, 000 tons of high-density polyethylene,850, 000 tons of acetic acid, 140, 000 tons of butadiene, and other domestically scarce and high-value-added chemical products, as well as Refined oil products such as gasoline, diesel, andaviation kerosene that meet the national standards above China VI. As smaller refinerieswith higher production costs and outdated facilities are gradually phased out, the concentrationof the refining and chemical industry and the competitiveness of large-scale newly builtrefineries will greatly improve. The company has prominent advantages in policy support,process technology, and industrial synergy. Compared to other refineries, it has characteristics ofhigh quality and low cost, making it highly competitive in the market.
②In the PTA sector
PTA serves as the direct upstream raw material for polyester production, and China is theworld's largest producer and consumer of PTA. The company currently has built and put intooperation a PTA production capacity of 16.6 million tons/year. It is the largest PTA productionsupplier in the world in terms of capacity, with the most advanced technology and the mostsignificant cost advantages. It is also the only company in the industry with a capacity of over 10,000 tons per year.
③In the polyester new materials sector
One of the company's primary operations is the research, production, and sales of relatedproducts. The main products include PET (Polyethylene Terephthalate), POY (Partially OrientedYarn), FDY (Fully Drawn Yarn), DTY (Drawn Textured Yarn), BOPET (Biaxially Oriented PET), PBT(Polybutylene Terephthalate), PBS/PBAT (Polybutylene Succinate/Polybutylene AdipateTerephthalate), and other polyester and chemical new materials products. The company ranks
among the top five in the national civil filament capacity and second in the national industrialfilament capacity. It is one of the largest and technologically advanced manufacturers of polyesterfilament for both civilian and industrial applications in China.The subsidiary company Kanghui New Material, focuses on creating world-leading high-end,differentiated, green and environmentally friendly functional film materials, high-performanceengineering plastics and biodegradable materials. In terms of functional film materials, Kanghui NewMaterial has broken through foreign technical barriers in the fields of high-end MLCC release basefilm, polarizer release protection base film, OCA release base film, environmental protection RPETbase film, composite current collector base film, lithium battery process protection film,photosensitive dry film base film, ultra-thin capacitor film, etc., and has continued to solve the"choke point" problem in the field of new materials. It has the core competitiveness and industrialdevelopment strength of the industry.
In terms of high-performance engineering plastics, Kanghui New Material has an annualproduction capacity of 210,000 tons of PBT engineering plastics, making it the largest PBT producerin China. It is mainly used in automotive parts, polymer alloys, cable protective sheaths, electronicappliances and other industrial fields. In terms of biodegradable materials, Kanghui New Materialhas the largest single-set annual production capacity of 33,000 tons of PBAT based on its owntechnology in China, which is applied to green environmental protection applications such as food-grade shopping bags, tableware and straws for PBS/PBAT.
2 Products and production
(1). Main business model
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The company's main business model involves the procurement of crude oil and relatedadditives, primarily producing PX products and finished oil, as well as other chemicals. The PXproducts are mainly used as raw materials for the company's PTA plant, with a portion of the PTAproducts being used internally by the company's polyester factory, and the rest being sold todownstream customers in the fiber industry for the production of polyester fibers and otherproducts. Various polyester products are sold to downstream weaving factories for the productionof textiles, industrial yarn is sold to construction and automotive component manufacturers,polyester chips are sold to spinning companies, BOPET films are sold to downstream printing,packaging, and electronics companies, and PBT resins are sold to downstream automotive,electronics, and machinery companies. The specific operating modes are as follows:
(1) Petroleum Refining Sector
Petroleum products, also known as oil products, are processed from crude oil through variousrefining processes such as atmospheric distillation, hydrogenation cracking, and reforming. Theseprocesses produce various fuel oils (gasoline, kerosene, diesel, etc.), lubricants, coke, paraffin wax,asphalt, basic organic materials (ethylene, propylene, butene, benzene, toluene, xylene, acetylene,naphthalene), as well as various synthetic organic materials derived from the basic organic materials.
(2) PTA Sector
PTA (Purified Terephthalic Acid) is an important bulk organic material widely used in varioussectors of the national economy, including chemical fibers, light industry, electronics, andconstruction. In the domestic market, the main downstream products of PTA are polyester fibers,which are primarily used in clothing, home textiles, and industrial textiles. The main businessprocess involves purchasing para-xylene (PX) and producing PTA through oxidation reactions,crystallization, drying, hydrogenation, and further crystallization processes, followed by selling theproduct to downstream customers.
The profit model in the PTA industry is based on producing and selling PTA products to generateprofits. Since the fixed investment for the products is significant, improving profitability relies mainlyon reducing the fixed cost per unit. Companies achieve this by capitalizing on economies of scale,
adopting advanced processing technologies and equipment, establishing efficient publicinfrastructure, enhancing production safety and product quality stability, and ultimately loweringproduction costs to increase profitability.
(3) Polyester Sector
The primary business process involves the procurement of petrochemical products such as PTA,MEG, and other additives, followed by polymerization reactions using appropriate productionequipment. Subsequently, the polyester filaments are produced through spinning and drawingprocesses, and the products are sold to downstream weaving companies for the production of civiland industrial textiles.The profit model in the polyester filament industry is based on producing and selling polyesterfilaments to generate profits. Due to the significant fixed costs associated with the products,improving profitability depends on three main factors: reducing the fixed cost per unit, increasingthe rate of new product development, and adding differentiated products. Companies achieve thisby focusing on increasing the rate of new product development, pursuing differentiation in productlines, enhancing product value, and ultimately improving overall profitability.
(4) Polyester Film Sector
The main business process involves the procurement of petrochemical products such as PTA,MEG, and other additives. Unlike the polyester industry, the equipment and process routes differ.In the polyester industry, equipment is used to extrude the film into polyester filaments, while inthe polyester film industry, equipment is used to extrude the film directly. Consequently, thedownstream customer base is different.
The profit model in the polyester film industry is based on producing and selling polyester filmsto generate profits. Due to the significant fixed investment required, improving profitability dependsmainly on two factors: reducing the fixed cost per unit and developing new products. For companies,relying on the cutting-edge equipment technology, self-owned synthesis technology andindependent research and development capabilities accumulated in the industry for more than tenyears, they overcome various technical difficulties, break through foreign technical barriers in thefields of medium and high-end MLCC release base film, polarizer release protection base film, OCArelease base film, environmental protection RPET base film, composite current collector base film,lithium battery process protection film, photosensitive dry film base film, ultra-thin capacitive filmand PBS-based biodegradable materials, and actively extend and expand the medium and high-endmaterial business in various application scenarios.
(5) Engineering Plastics Sector
The primary business process involves the procurement of petrochemical products such as PTA,BDO, and other additives. The production process includes polymerization, extrusion, pulverization,and granulation, ultimately producing engineering plastics. The products are then sold todownstream customers.
The profit model in the engineering plastics industry is based on producing and selling plasticpellets to generate profits. Due to the significant fixed investment associated with the products,improving profitability relies mainly on two factors: reducing the fixed cost per unit and developingnew products. For companies, the future primarily involves capitalizing on economies of scale toseize market share, increasing product added value, and improving overall profitability.
Main situation of adjusting the business model during the reporting period
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(2). Main products
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| Product | Business sector | Primary upstream raw materials | Applications of major downstream materials | Main factors affecting prices |
| Refined oil | Petroleum refining | Crude Oil | Aviation kerosene, gasoline, and diesel and other power fuels | Upstream raw materials like crude oil and downstream demand |
| PX | Chemical raw materials and chemicals manufacturing | Crude Oil | PTA | Upstream raw materials like crude oil and downstream demand |
| Ethylene | Chemical raw materials and chemicals manufacturing | Crude Oil | Polyethylene, ethylene glycol | Upstream raw materials like crude oil and downstream demand |
| PTA | Chemical raw materials and chemicals manufacturing | PX | Polyester fiber, bottle grade chips, film grade chips, etc. | Crude oil and PX supply and downstream demand |
| Polyester Filament Yarn (PFY) | Polyester manufacturing | PTA, MEG | Advertising light box cloth, geotextile, conveyor belt, automobile fiber and tire meridian, clothing and home textiles, etc. | Upstream raw materials like crude oil and downstream textile prosperity |
| Polyester Filament | Polyester manufacturing | PTA, MEG | Filature | Upstream raw materials like crude oil and downstream demand |
| BOPET | Plastics product manufacturing | PTA, MEG | Packaging film, insulating film, capacitor film, etc. | Upstream raw materials like crude oil and downstream demand |
| PBT | Plastics product manufacturing | PTA, BDO | Auto parts, electronic appliances, aerospace materials, etc. | Upstream raw materials like crude oil and downstream demand |
| PBS/PBAT | Plastics product manufacturing | PTA, BDO, Adipic acid | Packaging materials, shrink film, agricultural film, etc. | Upstream raw materials like crude oil and downstream demand |
(3). R&D and innovation
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As of the end of 2022, the company has accumulatively held 1, 331 patents, of which 215 werenewly approved during the reporting period.
(4). Production Technology and Process
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During the reporting period, there were no significant changes in the company's main productsand their production processes.
For specific details regarding the production processes of the company's main products in thepolyester fiber sector, please refer to Section 4, "Discussion and Analysis of Operating Conditions, "subsection "II. (IV) Analysis of Operational Information in the Chemical Industry, " and the section"Production Processes and Flow" (page 33) in the company's "2016 Annual Report."
Regarding the production processes of the company's refining and ethylene engineering, aswell as the PBAT project, please refer to Section 4, "Discussion and Analysis of Operating Conditions," subsection "II. (IV) Analysis of Operational Information in the Chemical Industry, " and the section"Production Processes and Flow" (page 34) in the company's "2020 Annual Report."
(5). Production capacity and construction work
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Unit: hundred million yuan Currency: RMB
| Major plants/projects | Designed capacity | Capacity utilization(%) | Capacity under construction | Investment in capacity under construction | Planned completion time |
| Polyester Filament Yarn (PFY) of Suzhou plant | 1, 400, 000 tons/Year | 100 | High-performance industrial yarn project with an annual output of 400, 000 tons | 22.93 | Currently in the trial operation stage |
| PFY for civil use of Nantong plant | 1, 750, 000 tons/Year | 100 | Annual output of 1.5 million tons of green multi-functional textile new materials project | 82.28 | The production of 150,000 tons/year elastic fiber, 150,000 tons/year environmental protection fiber, 300,000 tons/year full matting POY and 300,000 tons/year cationic POY has been completed |
| PFY for civil use of Suqian plant | 200, 000 tons/Year | 100 | |||
| Polyester film of Kanghui New Material (Yingkou) Industrial Park | 386, 000 tons/Year | 100 | |||
| Engineering plastics of Kanghui New Material (Yingkou) Industrial Park | 210, 000 tons/Year | 100 | |||
| PBS bio-degradable advanced materials project of Kanghui New Material | 33, 000 tons/Year | 100 |
| (Yingkou) Industrial Park | |||||
| PTA of Dalian plant | 1, 1600, 000 tons/Year | 99.44 | |||
| Refining and chemical project of Dalian plant | 20, 000, 000 tons/Year | 102.44 | |||
| Ethylene project of Dalian plant | 1, 500, 000 tons/Year | 106.06 | |||
| PBS biodegradable plastics in Kanghui Dalian plant | / | / | 450, 000 tons/Year | 26.77 | Expected to be put into production gradually in the first half of 2024 |
| Lithium battery separator in Kanghui Yingkou Plant | / | / | 440 million square meters/Year | 9.85 | Gradually put into production in the middle of 2023, and currently in the trial production stage |
| PTA of Huizhou Plant | / | / | 2 sets of 2, 500, 000 tons/year PTA plant | 107.72 | Fully put into production in the middle of 2023, and currently in the trial production stage |
| Hengli Petrochemical Chemical New Material Supporting Chemical Project | / | / | 300, 000 tons/Year Adipic acid, etc. | 28.70 | Gradually put into production in the middle of 2023 |
| Annual output of 1.6 million tons of high-performance resin and new material projects | / | / | Bisphenol A, isopropanol, ethylene oxide, electronic grade DMC (including EC, EMC and DEC), ABS, etc. | 159.48 | Gradually put into production in the third quarter of 2023, and expected to be fully put into production in the second quarter of 2024 |
| Annual output of 800, 000 tons of functional films | / | / | The first phase of the project plans to build a 470,000 | 46.25 | The first phase of the project will be |
| and functional plastics | tons/year high-end functional polyester film plant (totaling 12 lines), and the second phase includes a 100,000 tons/year functional film modification plant, a 150,000 tons/year modified PBT plant, and a 80,000 tons/year modified PBAT plant, etc. | put into production line by line in 2023. By the end of 2023, production and debugging of 9 out of 12 lines have been completed. It is expected that all lines will reach their production capacity in the second half of 2024. The follow-up will be the second phase of the project | |||
| Annual output of 600, 000 tons of functional films and functional plastics, functional film and 3 billion square meters lithium battery separator project | The first phase of the project plans to build a 500,000 tons/year polyester film production line, a 100,000 tons/year polyester film coating production line, a 1.5 billion square meters/year lithium battery separator production line, and a 600 million square meters/year coating production line | 33.23 | Expected to be put into production line by line in the second half of 2024 |
Note: 1. The designed capacity of the plants and the projects listed above refers to what hasbeen put into production, excluding those under construction.
2. The date of the invested amount of production capacity under construction is as of theend of 2023
Increase and decrease of production capacity
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1. The annual production capacity of Kanghui New Material Yingkou factory's super wet lithiumbattery separator of 440 million square meters has been gradually put into production in mid-2023and is currently in the trial production stage.
2. Hengli (Huizhou) Industrial Park has fully put into operation of the 5 million tons/year PTA andis currently in the trial production stage.
3. The 300,000 tons/year adipic acid and other new material supporting chemical projects of HengliChemical have been gradually put into production in mid-2023.
4. The project of annul producing 1.6 million tons of high-performance resin and netting materialshas been gradually put into production in the third quarter of 2023, and is expected to be fully putinto production in the second quarter of 2024.
Adjustment of product line and production capacity structure optimization
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Abnormal shutdown
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3 Raw materials procurement
(1). Basic situation of main raw materials
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Unit:10, 000 tons
| Major raw materials | Procurement model | Settlement model | Year-on-year price change ratio(%) | Procurement quantity | Consumption quantity |
| Crude Oil | Contract, spot | Letter of credit, Cable transfer | -14.90 | 2, 101.06 | 2, 199.04 |
| PX | Contract, spot | Cable transfer, Letter of credit, Bank acceptance bills | -0.13 | 366.87 | 961.38 |
| MEG | Contract, spot | Cable transfer | 6.17 | 117.6 | |
| BDO | Contract, spot | Bank acceptance bills | -41.28 | 16.22 | 17.05 |
The impact of major procurement price changes on the Company’s operating costs: theprocurement prices of the raw material exerting positive impact on the Company’s operating costs.
(2). Basic situation of main energy
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| Major energy | Procurement model | Settlement model | Year-on-year price change ratio(%) | Procurement quantity | Consumption quantity |
| Electricity | Market-oriented procurement | Monthly settlement | 4, 316.7939 million kwh | 6, 083.5231 million kwh | |
| Thermal coal | Market-oriented procurement | Monthly settlement | 7, 587, 800 tons | 7,914, 000 tons | |
| Natural gas | Market-oriented procurement | Monthly settlement | 309.4508 million meters | 309.6087 million cubic meters |
The price of major energy sources is directly proportional to the Company's operating costs. Theprices of major energies are affected by national policies, the supply and demand structure of theregional markets, and the stability of supply.
(3). Risk response measures for raw material price fluctuations
The main situation of holding derivatives and other financial products
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To reasonably mitigate the significant price fluctuations of major raw materials, the company andits subsidiaries engaged in hedging activities during the reporting period. The hedging primarilyinvolved commodities related to production and operations, such as Crude Oil, petroleum products,PTA, and chemicals (including but not limited to Styrene, Ethylene Glycol, Polypropylene).
(4). Basic situation of adopting other methods such as staged reserves
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4 Product sales
(1). Basic situation of the company's main operations by segment
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Unit: ten thousand yuan Currency: RMB
| Business segment | Revenue from operations | Cost of sales | Gross margin (%) | Year-on-year changes in operating revenue(%) | Year-on-year changes in operating cost(%) | Year-on-year changes in gross margin(%) | Gross margins among the peers |
| Petrochemical segment | 22, 668, 414.46 | 20, 189, 829.10 | 10.93 | 8.23 | 5.41 | 2.38 | |
| Other segments | 651, 548.82 | 570, 713.93 | 12.41 | -46.75 | -53.71 | 13.16 |
(2). Basic situation of the company's main operations by sales channel
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Note to accounting policies
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5 Environmental protection and safety situation
(1). Basic Situation of Major Safety Production Accidents During the Company’s Reporting Period
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(2). Major environmental violations
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(V) Investment Status AnalysisGeneral Analysis on External Equity Investment
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1. Major equity investments
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2. Major non-equity investment
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3. Financial assets measured at fair value
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For details, see note of this report.
Securities investment situation
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Securities Investment Situation
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Private Equity Fund Investment Situation
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Derivatives Investment Situation
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4. The specific progress of major asset reorganization and integration during the reportingperiod
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(VI) Sale of major assets and equity interests
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(VII) Analysis of Major Holding and Participating Companies
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Unit: hundred million yuan
| Company name | Shareholding (%) | Business nature | Registered capital | Total assets | Net assets | Net profit |
| Hengli Petrochemical Refining | 100.00 | Manufacturing | 175.96 | 1,109.78 | 321.39 | 33.58 |
| Hengli Petrochemical (Dalian) | 100.00 | Manufacturing | 58.90 | 361.75 | 115.78 | 1.62 |
| Hengli Chemical Fiber | 100.00 | Manufacturing | 22.08 | 451.38 | 67.69 | 16.39 |
| Hengli Petrochemical Chemical | 100.00 | Manufacturing | 45.75 | 610.85 | 76.92 | 13.04 |
| Kanghui New Material | 100.00 | Manufacturing | 16.78 | 212.73 | 63.47 | 2.44 |
Note: Jiangsu Hengli Chemical Fiber Co., Ltd. includes its subsidiaries Jiangsu Hengke AdvancedMaterials Co. Ltd., Nantong Teng'an Logistics Co., Ltd., Jiangsu Xuanda Polymer Material Co., Ltd.,Jiangsu Deli Chemical Fiber Co., Ltd., Hengli Futures Co., Ltd., Hengli Hengxin Industry and Trade(Shanghai) Co., Ltd., Suzhou Susheng Thermal Power Co., Ltd., Suzhou Binglin Trading Co. , Ltd.,Sichuan Hengli New Material Co., Ltd., Hengli New Materials (Suqian) Co., Ltd., Suzhou HengliChemical New Material Co., Ltd.Hengli Petrochemical (Dalian) Co., Ltd. including its subsidiaries Hengli Shipping (Dalian) Co.,Ltd. . HENGLI PETROCHEMICAL CO., LIMITED, and Shenzhen Ganghui Trading Co., Ltd.engli Petrochemical (Dalian) Refining and Chemical Co., Ltd. includes its subsidiaries HengliPetrochemical International Pte. Ltd., Hengli Oilfield Pte. Ltd., Hengli Shipping International Pte. Ltd.,Hengli Energy (Hainan) Co., Ltd., Hengli Oil and Chemical (Hainan) Co., Ltd., Suzhou Hengli ChemicalImport and Export Co., Ltd., Shenzhen Shengang Trading Co., Ltd., Hengli Refining and ChemicalProduct Sales (Dalian) Co., Ltd., Hengli Aviation Oil Co., Ltd., Hengli Oil and Chemical (Suzhou) Co.,Ltd., Hengli Energy (Jiangsu) Co., Ltd., Hengli Logistics (Dalian) Co., Ltd. Company, Suzhou HengliChemical Polymer Co., Ltd., Suzhou Hengli Energy Chemical Import and Export Co., Ltd.Hengli Petrochemical (Dalian) Chemical Co., Ltd. includes its subsidiaries Hengli Petrochemical(Dalian) New Materials Technology Co., Ltd., Hengli Petrochemical Public Engineering (Dalian) Co.,Ltd., and Dalian Hengzhong Special Materials Co., Ltd.Kanghui New Materials Technology Co., Ltd. includes its subsidiaries Kanghui InternationalTrade (Jiangsu) Co., Ltd., Suqian Kanghui New Materials Co., Ltd., Jiangsu Kanghui New MaterialsTechnology Co., Ltd., Kanghui Dalian New Materials Technology Co., Ltd., and Kanghui Nantong NewMaterials Technology Co., Ltd.
(VIII) Structured entities controlled by the company
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On December 31, 2023, structured entities related to the company but not included in thescope of the financial statements are mainly engaged in asset management business, operatingclient assets, and providing clients with investment management services for securities, futures andother financial products. The total assets of this type of structured entity on December 31, 2023 are
738.5488 million yuan.
VI. Discussions and analysis of the Company’s future development(I) Industrial landscape and trend
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1. Petrochemical industry
(1) The industry is accelerating its transformation towards green and low-carbon development,promoting digital and green transformation
Under the "dual carbon" goal, we will vigorously promote the transformation of cleanproduction technology and recycling, promote advanced and applicable energy-saving, low-carbon,water-saving technologies, and comprehensive waste utilization technologies, and attach greatimportance to the conservation and intensive utilization of various resources. Accelerate thedemonstration application of CCUS, effectively reduce carbon emissions, and explore thedevelopment of hydrogen production tail gas and catalytic cracking flue gas carbon dioxide directconversion, carbon dioxide dry reforming, carbon dioxide hydrogenation to produce oil productsand chemical technology demonstrations.
Accelerate the integration of new generation information technologies such as 5G, big data,and artificial intelligence with the petrochemical and chemical industry, continuously enhance theability to obtain chemical process data, enrich data in enterprise production management, processcontrol, product flow, and other aspects, connect production and operation information data"islands", build analysis models for production and operation, market and supply chain, strengthenintegrated control of the entire process, promote innovative applications of digital twins, acceleratedigital transformation, achieve organizational structure optimization, dynamic and accurate services,assist management decision-making and other management model innovations, improve intrinsicsafety, and enhance enterprise management capabilities.
(2) The market for high-end chemical new materials is vast
Some high-end petrochemical products and new chemical materials in China are currentlyunable to meet market demand, and the market potential is enormous. Focusing closely on thedemand for chemical materials in strategic emerging industries such as new energy vehicles, next-generation information technology, aerospace, rail transit, energy conservation and environmentalprotection, and big health, we will accelerate the transformation and upgrading of advanced andapplicable technologies, increase efforts to extend, supplement, and strengthen the supply chain,and improve the level of product refinement, specialization, and serialization. With thedevelopment of downstream industries, the future market development space for chemical newmaterials is vast.
2. PTA
China is the largest producer and consumer of PTA. Under the competitive landscape of theintegrated industrial chain, leading companies in the PTA industry have strong marketcompetitiveness in terms of the scale of a single set of facility, stable production and operation,material consumption, energy consumption, and product quality. As the PTA industry is goingthrough fiercer competition, its concentration will be further increased.
3. Polyester fiber
The chemical fiber industry is the core support for the stable development and continuousinnovation of the textile industry chain, an internationally competitive advantage industry, an
important component of the new materials industry, and plays an important role in the constructionof a modern industrial system. The chemical fiber industry is accelerating its development towardshigh-end, intelligent, green, and branded products:
Improve the added value of conventional fibers, enhance the production and application levelof high-performance fibers, accelerate the development of bio based chemical fibers anddegradable fiber materials, develop high-quality differentiated products, and strengthen thedevelopment of application technologies.Strengthen the research and application of intelligent equipment, and promote the researchand application of equipment such as large-scale integration, low energy intelligent logistics,automatic tube dropping, and automatic packaging. Accelerate the research and application ofautomatic head forming devices and online quality monitoring systems for polyester texturingequipment, and improve the intelligence level of spinning and winding equipment for polyester,spandex, and nylon. Promote the application of emerging digital technologies and enhance thedigitalization level of various links in the industrial chain, such as research and development design,production and manufacturing, warehousing and logistics. Build an industrial Internet platformintegrated with master data, real-time data, applications, identity resolution, managementinformation system and business intelligence, promote upstream and downstream enterprises inthe industrial chain to realize resource data sharing through the industrial Internet platform,strengthen supply and demand docking, and promote collaborative development and collaborativeapplication of the whole industry chain.
Optimize energy structure, strengthen clean production technology transformation andpromote key energy-saving and emission reduction technologies, and promote energy-saving andlow-carbon development. Improve the level of recycling, promote key technological breakthroughsand industrial development in the high-value utilization of waste textiles, accelerate theoptimization of the industrial structure and enterprise upgrading of recycled chemical fibers.
Taking technology as the core and demand oriented, increasing the supply of high-qualityproducts, cultivating well-known fiber brands, enhancing consumer awareness of Chinese fibers andcorporate brands, and promoting the internationalization of Chinese fibers and corporate brands.(II) Development strategy
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General development strategy: we are committed to providing quality fiber and creating abetter life for the society. Under the principle of “doing the right things at the right time”, we adhereto the development philosophy of “innovation, coordination, green, and sharing”, the operationconcept of “winning global markets with surpassing quality, persistence, and will”, and themanagement ideal of “people-centered, scientific, institutionalized, and professional”, foster acompany spirit of “solidarity, integrity, steadiness, and innovation”, increase the industrialinnovation capacity, improve industrial structures, and drive the Company into high-end, intelligent,green, integrated, and international development.
(1) The Company will take solid steps in “improving the upstream and enhancing thedownstream”. In the first place, the Company will continue to strengthen the upstream industrialplatform to support the development of “refining+ethylene+coalification” underpinning the “bigchemicals”, and implement “making up and enhancing the industrial chains” and “R&D andinnovations”, reserving space and paving ways for the new downstream material businesses in thefuture. On top of that, the Company will redouble its efforts in the downstream businesses,consolidate traditional market strengths, benchmark the breakthroughs in major new materials asthe development and upgrading of “new consumption” and “key&core technologies”, nurture newleading material business growth points in scale, and make strides toward a world leadingpetrochemical new material company that covers the whole industrial chain.
(2) The Company will take unswerving steps in adopting integrated development strategyacross the board. The Company will focus on diversifying the specs of the products, expandingcapacity, differentiating the products through R&D, technology and innovation upgrading, and strive
to realize the industrial development goal of “industrial growth in bases, scale production,meticulous products, professional technology, and sound management”.(III) Operational plan
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2024 is a crucial year for achieving the goals and tasks of the 14th Five Year Plan. The companyadheres to the overall tone of seeking progress while maintaining stability, consolidates traditionaladvantages, develops new driving forces, coordinates development and safety, mobilizes all positivefactors, gathers strength, adheres to integrity and innovation, and strives to achieve the company'sannual business goals, ensuring high-quality economic growth, and continuing to strive towards thegreat goal of "century long perseverance". The key work for the whole year will revolve around thefollowing aspects:
1. Strengthen efficient collaboration between production and sales, and make every effort toincrease market share.
Continue to strengthen "quality, cost, and quick response", adhere to the business policy of"sales determine production, production promotion", adhere to the business philosophy of"customer centered, market centered, and all staff marketing", quickly identify market changes andcustomer needs, establish a sound and flexible organizational structure, quickly respond to marketchanges, continuously optimize product structure, and meet market demand. Fully utilize the twomajor domestic and international markets, continue to increase market development efforts,expand marketing channels, and enhance market share.
2. Stimulate new productive forces and strengthen innovation driven development.
Deeply implement the innovation driven development strategy, continuously improve thetechnological innovation system, target key core technology links in the industrial chain, and deepenthe integration of industry, academia, research and application to promote industrial innovation.The refining, chemical, petrochemical, and fine chemical sectors should fully utilize the resourceadvantages of industrial parks, strengthen the extension of products to high-end fields, enhanceproduct competitiveness, and effectively promote green development of enterprises. The polyesternew materials sector should continue to leverage its technological advantages, increase efforts innew product development, concentrate advantageous resources, and break through the key coretechnologies of high-value fiber products.
3. Strengthen management empowerment and build a solid foundation for high-qualitydevelopment.
Further improve and perfect the safety and environmental protection management system,implement safety production responsibilities and safety management work, and build a higher andstronger safety defense line. Under the guidance of the national dual carbon policy, we willvigorously promote green manufacturing, optimize the industrial system, improve industrial layout,and continue to develop towards high-end, intelligent, and high-quality green development.
Efficiently implement "system management of personnel, process management, and formmanagement efficiency", further improve systems, optimize processes, and enhance managementefficiency and execution. Make full use of existing digital platforms, further improve overall researchand development capabilities, promote the improvement of intelligent manufacturing level, andhelp build industry-leading intelligent factories.(IV) Potential Risks
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Risk of macroeconomic fluctuations
The products involved in the company's business field are closely related to the nationaleconomy and people's livelihood, and there is a high degree of linkage between industrydevelopment and the prosperity of the national economy. The changes in the macro environmentof China's national economy, export policies, and consumer demand to a certain extent affectindustry operating rates, product prices, profitability, and so on. The company closely monitors the
macroeconomic situation and market dynamics, makes timely predictions, adjusts businessstrategies, and minimizes the risks caused by macroeconomic fluctuations.
2. Risk of raw material price fluctuations
The production and operation of the company are greatly affected by the price changes ofupstream raw materials, especially crude oil and coal. If the company's inventory and procurementmanagement, as well as downstream product market price adjustments, cannot effectively reduceor digest the impact of raw material price fluctuations, it may have adverse effects on the company'sbusiness production and performance. The company will continue to monitor market changes inraw materials, conduct dynamic analysis and judgment, choose appropriate procurementopportunities, control the fluctuation of raw material procurement prices, and effectively controlprocurement costs; Strengthen marketing management and reduce the adverse effects of rawmaterial fluctuations on the company.
3. Foreign exchange risk
If the RMB continues to fluctuate substantially, great uncertainties would be posed to theCompany’s exchange gains or losses, export product prices denominated in foreign currencies, rawmaterial prices and other operational factors. The Company will leverage forward foreign exchangecontracts and other methods to establish and improve the exchange rate hedging mechanism andreduce the amount of foreign currency receipts and payments in order to reduce the impact ofexchange rate changes on the Company’s profitability.
4. Environmental protection and safety risk
Realizing high standards of safety production and environmental protection operation is thelifeline, benefit line, and scenic line of enterprises. Environmental protection and safety issuesremain the top priority of enterprise risk management. The company has always adhered to thepolicy of "safety first, prevention oriented, and comprehensive governance", strengthened essentialsafety management, fully implemented the main responsibility of enterprise safety, deepenedsafety standardization and HSE system management, and continuously improved the ability ofsafety production technology innovation and risk control. Standardize accident emergencymanagement work, establish an emergency management system, prevent and reduce the risk ofemergencies, and improve the ability to respond to emergencies. With the enhancement ofenvironmental awareness and the tightening of government environmental protectionrequirements, the company actively integrates green and low-carbon production into enterprisedevelopment, increases environmental investment, and meets the requirements of potentiallyincreasingly strict environmental laws, regulations, and rules in the future(V) Others
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VII. Explanation of the circumstances and reasons why the company did not disclose
in accordance with the guidelines due to special reasons such as non-
applicability of the guidelines or state secrets and commercial secrets
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Chapter 4 Corporate Governance
I. Notes on Corporate Governance
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In strict accordance with the requirements of the Company Law, the Securities Law, the Code ofCorporate Governance for Listed Companies, the Rules Governing the Listing of Stocks on ShanghaiStock Exchange and other laws, regulations and regulatory documents, the Company continuouslyimproved the corporate governance structure, established and improved a sound system of internalmanagement including General Shareholders Meetings, the Board of Directors and the SupervisoryCommittee to regulate its operations. The Company has formed a corporate governance structurewith clear rights and responsibilities, effective checks and balances, scientific decision-making andcoordinated operations among organs of authority, decision-making organs, supervisory organs andthe senior management teams. The structure ensures the effective implementation of the decision-making power of the general shareholders’ meeting and the Board of Directors and the supervisorypower of the supervisory committee as well as efficient and compliant operations and managementof the senior management team. The company's board of directors has four special committees forstrategy and sustainable development, audit, nomination, and compensation and evaluation, whichprovide consultation and suggestions for major decisions of the board of directors to ensureprofessional and efficient decision-making. The company continues to pay attention to new changesin regulatory laws and regulations, effectively implements new regulatory policies and requirements,continuously strengthens risk prevention and control, solidly promotes internal controlmanagement, carries out high-quality information disclosure, follows the principles of truthfulness,accuracy, completeness, timeliness, and fairness, reduces the scope of insiders, and ensures that allshareholders have fair access to information. Actively carry out investor relations management work,treat all investors fairly with an honest and open attitude. Promote the construction of ESG system,strive to fulfill social responsibilities, effectively safeguard the legitimate rights and interests of thecompany and all shareholders, and ensure the company's sustained and stable development..
Whether there is any major difference between corporate governance and laws, administrativeregulations, and the provisions of the China Securities Regulatory Commission on the governanceof listed companies; if there is a major difference, the reason should be explained
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II. The specific measures taken by the company's controlling shareholders and actualcontrollers to ensure the independence of the company's assets, personnel,finances, institutions, and operations, as well as the solutions adopted toaddress factors affecting the company's independence, work progress, andsubsequent work plans
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The situation of the controlling shareholders, actual controllers, and their affiliated entities engagingin similar or related businesses as the company, as well as the impact of significant changes inindustry competition or competition, the measures taken to address them, the progress of thesolutions, and the subsequent resolution plans
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III. Notes on General Shareholders Meetings
| Meeting session | Date of meeting | Inquiry index of the designated website where the resolution is published | Disclosure date of resolution | Meeting resolution |
| publication | ||||
| 2022 Annual General Meeting | May 19, 2023 | http://www.sse.com.cn/ | May 20, 2023 | For details, please refer to the "Announcement on the Resolutions of Hengli Petrochemical's 2022 Annual Shareholders' Meeting" (Announcement No.: 2023-025) |
| 2023 The first extraordinary general meeting of shareholders | June 27, 2023 | http://www.sse.com.cn/ | June 28, 2023 | For details, please refer to the "Announcement on Resolutions of Hengli Petrochemical's 2023 First Extraordinary General Meeting of Shareholders" (Announcement No.: 2023-036) |
| 2023 The second extraordinary general meeting of shareholders | October 12, 2023 | http://www.sse.com.cn/ | October 13, 2023 | For details, please refer to the "Announcement on Resolutions of Hengli Petrochemical's 2023 Second Extraordinary General Meeting of Shareholders" (Announcement No.: 2023-057) |
| 2023 The third extraordinary general meeting of shareholders | December 29, 2023 | http://www.sse.com.cn/ | December 30, 2023 | For details, please refer to the "Announcement on Resolutions of Hengli Petrochemical's 2023 Third Extraordinary General Meeting of Shareholders" (Announcement No.: 2023-071) |
Shareholders of preference shares whose voting rights have been restored request to convene anextraordinary general meeting
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Note to the general meeting of shareholders
√适用 □不适用
During the reporting period, the company held a total of four shareholder meetings, includingone annual shareholder meeting and three extraordinary shareholder meetings. The convening andprocedures of the shareholder meetings complied with the provisions of laws, administrativeregulations, the "Rules of Shareholders' General Meetings of Listed Companies, " and the company'sarticles of association. The attendees and the convener of the meetings were qualified and valid.The voting procedures and results of the shareholder meetings were legal and effective.
IV. Information about directors, supervisors and senior executives(I) Changes in shareholding and remuneration of current and resigned directors, supervisors and senior executives within the reporting period
√适用 □不适用
Unit: Share
| Name | Position (Note) | Sex | Age | Position start date | Position end date | Number of shares held at the beginning of the year | Number of shares held at the end of the year | Increase or decrease of shares during the year | Reason for increase or decrease | The total pre-tax remuneration received from the company within the Reporting Period (10, 000 yuan) | Whether to get paid at the company’s related party |
| Fan Hongwei | Chairman of the board | Female | 57 | 2022-04-27 | 2025-04-27 | 791,494,169 | 791,494,169 | - | 120 | No | |
| Wang Zhiqing | Director, General Manager | Male | 62 | 2022-12-29 | 2025-04-27 | - | - | - | 165 | No | |
| Li Feng | Director, Deputy General Manager, Board Secretary | Male | 45 | 2022-04-27 | 2025-04-27 | - | - | - | 108.82 | No | |
| Liu Dunlei | Director, Deputy General Manager | Male | 52 | 2022-04-27 | 2025-04-27 | - | - | - | 146.49 | No | |
| Gong Tao | director | Male | 44 | 2022-04-27 | 2025-04-27 | - | - | - | 107.56 | No | |
| Liu Jun | Independent Director | Male | 60 | 2022-04-27 | 2025-04-27 | - | - | - | 20.00 | No | |
| Wu Yongdong | Independent Director | Male | 44 | 2022-04-27 | 2025-04-27 | - | - | - | 20.00 | No | |
| Xue | Independent | Male | 45 | 2022-04-27 | 2025-04-27 | - | - | - | 20.00 | No |
| Wenliang | Director | ||||||||||
| Kang Yunqiu | Chairman of the Supervisory Board | Female | 44 | 2022-04-27 | 2025-04-27 | 4,640 | 4,640 | - | - | Yes | |
| Shen Guohua | Supervisor | Male | 46 | 2022-04-27 | 2025-04-27 | - | - | - | 49.34 | No | |
| Tang Fangming | Employee Supervisor | Male | 44 | 2022-04-06 | 2025-04-27 | - | - | - | 37.26 | No | |
| Liu Qianhan | Deputy General Manager | Male | 47 | 2022-04-27 | 2025-04-27 | - | - | - | 72.50 | No | |
| Liu Xuefen | Deputy General Manager, Chief Financial Officer | Female | 52 | 2022-04-27 | 2025-04-27 | - | - | - | 143.48 | No | |
| Zhang Wenyu | Deputy General Manager | Male | 49 | 2023-08-07 | 2025-04-27 | 15,000 | - | -15,000 | Note: Zhang Wenyu has not bought or sold the company's stock since he became the deputy general manager | 32.99 | No |
| Total | / | / | / | / | / | 791,513,809 | 791,498,809 | -15,000 | / | 1,043.45 | / |
| Name | Main work experience |
| Fan | Born in 1967, Chinese nationality, no overseas permanent residence, college degree. From May 1994 to December 2001, he served as the general manager |
| Hongwei | of Wujiang Chemical Fiber Weaving Factory Co., Ltd.; from January 2002, he served as the director of Hengli Group Co., Ltd.; from November 2002 to August 2011, he served as the director of Jiangsu Hengli Chemical Fiber Limited; From August 2011 to March 2016, served as the vice chairman and general manager of Jiangsu Hengli Chemical Fiber Co., Ltd.; since March 2016, he has served as the chairman of Jiangsu Hengli Chemical Fiber Co., Ltd. From March 2016 to December 2022, he served as the chairman and general manager of the Company; since December 2022, he has served as the chairman of the Company. |
| Wang Zhiqing | Born in 1962, Chinese nationality, no overseas permanent residence, Doctor of Engineering, professor-level senior engineer. Started to work in 1983, successively served as chief engineer of Luoyang Petrochemical General Plant, deputy manager and manager of Sinopec Luoyang Branch, leader of Sinopec Guangxi Oil Refining Preparatory Team, general manager of Sinopec Jiujiang Branch, Director of Jiujiang Petrochemical Complex, chairman, general manager, and deputy secretary of the party committee of Shanghai Petrochemical Co., Ltd. Since December 2022, he has served as the general manager of the Company,and since June 2023 served as a director of the Company. |
| Li Feng | Born in 1979, Chinese nationality, no overseas permanent residence, master's degree, senior economist, member of the third M&A financing committee of China Association of Listed Companies. Served as project manager, office director, and deputy general manager of Jiangsu Hengli Chemical Fiber Co., Ltd.; served as deputy general manager and secretary of the board of directors of Jiangsu Hengli Chemical Fiber Co., Ltd. from August 2011 to March 2016; Since March 2016, he has served as director and deputy general manager of Jiangsu Hengli Chemical Fiber Co., Ltd.; since March 2016, he has served as director, deputy general manager and secretary of the board of directors of the Company. |
| Gong Tao | Born in 1980, Chinese nationality, no overseas permanent residence, master degree. He used to be a technician of Xianglu Petrochemical (Xiamen) Co., Ltd., a monitor of Zhejiang Yisheng Petrochemical Co., Ltd., and an engineer of Hanbang (Jiangyin) Petrochemical Co., Ltd.; from February 2011 to May 2015 years, he was the director and manager of Hengli Petrochemical (Dalian) Co., Ltd.; From May 2015 to now, he has been the deputy general manager of Hengli Petrochemical (Dalian) Co., Ltd. Since March 2018, he has served as a director of the Company. |
| Liu Dunlei | Born in 1972, Chinese nationality, no overseas permanent residence, bachelor degree. Served as assistant to the general manager and manager of Qingdao Gaohe Co., Ltd.; successively served as FDY engineer, workshop director, and manager of Area E of the filament department of Jiangsu Hengli Chemical Fiber Co., Ltd.; Since August 2012, he has served as the general manager of Jiangsu Hengke Advanced Materials Co. Ltd.; since March 2016, he has served as the Company's deputy general manager; since March 2018, he has served as the Company's director and deputy general manager. |
| Liu Jun | Born in 1964, Chinese nationality, no overseas permanent residence, Ph.D. He used to be an associate professor, professor, and vice president of Nanjing Normal University, and served as a member of the party group, vice president, member of the judicial committee, and judge of Yangzhou Intermediate People's Court. He is currently a professor at the Law School of Nanjing Normal University. Since April 2022, he has served as an independent director of the Company. |
| Wu Yongdong | Born in 1980, Chinese nationality, no overseas permanent residence, bachelor degree, Chinese certified public accountant. Served as senior project manager of Tianjian Certified Public Accountants (Special General Partnership), credit partner of Ruihua Certified Public Accountants (Special General Partnership) Zhejiang Branch, Internal audit director and director of Hangzhou Shunwang Technology Co., Ltd., and financial director of Zhejiang Chuangke Network Co., Ltd. He is currently the financial director of Hangzhou Jierui Air Treatment Equipment Co., Ltd. Since April 2022, he has served as an independent director of the Company. |
| Xue Wenliang | Born in 1979, Chinese nationality, no overseas permanent residence, Ph.D., once served as an associate researcher and master tutor at the Textile College of Donghua University, and is now a professor and doctoral tutor at the Textile College of Donghua University. Since April 2022, he has served as an independent director of the Company. |
| Kang Yunqiu | Born in 1980, Chinese nationality, no permanent residence abroad, bachelor degree, senior economist. Served as general ledger accountant of Jiangsu Hengli Chemical Fiber Co., Ltd., financial manager of Jiangsu Boyada Textile Co., Ltd., financial director of Suzhou Wujiang Tongli Lake Tourist Resort Co., Ltd. He is currently the assistant to the chief financial officer of Hengli Group Co., Ltd., and the director of Suzhou Wujiang Tongli Lake Tourist Resort Co., Ltd. Since April 2022, he has served as the chairman of the Company's board of supervisors. |
| Shen Guohua | Born in 1978, Chinese nationality, no overseas permanent residence, college degree. Previously served as deputy manager of the general ledger accountant and finance department of Jiangsu Hengli Chemical Fiber Co., Ltd.; from December 2017 to August 2021, he served as the manager of the Company's audit department. Since August 2021, he has served as the Company's audit director. Since April 2022, he has served as a supervisor of the Company. |
| Tang Fangming | Born in 1980, Chinese nationality, no overseas permanent residence, bachelor degree, senior engineer, successively worked as a technician, engineer, and director of the enterprise management department of Jiangsu Hengli Chemical Fiber Co., Ltd.; he is currently the assistant to the general manager of Jiangsu Hengli Chemical Fiber Co., Ltd. Since April 2022, he has served as the employee supervisor of the Company. |
| Liu Qianhan | Born in 1977, Chinese nationality, no overseas permanent residence, master degree. Served as business representative, deputy sales manager and sales manager of Jiangsu Hengli Chemical Fiber Co., Ltd.; Deputy General Manager of Jiangsu Hengli Chemical Fiber Co., Ltd. from September 2010 to now; current Deputy General Manager of the Company. |
| Liu Xuefen | Born in 1972, Chinese nationality, no overseas permanent residence, college degree. Worked as cashier and accountant of Wujiang Silk Sample Factory; teller, loan officer and accounting supervisor of Shengze Branch of China Construction Bank; from April 2004 to April 2012, manager of the audit department of Jiangsu Hengli Chemical Fiber Co., Ltd; Since April 2012, he has served as the financial director of Hengli Petrochemical (Dalian) Co., Ltd.; from May 2016 to March 2018, he has served as the Company's supervisor; he is currently the Company's deputy general manager and financial director. |
| Zhang Wenyu | Born in 1975, Chinese nationality, no overseas permanent residence, college degree. He has served as the sales manager of Jiangsu Hengke New Material Co., Ltd. and the sales director of Jiangsu Hengli Chemical Fiber Co., Ltd. He is currently the deputy general manager of Jiangsu Hengli Chemical Fiber Co., Ltd. and the deputy general manager of the company. |
Other note
√适用 □不适用
1. The total pre-tax remuneration received by directors, supervisors, and senior management during the reporting period only includes theirremuneration during their tenure.
2. The shareholding changes of Zhang Wenyu during the reporting period occurred before he became the deputy general manager, and he has notbought or sold the company's shares since taking office as the deputy general manager.
3. The company held the ninth meeting of the ninth board of directors on June 7, 2023 and the first extraordinary general meeting of shareholdersin 2023 on June 27, 2023 to consider and approve relevant proposals, agreeing to elect Wang Zhiqing as a non-independent director of the ninth board ofdirectors. On August 7, 2023, the eleventh meeting of the ninth board of directors was held to consider and approve relevant proposals, agreeing to appointZhang Wenyu as the deputy general manager of the company.
or details, please refer to the "Announcement of the Resolution of the Ninth Meeting of the Ninth Board of Directors of Hengli Petrochemical"
(Announcement No. 2023-030), "Announcement of the Resolution of the First Extraordinary General Meeting of Shareholders of Hengli Petrochemical in2023" (Announcement No. 2023-036), and "Announcement of the Resolution of the Eleventh Meeting of the Ninth Board of Directors of HengliPetrochemical" (Announcement No. 2023-044) published by the company on June 8, 2023, June 28, 2023, and August 8, 2023 respectively on the designatedinformation disclosure media.
(II) Positions of current and resigned directors, supervisors and senior executives during thereporting period
1. Employment in shareholders' entities
√适用 □不适用
| Staff name | Name of shareholders' entity | Positions held in shareholders’ entity | Start date of the term | End date of the term |
| Fan Hongwei | Hengli Group Co., Ltd. | Director | January 2014 | |
| Fan Hongwei | Hailaide International Investment Ltd. | Director | January 2014 | |
| Fan Hongwei | Tak Shing Li International Holdings Ltd. | Director | January 2014 | |
| Fan Hongwei | Hengneng Investment (Dalian) Co., Ltd. | Executive Director | January 2017 | |
| Fan Hongwei | Hengfeng Investment (Dalian) Co., Ltd. | Executive Director | January 2017 | |
| Fan Hongwei | Suzhou Huaer Investment Co., Ltd. | Supervisor | January 2014 | |
| Fan Hongwei | Suzhou Shenglun Investment Co., Ltd. | Supervisor | January 2014 | |
| Kang Yunqiu | Hengli Group Co., Ltd. | Assistant to the Chief Financial Officer | February 2014 | |
| Note to employment in shareholders' entity | Suzhou Huaer Investment Co., Ltd. and Suzhou Shenglun Investment Co., Ltd. are the secondary shareholders of the company | |||
2. Employment in other entities
√适用 □不适用
| Staff name | Name of other entity | Positions held in other entity | Start date of the term | End date of the term |
| Fan Hongwei | Suzhou Tongli Lake Conference Center Co., Ltd. | Supervisor | April 2015 | |
| Fan Hongwei | Wujiang Huayi Investment Co., Ltd. | Supervisor | January 2014 | |
| Fan Hongwei | Jiangsu Boyada Textile Co., Ltd. | Director | January 2014 | |
| Fan Hongwei | Suzhou Kanglian Investment Co., Ltd. | Supervisor | October 2014 | |
| Fan Hongwei | Suzhou Haolan Investment Co., Ltd. | Supervisor | October 2014 | |
| Fan Hongwei | Suzhou Chundao Investment Co., Ltd. | Supervisor | October 2014 | |
| Fan Hongwei | Suzhou Hanci Investment Co., Ltd. | Supervisor | October 2014 | |
| Fan Hongwei | Suzhou Zhongkun Investment Co., Ltd. | Supervisor | October 2014 | |
| Fan Hongwei | Wujiang Chemical Fiber Weaving Factory Co., Ltd. | Supervisor | January 2014 |
| Fan Hongwei | Hengli Import and Export Co., Ltd. | Supervisor | January 2014 | |
| Fan Hongwei | Wujiang Tiancheng Real Estate Co., Ltd. | Supervisor | January 2014 | |
| Fan Hongwei | Suzhou Kangjia Property Management Co., Ltd. | Supervisor | January 2014 | |
| Fan Hongwei | Suzhou Hengli Real Estate Co., Ltd. | Supervisor | January 2014 | |
| Fan Hongwei | Suzhou Wujiang Tongli Lake Tourist Resort Co., Ltd. | Director | July 2015 | |
| Fan Hongwei | Yingkou Henghan Investment Co., Ltd. | Supervisor | January 2014 | |
| Fan Hongwei | Hengli Investment (Yingkou) Co., Ltd. | Supervisor | June 2014 | |
| Fan Hongwei | Yingkou Comfort Investment Co., Ltd. | Supervisor | June 2014 | |
| Fan Hongwei | Yingkou Lishun Real Estate Co., Ltd. | Supervisor | July 2014 | |
| Fan Hongwei | Yingkou Lida Real Estate Co., Ltd. | Supervisor | July 2014 | |
| Fan Hongwei | Yingkou Ligang Real Estate Co., Ltd. | Supervisor | July 2014 | |
| Fan Hongwei | Zidian International Investment Co., Ltd. | Director | January 2014 | |
| Fan Hongwei | Suzhou Hengli Intelligent Technology Co., Ltd. | Supervisor | July 2017 | |
| Fan Hongwei | Sichuan Hengli Real Estate Co., Ltd. | Executive Director | November 2019 | |
| Fan Hongwei | Shanghai Yuanyuan Education Technology Co., Ltd. | Director | August 2020 | |
| Kang Yunqiu | Hengli Industrial Investment (Suzhou) Co., Ltd. | Supervisor | November 2019 | |
| Kang Yunqiu | Hengli (Suzhou) Technology R&D Co., Ltd. | Supervisor | July 2020 | |
| Kang Yunqiu | Hengli Industrial Construction (Suzhou) Co., Ltd. | Supervisor | January 2021 | |
| Kang Yunqiu | Suzhou Wujiang Tongli Lake Tourist Resort Co., Ltd. | Director | October 2022 | July 2024 |
| Kang Yunqiu | Hengli (Shenzhen) Investment Group Co., Ltd | Supervisor | March 2024 | |
| Kang Yunqiu | Suzhou Jiebang Real Estate Co., Ltd | Supervisor | November 2023 | |
| Kang Yunqiu | Suzhou Beifu Real Estate Co., Ltd | Supervisor | November 2023 | |
| Kang Yunqiu | Suzhou Anjing Real Estate Co., Ltd | Supervisor | November 2023 | |
| Kang Yunqiu | HengAn Internet (Beijing) Information Technology Co., Ltd | Supervisor | December 2023 | |
| Kang Yunqiu | Suzhou Hengli System Integration Co., Ltd | Supervisor | September 2020 | |
| Kang Yunqiu | Suzhou Yuean Real Estate Co., Ltd | Supervisor | November 2023 | |
| Li Feng | Suzhou Yikai Statistics Office Co., Ltd | Supervisor | May 2015 | |
| Liu Jun | Guangxi Ruiyi New Energy Co., Ltd | Director | October 2020 | |
| Wu Yongdong | Hangzhou Jierui Air Treatment Equipment Co., Ltd. | Chief Financial Officer | December 2021 |
| Note to employment in other organizations |
(III) Remuneration of Directors, Supervisors and Senior Management
√适用 □不适用
| Decision-making procedures for the remuneration of directors, supervisors and senior executives | The compensation plan for the company's directors and the salary distribution plan for senior executives proposed by the Remuneration and Appraisal Committee, and reported to the Board of Directors for approval |
| Whether the director withdraws when discussing his own remuneration in the board meeting | Yes |
| Specific details of the recommendations made by the Remuneration and Evaluation Committee or the special meeting of independent directors on the remuneration of directors, supervisors, and senior management personnel | The Remuneration and Evaluation Committee evaluated the annual performance of the company's directors and senior executives by understanding the company's main financial indicators and the completion of business objectives, reviewing the company's directors and senior executives' personal performance reports, and convening a meeting to review their remuneration plans. They concluded that the remuneration plan was reasonable and that the management team's remuneration was in line with market-based salaries. |
| Basis for Determination of Remuneration of Directors, Supervisors and Senior Management | According to the company's overall operating conditions and the annual salary level of previous years, it is determined by comparing the director and executive salary levels of similar listed companies and Others companies in the same industry |
| Actual Payment of Remuneration to Directors, Supervisors and Senior Management | The payment has been completed according to the results of the performance appraisal. For details, please refer to the "Statement of Shareholding Changes and Remuneration of Directors, Supervisors and Senior Management" |
| Total remuneration actually received by all directors, supervisors and senior management at the end of the reporting period | 10.4345 million yuan |
(IV) Changes in Directors, Supervisors and Senior Management of the Company
√适用 □不适用
| Name | Position held | Changes | Reason for change |
| Wang Zhiqing | Director | Election | Company work arrangement |
| Zhang Wenyu | Deputy General Manager | Appointment | General Election of the Board of Directors |
(V) Explanation of punishments received by securities regulatory agencies in the past three years
□适用 √不适用
(VI) Others
□适用 √不适用
V. Relevant information on board meetings held during the reporting period
| Meeting session | Date of Meeting | Meeting resolutions |
| Announcement of the Resolution of the Seventh Meeting of the Ninth Board of Directors | 2023-2-12 | 1. “Proposal on Changing the Asset Management Institution of the Third Phase Employee Stock Ownership Plan” 2. “Proposal on Changing the Asset Management Institution of the Fifth Employee Stock Ownership Plan” |
| Announcement of the Resolution of the 8th Meeting of the 9th Board of Directors | 2023-4-26 | 1. “General Manager Work Report for 2022” 2. “Work Report of the Board of Directors for 2022” 3.” Annual Report 2022 and Abstract” 4. “Financial Final Account Report for 2022” 5. “Proposal on Not Proposing Profit Distribution in 2022” 6. “Company's 2022 Annual Internal Control Evaluation Report" 7. “Proposal on the Remuneration of Directors and Senior Management in 2022” 8. “2022 Social Responsibility Report” 9. “Proposal on the Estimated Situation of Daily Related Transactions in 2023” 10. “Proposal on Conducting Foreign Exchange Derivatives Trading Business in 2023” 11. “Proposal on Carrying out Futures Hedging Business in 2023” 12. “Proposal on the 2023 Entrusted Investment Plan” 13. “Proposal on the 2023 Guarantee Plan” 14. “Proposal on Applying for Comprehensive Credit Line in 2023” 15. “Proposal on Renewal of Appointment of Accounting Firm” 16. “First Quarterly Report of 2023” 17. “Proposal on Revising the Information Disclosure Suspension and Exemption Management System” 18. “Proposal on the Revision of the Investor Relations Management System” 19. “Proposal on Changes in Accounting Policies” 20. “Proposal on Convening the 2022 Annual General Meeting of Shareholders of the Company” |
| Announcement of the Resolution of the 9th Meeting of the 9th Board of Directors | 2023-6-7 | 1.” Proposal on Increasing the Number of Board of Directors and Amending Some Provisions of the Articles of Association” 2. “Proposal on Amending the Rules of Procedure of the Board of Directors” 3. “Proposal on the Renaming of the Strategy and Investment Committee of the Board of Directors and the Revision of the Relevant Implementation Rules” 4. “Proposal on the election of Mr. Wang Zhiqing as a non-independent director of the 9th Board of Directors of the Company” 5. “Proposal on Adjusting the Members of the Special Committee of the Board of Directors” 6. “Proposal on Convening the First Extraordinary General Meeting of Shareholders of the Company in 2023” |
| Announcement of the Resolution of the 10th Meeting of the 9th Board of Directors | 2023-7-4 | 1. “Proposal on Approving the Restructuring and Listing of the Company's Subsidiary, Kanghui New Material Technology Co., Ltd.” 2. “Proposal on the Restructuring and Listing of the Subsidiary Kanghui New Material Technology Co., Ltd. in Compliance with Relevant Laws and Regulations” 3. “Proposal on the Restructuring and Listing Plan for the Spin-off of the Subsidiary Kanghui New Material Technology Co., Ltd.” 4. “Plan on Restructuring and Listing of the Subsidiary Kanghui New Material Technology Co., Ltd.” 5. “Proposal on the Restructuring and Listing of the Subsidiary Kanghui New Material Technology Co., Ltd. in Accordance with the "Split Rules for Listed Companies (Trial Implementation)" 6. “Proposal on the Restructuring and Listing of the Subsidiary Kanghui New Material Technology Co., Ltd. to Safeguard the Legitimate Rights and Interests of Shareholders and Creditors” 7. “Proposal on the Maintenance of Independence and Continuous Operation Capacity of Listed Companies” 8. “Proposal on the Ability of New Companies Formed by Spin-off to Operate in a Standardized Manner” 9. “Proposal on the completeness and compliance of the legal procedures for this spin-off and the validity of the legal documents submitted” 10. “Proposal on the Purpose, Commercial Rationality, Necessity and Feasibility Analysis of This Spin-off” 11. “Proposal on Requesting the General Meeting of Shareholders to Authorize the Board of Directors and Its Authorized Personnel to Handle Matters Related to This Spin-off” 12. “Proposal on Not Convening a Shareholders' Meeting to Review the Restructuring and Listing of the Company's Subsidiaries” |
| Announcement of the Resolution of the 11th Meeting of the 9th Board of Directors | 2023-8-7 | “Proposal on Appointment of Deputy General Manager of the Company” |
| Announcement of the resolution of the 12th meeting of the 9th Board of Directors | 2023-8-22 | “Full Text and Abstract of the 2023 Semi-annual Report” |
| Announcement of the resolution of the 13th meeting of the 9th Board of Directors | 2023-9-11 | 1. “Proposal on Approving the Restructuring and Listing of the Company's Subsidiary, Kanghui New Material Technology Co., Ltd” 2. “Proposal on the Restructuring and Listing of the Subsidiary Company Kanghui New Material Technology Co., Ltd. in Accordance with Relevant Laws and Regulations” 3. “Proposal on the Restructuring and Listing Plan for the Spin-off of Subsidiary Kanghui New Material Technology Co., Ltd” 4. “Proposal on the Plan (Revised Draft) of Hengli Petrochemical Co., Ltd. to Split and Restructure its Subsidiary Kanghui New Material Technology Co., Ltd. for Listing” |
| 5. “Proposal on the Restructuring and Listing of the Subsidiary Kanghui New Material Technology Co., Ltd. in Accordance with the "Listed Company Spin-off Rules (Trial Implementation)" 6. “Proposal on the Restructuring and Listing of the Subsidiary Kanghui New Material Technology Co., Ltd. to Safeguard the Legitimate Rights and Interests of Shareholders and Creditors” 7. “Proposal on the Maintenance of Independence and Continuous Operation Capacity of Listed Companies” 8. “Proposal on the Ability of New Companies Formed by Spin-off to Operate in a Standardized Manner” 9. “Proposal on the Completeness and Compliance of the Legal Procedures for the Performance of This Spin-off and the Validity of the Legal Documents Submitted” 10. “Proposal on the purpose, commercial rationality, necessity and feasibility analysis of this spin-off” 11. “Proposal on Requesting the General Meeting of Shareholders to Authorize the Board of Directors and Its Authorized Personnel to Handle Matters Related to This Spin-off” 12. “Proposal on Convening the Second Extraordinary General Meeting of Shareholders in 2023” | ||
| Announcement of the Resolution of the 14th Meeting of the 9th Board of Directors | 2023-10-27 | “Third Quarterly Report of 2023” |
| Announcement of the Resolution of the 15th Meeting of the 9th Board of Directors | 2023-12-13 | 1. “Proposal on Amending the Working System of Independent Directors” 2. “Proposal on Amending the Implementation Rules of the Special Committees of the Board of Directors” 3. “Proposal on Amending the Special Management System for Raised Funds” 4. “Proposal on the Revision of the Foreign Exchange Derivatives Trading Business Management System” 5. “Proposal on Revising the Management System of Foreign Guarantees” 6. “Proposal on Establishing the Accounting Firm Selection and Employment System” 7. “Proposal on Adjusting the Members of the Special Committee of the Ninth Board of Directors” 8. “Proposal on Convening the Third Extraordinary General Meeting of Shareholders in 2023” |
VI. Performance of duties by directors(I) Participation of Directors in the Board of Directors and General Meetings of Shareholders
| Director's name | Whether independent dire | Participation in the board of directors | Participation in the general meeting of shareholders | |||||
| Numbe | In- | Participation | Entruste | Numbe | Did not | Attendanc | ||
| ctor | r of board meetings this year | person attendance | by means of communication | d attendance | r of absences | attend two meetings in person in a row | e at general meetings of shareholders | |
| Fan Hongwei | No | 9 | 9 | 2 | 0 | 0 | No | 3 |
| Wang Zhiqing | No | 6 | 6 | 4 | 0 | 0 | No | 1 |
| Li Feng | No | 9 | 9 | 2 | 0 | 0 | No | 4 |
| Liu Dunlei | No | 9 | 9 | 7 | 0 | 0 | No | 2 |
| Gong Tao | No | 9 | 9 | 7 | 0 | 0 | No | 1 |
| Liu Jun | Yes | 9 | 9 | 7 | 0 | 0 | No | 2 |
| Xue Wenliang | Yes | 9 | 9 | 7 | 0 | 0 | No | 2 |
| Wu Yongdong | Yes | 9 | 9 | 7 | 0 | 0 | No | 2 |
Explanation for failing to attend two board meetings in person in a row
□适用 √不适用
| Number of board meetings held during the year | 9 | 10 |
| Including: Number of on-site meetings | 0 | 0 |
| Number of meetings held by means of communication | 2 | 2 |
| Number of meetings held on site combined with communication | 7 | 8 |
(II) Situation where directors raise objections to relevant matters of the company
□适用 √不适用
(III) Others
□适用 √不适用
VII. Special committees under the board of directors
√适用 □不适用
(I). Membership of special committees under the board of directors
| Special committee | Members |
| Audit Committee | Wu Yongdong, Liu Jun, Gong Tao |
| Nominating Committee | Liu Jun, Xue Wenliang, Liu Dunlei |
| Remuneration and Appraisal Committee | Xue Wenliang, Wu Yongdong, Li Feng |
| Strategy Committee | Fan Hongwei, Wang Zhiqing, Xue Wenliang |
(II). During the reporting period, the Audit Committee held 6 meetings
| Date of meeting | Meeting content | Material comments and suggestions | Other performance of duties |
| April 20, 2023 | The second annual audit communication meeting was held to express opinions on matters such as the preliminary audit opinions to be issued by the annual | Nil | Nil |
| audit accountants on the company's financial and accounting statements. | |||
| April 26, 2023 | Deliberate the Company's 2022 Annual Financial Accounting Statement, the Summary Report of the Audit Committee of the Board of Directors on the 2022 Annual Audit Work, the Company's 2022 Annual Internal Control Evaluation Report, the Proposal for Renewing the Accounting Firm, the 2022 Annual Report and its Summary, the Proposal on the Estimated Daily Related Transactions in 2023, the Company's First Quarter Financial Accounting Statement for 2023, and the First Quarter Report for 2023, and issue written audit opinions | Nil | Nil |
| August 22, 2023 | Review the "2023 Semi-annual Report" and provide written review comments | Nil | Nil |
| October 27, 2023 | Review the Third Quarterly Report of 2023 and provide written review opinions | Nil | Nil |
| December 1, 2023 | The first annual review communication meeting for the 2023 annual report was held | Nil | Nil |
| December 12, 2023 | The company will review the "Accounting Firm Selection and Employment System" and provide audit opinions | Nil | Nil |
(III). During the reporting period, the Nomination Committee held 2 meetings
| Date of meeting | Meeting content | Material comments and suggestions | Other performance of duties |
| June 7, 2023 | The company conducted a review of the qualifications of Wang Zhiqing, a non-independent director candidate who was elected by the company, and reviewed his resume and other information to determine whether he had the qualifications and abilities to hold the position. An audit opinion was issued | Nil | Nil |
| August 7, 2023 | The qualification review of Zhang Wenyu, the candidate for the deputy general manager of the company, was conducted by reviewing his resume and other information to determine whether he has the qualifications and abilities to assume the position, and an audit opinion was issued | Nil | Nil |
(IV). During the reporting period, the Remuneration and Appraisal Committee held 1 meeting
| Date of meeting | Meeting content | Material comments and suggestions | Other performance of duties |
| April 25, 2023 | Deliberate “the Proposal on the Remuneration of Directors and Senior Management of the Company in 2022” | Nil | Nil |
(V). During the reporting period, the Strategy and Investment Committee held 2 meeting
| Date of meeting | Meeting content | Material comments and suggestions | Other performance of duties |
| July 3, 2023 | Deliberate the restructuring and listing of the company's spin-off subsidiary Kanghui New Material Technology Co., Ltd., and issue audit opinions | Nil | Nil |
| September 10, 2023 | Deliberate the matters related to the restructuring and listing of the company's spin-off subsidiary Kanghui New Material Technology Co., Ltd., and issue audit opinions | Nil | Nil |
(VI). Specific circumstances of objections
□适用 √不适用
VIII. Explanation of the Board of Supervisors’ discovery of risks in the company
□适用 √不适用
The Supervisory Committee had no objection to the supervisory matters during the reporting period.
IX. Employees of the parent company and major subsidiaries at the end of thereporting period(I) Employees
| The number of employees employed by the parent company | 32 |
| The number of employees in the main subsidiary | 35,975 |
| Total Number of Employees | 39,615 |
| Number of retired employees whose parent company and main subsidiaries need to bear the expenses | 428 |
| Professional composition | |
| Professional composition category | Headcount |
| Production staff | 29,854 |
| Sales staff | 390 |
| Technical staff | 5,539 |
| Financial officer | 258 |
| Administrative staff | 1,544 |
| Others | 2,030 |
| Total | 39,615 |
| Education level | |
| Education level category | Headcount |
| Doctor | |
| Master | 17 |
| Undergraduate | 277 |
| College and below | 5,979 |
| Total | 33,342 |
| 39,615 | |
(II) Remuneration policy
√适用 □不适用
The company has established a legal, standardized, and effective salary and job grading system,taking into account the internal and external labor market conditions, regional and industrydifferences, and the value of employee positions. The principles guiding the system are"competitiveness externally, fairness internally, and protection of employee development space."The grading and salary determination are based on factors such as responsibilities, capabilities, andperformance contributions. Each subsidiary company refines and implements specificcompensation plans, promotion channels, and assessment indicators that are suitable for its owndevelopment, based on its business scope, industry, and regional factors.
The company's compensation and benefits primarily include basic salary, position-based salary,seniority-based salary, piecework wages, bonuses, overtime pay, night shift allowances,
management allowances, skill allowances, etc. The company also provides social insurance andhousing fund contributions for employees, offers free entry medical examinations, free work meals,holiday allowances, birthday cakes, etc. Annual salary increases are determined based on marketbenchmarks and the company's salary range, while annual bonuses are distributed based oncompany performance and individual achievements. The fair, reasonable, and competitivecompensation system aims to attract and retain outstanding talents, provide employees with asense of belonging and identity, motivate their sense of responsibility and enthusiasm, and promotethe mutual enhancement of company and employee value.
(III) Training plan
□适用 √不适用
(IV) Labor outsourcing
□适用 √不适用
X. Profit distribution or capital reserve conversion plan(I) Formulation, implementation or adjustment of cash dividend policy
√适用 □不适用
During the reporting period, there was no adjustment to the company's cash dividend policy.The company strictly follows the relevant provisions of the "Articles of Association" and"Shareholder Return Plan for the Next Five Years (2020-2024) ".
(II) Special Notes on Cash Dividend Policy
√适用 □不适用
| Does it comply with the provisions of the company's bylaws or requirements set by the shareholders' meeting resolutions? | √是 □否 |
| Are the dividend standards and ratios clear and explicit? | √是 □否 |
| Are the relevant decision-making procedures and mechanisms complete? | √是 □否 |
| Have the independent directors fulfilled their duties and played their expected roles? | √是 □否 |
| Do minority shareholders have sufficient opportunities to express their opinions and demands, and have their legal rights and interests been adequately protected? | √是 □否 |
(III) If the company has made profits during the reporting period and the parent company has
distributable profits, but no proposed cash dividend distribution plan has been put forward,
the company should provide detailed disclosure of the reasons as well as the purpose and
utilization plan of the undistributed profits
□适用 √不适用
(IV) Profit distribution and conversion of capital reserve into share capital during the reporting
period
√适用 □不适用
Unit: Ten thousand Yuan Currency: RMB
| Bonus shares for every 10 shares (shares) | 0 |
| Dividend per 10 shares (yuan) (tax included) | 5.5 |
| Number of conversions per 10 shares (shares) | 0 |
| Cash dividend amount (tax included) | 387,150.49 |
| Net profit attributable to ordinary shareholders of listed companies in the annual consolidated statement of dividends | 690,460.39 |
| Ratio of net profit attributable to ordinary shareholders of listed companies in the consolidated statements (%) | 56.07 |
| Repurchase of shares in cash is included in the amount of cash dividends | 0 |
| Total dividend amount (tax included) | 387,150.49 |
| The ratio of the total dividend amount to the net profit attributable to ordinary shareholders of the listed company in the consolidated statement (%) | 56.07 |
XI. The status and impact of the company's equity incentive plan, employee stockownership plan or other employee incentives(I) Relevant incentives have been disclosed in temporary announcements and there is no
progress or change in subsequent implementation
√适用 □不适用
| Event | Index |
| Proposed to change the asset management institution of the third and fifth employee stock ownership plans | For details, please refer to the "Announcement of Hengli Petrochemical on Changing the Asset Management Institution of the Third and Fifth Employee Stock Ownership Plans" (Announcement No. 2023-003) disclosed by the company on the website of the Shanghai Stock Exchange on February 18, 2023 |
| The lock-up period of the sixth employee stock ownership plan has expired | For details, please refer to the "Indicative Announcement of Hengli Petrochemical on the Expiration of the Lock-up Period for the Sixth Employee Stock Ownership Plan" (Announcement No. 2023-023) disclosed by the company on the website of the Shanghai Stock Exchange on May 10, 2023 |
| The asset management institution for the third and fifth employee stock ownership plans has been changed | For details, please refer to the announcement of Hengli Petrochemical on the completion of the change of asset management institutions for the third and fifth employee stock ownership plans disclosed on the website of the Shanghai Stock Exchange on May 27, 2023 (Announcement No. 2023-027) |
(II) Incentives not disclosed in the temporary announcement or with follow-up progressEquity Incentive Situation
□适用 √不适用
Other note
□适用 √不适用
Employee Stock Ownership Plan Status
□适用 √不适用
Other incentives
□适用 √不适用
(III) Share incentives granted to directors and senior executives during the reporting period
□适用 √不适用
(IV) The establishment and implementation of the evaluation mechanism for senior
management personnel and the incentive mechanism during the reporting period
√适用 □不适用
The company has established a senior management performance evaluation and incentivemechanism, with a compensation and assessment committee under the board of directors. Thiscommittee is responsible for studying and formulating the standards and procedures for evaluatingsenior management personnel and reviewing their compensation policies and plans. The companycontinuously improves its long-term incentive policies based on actual circumstances, aiming tomotivate senior management to fulfill their responsibilities diligently and responsibly.
XII. Construction and implementation of internal control system during the reporting
period
√适用 □不适用
During the reporting period, the company strictly adhered to various laws and regulations, suchas the "Company Law, " "Basic Norms for Enterprise Internal Control, " "Listing Rules of the ShanghaiStock Exchange, " and "Self-regulatory Guidelines for Listed Companies of the Shanghai StockExchange - Standard Operations." The company also followed internal control system standards tooperate and manage risks effectively. The company established a robust internal controlmanagement system, taking into account industry characteristics and actual business operations.The internal control system was continuously optimized and improved to ensure the lawful andcompliant operation and management of the company, asset security, and the accuracy andintegrity of financial reporting and related information. These measures aimed to enhanceoperational efficiency, actual results, and protect the interests of the company and all shareholders.
Explanation on major deficiencies in internal control during the reporting period
□适用 √不适用
XIII. Management and control over subsidiaries during the reporting period
√适用 □不适用
In compliance with the requirements of the "Company Law, " the company has established andcontinuously improved a modern corporate system. Through the shareholders' meeting, the boardof directors, and the supervisory board, effective management of subsidiary companies has beenimplemented. The company has developed a comprehensive management system that covers itsmajor business areas, achieving institutionalization of management practices. The managementsystem has also been disseminated to the subsidiary companies, which have formulated their ownmanagement systems based on it.
XIV. Explanation on the relevant situation of the internal control audit report
√适用 □不适用
According to the "Basic Norms for Enterprise Internal Control" and its supporting guidelines,as well as other internal control regulatory requirements, the company, in conjunction with itsinternal control system and evaluation methods, conducted an assessment of the effectiveness ofinternal controls as of the benchmark date for the internal control evaluation report. The companyprepared the "2023 Annual Internal Control Evaluation Report" in accordance with the format,content, and requirements specified by the China Securities Regulatory Commission (CSRC) and theShanghai Stock Exchange (SSE).
The company engaged an external auditing firm, Zhong Hui Certified Public Accountants LLP(Special General Partnership), to perform an internal control audit. The audit firm issued a standardunqualified opinion in the internal control audit report.
Whether to disclose the internal control audit report: YesType of internal control audit report opinion: standard unqualified opinion
XV. The rectification of problems in the self-examination of the special action of listedcompany governanceDuring the reporting period, there were no significant differences between the company'scorporate governance status and the relevant regulations of the China Securities RegulatoryCommission (CSRC) regarding the governance of listed companies. The company will continue toenhance its corporate governance level and improve its governance framework in accordance withlegal regulations and regulatory requirements. This ongoing effort aims to continuously enhancethe quality of the listed company.
XVI. Others
□适用 √不适用
Chapter 5 Environmental and Social Responsibility
I. Environmental information
| Whether to establish relevant mechanisms for environmental protection | Yes |
| Investment in environmental protection funds during the reporting period (unit: ten thousand yuan) | 23, 297 |
(I) Explanation on the environmental protection status of companies and their major subsidiaries that
belong to the key pollutant discharge units announced by the environmental protectiondepartment
√适用 □不适用
1. Sewage Information
√适用 □不适用
The Company pays great heed to environmental protection, and strictly acts upon the EnvironmentalProtection Law of the People’s Republic of China, the Law of the People’s Republic of China on PromotingClean Production, and the Law of the People’s Republic of China on the Prevention and Control ofEnvironmental Pollution by Solid Wastes and other relevant laws and regulations. The key pollutantdischarging companies and their subsidiaries mainly include Hengli Refining and Chemical, HengliChemical, Hengli Petrochemical (Dalian), Kanghui New Materials, Kanghui Dalian New Materials, HengliChemical Fiber, Deli Chemical Fiber, Hengke New Materials, and Su Sheng Thermal Power.During the reporting period, each pollutant discharging subsidiary carried out self-monitoring oftheir environmental impact and engaged professional third parties to test various pollutant factors. Thetest results showed that the emission concentrations of various pollutants were in compliance withnational and local pollutant discharge standards and other relevant standards. The total discharge ofpollutants is under the required limit as outlined by operation permits. (Due to the switch between oldand new pollutant discharge licenses, there were some changes in the approved total annual pollutantdischarge amount and discharge calculation methods of some key pollutant discharge subsidiaries.)The specific pollutant discharge is as follows:
1. Hengli Petrochemical Refining
| Type of pollutant | Main Pollutants and Characteristic Pollutants | Emission method | Number of discharge ports | The distribution of discharge po | Emission Concentration | Total emissions (tons/year) | Approved total emissions (tons/year) | Pollutant Emission Standards Executed | Excessive emission situation |
2. Hengli Chemical
| rts | |||||||||
| Waste water | Wastewater volume | Continuous emission | 1 | DW011 discharge port | / | 1684208 | / | / | Nil |
| Chemical oxygen demand | 1 | 26.416667mg/L | 30.348308 | 237.42 | DB21/1627-2008 Comprehensive Wastewater Discharge Standard | ||||
| Ammonia nitrogen | 1 | 0.2525mg/L | 0.086613 | 17.97 | GB31570-2015 Pollutant Discharge Standard for Petroleum Refining Industry | ||||
| Total Phosphorus | 1 | 0.2775mg/L | 0.445129 | / | GB31570-2015 Pollutant Discharge Standard for Petroleum Refining Industry | ||||
| Total nitrogen | 1 | 8.7675mg/L | 13.838439 | 70.9 | DB21/1627-2008 Comprehensive Wastewater Discharge Standard | ||||
| Exhaust gas | Sulfur dioxide | Organized emissions | 14 | / | 9.9379mg/m3 | 1189.749534 | 2449.38 | GB31570-2015 Pollutant Discharge Standard for Petroleum Refining Industry | |
| Nitrogen oxides | 12 | 25.81195mg/m3 | 2394.016197 | 5091.54 | |||||
| particulate matter | 16 | 1.10555mg/m3 | 117.585235 | 1051.2 | |||||
| Non-methane total hydrocarbons | 11 | 2.3925mg/m3 | 103.592676 | 2785.57 |
Typeofpollutant
| Type of pollutant | Main Pollutants and Characteristic Pollutants | Emission method | Number of discharge ports | The distribution of discharge ports | Emission Concentration | Total emissions (tons/year) | Approved total emissions (tons/year) | Pollutant Emission Standards Executed | Excessive emission situation |
| Waste water | Wastewater volume | Continuous emission | 1 | DW001 discharge port | / | 1585987 | / | / | Nil |
| Chemical oxygen demand | 1 | 22.526mg/L | 37.7575 | 204.3 | DB21/1627-2008 Comprehensive Wastewater Discharge Standard | ||||
| Ammonia nitrogen | 1 | 0.075mg/L | 0.15644 | 32.7 | GB31570-2015 Pollutant Discharge Standard for Petroleum Refining Industry | ||||
| Total Phosphorus | 1 | 0.182mg/L | 0.28337 | / | GB31570-2015 Pollutant Discharge Standard for |
| Petroleum Refining Industry | ||||||||
| Total nitrogen | 1 | 6.997mg/L | 11.0088 | 61.3 | DB21/1627-2008 Comprehensive Wastewater Discharge Standard | |||
| Exhaust gas | Sulfur dioxide | Organized emissions | 5 | / | 2.4105mg/m3 | 55.881175 | 116.5 | GB31570-2015 Pollutant Discharge Standard for Petroleum Refining Industry |
| Nitrogen oxides | 5 | 25.8145mg/m3 | 434.712418 | 974.4 | ||||
| particulate matter | 21 | 0.4141mg/m3 | 9.182814 | 149 | ||||
| Non-methane total hydrocarbons | 19 | 8.0292mg/m3 | 38.748273 | 745.6 |
3. Hengli Petrochemical (Dalian)
| Type of pollutant | Main Pollutants and Characteristic Pollutants | Emission method | Number of discharge ports | The distribution of discharge ports | Emission Concentration | Total emissions (tons/year) | Approved total emissions (tons/year) | Pollutant Emission Standards Executed | Excessive emission situation |
| Waste water | Wastewater volume | Continuous emission | 1 | DW004 discharge port | / | 3485880 | / | / | Nil |
| Chemical oxygen demand | 1 | 32.916667mg/L | 290.40595 | 559 | DB21/1627-2008 "Comprehensive Wastewater Discharge Standard" | ||||
| Ammonia nitrogen | 1 | 0.03mg/L | 0.36582 | 111.8 | GB31570-2015 Pollutant Discharge Standard for Petroleum Refining Industry | ||||
| Total Phosphorus | 1 | 0.131923mg/L | 1.729 | / | GB31570-2015 Pollutant Discharge Standard for Petroleum Refining Industry | ||||
| Total nitrogen | 1 | 4.848462mg/L | 63.0157 | 239.81 | DB21/1627-2008 "Comprehensive Wastewater Discharge Standard" | ||||
| Exhaust gas | Sulfur dioxide | Organized emissions | 2 | / | 13.76mg/m3 | 217.18 | 477.4409 | Emission Standards for Air Pollutants from Coal-fired Power Plants in Liaoning Province | |
| Nitrogen oxides | 2 | 28.605mg/m3 | 445.71 | 682.058 | Emission Standards for Air Pollutants from Coal-fired Power Plants in Liaoning Province | ||||
| particulate matter | 72 | 1.16mg/m3 | 19.7547 | 319.525 | GB31571-2015 "Petrochemical Industry Pollutant Discharge Standard" | ||||
| Non-methane total hydrocarbons | 72 | 1.1317mg/m3 | 209.670281 | 877.2 | GB31571-2015 "Petrochemical Industry Pollutant Discharge Standard" |
4. Kanghui New Material
5. Kanghui Dalian New Material
| Type of pollutant | Main Pollutants and Characteristic Pollutants | Emission method | Number of discharge ports | The distribution of discharge ports | Emission Concentration | Total emissions (tons/year) | Approved total emissions (tons/year) | Pollutant Emission Standards Executed | Excessive emission situation |
| Waste water | Wastewater volume | Continuous emission | 1 | Fence on the south side of the factory area | / | 512674 | 652352 | Table 2 standard in Liaoning Province's comprehensive sewage discharge standard DB21-1627-2008 | Nil |
| Chemical oxygen demand | 11.6225mg/L | 5.9401 | 28.808 | ||||||
| Ammonia nitrogen | 0.0705mg/L | 0.0356 | 2.91 | ||||||
| Total Phosphorus | 0.749mg/L | 0.384 | / | ||||||
| Total nitrogen | 17.187mg/L | 7.273 | 14.185 | ||||||
| Exhaust gas | Particulate matter | 1 | Factory central chimney | 2.8337mg/m? | 1.775 | 50.591 | Emission Standard of Air Pollutants for Boilers GB13271-2014 | ||
| Sulfur dioxide | 3.1783mg/m? | 1.931 | 20.23 | ||||||
| Nitrogen oxide | 32.8725mg/m? | 20.061 | 89.71 | Emission Standard of Pollutants for Synthetic Resin Industry GB31572-2015 | |||||
| VOCs | 15.127mg/m? | 22.46 | 170.763 |
6. Hengli Chemical Fiber
| Type of pollutant | Main Pollutants and Characteristic Pollutants | Emission method | Number of discharge ports | The distribution of discharge ports | Emission Concentration | Total emissions (tons/year) | Approved total emissions (tons/year) | Pollutant Emission Standards Executed | Excessive emission situation |
| Waste water | Wastewater volume | Indirect emissions | 1 | Relying on the main wastewater discharge outlet of Hengli Petrochemical | / | 37894 | / | Liaoning Province Integrated Wastewater Discharge Standard DB21/1627 | Nil |
| Chemical oxygen demand | 32.9166mg/L | 0.716145 | 4.15 | ||||||
| Ammonia nitrogen | 4.848mg/L | 0.1484 | 0.42 | ||||||
| Total Phosphorus | 0.03mg/L | 0.000838 | 0.13 | Emission Standard of Pollutants for Synthetic Resin Industry GB31572 | |||||
| Total nitrogen | 0.131mg/L | 0.004216 | / | ||||||
| Exhaust gas | Nitrogen oxide | Direct emissions | 5 | Each workshop and auxiliary feeding workshop | 0 | 0 | 7.92 | ||
| Particulate matter | 7.745mg/m? | 0.183379 | 0.342 | ||||||
| VOCs | 5.17mg/m? | 0.044043 | 5.52 |
Typeofpollutant
| Type of pollutant | Main Pollutants and Characteristic Pollutants | Emission method | Number of discharge ports | The distribution of discharge ports | Emission Concentration | Total emissions (tons/year) | Approved total emissions (tons/year) | Pollutant Emission Standards Executed | Excessive emission situation |
| Waste water | Wastewater volume | Continuous indirect discharge of municipal sewage plant | 1 | In the factory area | / | 54684 | 132000 | Takeover standard of sewage plant | Nil |
| Chemical oxygen demand | 1 | 33.28 mg/L | 1.82 | 6.02 |
7. Deli Chemical Fiber
| Sulfur dioxide | Continuous emission environment | 7 | In the factory area | 1.5mg/m3 | 5.34 | 20.83 | Emission Standard of Air Pollutants for Boilers DB32/4385-2022 | |
| Nitrogen oxides | 7 | 30mg/m3 | 31.18 | 58.79 | ||||
| Particles | 7 | 2mg/m3 | 1.65 | 30.7 | ||||
| VOCs | 4 | 1.5mg/m3 | 0.85 | 46.67 | Integrated Emission Standard of Air Pollutants DB32/4041-2021 |
Typeofpollutant
| Type of pollutant | Main Pollutants and Characteristic Pollutants | Emission method | Number of discharge ports | The distribution of discharge ports | Emission Concentration | Total emissions (tons/year) | Approved total emissions (tons/year) | Pollutant Emission Standards Executed | Excessive emission situation |
| Waste water | Wastewater volume | Indirect emissions | 1 | / | / | 89118 | 115350 | GB/T31962-2015 Emission Standard of Pollutants for Synthetic Resin Industry GB31572-2015, Integrated Wastewater Discharge Standard GB8978-1996, Antimony Pollutant Emission Standard for Textile Dyeing and Finishing Industrial Wastewater DB32/3432-2018, Water Quality Standard for Sewage Discharge into Urban Sewers GB/T31962-2015 | Nil |
| Chemical oxygen demand | 1 | 32.432mg/L | 3.013 | 46.14 | |||||
| Ammonia nitrogen | 1 | 1.315mg/L | 0.125 | 0.9577 | |||||
| Total phosphorus | 1 | / | 0.009 | 0.16075 | |||||
| Total nitrogen | 1 | / | 0.432 | 0.5972 | |||||
| Exhaust gas | Sulfur dioxide | 1 | 3.08mg/m? | 0.48069 | 13.2 | Integrated Emission Standard of Air Pollutants DB/324041-2021, Emission Standard of Air Pollutants for Boilers DB32/4385-2022, Emission Standard of Odor Pollutants GB14554-93, Emission Standard of Pollutants for Synthetic Resin Industry GB31572-2015, Unorganized Emission Control Standard for Volatile Organic Compounds GB37822-2019 | |||
| Nitrogen oxides | 1 | 24.572mg/m? | 4.01392 | 22.706 | |||||
| Particulate matter | 1 | 2.381mg/m? | 0.39028 | 2.113 | |||||
| Non-methane total hydrocarbons | 1 | / | 0.86792 | 1.92 |
8. Hengke Advanced Materials
| Type of pollutant | Main Pollutants and Characteristic Pollutants | Emission method | Number of discharge ports | The distribution of discharge ports | Emission Concentration | Total emissions (tons/year) | Approved total emissions (tons/year) | Pollutant Emission Standards Executed | Excessive emission situation |
| Waste water | Wastewater volume | Indirect emissions | 1 | Sewage station | / | 67398 | / | "Water Quality Standards for Sewage Discharge into Urban Sewers GB/T31962-2015", "Emission Standards for Pollutants in the Synthetic Resin Industry GB31572-2015", "Emission Standards for Water Pollutants in the Textile Dyeing and Finishing Industry GB4287-2012", "Emission Standards for Pollutants in the Petrochemical Industry GB31571-2015", "Comprehensive Sewage Discharge Standards GB8978-1996" | Nil |
| Chemical oxygen demand | 16.21mg/L | 1.122 | 361.25 | ||||||
| Ammonia nitrogen | 0.55mg/L | 0.042 | 1.21 | ||||||
| Total Phosphorus | 0.165mg/L | 0.0083 | 0.44 | ||||||
| Total nitrogen | 4.38mg/L | 0.348 | 9.41 | ||||||
| Exhaust gas | Sulfur dioxide | Directly discha | 1 | Heating medi | 1.65mg/m? | 2.68 | 69.84 | Emission Standards for Air Pollutants from Boilers DB32/4385-2022, Emission Standards for Pollutants from |
9. Su Sheng Thermal Power
| Type of pollutant | Main Pollutants and Characteristic Pollutants | Emission method | Number of discharge ports | The distribution of discharge ports | Emission Concentration | Total emissions (tons/year) | Approved total emissions (tons/year) | Pollutant Emission Standards Executed | Excessive emission situation |
| waste water | Waste water volume | Indirect emissions | 1 | Within the factory area | / / | 6649.39 | 11000 | Integrated Wastewater Discharge Standard GB8978-1996 | Nil |
| Exhaust gas | Sulfur dioxide | Direct emissions | 2 | 10.11mg/m3 10.11mg/m3 | 46.34 | 434.337 | DB32/4148—2021 Emission Standard of Air Pollutants for Coal-fired Power Plants DB32/4148-2021 | ||
| Nitrogen oxide | 28.99mg/m3 28.99mg/m3 | 133.17 | 868.674 | ||||||
| Particulate matter | 1.59mg/m3 1.59mg/m3 | 7.03 | 172.424 |
2. Construction and operation of pollution prevention and control facilities
√适用 □不适用
During the reporting period, the above companies who discharged pollutants all built theirpollutant control facilities following the requirements for environmental impact assessment of theconstruction project. Currently, the facilities are under normal operation. The companies carry outdaily maintenance of the facilities to ensure their efficient and stable operations of keepingemissions within the standards.
3. Environmental Impact Assessment of Construction Projects and Other Environmental
Protection Administrative Licensing
√适用 □不适用
During the reporting period, the company's construction and renovation projects have beenaccompanied by the preparation of environmental impact assessment reports by relevant
| Nitrogen oxides | rge after treatment | um station | 18.4 mg/m3 | 8.82 | 349.39 | Synthetic Resin Industry GB31572-2015, Emission Standards for Pollutants from Petrochemical Industry GB31571-2015, Comprehensive Emission Standards for Air Pollutants DB32/4041-2021, Emission Standards for Odor Pollutants GB14554-93 | |
| Particulate matter | 3.59 mg/m3 | 4.44 | 52.41 | ||||
| Non-methane | 2.52 mg/m3 | 0.66 | 28.86 |
construction units. These reports have received approval from the corresponding ecological andenvironmental departments, granting permission for construction. Various pollution prevention andcontrol facilities (including those for air, water, noise, and solid waste classification and disposal)and environmental management during the construction period have been implemented inaccordance with the approved content of the environmental impact assessment report. Thecompany strictly adheres to the "design, construction, and production simultaneously" system forenvironmental protection.
4. Emergency plan for environmental emergencies
√适用 □不适用
| Company | Emergency plan | Filing party | Filing number |
| Hengli Petrochemical Refining | “Hengli Petrochemical (Dalian) Refining Co., Ltd. Emergency plan for environmental emergencies “ | Dalian Wafangdian (Changxing Island Economic Zone) Ecological Environment Branch | 210281-2021-052-H |
| Hengli Petrochemical (Dalian) | “Hengli Petrochemical (Dalian) Co., Ltd. Emergency plan for environmental emergencies “ | Dalian Wafangdian (Changxing Island Economic Zone) Ecological Environment Branch | 210281-2022-068-H |
| Hengli Petrochemical Chemical | “Hengli Petrochemical (Dalian) Chemical Co., Ltd. Emergency plan for environmental emergencies “ | Dalian Wafangdian (Changxing Island Economic Zone) Ecological Environment Branch | 210281-2022-069-H |
| Kanghui New Material | “Kanghui New Material Technology Co., Ltd. Emergency plan for environmental emergencies “ | Environmental Protection Bureau of Administrative Committee of Yingkou Xianrendao Economic Development Zone | 210881-2021-037-M |
| Kanghui Dalian New Material | “Kanghui Dalian New Material Technology Co., Ltd Emergency Plan for environmental emergencies” | Dalian Wafangdian (Changxing Island Economic Zone) Ecological Environment Branch | 210281-2022-034-L |
| Hengli Chemical Fiber | “Jiangsu Hengli Chemical Fiber Co., Ltd. Emergency plan for environmental emergencies “ | Suzhou Wujiang Ecological Environment Bureau | 320509-2022-042-M |
| “Daxie Village Factory of Jiangsu Hengli Chemical Fiber Co., Ltd. Emergency plan for environmental emergencies” | Suzhou Wujiang Ecological Environment Bureau | 320509-2023-129-L | |
| Deli Chemical Fiber | “Jiangsu Deli Chemical Fiber Co., Ltd. Emergency plan for environmental emergencies “ | Suqian Sucheng Ecological Environment Bureau | 321302-2023-025-L |
| Hengke Advanced Materials | 《Jiangsu Hengke Advanced Materials Co. Ltd. Contingency plans for environmental emergencies》 | Nantong Tongzhou Ecological Environment Bureau | 320683-2023-090-H |
| Susheng Thermal Power | “Suzhou Susheng Thermal Power Co., Ltd. Emergency plan for environmental emergencies “ | Suzhou Wujiang Ecological Environment Bureau | 320509-2023-138-M |
5. Environmental Self-Monitoring Program
√适用 □不适用
The company's key pollutant-emitting subsidiaries under its jurisdiction have developedenvironmental monitoring plans in accordance with relevant national self-monitoring standards andenvironmental management system requirements. These plans are submitted to the localenvironmental regulatory authorities for record-keeping while applying for pollutant dischargepermits. The company regularly organizes its environmental monitoring station to conduct tests onvarious pollutants emitted from each workshop's discharge outlets. For projects where the companylacks testing capabilities, it entrusts third-party institutions with environmental monitoringqualifications to conduct emission testing for specific pollutants, such as wastewater and exhaustgases. The company assigns dedicated personnel to inspect and aggregate data on various pollutantindicators. Additionally, data analysis is performed to provide timely feedback to relevantdepartments as a basis for adjusting process parameters and ensuring compliance with emissionstandards. This systematic approach ensures that the company achieves standardized emissions.
6. Administrative penalties due to environmental issues during the reporting period
□适用 √不适用
7. Other environmental information that should be disclosed
□适用 √不适用
(II) Explanation on environmental protection of companies other than key pollutant discharge
entities
√适用 □不适用
1. Cases of receiving administrative penalties due to environmental issues
□适用 √不适用
2. Disclose other environmental information with reference to key pollutant discharge entities
□适用 √不适用
3. Reasons for not disclosing other environmental information
√适用 □不适用
The company places great importance on environmental protection and strictly implements the"Environmental Protection Law of the People's Republic of China." It is committed to complying with nationaland local environmental laws and regulations, industry technical specifications, and government managementprovisions. The company actively carries out daily environmental management work. Non-productionsubsidiaries under the company have minimal impact on the environment, with their energy consumptionand emissions mainly concentrated in daily operational and office activities. The company's subsidiaries
actively assume corporate environmental responsibilities and strictly adhere to various environmental policies.They effectively implement environmental measures to protect the environment.
(III) Relevant information that is conducive to protecting the ecology, preventing pollution, andfulfilling environmental responsibilities
√适用 □不适用
Please refer to the relevant content in the chapter "03 Energy Conservation and EmissionsReduction, Permanent Protection of Green" of the 2023 Environmental, Social and Governance (ESG)Report disclosed by the company on the website of the Shanghai Stock Exchange (www.sse.com.cn)on April 10, 2024.
(IV) Measures and effects taken to reduce its carbon emissions during the reporting period
| Whether to take carbon reduction measures | Yes |
| Reduction of carbon dioxide equivalent emissions (unit: tons) | Not applicable |
| Types of carbon reduction measures (such as using clean energy for power generation, using carbon reduction technologies in the production process, and developing new products that help reduce carbon emissions) | In the production process, use carbon reduction technologies such as carbon dioxide recovery, clean energy generation such as photovoltaics and biogas, and research and development of new green products that help reduce carbon emissions |
Specific note
√适用 □不适用
Please refer to the relevant content in the chapter "03 Energy Conservation and EmissionsReduction, Sustainable Green Protection" of the 2023 Environmental, Social and Governance (ESG)Report disclosed by the company on the website of the Shanghai Stock Exchange (www.sse.com.cn)on April 10, 2024.
II. Social Responsibility Work Situation(I) Whether to disclose social responsibility report, sustainable development report or ESG
report separately
√适用 □不适用
The company has prepared and disclosed its separate Annual Corporate Social Responsibility Reportfor the year 2023. For specific details, please refer to the "2023 Annual Corporate SocialResponsibility Report" disclosed by the company on April 10, 2024, on the SSE website(www.sse.com.cn).(II) Specific situation of social responsibility work
√适用 □不适用
| External donation, public welfare projects | Quantity/Content | Detail |
| Total investment (ten thousand yuan) | 10,200 | Subsidiary Hengli Refining and Chemical donated 100 million yuan to help Dalian The construction of medical and educational infrastructure in Changxing Island area; the subsidiary Jiangsu Xuanda Polymer Materials Co., Ltd. donated 2 million yuan to Nantong Hengli Education Development Foundation |
| Including: capital (ten thousand yuan) | 10,200 | |
| Material discount (ten | 0 |
| thousand yuan) | ||
| Number of people benefited (person) |
Special note
□适用 √不适用
III. Consolidate and expand the achievements of poverty alleviation and rural
revitalization
√适用 □不适用
| Poverty Alleviation and Rural Revitalization Projects | Quantity/Content | Details |
| Total investment (ten thousand yuan) | 0.3 | Subsidiary Hengli Futures Co., Ltd. donated 3,000 yuan for rural revitalization projects |
| Including: capital (ten thousand yuan) | 0.3 | |
| Material discount (ten thousand yuan) | ||
| Number of people benefited (person) | ||
| Forms of assistance (such as industrial poverty alleviation, employment poverty alleviation, education poverty alleviation, etc.) |
Special note
□适用 √不适用
Chapter 6 Important eventsI. Fulfillment of Commitments(I) Commitments made by the actual controller, shareholders, related parties, acquirers, and
the company itself, as well as relevant parties, during the reporting period or continuinginto the reporting period
□适用 √不适用
(II) The company's assets or projects have profit forecasts, and the reporting period is still in
the period of profit forecasts. The company shall explain whether the assets or projects havereached the original profit forecasts and the reasons
□已达到 □未达到 √不适用
(III) Fulfillment of Performance Commitment and Its Impact on Goodwill Impairment Test
□适用 √不适用
II. Non-operating funds occupied by controlling shareholders and other related
parties during the reporting period
□适用 √不适用
III. Guarantee in violation of regulations
□适用 √不适用
IV. Explanation of the company's board of directors to the accounting firm's "non-standard opinion audit report"
□适用 √不适用
V. The company's analysis and explanation on the reasons and effects of changes inaccounting policies, accounting estimates, or corrections of major accountingerrors(I) The company's analysis and explanation of the reasons and effects of the correction of major
accounting errors
□适用 √不适用
(II) The company's analysis and explanation of the reasons and effects of the correction of majoraccounting errors
□适用 √不适用
(III) Communication with the former accounting firm
□适用 √不适用
(IV) Approval procedures and other note
□适用 √不适用
VI. Appointment and Dismissal of Accounting Firms
Unit: ten thousand yuan Currency: RMB
| Currently employed | |
| Domestic accounting firm name | Zhonghui Certified Public Accountants (Special General Partnership) |
| Domestic accounting firm remuneration | 379 |
| Audit period for domestic accounting firms | 4 |
| The name of the certified public accountant of the domestic accounting firm | Han Jian, Fang Sai |
| Consecutive years of audit services of CPAs of domestic accounting firms | Han Jian (5 years), Fang Sai (2 year) |
| Name | Remuneration | |
| Internal control audit accounting firm | Zhonghui Certified Public Accountants (Special General Partnership) | 60 |
Explanation on the appointment and dismissal of accounting firms
□适用 √不适用
Explanation on the change of accounting firm during the audit period
□适用 √不适用
Explanation of the situation where the audit fee has decreased by more than 20% (including 20%)compared to the previous year
□适用 √不适用
VII. Situations at risk of delisting(I) Reasons for delisting risk warning
□适用 √不适用
(II) Countermeasures the company intends to take
□适用 √不适用
(III) Circumstances and reasons for facing termination of listing
□适用 √不适用
VIII. Matters related to bankruptcy and reorganization
□适用 √不适用
IX. Major litigation and arbitration matters
□本年度公司有重大诉讼、仲裁事项 √本年度公司无重大诉讼、仲裁事项
X. Listed companies and their directors, supervisors, senior managers, controllingshareholders, and actual controllers suspected of violating laws and regulations,punishments and rectifications
√适用 □不适用
The Shanghai Stock Exchange issued the "Decision on the Criticism of the ControllingShareholder and Actual Controller of Hengli Petrochemical Co., Ltd." on February 15, 2023(Disciplinary Action Decision [2023] No. 16 of Shanghai Stock Exchange). For details, please refer tothe website of Shanghai Stock Exchange (www.sse.com.cn).
XI. Explanation on the integrity status of the company and its controlling
shareholders and actual controllers during the reporting period
□适用 √不适用
XII. Significant related party transactions(I) Related party transactions related to daily operations
1. Matters that have been disclosed in the temporary announcement and have no progressor change in subsequent implementation
√适用 □不适用
| Matter | Index |
| Estimated daily related party transactions in 2023 | For details, please refer to the "Announcement of Hengli Petrochemical on the Expected Status of Daily Related Transactions in 2023" (Announcement No. 2023-010) disclosed by the company on the website of the Shanghai Stock Exchange on April 28, 2023 |
2. Matters that have been disclosed in the interim announcement, but have progress orchanges in subsequent implementation
□适用 √不适用
3. Matters not disclosed in the interim announcement
□适用 √不适用
(II) Related party transactions in asset or equity acquisition and sale
1. Matters that have been disclosed in the temporary announcement and have no progress or
□适用 √不适用
2. Matters that have been disclosed in the interim announcement, but have progress or changesin subsequent implementation
□适用 √不适用
3. Matters not disclosed in the interim announcement
□适用 √不适用
4. If performance agreement is involved, the performance realization within the ReportingPeriod shall be disclosed
□适用 √不适用
(III) Significant connected transactions involving joint foreign investment
1. Matters that have been disclosed in the temporary announcement and have no progress orchange in subsequent implementation
□适用 √不适用
2. Matters that have been disclosed in the interim announcement, but have progress or changesin subsequent implementation
□适用 √不适用
3. Matters not disclosed in the interim announcement
□适用 √不适用
(IV) Creditor's rights and liabilities with related parties
1. Matters that have been disclosed in the temporary announcement and have no progress orchange in subsequent implementation
□适用 √不适用
2. Matters that have been disclosed in the interim announcement, but have progress or changesin subsequent implementation
□适用 √不适用
3. Matters not disclosed in the interim announcement
□适用 √不适用
(V) The financial business between the company and the financial company that has a relatedrelationship, the company's holding financial company and related parties
□适用 √不适用
(VI) Others
□适用 √不适用
XIII. Significant contracts and their performance(I) Trusteeship, contracting and leasing
1. Trusteeship
□适用 √不适用
2. Contracting
□适用 √不适用
3. Leasing
□适用 √不适用
(II) Guarantee
√适用 □不适用
Unit: hundred million yuan Currency: RMB
| The company's external guarantees (excluding guarantees for subsidiaries) | |||||||||||||||
| Guarantor | Guarantor's relationship with the listed company | The party being guaranteed | Guarantee amount | Guarantee date (signing date of the agreement) | Guarantee start date | Guarantee expiry date | Guarantee type | Collateral (if any) | Whether the guarantee has been fulfilled | Whether the guarantee is overdue | Guarantee overdue amount | Counter guarantee | Whether to guarantee for related parties | Relationship with related party | |
| Nil | |||||||||||||||
| Total amount of guarantees incurred during the reporting period (excluding guarantees to subsidiaries) | - | ||||||||||||||
| Total balance of guarantees at the end of the reporting period (A) (excluding guarantees to subsidiaries) | - | ||||||||||||||
| Guarantees provided by the company and subsidiaries to its subsidiaries | |||||||||||||||
| Total amount of guarantees for subsidiaries during the reporting period | 2,941.87 | ||||||||||||||
| Total balance of guarantees to subsidiaries at the end of the reporting period (B) | 2,005.64 | ||||||||||||||
| Total company guarantees (including guarantees to subsidiaries) | |||||||||||||||
| Total Guarantee (A+B) | 2,005.64 | ||||||||||||||
| The ratio of the total guarantee amount to the company's net assets (%) | 334.32 | ||||||||||||||
| Including: | |||||||||||||||
| Amount of guarantee provided for shareholders, actual controllers and their related parties (C) | 0 | ||||||||||||||
| Amount of debt guarantee provided directly or indirectly for guaranteed objects whose asset-liability ratio exceeds 70% (D) | |||||||||||||||
| The amount of the part where the total guarantee exceeds 50% of the net assets (E) | 1,581.84 | ||||||||||||||
| The total amount of the above three guarantees (C+D+E) | 1,581.84 | ||||||||||||||
| Explanation on possible joint and several liability for unexpired guarantees | |
| Guarantee information | During the reporting period, the company's guarantees were mutual guarantees between the company and its subsidiaries (sub-subsidiaries). |
(III) Entrusting others to manage cash assets
1. Entrusted financial management
(1) Overall situation of entrusted financial management
√适用 □不适用
Unit: ten thousand yuan Currency: RMB
| Type | Source of fund | Amount | Outstanding balance | Overdue uncollected amount |
| Bank financial products | Self-owned funds | 92,970.00 | ||
| Financial products of securities companies | Self-owned funds | 24,930.40 | 23,450.00 | |
| Trust financial products | Self-owned funds | 16,000.00 | 2,000.00 | |
| Public fund products | Self-owned funds | 4,999.90 | 4,999.90 | |
| Private equity fund products | Self-owned funds | 7,800.00 | 3,300.00 |
Others
□适用 √不适用
(2) Individual entrusted financial management
√适用 □不适用
Unit: yuan Currency: RMB
| Trustee | Entrusted financial management type | Entrusted financial management amount | Entrusted financial management start date | Entrusted financial management maturity date | Sources of funds | Funding direction | restrictions situation | Remuneration determination method | Annualized rate of return | Expected income (if any) | Actual gain or loss | Unexpired amount | Whether it has gone through legal procedures | Is there any entrusted financial plan in the future? | Amount of provision for impairment (if any) |
| Galaxy Securities | Financial products of securities companies | 10,000,000.00 | 2023/4/27 | Self-owned funds | Fixed-income bonds | NIL | 10,000,000.00 | Yes | |||||||
| Guolian Securities | Financial products of securities companies | 49,500,000.00 | 2023/12/25 | Self-owned funds | Fixed-income bonds | NIL | 49,500,000.00 | Yes | |||||||
| China Securities Co., Ltd | Financial products of securitie | 125,000,000.00 | 2023/12/29 | Self-owned | Fixed-income bonds | NIL | 125,000,000.00 | Yes |
| s companies | funds | ||||||||||||||
| Jiangsu International Trust Co., Ltd | Trust financial products | 20,000,000.00 | 2023/4/26 | Self-owned funds | money market instruments | NIL | 20,000,000.00 | Yes | |||||||
| Federal Reserve Securities | Financial products of securities companies | 50,000,000.00 | 2023/8/8 | Self-owned funds | bond | NIL | 50,000,000.00 | Yes | |||||||
| Tianzhi Fund Management Co., Ltd | Public fund products | 49,999,000.00 | 2023/12/5 | Self-owned funds | mixed securities investment | NIL | 49,999,000.00 | Yes |
Others
□适用 √不适用
(3) Provision for impairment of entrusted financial management
□适用 √不适用
2. Entrusted loan situation
(1) General situation of entrusted loans
□适用 √不适用
Others
□适用 √不适用
(2) Individual entrusted loans
□适用 √不适用
Others
□适用 √不适用
(3) Provision for impairment of entrusted loans
□适用 √不适用
3. Others
□适用 √不适用
(IV) Other major contracts
□适用 √不适用
XIV. Progress description of the use of raised funds
□适用 √不适用
XV. Explanations on other major events that have a significant impact on investors'value judgments and investment decisions
□适用 √不适用
Chapter 7 Share Changes and Shareholders
I. Changes in Shares(I) Changes in Shares
1. Changes in Shares
During the reporting period, the total number of shares and share capital structure of the companyremained unchanged.
2. Description of changes in shares
□适用 √不适用
3. The impact of shareholding changes on financial indicators such as earnings per share andnet assets per share in the last year and the latest period (if any)
□适用 √不适用
4. Other content that the company deems necessary or required by securities regulators todisclose
□适用 √不适用
(II) Changes in restricted shares
□适用 √不适用
II. Securities Issuance and Listing(I) Securities issuance as of the reporting period
√适用 □不适用
Unit: share Currency: RMB
| Types of stocks and their derivative securities | Issuance date | Issue price (or interest rate) | Issue quantity | Listing date | The number of transactions approved for listing | Transaction end date |
| Common stock | ||||||
| Convertible corporate bonds, convertible bonds with warrants | ||||||
| Bonds (including corporate bonds, corporate bonds, and non-financial corporate bond financing instruments) | ||||||
| Short-term bond | 2023-07-17 | 3.53% | 1 billion yuan | 2023-07-20 | 2024-07-19 | |
| Short-term bond | 2022-07-22 | 3.18% | 1 billion yuan | 2022-07-26 | 2023-07-25 | |
Explanation on securities issuance as of the reporting period (for bonds with different interest ratesduring the duration, please explain separately) :
√适用 □不适用
On November 10, 2021, and November 26, 2021, the company convened the 23rd meeting ofthe eighth Board of Directors and the second extraordinary general meeting of shareholders in 2021.The meetings reviewed and approved the Proposal on Registering and Issuing Short-Term FinancingBonds, agreeing that the company would apply to the China Interbank Market Dealers Associationto register and issue short-term financing bonds with an amount not exceeding RMB 3 billion(including 3 billion yuan).On March 11, 2022, the company received the Acceptance of Registration Notice (Zhong ShiXie Zhu [2022] CP14) from the Dealers Association, stating that the Dealers Association acceptedthe registration of the company's short-term financing bonds with a registered amount of 3 billionyuan. The registered quota is valid for a period of 2 years from the date of the notice.On May 31, 2022, the company issued the first tranche of short-term financing bonds for theyear 2022 in the national interbank market. The bonds have a maturity of 1 year, with a totalissuance amount of 1 billion yuan and an issuance interest rate of 3.03%.
On July 22, 2022, the company issued the second tranche of short-term financing bonds for theyear 2022 in the national interbank market. The bonds have a maturity of 1 year, with a totalissuance amount of 1 billion yuan and an issuance interest rate of 3.18%.
On July 17, 2022, the company issued the first tranche of short-term financing bonds for theyear 2023 in the national interbank market. The bonds have a maturity of 1 year, with a totalissuance amount of 1 billion yuan and an issuance interest rate of 3. 53%.
(II) Changes in the total number of shares of the company and the structure of shareholders, as
well as changes in the structure of the company's assets and liabilities
□适用 √不适用
(III) Existing Internal Staff Shares
□适用 √不适用
III. Shareholders and actual controllers(I) Total number of shareholders
| Total number of ordinary shareholders as of the end of the reporting period (accounts) | 101,183 | 114, 006 |
| The total number of ordinary shareholders at the end of the previous month before the annual report disclosure date (accounts) | 98,151 | 113, 210 |
| Total number of preferred shareholders with voting rights restored as of the end of the reporting period (accounts) | 0 | 0 |
| The total number of preference shareholders whose voting rights have been restored at the end of the previous month before the annual report disclosure date (accounts) | 0 | 0 |
(II) Table of shareholdings of the top ten shareholders and top ten tradable shareholders (or shareholders not subject to sales restrictions) as of the endof the reporting period
Unit: share
| Shareholdings of the top ten shareholders | |||||||
| Shareholder's name (Full name) | Changes during the reporting period | Number of shares held at the end of the period | Ratio (%) | Number of restricted shares held | Pledge, Mark or Freeze Situation | Shareholder nature | |
| Share status | Quantity | ||||||
| Hengneng Investment (Dalian) Co., Ltd. | 0 | 1,498,478,926 | 21.29 | 0 | Pledged | 0 | Domestic non-state-owned legal person |
| Hengli Group Co., Ltd. | -123,000,000 | 1,120,172,342 | 15.91 | 0 | Pledged | 279, 000, 000 | Domestic non-state-owned legal person |
| Hengli Group - Southwest Securities－21 Hengli E1 Guarantee and Trust Property Account | 123,000,000 | 980,440,000 | 13.93 | 0 | None | 0 | Other |
| Fan Hongwei | 0 | 791,494,169 | 11.24 | 0 | None | 0 | Domestic natural person |
| Tak Shing Li International Holdings Ltd. | 0 | 732,711,668 | 10.41 | 0 | None | 0 | Foreign legal person |
| Hong Kong Securities Clearing Company Limited | 3,242,891 | 120,480,118 | 1.71 | 0 | None | 0 | Other |
| Xuanyuan Private Equity Fund Investment Management (Guangdong) Co., Ltd. - Xuanyuan Yuanbao No. 16 Private Securities Investment Fund | -1,066,200 | 82,600,783 | 1.17 | 0 | None | 0 | Other |
| Xuanyuan Private Equity Fund Investment Management (Guangdong) Co., Ltd. - Xuanyuan Yuanbao No. 15 Private Securities Investment Fund | -1,008,600 | 74,115,694 | 1.05 | 0 | None | 0 | Other |
| Dalian State-owned Assets Investment and Operation Group Co., Ltd. | -80,000 | 68,818,123 | 0.98 | 0 | Pledged | 15, 000, 000 | State-owned legal entity |
| Xuanyuan Private Equity Fund Investment Management (Guangdong) Co., Ltd. - Xuanyuan Yuanbao No. 17 Private Equity Securities Investment Fund | -865,800 | 66,297,823 | 0.94 | 0 | None | 0 | Other |
| Shareholdings of the top ten shareholders not subject to sales restrictions | |||||||
| Shareholder's name | Number of unrestricted tradable shares held | Share type and quantity | |||||
| Type | Quantity | ||||||
| Hengneng Investment (Dalian) Co., Ltd. | 1,498,478,926 | Renminbi ordinary shares | 1, 498, 478, 926 | ||||
| Hengli Group Co., Ltd. | 1,120,172,342 | Renminbi ordinary shares | 1, 243, 172, 342 | ||||
| Hengli Group－Southwest Securities－21 Hengli E1 Guarantee and Trust Property Account | 980,440,000 | Renminbi ordinary shares | 857, 440, 000 | ||||
| Fan Hongwei | 791,494,169 | Renminbi ordinary shares | 791, 494, 169 | ||||
| Tak Shing Li International Holdings Ltd. | 732,711,668 | Renminbi ordinary shares | 732, 711, 668 | ||||
| Hong Kong Securities Clearing Company Limited | 120,480,118 | Renminbi ordinary shares | 117, 237, 227 | ||||
| Xuanyuan Private Equity Fund Investment Management (Guangdong) Co., Ltd. - Xuanyuan Yuanbao No. 16 Private Securities Investment Fund | 82,600,783 | Renminbi ordinary shares | 83, 666, 983 | ||||
| Xuanyuan Private Equity Fund Investment Management (Guangdong) Co., Ltd. - Xuanyuan Yuanbao No. 15 Private Securities Investment Fund | 74,115,694 | Renminbi ordinary shares | 75, 124, 294 | ||||
| Dalian State-owned Assets Investment and Operation Group Co., Ltd. | 68,818,123 | Renminbi ordinary shares | 68, 898, 123 | ||||
| Xuanyuan Private Equity Fund Investment Management (Guangdong) Co., Ltd. - Xuanyuan Yuanbao No. 17 Private Equity Securities Investment Fund | 66,297,823 | Renminbi ordinary shares | 67, 163, 623 | ||||
| Explanation of the repurchase accounts among the top ten shareholders | As of the end of the reporting period, none of the top ten shareholders had a corporate repurchase account. | ||||||
| Explanation on proxy voting rights, proxy voting rights and waiver of voting rights of the above-mentioned shareholders | When Hengli Group, the controlling shareholder of the company, conducted a non-public issuance of exchangeable corporate bonds, it established a guarantee and trust account through the trustee, using a portion of Hengli Petrochemical's legally owned A-share stocks as collateral and trust property. The account is held in the name of Southwest Securities Co., Ltd. and is registered as the securities holder in the company's shareholder register under the name "Hengli Group-Southwest Securities-21 Hengli E1 Guarantee and Trust Property Account." When exercising voting rights, Southwest Securities Co., Ltd. will act in accordance with the opinions of Hengli Group, while ensuring the interests of the holders of the exchangeable bonds are not compromised. | ||||||
| Explanation on the related relationship or concerted action of the above-mentioned shareholders | Hengli Group, Hengneng Investment, Fan Hongwei and Tak Shing Li are parties acting in concert with each other; the relationship between other shareholders is unknown. |
| Explanation on preferred stockholders with restored voting rights and the number of shares held | During the reporting period, the company had no preferred shareholders. |
The top ten shareholders' participation in the refinancing business and their share lending
√适用 □不适用
Unit: share
| The top ten shareholders' participation in the refinancing business and their share lending | ||||||||
| Shareholder's name | Shareholding in general accounts and credit accounts at the beginning of the period | Refinancing lending shares at the beginning of the period and not yet returned | Ending ordinary account and credit account shareholding | Transferred and financed lending shares at the end of the period and not yet returned | ||||
| Total quantity | Proportion (%) | Total quantity | Proportion (%) | Total quantity | Proportion (%) | Total quantity | Proportion (%) | |
| Dalian State-owned Assets Investment and Operation Group Co., Ltd. | 68,898,123 | 0.98 | 0 | 0 | 68,818,123 | 0.98 | 80,000 | 0.12 |
The top ten shareholders have changed compared to the previous period
□适用 √不适用
The number of shares held by the top ten shareholders with sales restrictions and the conditions for sales restrictions
□适用 √不适用
(III) Strategic investors or general legal persons become the top 10 shareholders due to allotmentof new shares
□适用 √不适用
IV. Controlling Shareholders and Actual Controllers(I) Controlling Shareholders1 Legal person
√适用 □不适用
| Name | Hengli Group Co., Ltd. |
| The person in charge or legal representative of the entity | Chen Jianhua |
| Date of establishment | January 16, 2002 |
| Main operating business | Production and sales of needle textiles and paper packaging materials (excluding printing) ; sales of chemical fiber raw materials, plastics, mechanical and electrical equipment, instruments, ash residue, purified terephthalic acid (PTA), and monoethylene glycol (MEG) ; industrial investment; research and development of new textile raw materials products; self-operated and agency import and export of various commodities and technologies; limited branch operations include thermal power generation and steam production and supply. (Business activities in projects that require approval by law can only be conducted after obtaining approvals from relevant departments). |
| Shareholdings of other domestic and foreign listed companies controlled and participated in during the reporting period | Hengli Group is the controlling shareholder of the listed company Guangdong Songfa Ceramics Co., Ltd. (stock code: 603268) and the listed company Suzhou Wujiang Tongli Lake Tourist Resort Co., Ltd. (stock code: 834199). |
| Other information | Nil |
2 Natural Person
□适用 √不适用
3 Special note on the absence of a controlling shareholder in the company
□适用 √不适用
4 Explanation on the change of controlling shareholders during the reporting period
□适用 √不适用
5 Block diagram of the property rights and control relationship between the company and thecontrolling shareholder
√适用 □不适用
Note :
When calculating the shareholding ratio of the controlling shareholder Hengli Group, the numberof shares held indirectly through the "Hengli Group-Southwest Securities-21 Hengli E1 Guaranteeand Trust Property Account" is included.
(II) Actual controller1 Legal person
□适用 √不适用
2 Natural person
√适用 □不适用
| Name | Chen Jianhua and Fan Hongwei (Spouse) |
| Nationality | China |
| Whether to obtain the right of residence in other countries or regions | Nil |
| Main occupation and position | Chen Jianhua is the chairman and general manager of Hengli Group Co., Ltd., the controlling shareholder of the listed company; Fan Hongwei is the current chairman of the listed company |
| Domestic and foreign listed companies that have been controlled in the past 10 years | Chen Jianhua and Fan Hongwei are the actual controllers of the listed company Guangdong Songfa Ceramics Co., Ltd. (stock code: 603268) and the listed company Suzhou Wujiang Tongli Lake Tourist Resort Co., Ltd. (stock code: 834199). |
3 Special note for the absence of actual controllers in the company
□适用 √不适用
4 Explanation on changes in the company's control during the reporting period
□适用 √不适用
5 Block diagram of the property rights and control relationship between the company and the
actual controller
√适用 □不适用
Note:
When calculating the shareholding ratio of Hengfeng Investment (Dalian) Co., Ltd., the number ofshares directly held through its own account "Hengfeng Investment (Dalian) Co., Ltd." (accountingfor 0.46% of the total share capital) and the number of shares indirectly held through the contractualprivate equity fund account "Hainan Huayin Tianxia Private Equity Fund Management Co., Ltd. -Huayin Xuyang No. 1 Private Equity Securities Investment Fund" (accounting for 0.58% of the totalshare capital) are included.
6 The actual controller controls the company through trust or other asset managementmethods
□适用 √不适用
(III) Other information on controlling shareholders and actual controllers
□适用 √不适用
V. The cumulative number of pledged shares by the company's controllingshareholder or largest shareholder and their concerted actors accounts for morethan 80% of their total holdings in the company
□适用 √不适用
VI. Other legal person shareholders holding more than 10% of the shares
√适用 □不适用
Unit: ten thousand yuan Currency: RMB
| Legal entity shareholder name | The person in charge or legal representative of the entity | Date of establishment | Organization Code | Registered capital | Main operating business or management activities, etc. |
| Hengneng Investment (Dalian) Co., Ltd. | Fan Hongwei | 2014-03-06 | 912102440890861452 | 50, 000 | Project investment (excluding special approval) |
| Tak Shing Li International Holdings Ltd. | Fan Hongwei | 2003-08-27 | Registration number: 859250 | 500 | Mainly engaged in trade and investment business |
| Other information | Hengneng Investment and Tak Shing Li are persons acting in concert with Hengli Group, the controlling shareholder of the company | ||||
VII. Explanation on reduction of shareholding restriction
□适用 √不适用
VIII. Specific implementation of share repurchase during the reporting period
□适用 √不适用
Chapter 8 Information of Preferred Shares
□适用 √不适用
Chapter 9 Information of BondsI. Corporate bonds, company bonds and non-financial corporate debt financinginstruments
√适用 □不适用
(I) Corporate bonds
□适用 √不适用
(II) Company bonds
□适用 √不适用
(III) Debt financing instruments for non-financial enterprises in the inter-bank bond market
√适用 □不适用
1. Non-financial corporate debt financing instruments
Unit: hundred million yuan Currency: RMB
| Bond name | Abbreviation | Code | Issuance date | Value date | Maturity date | Bond balance | Interest rate(%) | Payment of principal and interest | Trading places | Investor Suitability Arrangements (if any) | Trading Mechanism | Whether there is a risk of termination of listing transactions |
| 2023 Phase I Short-term Financing Bonds | 23 Hengli Petrochemical CP001 | 042380398 | 2023-07-17 | 2023-07-19 | 2024-07-19 | 10 | 3.53 | One-time repayment of principal and interest at maturity | China Interbank Market | No |
The company's countermeasures against the risk of delisting and trading bonds
□适用 √不适用
Overdue Bonds
□适用 √不适用
Bond interest payment and payment during the reporting period
□适用 √不适用
2. The triggering and implementation of issuer or investor option clauses and investor
protection clauses
□适用 √不适用
3. Intermediaries providing services for bond issuance and duration business
| Intermediary name | Office address | Name of Signing Accountant | Contact person | Contact number |
| China Merchants Bank Co., Ltd. | China Merchants Bank Building, No. 7088 Shennan Avenue, Shenzhen | Cao Chong, Guo Wei | 0755-88026137、0411-39853306 | |
| Beijing Tianyuan Law Firm | Unit 509, Block A, International Enterprise Building, No. 35, Financial Street, Xicheng District, Beijing | Zhang Deren and Huang Jingya | 010-57763888 | |
| Zhonghui Certified Public Accountants (Special General Partnership) | Room 601, Building A, Hualian Times Building, No. 8 Xinye Road, Jianggan District, Hangzhou | Han Jian, Fang Sai | Han Jian | 0571-88879999 |
| Oriental Jincheng International Credit Rating Co., Ltd. | 45-47F, Building A, Ping An Happiness Center, No. 24, Lize Road, Fengtai District, Beijing | Guo Zhebiao | 010-62299800 | |
| China Minsheng Banking Corp., Ltd | No. 2, Fuxingmennei Street, Xicheng District, Beijing | Shu Chang | 010-56366525 |
Changes to the above-mentioned intermediaries
□适用 √不适用
4. Use of raised funds at the end of the reporting period
√适用 □不适用
Unit: hundred million yuan Currency: RMB
| Bond name | Total amount of funds raised | Amount used | Unused amount | Operation of special account for raised funds (if any) | Rectification of illegal use of raised funds (if any) | Whether it is consistent with the purpose, use plan and other agreements promised in the prospectus |
| 23 Hengli Petrochemical CP001 | 10 | 10 | 0 | Yes |
The progress and operational benefits of raising funds for construction projects
□适用 √不适用
Explanation on changing the use of funds raised from the above bonds during the reporting period
□适用 √不适用
Other note
□适用 √不适用
5. Adjustments to credit rating results
□适用 √不适用
Other note
□适用 √不适用
6. The implementation and changes of guarantees, debt repayment plans and other debtrepayment guarantee measures during the reporting period and their impact
□适用 √不适用
7. Explanation on other conditions of non-financial corporate debt financing instruments
□适用 √不适用
(IV) The company incurred a consolidated net loss during the reporting period that exceeded 10%
of the net assets at the end of the previous year
□适用 √不适用
(V) Overdue interest-bearing debts other than bonds at the end of the reporting period
□适用 √不适用
(VI) The impact on bond investors' rights during the reporting period due to violations of laws,regulations, company bylaws, provisions of information disclosure management systems, as wellas deviations from the provisions or commitments stated in the bond prospectus
□适用 √不适用
(VII) Accounting Data and Financial Indicators of the Company in the Previous Two Years by theEnd of the Reporting Period
√适用 □不适用
Unit: ten thousand yuan Currency: RMB
| Key indicators | 2023 | 2022 | Year-on-year changes(%) | Reason of changes |
| Net profit excluding extraordinary profit or loss | 599,723.27 | 104,528.51 | 473.74 | |
| Current ratio | 0.53 | 0.61 | -13.11 | |
| Quick ratio | 0.21 | 0.25 | -16.00 | |
| Debt-to-assets ratio (%) | 76.98 | 78.08 | -1.10 | |
| Total debt-to-EBITDA ratio | 0.12 | 0.09 | 33.33 | |
| Interest coverage ratio | 2.30 | 1.36 | 69.12 | |
| Cash flow interest coverage ratio | 4.10 | 5.94 | -30.98 | |
| EBITDA-to-interest coverage ratio | 3.97 | 3.20 | 24.06 | |
| Loan repayment rate (%) | 100.00 | 100.00 | ||
| Interest coverage rate (%) | 100.00 | 100.00 |
II. Convertible corporate bonds
□适用 √不适用
Chapter 10 Financial reportI. Auditor’s Report
√适用 □不适用
To all shareholders of Hengli Petrochemical Co., Ltd.:
I. OpinionWe have audited the financial statements of Hengli Petrochemical Co., Ltd. (hereinafter "theCompany"), which comprise the consolidated and company balance sheets as at 31 December 2023,and the consolidated and company income statements, consolidated and company cash flowstatements and consolidated and company statements of changes in equity for the year then ended,and notes to the financial statements.In our opinion, the accompanying financial statements present fairly, in all material respects,the consolidated and company financial positions as at 31 December 2023, and their financialperformance and their cash flows for the year then ended in accordance with the requirements ofAccounting Standards for Business Enterprises.II. Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing. Ourresponsibilities under those standards are further described in the Auditor's Responsibilitiesfor the Audit of the Financial Statements section of our report. We are independent of theCompany and have fulfilled our other ethical responsibilities in accordance with the ChinaCode of Ethics for Certified Public Accountants. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
III. Key Audit MatterKey audit matter is the matter that, in our professional judgment, was of most significance inour audit of the financial statements for the year ended 31 December 2023. This matter wasaddressed in the context of our audit of the financial statements as a whole, and in forming ouropinion thereon, and we do not provide a separate opinion on this matter.(I) Revenue recognition
| Key audit matter | Addressed in the context of our audit |
| Revenue recognition | |
| As mentioned in note to the financial statements of the Company, the operating revenue for the period was RMB 234. 79 billion. The primary revenue sources and recognition criteria are shown in note to the financial statements of the Company. Since revenue is one of the key performance indicators of the Company, there is an inherent risk that management will manipulate revenue recognition in order to achieve specific goals or expectations. Therefore, we recognize revenue recognition as a key audit matter. | In the audit of the financial statements for the year, we have implemented the following procedures for the matter of revenue recognition: 1. Evaluate and test the design and operation effectiveness of key internal controls related to revenue recognition of the Company; 2. Understand the various types of income of the Company and their recognition conditions, and evaluate whether the income recognition policy meets the requirements of the accounting standards; 3. Combined with the comparison of gross profit margins of companies in the same industry, an analysis procedure is performed on the Company's revenue, costs and gross profit margins |
| to analyze the rationality of the gross profit margin change trend; 4. Select sample and inspect the Company's various types of income related contracts, invoices, income confirmation documents and other documents to test the authenticity of income; 5. Perform a sample test on the revenue recognized around the balance sheet date to assess whether the sales revenue is recognized in the appropriate accounting period; 6. Carry out confirmation procedure on the income amount of the Company's major customers and the balances of receivable. | |
| Provision for decline in value of inventories | |
| As mentioned in note to the financial statements of the Company, the inventories balance as of balance sheet date is RMB 31.86 billion and the balance of provision for decline in value of inventories is RMB 0.59 billion, with the carrying amount of inventories of RMB31.27 billion. The carrying amount of inventories is a material amount. The Company's inventories are mainly crude oil and refining-related products, which are greatly affected by the macroeconomic and crude oil market price fluctuations. Whether the provision for decline in value of inventories is sufficient or not has a significant impact on the financial statements, and the Company's provision for decline in value of inventories is subject to the judgment of the management involved in the determination of the net realizable value. Therefore, we recognize provision for decline in value of inventories as a key audit matter. | In the audit of the financial statements for the year, we have implemented the following procedures for the matter of Provision for decline in value of inventories: 1. Evaluate and test the design and operation effectiveness of key internal controls related to provision for decline in value of inventories of the Company; 2. Conduct sampling inspection on the inventory of the Company to check whether the quantity of inventory is accurate, and whether there are any conditions such as damage, obsolescence, obsolescence, and defects; 3. Obtained calculation sheet of the provision for decline in value of inventories, prepared by the management of the Company, reviewed the key parameters for calculating the provision for decline in value of inventories, including estimated future sales prices, costs to be incurred by the completion of the project, sales expenses, and related taxes and fees, and checked the accuracy of the calculation of provision for decline in value of inventories; 4. Check whether the calculation and accounting treatment of provision for decline in value of inventories is correct, whether provision or write-off for the year is consistent with the relevant amount of profit or loss account. |
IV. Other InformationManagement is responsible for the other information. The other information comprises theinformation included in the Company’s 2023 annual report, but does not include the financialstatements and our auditor's report thereon.Our opinion on the financial statements does not cover the other information and we do notexpress any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent withthe financial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
If, based on the work we have performed, we conclude that there is a material misstatementof this other information, we are required to report that fact. We have nothing to report in thisregard.
V. Responsibilities of Management and Those Charged with Governance for the FinancialStatements
Management of the Company is responsible for the preparation of the financial statements toachieve fair presentation in accordance with Accounting Standards for Business Enterprises, and forthe design, implementation and maintenance of such internal control as management determine isnecessary to enable the preparation of the financial statements that are free from materialmisstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company'sability to continue as a going concern, disclosing, as applicable, matters related to going concernand using the going concern basis of accounting unless management either intend to liquidate the Companyor to cease operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financialreporting process.
VI. Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements asa whole are free from material misstatement, whether due to fraud or error, and to issue anauditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but isnot a guarantee that an audit conducted in accordance with auditing standards will always detect amaterial misstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with auditing standards, we exercise professional judgmentand maintain professional skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whetherdue to fraud or error, design and perform audit procedures responsive to those risks, and obtainaudit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of notdetecting a material misstatement resulting from fraud is higher than for one resulting from error,as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the overrideof internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
(4) Conclude on the appropriateness of the management’s use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertainty exists relatedto events or conditions that may cast significant doubt on the Company's ability to continue as agoing concern. If we conclude that a material uncertainty exists, the auditing standards require usto draw attention to users of the financial statements in our auditor's report to the relateddisclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor's report.However, future events or conditions may cause the Company to cease to continue as a goingconcern.
(5) Evaluate the overall presentation, structure and content of the financial statements,including the disclosures, and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of theentities or business activities within the Company to express an opinion on the financial statements.We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, theplanned scope and timing of the audit and significant audit findings, including any significantdeficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied withrelevant ethical requirements regarding independence, and to communicate with them allrelationships and other matters that may reasonably be thought to bear on our independence, andwhere applicable, related safeguards.
From the matters communicated with those charged with governance, we determine thosematters that were of most significance in the audit of the financial statements of the current periodand are therefore the key audit matters. We describe these matters in our auditor's report unlesslaw or regulation precludes public disclosure about the matter or when, in extremely rarecircumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.
Zhonghui Certified Public Accountants Chinese Certified Public Accountant:
(special general partnership) (Engagement partner)
China·Hangzhou Chinese Certified Public Accountant:
Report date: 9 April 2024
II. Financial statements
Consolidated Balance SheetAs at 31/12/2023Prepared by: Hengli Petrochemical Co., Ltd.
Unit: Yuan Currency: RMB
| Item | Note | As at 31/12/2023 | As at 31/12/2022 |
| Current assets: | |||
| Cash and bank balances | 20,469,039,149.14 | 28,076,405,879.84 | |
| Settlement reserve | |||
| Due from banks and other financial institutions | |||
| Financial assets held for trading | 298,830,073.13 | 604,414,444.44 | |
| Derivative financial assets | |||
| Notes receivable | |||
| Accounts receivable | 538,415,259.33 | 372,445,926.69 | |
| Receivable financing | 4,170,047,562.43 | 2,287,271,229.26 | |
| Prepayments | 1,735,558,535.56 | 1,997,468,820.54 | |
| Insurance premium receivables | |||
| Reinsurance premium receivables | |||
| Reserve receivable for reinsurance | |||
| Other receivables | 809,207,973.41 | 701,520,929.51 | |
| Including: Interest receivables | |||
| Dividend receivables | |||
| Financial assets purchased under agreements to resell | |||
| Inventories | 31,267,554,645.91 | 37,835,511,471.41 | |
| Contract assets | |||
| Assets held-for-sale | |||
| Non-current assets due within one year | |||
| Other current assets | 6,794,497,876.94 | 4,468,726,603.40 | |
| Total current assets | 66,083,151,075.85 | 76,343,765,305.09 | |
| Non-current assets: | |||
| Loans and advances | |||
| Debts investment | 20,427,397.26 | ||
| Other debts investment | |||
| Long-term receivables | |||
| Long-term equity investments | 646,000,353.85 | 559,215,493.16 | |
| Other equity instruments investment | |||
| Other non-current financial assets | |||
| Investment properties | 192,405,490.57 | 164,271,812.80 | |
| Fixed assets | 129,987,346,509.40 | 118,718,591,050.99 | |
| Construction in progress | 48,824,137,687.45 | 27,287,491,499.08 | |
| Productive biological assets | |||
| Oil and gas assets | |||
| Right-of-use assets | 77,132,749.74 | 87,844,283.36 | |
| Intangible assets | 9,034,820,634.08 | 8,924,775,668.34 | |
| Development cost | |||
| Goodwill | 77,323,123.69 | 77,323,123.69 | |
| Long-term deferred expenses | 2,017,090,197.82 | 2,027,293,324.85 | |
| Deferred tax assets | 276,325,176.98 | 892,227,246.46 | |
| Other non-current assets | 3,383,287,915.12 | 6,327,248,356.84 | |
| Total non-current assets | 194,515,869,838.70 | 165,086,709,256.83 | |
| TOTAL ASSETS | 260,599,020,914.55 | 241,430,474,561.92 | |
| Current Liabilities: | |||
| Short-term loans | 66,995,050,481.39 | 69,316,898,813.08 | |
| Borrowings from central bank | |||
| Deposits and placements from banks and other financial institutions | |||
| Financial liabilities held for trading | 190,324,330.67 | 346,020,729.70 | |
| Derivative financial liabilities | |||
| Notes payable | 12,002,453,588.53 | 20,603,775,870.27 | |
| Accounts payable | 15,598,667,595.93 | 8,869,309,998.90 | |
| Receipts in advance | |||
| Contract liabilities | 8,502,387,268.92 | 12,090,983,326.47 | |
| Financial assets sold under agreements to repurchase | |||
| Due to customers and banks | |||
| Securities brokering | |||
| Securities underwriting | |||
| Employee benefits payable | 500,637,516.56 | 476,509,780.18 | |
| Taxes payable | 1,439,601,734.55 | 1,036,013,713.16 | |
| Other payables | 416,224,941.72 | 382,263,173.05 | |
| Including: Interest payables | |||
| Dividends payable | |||
| Fees and commissions payable | |||
| Reinsurance premium payable | |||
| Liabilities held-for-sale | |||
| Non-current liabilities due within one year | 13,498,071,650.12 | 9,349,028,245.01 | |
| Other current liabilities | 4,718,353,856.20 | 3,382,127,557.85 | |
| Total current liabilities | 123,861,772,964.59 | 125,852,931,207.67 | |
| Non-current liabilities: | |||
| Claims reserve of insurance contract | |||
| Long-term loans | 70,620,906,532.26 | 58,347,153,350.72 | |
| Bonds payable | |||
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Lease liabilities | 41,516,484.45 | 55,750,879.91 | |
| Long-term payables | 2,085,460,266.51 | 858,833,333.34 | |
| Long-term employee benefits payable | |||
| Provisions | |||
| Deferred income | 3,949,091,884.36 | 3,376,501,714.84 | |
| Deferred tax liabilities | 41,710,468.32 | 18,914,506.94 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 76,738,685,635.90 | 62,657,153,785.75 | |
| TOTAL LIABILITIES | 200,600,458,600.49 | 188,510,084,993.42 | |
| Owners’equity (or Shareholders’equity): | |||
| Paid-in capital (or Share capital) | 7,039,099,786.00 | 7,039,099,786.00 | |
| Other equity instruments | |||
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Capital reserve | 18,763,586,176.98 | 18,686,516,127.76 | |
| Less: Treasury shares | |||
| Other comprehensive income | -9,624,653.08 | -50,052,317.06 | |
| Specific reserve | 109,358,123.52 | 1,602,239.79 | |
| Surplus reserve | 995,318,771.37 | 905,565,700.75 | |
| General risk reserve | |||
| Undistributed profits | 33,094,662,821.91 | 26,279,812,029.77 | |
| Total owners’equity (or shareholders’equity) attributable to the parent | 59,992,401,026.70 | 52,862,543,567.01 | |
| Minority interests | 6,161,287.36 | 57,846,001.49 | |
| Total owners’equity (or shareholders’equity) | 59,998,562,314.06 | 52,920,389,568.50 | |
| Total liabilities and owners’equity (or shareholders’equity) | 260,599,020,914.55 | 241,430,474,561.92 | |
Legal representative: Fan Hongwei Person in charge of financial function: Liu Xuefen Prepared by:
Zheng Minxia
Parent Company Balance Sheet
As at 31/12/2023Prepared by: Hengli Petrochemical Co., Ltd.
Unit: Yuan Currency: RMB
| Item | Note | As at 31/12/2023 | As at 31/12/2022 |
| Current assets: | |||
| Cash and bank balances | 14,398,907.50 | 31,980,728.03 | |
| Financial assets held for trading | |||
| Derivative financial assets | |||
| Notes receivable | |||
| Accounts receivable | 1,206,845.42 | ||
| Receivable financing | |||
| Prepayments | 171,071.66 | 1,271,836.74 | |
| Other receivables | 164,731,382.20 | 811,162,769.45 | |
| Including: Interest receivables | |||
| Dividend receivables | 81,550,000.00 | 800,000,000.00 | |
| Inventories | |||
| Contract assets | |||
| Assets held-for-sale | |||
| Non-current assets due within one year | |||
| Other current assets | 35,987,407.95 | 42,450,791.47 | |
| Total current assets | 216,495,614.73 | 886,866,125.69 | |
| Non-current assets: | |||
| Debts investment | |||
| Other debts investment | |||
| Long-term receivables | |||
| Long-term equity investments | 44,366,275,704.93 | 44,316,275,704.93 | |
| Other equity instruments investment | |||
| Other non-current financial assets | |||
| Investment properties | 73,260,186.32 | 37,900,752.88 | |
| Fixed assets | 2,723,712,211.22 | 2,852,515,397.82 | |
| Construction in progress | 40,240,646.81 | 34,483,864.48 | |
| Productive biological assets | |||
| Oil and gas assets | |||
| Right-of-use assets | |||
| Intangible assets | |||
| Development cost | |||
| Goodwill | |||
| Long-term deferred expenses | |||
| Deferred tax assets | |||
| Other non-current assets | |||
| Total non-current assets | 47,203,488,749.28 | 47,241,175,720.11 | |
| TOTAL ASSETS | 47,419,984,364.01 | 48,128,041,845.80 | |
| Current Liabilities: | |||
| Short-term loans | |||
| Financial liabilities held for trading | |||
| Derivative financial liabilities | |||
| Notes payable | 3,219,218.07 | 20,337,770.04 | |
| Accounts payable | 2,608,881.32 | 1,001,201.98 | |
| Receipts in advance | |||
| Contract liabilities | |||
| Employee benefits payable | 600,000.00 | 2,400,000.00 | |
| Taxes payable | 6,291,958.40 | 7,588,420.83 | |
| Other payables | 5,584,532,670.44 | 6,593,083,472.18 | |
| Including: Interest payables | |||
| Dividends payable | |||
| Liabilities held-for-sale | |||
| Non-current liabilities due within one year | 1,015,294,281.98 | 2,030,618,280.89 | |
| Other current liabilities | |||
| Total current liabilities | 6,612,547,010.21 | 8,655,029,145.92 | |
| Non-current liabilities: | |||
| Long-term loans | |||
| Bonds payable | |||
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Lease liabilities | |||
| Long-term payables | |||
| Long-term employee benefits payable | |||
| Provisions | |||
| Deferred income | |||
| Deferred tax liabilities | |||
| Other non-current liabilities | |||
| Total non-current liabilities | |||
| TOTAL LIABILITIES | 6,612,547,010.21 | 8,655,029,145.92 | |
| Owners’equity (or Shareholders’equity): | |||
| Paid-in capital (or Share capital) | 7,039,099,786.00 | 7,039,099,786.00 | |
| Other equity instruments | |||
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Capital reserve | 24,142,978,843.34 | 24,142,978,843.34 | |
| Less: Treasury shares | |||
| Other comprehensive income | |||
| Specific reserve | |||
| Surplus reserve | 2,813,304,057.66 | 2,679,861,592.27 | |
| Undistributed profits | 6,812,054,666.80 | 5,611,072,478.27 | |
| Total owners’equity (or shareholders’equity) | 40,807,437,353.80 | 39,473,012,699.88 | |
| Total liabilities and owners’equity (or shareholders’equity) | 47,419,984,364.01 | 48,128,041,845.80 | |
Legal representative: Fan Hongwei Person in charge of financial function: Liu Xuefen Prepared by:
Zheng Minxia
Consolidated Income StatementFor the year ended 31 December 2023
Unit: Yuan Currency: RMB
| Item | Note | 2023 | 2022 |
| I. Total revenue from operations | 234,866,125,177.52 | 222,372,593,675.48 | |
| Including: Revenue from operations | 234,790,672,395.88 | 222,323,583,969.88 | |
| Interest income | 35,252,401.34 | 26,648,486.54 | |
| Premium earned | |||
| Fees and commissions income | 40,200,380.30 | 22,361,219.06 | |
| II. Total cost of operations | 226,611,119,211.98 | 218,462,766,541.73 | |
| Including: Cost of operations | 208,383,851,927.36 | 204,077,597,066.45 | |
| Interest expenses | |||
| Fees and commissions expenses | |||
| Cash surrender amount | |||
| Net expenses of claim settlement | |||
| Net provisions for insurance contract reserves | |||
| Insurance policies dividend expenses | |||
| Reinsurance expenses | |||
| Taxes and surcharges | 9,200,633,914.43 | 6,631,019,180.66 | |
| Selling expenses | 293,473,043.49 | 392,769,176.78 | |
| Administrative expenses | 1,997,367,969.54 | 1,889,298,663.76 |
| Research and development expenses | 1,371,028,486.34 | 1,184,711,003.40 | |
| Financial expense | 5,364,763,870.82 | 4,287,371,450.68 | |
| Including: Interest expenses | 4,558,991,721.03 | 4,632,905,829.96 | |
| Interest income | 455,728,555.41 | 332,736,566.09 | |
| Add: Other income | 1,015,629,245.71 | 1,595,543,126.20 | |
| Investment income (”-” for loss) | -36,566,983.25 | -322,324.78 | |
| Including: Gains from investments in associates and joint ventures | 76,784,860.69 | ||
| Gain from derecognition of financial assets at amortized cost | -174,694,586.97 | ||
| Foreign exchange gain (”-” for loss) | |||
| Gain from net exposure of hedging (”-” for loss) | |||
| Gains from changes of fair value (”-” for loss) | 370,550,373.91 | -45,679,570.72 | |
| Credit impairment loss (”-” for loss) | -108,054,345.28 | -2,373,806.12 | |
| Assets impairment loss (”-” for loss) | -593,692,020.24 | -3,128,732,830.34 | |
| Gain from disposal of assets (”-” for loss) | -3,063,798.81 | -3,332,571.69 | |
| III. Operating profit (”-” for loss) | 8,899,808,437.58 | 2,324,929,156.30 | |
| Add: Non-operating income | 79,815,457.88 | 105,330,717.22 | |
| Less: Non-operating expenses | 106,391,688.27 | 20,681,258.19 | |
| IV. Total profit (”-” for loss) | 8,873,232,207.19 | 2,409,578,615.33 | |
| Less: Income tax expenses | 1,968,768,270.41 | 91,541,665.11 | |
| V. Net profit (”-” for loss) | 6,904,463,936.78 | 2,318,036,950.22 | |
| (I) Classified by continuity of operations | |||
| 1.Net profit from continuing operations (”-” for loss) | 6,904,463,936.78 | 2,318,036,950.22 | |
| 2.Net profit from discontinued operations (”-” for loss) | |||
| (II) Classified by attribution to ownership | |||
| 1.Net profit attributable to shareholders of the parent (”-” for loss) | 6,904,603,862.76 | 2,318,303,166.69 | |
| 2.Net profit attributable to minority interests (”-” for loss) | -139,925.98 | -266,216.47 | |
| VI. Other comprehensive income - after tax | 40,427,663.98 | 105,052,177.39 | |
| (I) Other comprehensive income - after tax attributable to owners of the parent | 40,427,663.98 | 100,564,060.24 | |
| 1. Other comprehensive income not reclassified into profit or loss subsequently | |||
| (1)Changes in remeasurement of defined benefit plan | |||
| (2)Share of other comprehensive income of the equity method investments | |||
| (3)Changes in fair value of other equity instruments investment | |||
| (4)Changes in fair value of the Company’s own credit risks | |||
| 2. Other comprehensive income that will be reclassified into profit or loss subsequently | 40,427,663.98 | 100,564,060.24 | |
| (1)Share of other comprehensive income of associates and joint ventures under equity method | |||
| (2)Changes in the fair value of other debt investments | |||
| (3)Reclassification of financial assets recognised as other comprehensive income | |||
| (4)Credit impairment loss of other debt investments | |||
| (5)Cash flow hedging reserve | 6,252,291.04 | -6,398,442.57 | |
| (6)Translation of foreign currency financial statements | 34,175,372.94 | 106,962,502.81 | |
| (7)Others | |||
| (II) Other comprehensive income - after tax attributable to minority interests | 4,488,117.15 | ||
| VII. Total comprehensive income | 6,944,891,600.76 | 2,423,089,127.61 | |
| (I) Total comprehensive income attributable to owners of the parent | 6,945,031,526.74 | 2,418,867,226.93 | |
| (II) Total comprehensive income attributable to minority interests | -139,925.98 | 4,221,900.68 | |
| VIII. Earnings per share: | |||
| (I) Basic earnings per share (RMB per share) | 0.98 | 0.33 | |
| (II) Diluted earnings per share (RMB per share) | 0.98 | 0.33 | |
For the business combination under common control in this period, the net profit realized by theacquiree before the merger is: 0 yuan, and the net profit realized by the acquiree in the previousperiod is: 0 yuan.Legal representative: Fan Hongwei Person in charge of financial function: Liu Xuefen Prepared by:
Zheng Minxia
Parent Company Income StatementFor the year ended 31 December 2023
Unit: Yuan Currency: RMB
| Item | Note | 2023 | 2022 |
| I. Revenue from operations | 3,454,179.12 | 1,633,324.64 | |
| Less: Cost of operations | 2,011,877.89 | 1,270,659.72 | |
| Taxes and surcharges | 25,042,286.44 | 22,046,809.69 | |
| Selling expenses | |||
| Administrative expenses | 129,668,253.01 | 95,862,573.23 | |
| Research and development expenses | |||
| Financial expense | 47,325,474.75 | 33,033,234.46 | |
| Including: Interest expenses | 47,719,397.32 | 34,113,823.35 | |
| Interest income | 417,251.35 | 1,099,802.78 | |
| Add: Other income | 17,478,025.50 | 1,787,238.79 |
| Investment income (”-” for loss) | 1,521,000,000.00 | 6,022,872,521.63 | |
| Including: Gains from investments in associates and joint ventures | |||
| Gain from derecognition of financial assets at amortized cost | |||
| Gain from net exposure of hedging (”-” for loss) | |||
| Gains from changes of fair value (”-” for loss) | |||
| Credit impairment loss (”-” for loss) | -3,534,195.83 | -102,189.08 | |
| Assets impairment loss (”-” for loss) | |||
| Gain from disposal of assets (”-” for loss) | 54,000.00 | ||
| II. Operating profit (”-” for loss) | 1,334,404,116.70 | 5,873,977,618.88 | |
| Add: Non-operating income | 20,537.22 | ||
| Less: Non-operating expenses | |||
| III. Total profit (”-” for loss) | 1,334,424,653.92 | 5,873,977,618.88 | |
| Less: Income tax expenses | |||
| IV. Net profit (”-” for loss) | 1,334,424,653.92 | 5,873,977,618.88 | |
| (I) Net profit from continuing operations (”-” for loss) | 1,334,424,653.92 | 5,873,977,618.88 | |
| (II) Net profit from discontinued operations (”-” for loss) | |||
| V. Other comprehensive income - after tax | |||
| (I) Other comprehensive income not reclassified into profit or loss subsequently | |||
| 1.Changes in remeasurement of defined benefit plan | |||
| 2.Share of other comprehensive income of the equity method investments | |||
| 3.Changes in fair value of other equity instruments investment | |||
| 4.Changes in fair value of the Company’s own credit risks | |||
| (II) Other comprehensive income that will be reclassified into profit or loss subsequently | |||
| 1.Share of other comprehensive income of associates and joint ventures under equity method | |||
| 2.Changes in the fair value of other debt investments | |||
| 3.Reclassification of financial assets recognised as other comprehensive income | |||
| 4.Credit impairment loss of other debt investments | |||
| 5.Cash flow hedging reserve |
| 6.Translation of foreign currency financial statements | |||
| 7.Others | |||
| VI. Total comprehensive income | 1,334,424,653.92 | 5,873,977,618.88 | |
| VII. Earnings per share: | |||
| (I) Basic earnings per share (RMB per share) | |||
| (II) Diluted earnings per share (RMB per share) | |||
Legal representative: Fan Hongwei Person in charge of financial function: Liu Xuefen Prepared by:
Zheng Minxia
Consolidated Cash Flows StatementFor the year ended 31 December 2023
Unit: Yuan Currency: RMB
| Item | Note | 2023 | 2022 |
| I. Cash flows from operating activities: | |||
| Cash received from sales of goods or rendering of services | 253,368,629,479.01 | 267,426,902,574.47 | |
| Net increase in deposits from customers and inter-banks | |||
| Net increase in due to central bank | |||
| Net increase in fund borrowings from other financial institutes | |||
| Cash received from insurance premium of original insurance contracts | |||
| Net cash received from reinsurance business | |||
| Net increase in insured’s deposits and investments | |||
| Cash received from interests, fees and commissions | 88,560,362.90 | 52,563,354.96 | |
| Net increase of placement from banks and other financial institutions | |||
| Net increase in fund of repurchase business | |||
| Net cash received in securities brokerage agency | |||
| Tax refund received | 1,733,346,941.05 | 5,562,889,817.74 | |
| Other cash received relating to operating activities | 5,496,564,458.04 | 5,936,292,171.41 | |
| Sub-total of cash inflows | 260,687,101,241.00 | 278,978,647,918.58 | |
| Cash paid for goods and services | 216,905,242,986.13 | 234,363,054,837.45 | |
| Net increase in issued loans and advance | |||
| Net increase in deposits in central bank and inter-banks | |||
| Cash paid for claims of original insurance contracts | |||
| Net increase in due from banks and other financial institutions | |||
| Cash paid for interest, fees and commission | |||
| Cash paid for policy dividends | |||
| Cash paid to and on behalf of employees | 4,127,786,612.89 | 3,736,263,307.53 | |
| Payments of all types of taxes | 13,644,805,641.55 | 11,290,319,184.00 | |
| Other cash paid relating to operating activities | 2,473,475,871.46 | 3,635,039,806.17 | |
| Sub-total of cash outflows | 237,151,311,112.03 | 253,024,677,135.15 | |
| Net cash flows from operating activities | 23,535,790,128.97 | 25,953,970,783.43 | |
| II. Cash flows from investing activities: | |||
| Cash received from disposal of investments | 5,107,392,261.85 | 2,882,252,002.75 | |
| Cash received from returns on investments | 10,065,585.08 | ||
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 19,140,467.53 | 7,064,483.56 | |
| Cash received from disposal of subsidiaries and other business units | |||
| Other cash received relating to investing activities | 1,314,070,624.32 | 347,902,490.45 | |
| Sub-total of cash inflows | 6,450,668,938.78 | 3,237,218,976.76 | |
| Cash paid to acquire fixed assets, intangible assets and other long-term assets | 39,740,884,349.33 | 25,714,852,414.63 | |
| Cash paid to acquire investments | 4,635,580,702.27 | 2,503,807,796.91 | |
| Net increase in pledged loans | |||
| Cash paid to acquire subsidiaries and other business units | |||
| Other cash paid relating to investing activities | 888,703,263.24 | 1,315,628,697.98 | |
| Sub-total of cash outflows | 45,265,168,314.84 | 29,534,288,909.52 | |
| Net cash flows from investing activities | -38,814,499,376.06 | -26,297,069,932.76 | |
| III. Cash flows from financing activities : | |||
| Cash received from capital contribution | 6,300,000.00 | ||
| Including: Cash received from investment by minority interests of subsidiaries | 6,300,000.00 | ||
| Cash received from borrowings | 105,716,625,805.89 | 97,969,621,917.23 | |
| Cash received relating to other financing activities | 7,661,905,079.75 | 3,735,166,378.16 | |
| Sub-total of cash inflows | 113,378,530,885.64 | 101,711,088,295.39 | |
| Cash repayments of amounts borrowed | 91,910,909,309.97 | 74,702,848,106.14 | |
| Cash payments for interest expenses and distribution of dividends or profits | 5,772,677,855.06 | 12,120,673,280.05 | |
| Including: Dividend paid to minority interests of subsidiaries | |||
| Other cash payments relating to financing activities | 5,785,239,564.93 | 4,482,150,476.99 | |
| Sub-total of cash outflows | 103,468,826,729.96 | 91,305,671,863.18 | |
| Net cash flows from financing activities | 9,909,704,155.68 | 10,405,416,432.21 | |
| IV. Effect of foreign exchange rate changes on cash | 70,624,033.36 | 671,837,669.76 | |
| V. Net increase in cash and cash equivalents | -5,298,381,058.05 | 10,734,154,952.64 | |
| Add: Opening balance of cash and cash equivalent | 20,323,703,829.39 | 9,589,548,876.75 | |
| VI. Closing balance of cash and cash equivalent | 15,025,322,771.34 | 20,323,703,829.39 |
Legal representative: Fan Hongwei Person in charge of financial function: Liu Xuefen Prepared by:
Zheng Minxia
Parent Company Cash Flows Statement
For the year ended 31 December 2023
Unit: Yuan Currency: RMB
| Item | Note | 2023 | 2022 |
| I. Cash flows from operating activities: | |||
| Cash received from sales of goods or rendering of services | |||
| Tax refund received | 65,555,330.97 | ||
| Other cash received relating to operating activities | 110,866,078.81 | 993,485,513.95 | |
| Sub-total of cash inflows | 110,866,078.81 | 1,059,040,844.92 | |
| Cash paid for goods and services | |||
| Cash paid to and on behalf of employees | 13,579,054.13 | 7,320,727.56 | |
| Payments of all types of taxes | 16,469,707.26 | 19,550,279.49 | |
| Other cash paid relating to operating activities | 1,196,356,798.85 | 119,160,048.56 | |
| Sub-total of cash outflows | 1,226,405,560.24 | 146,031,055.61 | |
| Net cash flows from operating activities | -1,115,539,481.43 | 913,009,789.31 | |
| II. Cash flows from investing activities: | |||
| Cash received from disposal of investments | 577,647.63 | ||
| Cash received from returns on investments | 2,239,450,000.00 | 6,423,294,874.00 | |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 68,535.40 | ||
| Cash received from disposal of subsidiaries and other business units | |||
| Other cash received relating to investing activities | |||
| Sub-total of cash inflows | 2,239,518,535.40 | 6,423,872,521.63 | |
| Cash paid to acquire fixed assets, intangible assets and other long-term assets | 28,460,874.50 | 1,458,394,502.24 | |
| Cash paid to acquire investments | 50,000,000.00 | 1,000,000,000.00 | |
| Cash paid to acquire subsidiaries and other business units | |||
| Other cash paid relating to investing activities | |||
| Sub-total of cash outflows | 78,460,874.50 | 2,458,394,502.24 | |
| Net cash flows from investing activities | 2,161,057,660.90 | 3,965,478,019.39 | |
| III. Cash flows from financing activities : | |||
| Cash received from capital contribution | |||
| Cash received from borrowings | 999,000,000.00 | 1,998,113,207.54 | |
| Cash received relating to other financing activities | 382,298,725.15 | ||
| Sub-total of cash inflows | 999,000,000.00 | 2,380,411,932.69 | |
| Cash repayments of amounts borrowed | 2,000,000,000.00 | ||
| Cash payments for interest expenses and distribution of dividends or profits | 62,100,000.00 | 7,111,099,533.86 | |
| Other cash payments relating to financing activities | 170,000,000.00 | ||
| Sub-total of cash outflows | 2,062,100,000.00 | 7,281,099,533.86 | |
| Net cash flows from financing activities | -1,063,100,000.00 | -4,900,687,601.17 | |
| IV. Effect of foreign exchange rate changes on cash | |||
| V. Net increase in cash and cash equivalents | -17,581,820.53 | -22,199,792.47 | |
| Add: Opening balance of cash and cash equivalent | 31,980,728.03 | 54,180,520.50 | |
| VI. Closing balance of cash and cash equivalent | 14,398,907.50 | 31,980,728.03 | |
Legal representative: Fan Hongwei Person in charge of financial function: Liu Xuefen Prepared by:
Zheng Minxia
Consolidated Statement of Changes in Equity
For the year ended 31 December 2023
Unit: Yuan Currency: RMB
| Item | 2023 | ||||||||||||||
| Equity attributable to the parent company | Minority interests | TOTAL OWNERS’EQUITY | |||||||||||||
| Paid-in capital (or Share capital) | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Specific reserve | Surplus reserve | General risk reserve | Undistributed profits | Others | Subtotal | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
| I. Balance at end of previous year | 7,039,099,786.00 | 18,686,516,127.76 | -50,052,317.06 | 1,602,239.79 | 905,565,700.75 | 26,279,812,029.77 | 52,862,543,567.01 | 57,846,001.49 | 52,920,389,568.50 | ||||||
| Add: Changes in accounting policies | |||||||||||||||
| Correction of errors | |||||||||||||||
| Business combination under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Balance in beginning of year | 7,039,099,786.00 | 18,686,516,127.76 | -50,052,317.06 | 1,602,239.79 | 905,565,700.75 | 26,279,812,029.77 | 52,862,543,567.01 | 57,846,001.49 | 52,920,389,568.50 | ||||||
| III. Movement over the year ( “- “for decrease) | 77,070,049.22 | 40,427,663.98 | 107,755,883.73 | 89,753,070.62 | 6,814,850,792.14 | 7,129,857,459.69 | -51,684,714.13 | 7,078,172,745.56 | |||||||
| (I) Total comprehensive income | 40,427,663.98 | 6,904,603,862.76 | 6,945,031,526.74 | -139,925.98 | 6,944,891,600.76 | ||||||||||
| (II) Owner’s contributions and decrease of capital | 77,070,049.22 | 77,070,049.22 | -51,544,788.15 | 25,525,261.07 | |||||||||||
| 1. Capital contribution from owner | -51,544,788.15 | -51,544,788.15 | |||||||||||||
| 2. Increase in owners’equity resulted from other equity |
| instruments | |||||||||||||||
| 3. Increase in owners’equity resulted from share-based payments | 77,070,049.22 | 77,070,049.22 | 77,070,049.22 | ||||||||||||
| 4. Others | |||||||||||||||
| (III) Appropriation of profits | 89,753,070.62 | -89,753,070.62 | |||||||||||||
| 1. Transfer to surplus reserve | 89,753,070.62 | -89,753,070.62 | |||||||||||||
| 2. Transfer to general risk reserve | |||||||||||||||
| 3. Distribution to owners (or shareholders) | |||||||||||||||
| 4. Others | |||||||||||||||
| (IV) Transfer |
| within equity | |||||||||||||||
| 1. Capital reserve converting into share capital (or Share capital) | |||||||||||||||
| 2. Surplus reserve converting into share capital (or Share capital) | |||||||||||||||
| 3. Surplus reserve cover the deficit | |||||||||||||||
| 4. Changes of equity from the revaluation of defined benefit plan | |||||||||||||||
| 5. Other comprehensive income |
| transfer to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Specific reserve | 107,755,883.73 | 107,755,883.73 | 107,755,883.73 | ||||||||||||
| 1. Appropriation for the year | 428,804,002.16 | 428,804,002.16 | 428,804,002.16 | ||||||||||||
| 2. Used in the year | 321,048,118.43 | 321,048,118.43 | 321,048,118.43 | ||||||||||||
| (VI) Others | |||||||||||||||
| IV. Balance at end of year | 7,039,099,786.00 | 18,763,586,176.98 | -9,624,653.08 | 109,358,123.52 | 995,318,771.37 | 33,094,662,821.91 | 59,992,401,026.70 | 6,161,287.36 | 59,998,562,314.06 |
| Item | 2022 | ||||||||||||||
| Equity attributable to the parent company | Minority interests | TOTAL OWNERS’EQUITY | |||||||||||||
| Paid-in capital (or Share capital) | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Specific reserve | Surplus reserve | General risk reserve | Undistributed profits | Others | Subtotal | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
| I. Balance at end of previous year | 7,039,099,786.00 | 18,455,844,491.64 | 228,626,593.18 | -150,616,377.30 | 139,116,306.31 | 858,111,239.40 | 31,118,454,108.29 | 57,231,382,961.16 | 69,336,250.34 | 57,300,719,211.50 | |||||
| Add: Changes in accounting policies | |||||||||||||||
| Correction of errors | |||||||||||||||
| Business combination under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Balance in beginning of year | 7,039,099,786.00 | 18,455,844,491.64 | 228,626,593.18 | -150,616,377.30 | 139,116,306.31 | 858,111,239.40 | 31,118,454,108.29 | 57,231,382,961.16 | 69,336,250.34 | 57,300,719,211.50 | |||||
| III. Movement over the year ( “- “for decrease) | 230,671,636.12 | -228,626,593.18 | 100,564,060.24 | -137,514,066.52 | 47,454,461.35 | -4,838,642,078.52 | -4,368,839,394.15 | -11,490,248.85 | -4,380,329,643.00 | ||||||
| (I) Total comprehensive income | 100,564,060.24 | 2,318,303,166.69 | 2,418,867,226.93 | 4,221,900.68 | 2,423,089,127.61 |
| (II) Owner’s contributions and decrease of capital | 230,671,636.12 | -228,626,593.18 | 459,298,229.30 | -13,954,922.38 | 445,343,306.92 | ||||||||||
| 1. Capital contribution from owner | |||||||||||||||
| 2. Increase in owners’equity resulted from other equity instruments | |||||||||||||||
| 3. Increase in owners’equity resulted from share-based payments | 77,070,049.00 | 77,070,049.00 | 77,070,049.00 | ||||||||||||
| 4. Others | 153,601,587.12 | -228,626,593.18 | 382,228,180.30 | -13,954,922.38 | 368,273,257.92 | ||||||||||
| (III) Appropri | 47,454,461.35 | -7,156,945,245.21 | -7,109,490,783.86 | -1,757,227.15 | -7,111,248,011.01 |
| ation of profits | |||||||||||||||
| 1. Transfer to surplus reserve | 47,454,461.35 | -47,454,461.35 | - | ||||||||||||
| 2. Transfer to general risk reserve | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -7,109,490,783.86 | -7,109,490,783.86 | -1,757,227.15 | -7,111,248,011.01 | |||||||||||
| 4. Others | |||||||||||||||
| (IV) Transfer within equity | |||||||||||||||
| 1. Capital reserve converting into share capital (or Share capital) | |||||||||||||||
| 2. Surplus reserve converting into |
| share capital (or Share capital) | |||||||||||||||
| 3. Surplus reserve cover the deficit | |||||||||||||||
| 4. Changes of equity from the revaluation of defined benefit plan | |||||||||||||||
| 5. Other comprehensive income transfer to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Specific reserve | -137,514,066.52 | -137,514,066.52 | -137,514,066.52 | ||||||||||||
| 1. Appropriation for the year | 268,184,171.73 | 268,184,171.73 | 268,184,171.73 | ||||||||||||
| 2. Used in the year | 405,698,238.25 | 405,698,238.25 | 405,698,238.25 |
| (VI) Others | |||||||||||||||
| IV. Balance at end of year | 7,039,099,786.00 | 18,686,516,127.76 | -50,052,317.06 | 1,602,239.79 | 905,565,700.75 | 26,279,812,029.77 | 52,862,543,567.01 | 57,846,001.49 | 52,920,389,568.50 |
Legal representative: Fan Hongwei Person in charge of financial function: Liu Xuefen Prepared by: Zheng Minxia
Parent Company Statement of Changes in Equity
For the year ended 31 December 2023
Unit: Yuan Currency: RMB
| Item | 2023 | ||||||||||
| Paid-in capital (or Share capital) | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Specific reserve | Surplus reserve | Undistributed profits | TOTAL OWNERS’EQUITY | |||
| Preferred shares | Perpetual bonds | Others | |||||||||
| I. Balance at end of previous year | 7,039,099,786.00 | 24,142,978,843.34 | 2,679,861,592.27 | 5,611,072,478.27 | 39,473,012,699.88 | ||||||
| Add: Changes in accounting policies | |||||||||||
| Correction of errors | |||||||||||
| Others | |||||||||||
| II. Balance in beginning of year | 7,039,099,786.00 | 24,142,978,843.34 | 2,679,861,592.27 | 5,611,072,478.27 | 39,473,012,699.88 | ||||||
| III. Movement over the year ( “- “for decrease) | 133,442,465.39 | 1,200,982,188.53 | 1,334,424,653.92 | ||||||||
| (I) Total comprehensive income | 1,334,424,653.92 | 1,334,424,653.92 | |||||||||
| (II) Owner’s contributions and decrease of capital | |||||||||||
| 1. Capital contribution from owner | |||||||||||
| 2. Increase in owners’equity resulted from other equity instruments | |||||||||||
| 3. Increase in owners’equity resulted from share-based payments | |||||||||||
| 4. Others | |||||||||||
| (III) Appropriation of profits | 133,442,465.39 | -133,442,465.39 | |||||||||
| 1. Transfer to surplus reserve | 133,442,465.39 | -133,442,465.39 | |||||||||
| 2. Distribution to owners (or shareholders) | |||||||||||
| 3. Others | |||||||||||
| (IV) Transfer within equity | |||||||||||
| 1. Capital reserve converting into share capital (or Share capital) | |||||||||||
| 2. Surplus reserve converting into share capital (or Share capital) | |||||||||||
| 3. Surplus reserve cover the deficit | |||||||||||
| 4. Changes of equity from the revaluation of defined benefit plan | |||||||||||
| 5. Other comprehensive income transfer to retained earnings | |||||||||||
| 6. Others | |||||||||||
| (V) Specific reserve | |||||||||||
| 1. Appropriation for the year | |||||||||||
| 2. Used in the year | |||||||||||
| (VI) Others | |||||||||||
| IV. Balance at end of year | 7,039,099,786.00 | 24,142,978,843.34 | 2,813,304,057.66 | 6,812,054,666.80 | 40,807,437,353.80 |
| Item | 2022 | ||||||||||
| Paid-in capital (or Share capital) | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Specific reserve | Surplus reserve | Undistributed profits | TOTAL OWNERS’EQUITY | |||
| Preferred shares | Perpetual bonds | Others | |||||||||
| I. Balance at end of previous year | 7,039,099,786.00 | 23,989,306,711.37 | 228,626,593.18 | 2,092,463,830.38 | 7,433,983,405.14 | 40,326,227,139.71 | |||||
| Add: Changes in accounting policies | |||||||||||
| Correction of errors | |||||||||||
| Others | |||||||||||
| II. Balance in beginning of year | 7,039,099,786.00 | 23,989,306,711.37 | 228,626,593.18 | 2,092,463,830.38 | 7,433,983,405.14 | 40,326,227,139.71 | |||||
| III. Movement over the year ( “- “for decrease) | - | - | - | - | 153,672,131.97 | -228,626,593.18 | - | - | 587,397,761.89 | -1,822,910,926.87 | -853,214,439.83 |
| (I) Total comprehensive income | 5,873,977,618.88 | 5,873,977,618.88 | |||||||||
| (II) Owner’s contributions and decrease of capital | 153,672,131.97 | -228,626,593.18 | 382,298,725.15 | ||||||||
| 1. Capital contribution from owner | |||||||||||
| 2. Increase in owners’equity resulted from other equity instruments | |||||||||||
| 3. Increase in owners’equity resulted from share-based payments | |||||||||||
| 4. Others | 153,672,131.97 | -228,626,593.18 | 382,298,725.15 | ||||||||
| (III) Appropriation of profits | 587,397,761.89 | -7,696,888,545.75 | -7,109,490,783.86 | ||||||||
| 1. Transfer to surplus reserve | 587,397,761.89 | -587,397,761.89 | |||||||||
| 2. Distribution to owners (or shareholders) | -7,109,490,783.86 | -7,109,490,783.86 | |||||||||
| 3. Others | |||||||||||
| (IV) Transfer within equity | |||||||||||
| 1. Capital reserve converting into share capital (or Share capital) | |||||||||||
| 2. Surplus reserve converting into share capital (or Share capital) | |||||||||||
| 3. Surplus reserve cover the deficit | |||||||||||
| 4. Changes of equity from the revaluation of defined benefit plan | |||||||||||
| 5. Other comprehensive income transfer to retained earnings | |||||||||||
| 6. Others | |||||||||||
| (V) Specific reserve | |||||||||||
| 1. Appropriation for the year | |||||||||||
| 2. Used in the year | |||||||||||
| (VI) Others | |||||||||||
| IV. Balance at end of year | 7,039,099,786.00 | - | 24,142,978,843.34 | 2,679,861,592.27 | 5,611,072,478.27 | 39,473,012,699.88 |
Legal representative: Fan Hongwei Person in charge of financial function: Liu Xuefen Prepared by: Zheng Minxia
III. Company information
1. Company profile
√适用 □不适用
Hengli Petrochemical Co., Ltd. (hereinafter referred to as ”the Company”) is formerly known asDalian Rubber & Plastics Machinery Co., Ltd. (hereinafter referred to as ”DXS”), whose name waschanged on 27 May 2016. The Company was founded on 9 March 1999. The Company's shares werelisted on the Shanghai Stock Exchange on 20 August 2001 with stock name: Hengli Petrochemicaland stock code: 600346. The unified social credit code of the Company is 912102001185762674and the registered address of the Company is OSBL Project-Public Works Office Building, No.298Changsong Road, Lingang Industrial Zone, Changxing Island, Dalian, Liaoning Province. The legalrepresentative is Fan Hongwei. The Company’s registered capital is RMB 7,039,099,786.00 with totalnumber of shares of 7,039,099,786 shares with par value of RMB 1 each, including 7,039,099,786shares of tradable A shares without any restricted conditions.On 27 January 2016, China Securities Regulatory Commission approved the Company’s majorasset restructuring through document “Approval of Dalian Rubber & Plastics Machinery Co., Ltd.’ smajor asset restructuring and issue shares to Hengli Group Co., Ltd. to raise capital for assetspurchasing” (Securities Regulatory approval [2016] No.187). The major asset restructuring includes:
(1) DXS’s previous holding company Dalian State-owned Assets Investment and Operation GroupCo., Ltd. (hereinafter referred to as ”DGJ”) transferred 200,202,495 shares (29.98% of DXS’s totalcapital) of DXS’s shares to Hengli Group Co., Ltd. (hereinafter referred to as ”Hengli Group”) with aprice of RMB 5.8435 per share;(2) DXS sold all assets and liabilities as of 30 June, 2015 to DalianYinghui Machinery Manufacturing Co., Ltd. and received cash as consideration;(3) The Companyissued 1,906,327,800 shares by private placement to acquire 85% shares in Jiangsu Hengli ChemicalFiber Co., Ltd. (hereinafter referred to as ”Hengli Chemical Fiber”) which were held by Hengli Group,Dechengli International Group Co. (hereinafter referred to as the ”Dechengli”), Jiangsu HegaoInvestment Co., Ltd. (hereinafter referred to as ”Hegao Investment”) and Hailaide internationalinvestment Ltd. (hereinafter referred to as ”Hailaide”), and paid in cash to acquire 14.99% shares ofHengli Chemical Fiber which were held by Hegao investment. The issuance of shares mentionedabove were verified by Ruihua Certified Public Accountants (LLP) and issued capital verificationreports Ruihua YanZi No.33030006 [2016] . After the issuance of shares, the number of totaloutstanding shares of the Company increased to 2,574,114,642 shares;(4) The Company issued251,572,300 shares by private placement to Jiangsu Soho Investment Group Co. Ltd., XiamenXiangyu Co. ,Ltd. and other six specific investors to raise supporting funds for this assets purchasing.The issuance of shares in above was verified by Ruihua Certified Public Accountants (LLP) and issuedcapital verification reports Ruihua Yan Zi No.33030014 [2016] . After the issuance of shares, thenumber of total outstanding shares of the Company increased to 2,825,686,942 shares.
On 31 January 2018, according to the ”Approval on Purchase of Assets by issuance of shares toFan Hongwei and others, and Raising of Supporting Funds by Hengli Petrochemical Co., Ltd.” (ZhengJian Xu Ke [2018] No.235) issued by China Securities Regulatory Commission, the Companyimplemented the assets restructuring which included (1) The Company issued 1,719,402,983 sharesby private placement to Fan Hongwei, Hengneng Investment (Dalian) Co., Ltd. (hereinafter referredto as ”Hengneng Investment”) and Hengfeng Investment (Dalian) Co., Ltd. (hereinafter referred toas ”Hengfeng Investment”) to acquire 100% shares of Hengli Investment (Dalian) Co., Ltd.(hereinafter referred to as ”Hengli Investment”) and 100% shares of Hengli Petrochemical (Dalian)Refining Co., Ltd. (hereinafter referred to as ”Hengli Refining”). The share issuance mentioned abovewere verified by Ruihua Certified Public Accountants (LLP) and issued capital verification reportsRuihua YanZi No.33050001 [2018] . After the issuance of shares, the number of total outstandingshares of the Company increased to 4,545,089,925 shares; (2) The Company issued 507,700,000shares by private placement to Ping An Asset Management Co., Ltd., Beixin Ruifeng Fund
Management Co., Ltd., and other six specific investors to raise supporting funds for this assetspurchasing. The share issuance mentioned above were verified by Ruihua Certified PublicAccountants (LLP) and issued capital verification reports Ruihua Yan Zi No.33050002 [2018] . Afterthe issuance of shares, the number of total outstanding shares of the Company increased to5,052,789,925 shares.On 30 April 2019, the Company’s annual shareholders meeting of 2018 resolved the ”Proposalof the Company’s profit distribution and conversion of capital reserve to share capital of 2018”.Based on the total number of outstanding shares of 4,965,774,651 shares (being total shares of5,052,789,925 shares deducted by 87,015,274 share of stock repurchased), capital reserve isconverted to share capital by issuance of 0.4 shares for each share held by all shareholders and thetotal shares increased by 1,986,309,861 shares. Share registration date was 26 June 2019. After theincrement in shares, the number of total outstanding shares of the Company increased to7,039,099,786 shares.The primary organizational structure of the Company: In accordance with the provisions ofnational laws and regulations and the Company's articles of association, a standardized multi-levelgovernance structure consisting of shareholders’ general meeting, the board of directors, the boardof supervisors and the management has been established; the board of directors has strategycommittee, audit committee and remuneration committee, nomination committee and the boardoffice. The Company has sales department, purchasing department, general manager's office,personnel department, production department, quality control department, finance department,securities department and other major functional departments.The Company engages in petrochemical industry. The business scope is: production and salesof chemical fibers (excluding chemical dangerous goods); sales of purified terephthalic acid (PTA);import and export of goods. The main products are oil refining products, chemical products, PTA,polyester chips, polyester fibers and films, etc.
The financial statements and notes to the financial statements have been approved to issueby the Board of Directors on 8 April 2024.
Iv. Basis of preparation of financial statements
1. Basis of preparation
The financial statements of the Company are prepared on going concern basis and incompliance with Accounting Standards for Business Enterprises and guidelines, interpretations andother related provisions promulgated by the Ministry of Finance (collectively,” AccountingStandards for Business Enterprises”). In addition, the Company also discloses relevant financialinformation according to Information Disclosures Regulations for Companies that Offering Shares inPublic No.15 - General Provision of Preparing Financial Report (revised in 2014) issued announcedby China Securities Regulatory Commission.
2. Going concern
The Company has no events or circumstances that have caused significant doubts about theassumption of going concern within 12 months after the end of the reporting period.III. Significant accounting policies and accounting estimatesSpecific accounting policies and accounting estimates:
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The Company and its subsidiaries determines certain specific accounting policies andaccounting estimates for impairment of receivables, depreciation of fixed assets, amortization of
intangible assets and revenue recognition according to the characteristics of the production andoperation. Specific accounting policies refer to the note to financial statements.
1. Statement of compliance with Accounting Standards for Business EnterprisesThe financial statements have been prepared in compliance with the Accounting Standard forBusiness Enterprises to truly and completely reflect the Company’s financial positions, operatingresults and cash flows.
2. Accounting period
The financial year of the Company is from 1 January to 31 December of each calendar year.
3. Operating cycle
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The normal business cycle refers to the period from the purchase of assets for processing tothe realization of cash or cash equivalents. The Company considers 12 months as an operating cycleand apply it as a standard for the liquidity of assets and liabilities.
4. Functional currency
The Company and domestic subsidiaries use Renminbi (“RMB”) as functional currency.Overseas subsidiaries of the Company determine its functional currency as US dollar in accordancewith its primary economic environment of the business location and converted into RMB inpreparation of consolidated financial statements.
The financial statements of the Company have been prepared in RMB.
5. Method for determining the importance criteria and the basis for selection
√适用 □不适用
| Item | Importance criteria |
| Important construction in progress | The book value at the end of the accounting period is more than 1% of the total assets |
| Important non-wholly-owned subsidiaries | Net assets account for more than 0.5% of the consolidated net assets |
| important investment | The amount incurred exceeds 500 million yuan |
6． Business combinations
√适用 □不适用
A business combination is a transaction or event that brings together two or more separateentities into one reporting entity. Business combinations are classified into business combinationsinvolving enterprises under common control and business combinations not involving enterprisesunder common control.
1．Business combinations involving enterprises under common control
A business combination involving enterprises under common control is a business combinationin which all of the combining enterprises are ultimately controlled by the same party or parties bothbefore and after the combination, and that control is not transitory.
Assets acquired and liabilities assumed by acquirer in the business combination are measuredat their carrying amounts of the acquiree in the consolidated financial statements of the ultimatecontrolling party at the combination date, except for adjustments due to different accountingpolicies. The difference between the carrying amount of the consideration paid for the combination(or total par value of shares issued) and the carrying amount of the net assets acquired is adjusted
to capital reserve. If the capital reserve is not sufficient to absorb the difference, any excess isadjusted to retained earnings.Business combinations involving entities under common control achieved in stages andinvolved multiple transactions, the difference between the carrying amount of the net assetsacquired and the sum of carrying amount of investment prior to combination date and carryingamount of new considerations paid for the combination at the combination date is adjusted tocapital reserve. If the capital reserve is not sufficient to absorb the difference, any excess is adjustedagainst retained earnings. The profit or loss, other comprehensive income and changes in otherowner’s equity recognized by the acquirer during the period from the later of initial investment dateand the date that the acquirer and acquiree both under common ultimate control to thecombination date are offset the opening retained earnings or profit for loss for the current periodin the comparative statements, except for other comprehensive income arising from theremeasurement of the net benefit or net asset change of the defined benefit plan by the investee.
2．Business combinations involving enterprises not under common controlA business combination involving enterprises not under common control is a businesscombination in which all of the combining enterprises are not ultimately controlled by the sameparty or parties both before and after the business combination.Where the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’sidentifiable net assets, the difference is recognized as goodwill. Where the cost of combination isless than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, firstly theacquirer shall reassess the measurement of the fair values of the acquiree’s identifiable assets,liabilities and contingent liabilities and measurement of the cost of combination, and then if the costof combination is still less than the acquirer’s interest in the fair values of the acquiree’s identifiablenet assets after that reassessment, the acquirer shall recognize the remaining differenceimmediately in profit or loss for the current period.If, at the date of combination or the end of the current period, due to various factors, the fairvalue of each asset paid as consideration for the combination or the fair value of the identifiableassets and liabilities of the purchased party is obtained during the combination cannot bereasonably determined, the Company calculates the value of business combination based on thetemporarily determinable value. If, within the 12 months after acquisition, additional informationcan prove the existence of related information at acquisition date and the contingent considerationneed to be adjusted, it is deemed to happen on the date of combination and retrospectivelyadjusted. Any adjustment of consideration for the combination or value of identifiable assets orliabilities made after 12 months of combination, the adjustment should follow Accounting Standardfor Business Enterprise No.28 – Changes in accounting policies, accounting estimates and correctionof error.Where the temporary difference obtained by the acquirer was not recognized due toinconformity with the conditions applied for recognition of deferred income tax, if, within the 12months after acquisition, additional information can prove the existence of related information atacquisition date and the expected economic benefits on the acquisition date arising from deductibletemporary difference by the acquiree can be achieved, relevant income tax assets can be recognized,and goodwill can be adjusted accordingly. If the goodwill is not sufficient, the difference isrecognized as profit or loss for the current period. Apart from above, the differences is taken intoprofit or loss of the current period if the recognition of deferred income tax assets is related to thebusiness combination.For business combinations involving entities not under common control achieved in stages thatinvolves multiple transactions, the Company determine whether the multiple transactions belongsto a single transactions in accordance with accounting standards. If the terms, conditions andeconomic impact of the disposal comply with any cases as following, the multiple transactionsshould be accounted as if a single transaction. ① These transactions are concluded simultaneouslyor affected by each other. ② To reach a complete business results, these transactions is as a whole.
③ Whether one transaction happening or not is up to another transaction. ④ To assess onetransaction separately is not economical but assess along with other transactions, they areeconomically justified.
In a business combination achieved in stages and considered as a single transaction, thetransactions should be regard all as one acquisition. For those cannot be considered as a singletransaction, the combination cost is the sum of consideration paid at acquisition date and fair valueof the acquiree's equity investment held prior to acquisition date; the cost of equity of the acquireeheld prior to acquisition date shall be re-measured at the fair value at acquisition date, thedifference between the fair value and the carrying amount shall be recognized as investmentincome or loss for the current period. Other comprehensive income and changes of investmentequity related with acquiree's equity held prior to acquisition date shall be transferred toinvestment profit or loss for current period at acquisition date, besides there is othercomprehensive income incurred by the changes of net assets or net liabilities due to theremeasurement of defined benefit plan.3．Transaction costs for business combinationThe overhead for the business combination, including the expenses for audit, legal services,valuation advisory, and other administrative expenses, are recorded in profit or loss for the currentperiod when incurred. The transaction costs of equity or debt instruments issued as theconsiderations of business combination are included in the initial recognition amount of the equityor debt instruments.
7. Judgment criteria for contro and basis of preparation of consolidated financial statements
√适用 □不适用
1．Scope of consolidated financial statements
The scope of consolidated financial statements is determined on the basis of control. Controlexists when the Company has power over the investee; is exposed, or has rights to variable returnsfrom its involvement with the investee; and has the ability to use its power to affect its returns. Asubsidiary is an entity that is controlled by the Company (including enterprise, a portion of aninvestee as a deemed separate entity, and structured entity controlled by the enterprise).
2．Preparation of the consolidated financial statements
The consolidation scope of consolidated financial statements is determined on the basis ofcontrol, including the financial statements of the Company and all of its subsidiaries. In preparingconsolidated financial statements, subsidiaries adopt the same accounting period and accountingpolicies as those of the Company.
All assets, liabilities, interests, income, fees and cash flows resulting from intra-grouptransactions are eliminated on consolidation in full.
Where a subsidiary or business has been acquired through a business combination involvingenterprises under common control in the reporting period, the subsidiary or business is deemed tobe included in the consolidated financial statements from the date they are controlled by theultimate controlling party. Their operating results and cash flows are included in the consolidatedincome statement and consolidated cash flow statement respectively from the date they arecontrolled by the ultimate controlling party. During the reporting period, the opening balance of theconsolidated balance sheet was being adjusted, and the related items of the comparative statementwere being adjusted as if the reporting entity has exercised control since the time when the ultimatecontrolling party began to control.
Where a subsidiary has been acquired through a business combination involving entities notunder common control, the opening balances of the consolidated balance sheet shall not beadjusted for the subsidiary or the business, the subsidiary's revenue, expenses and profit shall beincluded in the consolidated income statement, and cash flows shall be included in the consolidatedcash flow statement from the acquisition date to the end of the reporting date.
The shareholders’ equity of the subsidiaries that is not attributable to the Company ispresented under shareholders’ equity in the consolidated balance sheet as minority interest. Theportion of net profit or loss of subsidiaries for the period attributable to minority interest ispresented in the consolidated income statement under the profit or loss attributable to minorityinterest. When the amount of loss attributable to the minority shareholders of a subsidiary exceedsthe minority shareholders’ portion of the opening balance of owners’ equity of the subsidiary, theexcess amount shall be allocated against minority interest.
3．Acquiring minority interests of subsidiary and disposal of interests in subsidiary withoutlosing control
Where the Company acquires a minority interest from a subsidiary’s minority shareholders ordisposes of a portion of an interest in a subsidiary without a change in control, the transaction istreated as equity transaction, and the book value of shareholder’s equity attributed to the Companyand to the minority interest is adjusted to reflect the change in the Company’s interest in thesubsidiaries. The difference between the proportion interests of the subsidiary’s net assets beingacquired or disposed and the amount of the consideration paid or received is adjusted to the capitalreserve (share premium) in the consolidated balance sheet, with any excess adjusted to retainedearnings.
4．Losing control over the subsidiary
When the Company disposes of a subsidiary, the income, expenses, and profit of the subsidiaryfrom the beginning of current period to the disposal date are included in the consolidated incomestatement; the cash flows of the subsidiary from the beginning of current period to the disposaldate is included in the consolidated cash flow statement. For the loss of control over a subsidiarydue to disposal of a portion of the equity investment or other reasons, the remaining equity ismeasured at fair value on the date when the control is lost. The difference arising from the sum ofconsideration received for disposal of equity interest and the fair value of remaining equity interestover the share of net assets of the former subsidiary calculated continuously since the purchasedate based on the shareholding percentage before disposal are recognised as investment income inthe period when the control is lost. Other comprehensive income related to equity investment inthe subsidiary is accounted for on the same accounting treatment as direct disposal of relevant assetor liability by the acquiree at the time when the control is lost (i. e. to be transferred to investmentincome, except for the changes arising from remeasuring net assets or net liabilities of definedbenefit plan of the subsidiary using the equity method). The remaining equity interests aremeasured subsequently according to ”Accounting Standard for Business Enterprises No.2 – Long-term Equity Investments” or ”Accounting Standard for Business Enterprises No.22 – Recognition andMeasurement of Financial Instruments”. See ”Long-term equity investments” or ”Financialinstruments” for details.
5．Disposal of equity investment by stage-up until losing control
When the Company disposes of equity investment in a subsidiary by a stage-up approach withmultiple transactions until the control over the subsidiary is lost, it shall determine whether thesemultiple transactions related to the disposal of equity investment in a subsidiary until the controlover the subsidiary is lost belong to ”A single transaction”.
For those arrangements qualified as a single transaction, the carrying amount of long-termequity investments relating to each transaction of disposal is derecognized, the difference betweenthe consideration received and the carrying amount of disposed long-term equity investments isrecognized as other comprehensive income, and finally is recognized in profit or loss for the currentperiod at the date of losing control.
For those arrangements are not regarded as a single transaction, the accounting treatmentshall follow “disposal of interests in subsidiary without losing control” and “for the loss of controlover a subsidiary due to disposal of a portion of the equity investment or other reasons” asappropriate. The difference between each consideration received and the share of carrying value ofnet assets in proportion to disposed portion of shareholding percentage in the subsidiary is
recognized in capital reserve as an equity transaction. Capital reserve is not transferred to profit orloss for the current period when losing control.
8. Classification of joint arrangements and accounting treatment of joint operations
□适用 √不适用
9. Recognition criteria of cash and cash equivalents
Cash as presented in cash flow statement refers to cash on hand and deposit on demand forpayment. Cash equivalents refer to short-term (generally refers to the expiration within 3 monthsfrom the purchase date), highly liquid investments that can be readily converted to cash and thatare subject to an insignificant risk of changes in value.
10. Foreign currency transactions and translation of financial statements prepared in foreign
currencies
√适用 □不适用
1．Foreign currency transactions
Foreign currency transactions are translated into the functional currency of the Company atthe spot exchange rates (as announced by the People’s Bank of China) on the dates of thetransactions. However, the Company’s foreign currency exchange business or transactions involvingforeign currency conversion are converted into the amount of the recording currency according tothe actual exchange rate.
2．Translation method for foreign currency monetary and non-monetary items
At the balance sheet date, Items in foreign currencies are translated using the spot exchangerates at the balance sheet date. All the resulting exchange differences are taken to profit or loss,except for (1) those relating to foreign currency borrowings specifically for acquisition andconstruction of assets qualified for capitalisation, which are capitalised in accordance with theprinciple of capitalisation of borrowing costs; (2) non-monetary foreign currency items aredesignated as part of the hedge of the Company’s net investment of a foreign operation arerecognised in other comprehensive income until the net investment is disposed of, at which thecumulative amount is reclassified to the profit or loss for the current period; and (3) non-monetaryforeign currency items measured at historical cost shall still be translated at the spot exchange ratesprevailing on the transaction dates, while the amounts denominated in the functional currencies donot change.
Non-monetary foreign currency items measured at historical cost shall still be translated at thespot exchange rates prevailing on the transaction dates, while the amounts denominated in thefunctional currencies do not change. Non-monetary foreign currency items measured at fair valueare translated at the spot exchange rates prevailing on the date on which the fair values aredetermined. The resulting exchange differences are recognised in profit or loss or as othercomprehensive income for the current period, depending on the nature of the non-monetary item.
3．Translation of foreign currency financial statements
The financial statements denominated in foreign currency of a foreign operation are translatedto RMB in compliance with the following requirements: assets and liabilities on the balance sheetare translated at the spot exchange rate prevailing at the balance sheet date; owner’s equity itemsexcept for “undistributed profits” are translated at the spot exchange rates at the dates on whichsuch items arose; income and expenses items in the income statement are translated at the averageexchange rate for the period in which the transaction occurred. The undistributed profits broughtforward are reported at the prior year’s closing balance; the undistributed profits as at the end ofthe year are presented after translated the profit appropriation items; differences between theaggregate of asset and liability items and owners’ equity items are recognised as ”translation
differences arising on the translation of financial statements denominated in foreign currencies” inother comprehensive income. On disposal of foreign operations and loss of control, exchangedifferences arising from the translation of financial statements denominated in foreign currenciesrelated to the disposed foreign operations which has been included in owners’ equity in the balancesheet, shall be transferred to profit or loss in whole or in proportionate share in the period in whichthe disposal took place.The cash flow statement is translated at the average exchange rate on the date of cash flow.The impact of exchange rate changes on cash is presented separately as "Effect of changes inexchange rates on cash and cash equivalents” in the cash flow statement.
11. Financial instruments
√适用 □不适用
A financial instrument is any contract that gives rise to a financial asset of one enterprise anda financial liability or equity instrument of another enterprise. Financial instruments includefinancial assets, financial liabilities and equity instruments.1．Classification, recognition and measurement of financial assets
(1) Recognition and initial measurement of financial assets and liabilities
Financial asset or financial liability will be recognised when the Company became one of theparties under a financial instrument contract. For the purchase or sale of financial assets in aconventional way, the Company recognizes the assets received and liabilities assumed on thetransaction day.
Financial assets and liabilities are measured at fair value upon initial recognition. For financialassets measured at fair value through profit or loss, relevant transaction costs are directlyrecognised in profit or loss for the period. For other categories of financial assets and liabilities,relevant transaction costs are included in the amount initially recognised. Accounts receivablewithout significant financing component are initially recognised based on the transaction priceexpected to be entitled by the Company.
(2) Classification and measurement of financial assets
The Company classifies the financial assets according to the business model for managing thefinancial assets and characteristics of the contractual cash flows as follows: financial assetsmeasured at amortised cost, financial assets measured at fair value through other comprehensiveincome, and financial assets measured at fair value through profit or loss.
1) Financial assets measured at amortised cost
A financial asset is measured at amortised cost if it meets both of the following conditions: ①The Company’s business model for managing such financial assets is to collect contractual cash flows;
② The contractual terms of the financial asset stipulate that cash flows generated on specific datesare solely payments of principal and interest on the principal amount outstanding.
Subsequent to initial recognition, such financial assets are measured at amortised cost usingthe effective interest method. A gain or loss on a financial asset that is measured at amortised costshall be recognised in profit or loss for the current period when the financial asset is derecognised,amortised using the effective interest method or with impairment recognised.
For financial assets at amortized costs, it is recognized on the initially recognized amountadjusted by: (1) after deducting the already paid principal; (2) after multiplying or subtracting theaccumulative amount of amortization incurred from amortizing the balance between the initiallyrecognized amount and the amount of the maturity date by employing the actual interest ratemethod; and (3) after deducting the impairment losses that have actually incurred (applicable tofinancial assets only).
The effective interest method refers to the method whereby the post-amortization costs andthe interest incomes of different installments or interest expenses are calculated according to theeffective interests of the financial asset or financial liabilities (including a set of financial assets or
financial liabilities). The effective interest refers to the interest rate used to cash the future cashflow of a financial asset or financial liability within the predicted term of existence or within a shorterapplicable term into the current carrying amount of the financial asset or financial liability. Whendetermining the effective interest, the future cash flow shall be predicted on the basis of taking intoaccount all the contractual stipulations concerning the financial asset or financial liability (includingthe right to repay the loans ahead of schedule, call options, similar options, etc.), but the futurecredit losses shall not be taken into account.The Company recognizes interest income based on the calculation of financial asset bookbalance multiplied by the effective interest rate, except for the following circumstances: ① Forpurchased or originated financial assets that have incurred credit impairment, from the initialrecognition, their interest income is determined on the financial asset amortization costs and credit-adjusted effective interest rates; ② For the purchased or originated financial assets without creditimpairment, but become credit impaired in the subsequent period, the interest income isdetermined according to the amortized cost and effective interest rate of the financial asset. If thefinancial instrument has no credit impairment due to the improvement of its credit risk in thesubsequent period, and this improvement can be objectively related to an event that occurs afterthe application of the above regulations, interest income should be determined by multiplying theeffective interest rate and the financial asset book balance.
2) Financial assets measured at fair value through other comprehensive incomeFinancial asset is classified as measured at fair value through other comprehensive income if itmeets both of the following conditions: ①The Company’s business model for managing suchfinancial assets is achieved both by collecting collect contractual cash flows and selling such financiala. ② The contractual terms of the financial asset stipulate that cash flows generated on specificdates are solely payments of principal and interest on the principal amount outstanding.Subsequent to initial recognition, such financial assets are subsequently measured at fair value.Interest calculated using the effective interest method, impairment losses or gains and foreignexchange gains and losses are recognised in profit or loss for the current period, and other gains orlosses are recognised in other comprehensive income. On derecognition, the cumulative gain or losspreviously recognised in other comprehensive income is reclassified from other comprehensiveincome to profit or loss.For non-trading equity instrument investment, the Company can irrevocably designate thefinancial assets measured at fair value through other comprehensive income. Such designation ismade on individual basis of each non-trading equity instrument investment which also qualified asequity instruments in the issuer’s perspective. Subsequent to such designation, dividend (except forreturn of portion of investment costs) is recognized as profit or loss for the current period, othergains or losses (including exchange gain or loss) are recognized in other comprehensive income. Onderecognition, the cumulative gain or loss previously recognised in other comprehensive income isreclassified from other comprehensive income to profit or loss.
3) Financial assets measured at fair value through profit or loss
The Company classifies the financial assets other than those measured at amortised cost andmeasured at fair value through other comprehensive income as financial assets measured at fairvalue through profit or loss. Upon initial recognition, the Company irrevocably designates certainfinancial assets that are required to be measured at amortised cost or at fair value through othercomprehensive income as financial assets measured at fair value through profit or loss in order toeliminate or significantly reduce accounting mismatch.Subsequent to initial recognition, such financial assets are subsequently measured at fair value,any differences are gains or losses recorded in profit or loss for the current year.
(3) Classification and measurement of financial liabilities
The Company’s financial liabilities includes financial liabilities measured at fair value throughprofit or loss, financial liabilities that arise when a transfer of a financial asset does not qualify for
derecognition or continuing involvement, financial guarantee contracts and financial liabilities atamortized cost.
1) Financial liabilities measured at fair value through profit or loss
Financial liabilities measured at fair value through profit or loss includes trading financialliabilities (including financial liabilities with embedded derivatives) and designated financialliabilities measured at fair value through profit or loss. In a business combination involvingenterprises not under common control, if the Company, as a buyer, recognizes a financial liabilityfrom the contingent consideration, the financial liability shall be accounted for at fair value throughprofit or loss.
After initial recognition, financial liabilities measured at fair value through profit or loss aresubsequently measured at fair value. Any gains or losses generated are recognized in profit or lossfor the current period.
The amount of change in fair value of designated financial liabilities measured at fair valuethrough profit or loss due to changes in the Company’s own credit risk is included in othercomprehensive income unless the treatment causes or expands accounting mismatches in profit orloss. Other changes in fair value of this financial liability are included in profit or loss for the currentperiod. Upon derecognition, the accumulated gains or losses previously included in othercomprehensive income are transferred out of other comprehensive income and included in retainedearnings.
2) Financial liabilities that arise when a transfer of a financial asset does not qualify forderecognition or continuing involvement
Such financial liabilities are measured in according to the accounting policies of Transfer offinancial assets.
3) Financial guarantee contracts
Financial guarantee contracts are contracts that require the issuer to make specified paymentsto reimburse the contract holder for a loss the holder incurs because a specified debtor fails to makepayment when due in accordance with the terms of a debt instrument.
Financial guarantee contracts are not belonging to the above 1) or 2), they are subsequentlymeasured at the higher of the following: ① the amount of loss provision determined according tothe impairment method of financial instruments; ② the balance of the initial recognition amountafter deducting the accumulated amortization amount determined in accordance with the incomerecognition method.
4) Financial liabilities at amortized cost
Apart from the above 1), 2) or 3), the Company classifies the remaining financial liabilities asfinancial liabilities at amortized cost.
Such financial liabilities are measured at amortized cost using the effective interest ratemethod after initial recognition, and the resulting gains or losses are included in profit or loss forthe current period when they are derecognized or amortized in accordance with the effectiveinterest rate method.
(4) Equity instruments
Equity instruments refer to contracts that can prove the ownership of the Company'sremaining equity in assets after deducting all liabilities. The Company issues (including refinancing),repurchases, sells or cancels Equity instruments as a change in equity. Transaction costs related toequity transactions are deducted from equity. The Company's various distributions to equityinstruments holders (excluding stock dividends) reduce shareholder equity. The Company does notrecognise the fair value changes of equity instruments.
The distinction between financial liabilities and equity instruments
Financial liabilities refer to liabilities that meet one of the following conditions:
1) A contractual obligation to deliver cash or other financial assets to other parties.
2) A contractual obligation to exchange financial assets or financial liabilities with another partyunder potentially adverse conditions.
3) A non-derivative contract that has to be settled with or can be settled with the firm's ownequity instruments in the future, under which the firm will deliver a variable number of its ownequity instruments.
4) A derivative contract that has to be settled with or can be settled with the firm's own equityinstruments in the future, except for a derivative contract in which a fixed number of its own equityinstruments are to be exchanged for a fixed amount of cash or other financial assets.
If the Company cannot unconditionally avoid fulfilling a contractual obligation by deliveringcash or other financial assets, such contractual obligation meets the definition of a financialliability.If a financial instrument has to be settled with or can be settled with the Company's ownequity instruments in the future, consideration needs to be given to whether the Company's ownequity instruments used to settle the instrument is to be used as a substitute for cash or otherfinancial assets, or to give the holder of the instrument the remaining interest in the issuer's assetsafter deduction of all liabilities. If it is the former, the instrument is a financial liability of theCompany; if it is the latter, the instrument is an equity instrument of the Company.
(5) Derivative instruments and embedded derivative instruments
Derivative financial instruments include forward exchange contract, currency exchange rateswap agreement, interest rate swap agreement and foreign currency option contract etc. Derivativefinancial instruments are initially measured at the fair value of the date a derivative contract enteredinto and subsequently measured at their fair value. Any gains or losses arising from changes in fairvalue are directly recognized to profit or loss for the current period.
Embedded derivatives refer to derivatives embedded in non-derivatives (ie, host contracts).For the hybrid contract composed of embedded derivatives and the host contract, if the hostcontract is a financial asset, the Company does not split the embedded derivative from the hybridcontract, but applies the hybrid contract as a whole to the Company's accounting policies inclassification of financial assets. If the host contract included in the hybrid contract is not a financialasset and meets the following conditions at the same time, the Company will split the embeddedderivative from the hybrid contract and treat it as a separate derivative:
1) The economic characteristics and risks of embedded derivatives are not closely related tothe economic characteristics and risks of the host contract.
2) A separate instrument with the same terms as the embedded derivative meets the definitionof derivative.
3) The hybrid contract is not measured at fair value and its changes are included in profit orloss for the current period for accounting treatment.
If the embedded derivative is split from the hybrid contract, the Company will account for thehost contract of the hybrid contract in accordance with the applicable accounting standards. If theCompany cannot reliably measure the fair value of the embedded derivative according to the termsand conditions of the embedded derivative, the fair value of the embedded derivative is determinedbased on the difference between the fair value of the hybrid contract and the fair value of the hostcontract. After using the above method, if the fair value of the embedded derivative on theacquisition date or the subsequent balance sheet date cannot be measured separately, theCompany designates the hybrid contract as a whole as financial assets at fair value through profitor loss.
2．Recognition and measurement of transfer of financial assets
Transfer of financial assets refers to the transference or deliverance of financial assets (or itscash flows) to the other party (the transferee) other than the issuer of financial assets. Thederecognition of financial assets means that the Company transfers the previously recognizedfinancial assets from its balance sheet.
The financial assets that meet one of the following conditions will be derecognized by theCompany: (1) the contractual right to receive cash flows of the financial asset is expired; (2) thefinancial asset has been transferred, and almost all risks and rewards of ownership of the financialasset transferred to the transferee; (3) the financial asset has been transferred by the Company
foregone the control of the financial assets although the Company has neither transferred norretained almost all the risks and rewards of ownership of the financial asset.If the Company neither transfers nor retains almost all the risks and rewards of ownership offinancial assets, and retains control of the financial assets, it will continue to recognize the relevantfinancial assets to the extent that they are continuing to be involved in the transferred financialassets and recognises the relevant liabilities. The degree of continuing involvement in thetransferred financial assets refers to the level of risk on the exposed impact in changes in value offinancial asset to the Company.
If the transfer of an entire financial asset satisfies the conditions for derecognition, thedifference between the amounts of the following two items are included in profit or loss: (1) thecarrying amount of the transferred financial asset as of the date of derecognition; (2) the sum ofconsideration received from the transfer of the financial asset, and the accumulative amount of thechanges of the fair value originally included in other comprehensive income proportionate to thetransferred financial asset (financial assets transferred refer to debt instrument investments at fairvalue through other comprehensive income). If the transfer of financial asset partially satisfies theconditions to derecognition, the entire carry amount of the transferred financial asset is, betweenthe portion which is derecognized and the portion which is not, apportioned according to theirrespective relative fair value, and the difference between the amounts of the following two itemsare included into profit or loss: (1) the carrying amount of the portion which is derecognized; (2)the sum of consideration of the portion which is derecognized, and the portion of the accumulativeamount of the changes in the fair value originally included in other comprehensive income which iscorresponding to the portion which is derecognized (financial assets transferred refer to debtinstrument investments at fair value through other comprehensive income). For non-trading equityinstruments designated by the Company to be measured at fair value and whose changes areincluded in other comprehensive income, if the whole or part of the transfer meets the conditionsfor derecognition, the difference calculated according to the above method is included in retainedearnings.3．Conditions for derecognition of financial liabilitiesIf the current obligation of a financial liability (or part of it) has been discharged, the Companyderecognizes the financial liability (or part of it). If the Company (borrower) and the lender sign anagreement to replace the original financial liability by assuming a new financial liability, and thecontract terms of the new financial liability and the original financial liability are substantiallydifferent, the original financial liability is derecognized and a new financial liability is recognizedsimultaneously. If the Company makes substantial amendments to the original financial liabilities(or part of them) contract terms, the original financial liabilities shall be derecognized, and a newfinancial liability shall be recognized in accordance with the revised terms.If the financial liability (or part of it) is derecognized, the Company shall include the differencebetween its book value and the consideration paid (including non-cash assets transferred out orliabilities assumed) into profit or loss for the current period. If the Company repurchases part of itsfinancial liabilities, the book value of the financial liabilities as a whole will be allocated according tothe proportion of their respective fair values at the repurchase date and the total fair value at therepurchase date. The difference between the book value allocated to the derecognized portion andthe consideration paid (including non-cash assets transferred out or liabilities assumed) is includedin profit or loss for the current period.
4. Determination of the fair value of financial instruments
For the method for determining the fair value of financial assets and financial liabilities, seenotes to the financial statements.
5. Impairment of financial instruments
The Company accounts for impairment of financial assets at amortised cost, contract assets,debt instrument investment at fair value through other comprehensive income, lease receivablesand financial guarantee contracts as mentioned in this note. ECLs are the weighted average of credit
losses of financial instruments weighted by the risk of default. Credit losses refer to the differencebetween all contractual cash flows receivable according to the contract and discounted accordingto the original effective interest rate and all cash flows expected to be received, i. e. the presentvalue of all cash shortages.For purchased or originated financial assets that have suffered credit impairment, theCompany only recognizes the cumulative changes in expected credit losses for the entire durationof the period since initial recognition as loss provisions on the balance sheet date.For receivables or contract assets formed by transactions regulated by “Accounting Standardsfor Business Enterprises No. 14 – Revenue” and lease receivables regulated by “AccountingStandards for Business Enterprises No. 21 – Leases”, the Company uses a simplified measurementmethod to measure the loss allowance based on the expected credit loss during the lifetime period.
For receivables or contract assets recognized on transactions under "Accounting Standards forBusiness Enterprises No. 14 - Revenue" without significant financing components, the Companyuses simplified measurement methods to calculate the expected credit loss equivalent to thelifetime period.For financial instruments other than the above measurement methods, the Company measuresloss allowance in accordance with the general method and assesses on each balance sheet datewhether its credit risk has increased significantly since initial recognition. If the credit risk has notsignificantly increased since initial recognition and is in the first stage, the company measures theloss provision based on the expected credit loss amount of the financial instrument for the next 12months. If the credit risk has significantly increased since initial recognition but has not yetexperienced credit impairment, it is in the second stage, and the company measures the lossprovision based on the expected credit loss amount for the entire duration. If the financial asset hasexperienced credit impairment since initial recognition, it is in the third stage, and the companymeasures the loss provision based on the expected credit loss amount for the entire duration.The expected credit loss for lifetime period refers to the expected credit loss caused by allpossible default events during the entire expected duration of the financial instrument. Expectedcredit loss in the next 12 months refers to the event of financial instrument default that may occurwithin 12 months after the balance sheet date (if the expected duration of the financial instrumentis less than 12 months, then the expected duration) which is a portion of expected credit losses forthe entire duration.The Company considers all reasonable and reliable information, including forward-lookinginformation, by comparing the risk of default of a financial instrument on the balance sheet datewith the risk of default on the initial recognition date to determine the relative changes in defaultrisk of the financial instrument during the expected lifetime and to assess whether the credit risk offinancial instruments has increased significantly since initial recognition. For financial instrumentsthat cannot obtain sufficient evidence of a significant increase in credit risk at a reasonable cost atthe level of individual instruments, the Company considers whether the credit risk has increasedsignificantly on a portfolio basis. If the Company determines that a financial instrument has only alow credit risk on the balance sheet date, it is assumed that the credit risk of the financial instrumenthas not increased significantly since initial recognition.The Company remeasures the expected credit losses on each balance sheet date, and theresulting increase or reversal of the loss allowance is included in profit or loss for the current periodas an impairment loss or gain. For financial assets measured at amortised cost, the loss allowanceoffsets the book value of the financial asset presented in the balance sheet; for debt instrumentinvestments measured at fair value through other comprehensive income, the Company recognisesloss allowance in other comprehensive income and does not offset the book value of the financialasset presented in the balance sheet.
6. Offset of financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount reported in the balance sheetwhen there is a legally enforceable right to offset the recognized amounts and there is an intention
to settle on a net basis or realize the asset and settle the liability simultaneously. Otherwise, financialassets and financial liabilities are separately shown in the balance sheet and not allowed to offset.
12. Notes receivables
√适用 □不适用
Recognition and accounting treatment of expected credit loss of notes receivable
√适用 □不适用
The Company determines the expected credit losses of notes receivable and conductsaccounting treatment in accordance with the simplified measurement method described in thisnote. On the balance sheet date, the credit losses of notes receivable are measured based on thepresent value of the difference between the contractual cash flow receivable and the expected cashflow receivable. The Company conducts separate impairment tests on notes receivable withsignificantly different credit risk characteristics and estimates the expected credit losses. Theremaining notes receivable are divided into several portfolios based on their credit riskcharacteristics. With reference to historical credit loss experience, combined with currentconditions and considering forward-looking information, the expected credit losses are estimatedon a portfolio basis.The categories and determination basis for the combination of bad debt provisions based on creditrisk characteristics
√适用 □不适用
| Name of group | Determination basis |
| Bank acceptance bills group | Acceptors are banks with low credit risk |
| Commercial acceptance bills group | Acceptors are enterprises with high credit risk |
A method for calculating the aging of credit risk characteristics based on aging
□适用 √不适用
Judgment criteria for single provision for bad debt reserves
□适用 √不适用
13. Accounts receivable
√适用 □不适用
Determination method and accounting treatment of expected credit loss of accountsreceivable
√适用 □不适用
Determination method and accounting treatment of expected credit loss of accounts receivableThe Company determines the expected credit losses of accounts receivable and makes accountingtreatment in accordance with the simplified measurement method described in this note. On thebalance sheet date, the Company measures the credit losses of accounts receivable based on thepresent value of the difference between the contractual cash flow that should be received and thecash flow expected to be received. The Company will conduct separate impairment tests onaccounts receivable with significantly different credit risk characteristics and estimate expectedcredit losses. The remaining accounts receivable are divided into several portfolios based on creditrisk characteristics, and expected credit losses are estimated on a portfolio basis, taking into accounthistorical credit loss experience, current conditions, and forward-looking information.
| Name of group | Determination basis |
| Ageing group | Accounts receivable with similar credit risk characteristics by ageing |
| Group of related parties in the | Receivables from related parties within the scope of consolidation have |
| scope of consolidation | similar credit risk characteristics |
| Group of high credit rating | Accounts receivable of Fortune 500 clients within credit term |
A method for calculating the aging of credit risk characteristics based on aging
√适用 □不适用
The company counts and calculates the aging of accounts receivable based on the principle of first-in, first-out.Judgment criteria for single provision for bad debt reserves
√适用 □不适用
The Company will conduct separate impairment tests for accounts receivable with significantlydifferent credit risk characteristics, such as significantly deteriorating credit conditions of the debtor,low probability of future payment, and credit impairment that have already occurred.
14. Receivables financing
√适用 □不适用
Method for determining expected credit losses in receivables financing and accounting treatment
√适用 □不适用
The Company determines the expected credit losses of receivables financing and makes accountingtreatment in accordance with the general method described in this note. On the balance sheet date,the Company measures the credit loss of receivables financing based on the present value of thedifference between the contractual cash flow due and the expected cash flow received. When theexpected credit loss information of a single item of receivables financing cannot be assessed at areasonable cost, the Company divides receivables financing into several groups based on thecharacteristics of credit risk. On the basis of referring to historical credit loss experience, combiningthe current situation and considering forward-looking information, the Company estimates theexpected credit losses on group basis.
The categories and determination basis for the combination of bad debt provisions based oncredit risk characteristics
√适用 □不适用
| Name of group | Determination basis |
| Group of low credit risk | Including bank acceptance bills with low credit risk, letters of credit and other receivables financing with low credit risk characteristics |
A method for calculating the aging of credit risk characteristics based on aging
□适用 √不适用
Judgment criteria for single provision for bad debt reserves
√适用 □不适用
The Company will conduct separate impairment tests for accounts receivable with significantlydifferent credit risk characteristics, such as significantly deteriorating credit conditions of thedebtor, low probability of future payment, and credit impairment that have already occurred.
15. Other receivables
Determination method and accounting treatment of expected credit loss of otherreceivables
√适用 □不适用
The Company determines the expected credit losses of other receivables and performs accountingtreatment according to the general method described in this note. On the balance sheet date, thecredit losses of other receivables are measured based on the present value of the differencebetween the contractual cash flow receivable and the expected cash flow receivable. The Companyconducts separate impairment tests on other receivables with significantly different credit risk
characteristics and estimates the expected credit losses. The remaining other receivables aredivided into several portfolios based on credit risk characteristics, and the expected credit lossesare estimated on a portfolio basis by referring to historical credit loss experience, consideringcurrent conditions, and taking into account forward-looking information. The categories anddetermination basis for the combination of bad debt provisions based on credit risk characteristics
√适用 □不适用
| Name of group | Determination basis |
| Ageing group | Other receivables with similar credit risk characteristics by ageing |
| Group of related parties in the scope of consolidation | Receivables from related parties within the scope of consolidation have similar credit risk characteristics |
| Group of related parties outside the scope of consolidation | Receivables from related parties outside the scope of consolidation have similar credit risk characteristics |
| Group of government receivables | Other receivables such as government grants receivable and various tax refunds have similar credit risk characteristics |
A method for calculating the aging of credit risk characteristics based on aging
√适用 □不适用
The company counts and calculates the aging of accounts other receivable based on the principleof first-in, first-out.Judgment criteria for single provision for bad debt reserves
√适用 □不适用
The Company will conduct separate impairment tests for accounts other receivable withsignificantly different credit risk characteristics, such as significantly deteriorating credit conditionsof the debtor, low probability of future payment, and credit impairment that have alreadyoccurred.
16. Inventories
√适用 □不适用
Inventory category, issue pricing method, inventory system, amortization method for low-valueconsumables and packaging materials
√适用 □不适用
(1) Inventories include finished products or commodities held for sale in daily activities, in-process products in the production process, materials and materials consumed in the productionprocess or the provision of labor services, in-transit materials and subcontracting processingmaterials.
(2) The inventory obtained by the Company is measured at actual cost. (1) The cost ofpurchased inventory is the purchase cost of the inventory, and the inventory cost obtained throughfurther processing is composed of the purchase cost and processing cost. (2) The book value ofinventory obtained in settlement under debt restructuring is determined on the fair value of theforfeited creditor's rights and the relevant taxes and fees that can be directly attributed to theinventory when the inventory reaches the current position and status. (3) Under the presumptionthat the exchange of non-monetary assets has commercial substance and the fair value of the assetsswapped in or out can be reliably measured, the book value of inventory swapped in the exchangeof non-monetary assets is usually determined on the basis of the fair value of the assets swappedout, unless there is strong evidence that the fair value of the swapped assets is more reliable; fornon-monetary asset exchanges that do not meet the above presumption, the book value of theswapped assets and related taxes payable are used as the cost of swapped in inventory. (4) Theinventory acquired by the combination of enterprises under common control is determined basedon the book value of the acquiree; the inventories acquired by the combination of enterprises notunder common control are determined by the fair value.
(3) The cost of inventories issued by enterprises is measured by the weighted average method.
(4). Amortization method for low-value consumables and packaging materialsLow-value consumables are one-off amortized when taken for use.Packaging materials are one-off amortized when taken for use.
(5) The inventory system is a perpetual inventory system.
Recognition criteria and accrual method for the provision for decline in value in inventoryOn the balance sheet date, inventory is measured at the lower of cost and net realizable value.The net realizable value of inventories is the amount after the estimated selling price of inventoriesminus the estimated costs to be incurred to completion, the estimated selling expenses and relatedtaxes. When determining the net realizable value of inventories, based on the reliable evidenceobtained, taking into account the purpose of holding the inventory and the impact of events afterthe balance sheet date, except for clear evidence that the market price on the balance sheet dateis abnormal, the net realizable value of inventory items at the end of the current period isdetermined on the basis of the market price on the balance sheet date, of which:
(1) The inventory of finished goods, commodities and materials used for sale, such ascommodities directly used for sale, is determined by the amount of the estimated selling price ofthe inventory minus the estimated selling expenses and related taxes during normal production andoperation ;
(2) For the inventory of materials that need to be processed, in the normal production andoperation process, the net realizable value is determined based on the estimated selling price of thefinished product minus the estimated cost at the time of completion, the estimated selling expensesand related taxes. On the balance sheet date, if a part of the same inventory has a contract priceagreement and other parts do not have a contract price, the net realizable value is determinedseparately and compared with its corresponding cost to determine the amount of provision for orreversal of decline in value of inventory.
At end of period, the provision for decline in value is calculated according to a single inventoryitem; but for a large number of inventories with low unit prices, the provision for decline in value iscalculated according to the inventory category; For the product series produced and sold in thesame region, has the same or similar end user, and difficult to measure the inventory separatelyfrom other items, the provision for the decline in value in inventory is combined.
After accruing the provision for decline in value in inventory, if the factors that previouslyreduced the value of the inventory have disappeared and the net realizable value of the inventoryis higher than its book value, it will be reversed within the original provision for decline in value, andreversal amount is included in profit or loss for the current period.The category and basis for determining the combined inventory falling price reserves, as well asthe basis for determining the net realizable value of different types of inventory
□适用 √不适用
The calculation method and basis for determining the net realizable value of inventory based onthe combination of inventory age and confirmed net realizable value
□适用 √不适用
17. Contract assets
□适用 √不适用
18. Assets held for sale
□适用 √不适用
Recognition criteria and accounting treatment methods for non-current assets or disposalgroups classified as held for sale
□适用 √不适用
Recognition criteria and presentation method for discontinued operations
□适用 √不适用
19. Long-term equity investments
√适用 □不适用
Long-term equity investments referred to in this section refer to Long-term equity investmentsthat the Company has control, joint control or significant influence over the investee, includingequity investments in subsidiaries, joint ventures and associates.
1. Judgment criteria for joint control and significant influence
Joint control refers to the common control of an arrangement in accordance with the relevantagreement, and related activities of the arrangement must be agreed upon by the parties sharingcontrol rights before they can make decisions. If the Company and other joint venturers jointlyexercise joint control over the investee and jointly control the investee and have rights to the netassets of the investee, the investee is a joint venture of the Company. When judging whether thereis joint control, the protective rights enjoyed are not considered.
Significant influence refers to the power to participate in the decision-making of an enterprise'sfinancial and operating decisions, but it cannot control or jointly control the formulation of thesepolicies with other parties. If the Company can exert significant influence on the investee, theinvestee is an associate of the Company. When determining whether it can exert significantinfluence on the invested unit, consider that the investor directly or indirectly holds the votingshares of the invested unit and the current executable potential voting rights held by the investorand other parties are assumed to be converted into the investee, the impact includes the currentconvertible warrants, stock options and convertible corporate bonds issued by the investee.
2. Determination of investment cost of long-term equity investments
(1) If the combination is formed under a business combination under common control, themerger party pays cash, transfers non-cash assets, assumes debt or issues equity securities as theacquisition consideration, and the share of owner’s equity of the acquiree on the consolidatedfinancial statements of the ultimate controlling party on the acquisition date as its initial investmentcost. The difference between the initial investment cost of long-term equity investments and thecash paid, non-cash assets transferred, the book value of the debt assumed or the total face valueof the shares issued adjusts the capital reserve; if the capital reserve is insufficient to offset, theretained earnings are adjusted. Step by step acquisition of the equity of the acquiree under commoncontrol through multiple transactions, and ultimately forming a business combination undercommon control, it should be treated separately as whether ”single transaction”: if it belongs to a ”single transaction”, each transaction is treated collectively as a single transactions on obtainingcontrol rights. If it does not belong to a ”single transaction”, the initial investment costs of long-term equity investments is the share of the book value of the owner’s equity in the acquiree’sconsolidated financial statements. The difference between the cost and the book value of long-termequity investments before the combination plus the book value of the new consideration paid forthe shares on the acquisition date is adjusted to the capital reserve; if the capital reserve isinsufficient to offset, the retained earnings are adjusted. The equity investment held before theacquisition date by equity method or other comprehensive income recognized for other equityinstruments investment is temporarily not subject to accounting treatment.
(2) If a business combination is not formed under common control, the Company determinesthe combination cost as the initial investment cost of long-term equity investments according to thepurchase date. The combination cost is the fair value of the assets paid, liabilities incurred orassumed by the purchaser to obtain control of the purchased party on the purchase date, and theequity securities issued. Overhead expenses such as auditing, legal services, evaluation andconsulting and other related Administrative expenses incurred by the purchaser for the businessmerger are included in profit or loss for the current period; The transaction cost of the equitysecurities or debt securities issued by the purchaser as the combination consideration is included in
the initial recognition amount of equity securities or debt securities. The Company regards thecontingent consideration stipulated in the acquisition agreement as part of the transferconsideration for the business combination, and it is included in the cost of the businesscombination according to its fair value on the date of purchase. For a business combination notunder common control that is realized step-by-step through multiple transactions, it is determinedwhether the multiple transactions belong to a ”single transaction” in accordance with theaccounting standards for the enterprise. In the case of a ”single transaction”, each transaction istreated as a whole transaction that obtains control. If it does not belong to a ”single transaction”,the initial investment cost of long-term equity investments calculated based on the cost methodshall be the sum of the original holding equity amount of the acquiree’s equity investment plus thenewly added investment cost; If the equity is accounted for using the equity method, the relevantother comprehensive income will not be accounted for temporarily; if the original equity investmentis invested by other equity instruments, the difference between the fair value and the carryingamount, and the cumulative change in fair value originally included in other comprehensive income,are transferred to directly to retained earnings.
(3) Except for long-term equity investments formed by business combination, other equityinvestments are initially measured at cost: if they are obtained by paying cash, the actual purchaseprice is used as their initial investment cost; if they are obtained by issuing equity securities, theyare stated at the fair value of equity securities as its initial investment cost. The expenses directlyrelated to the issuance of equity securities are determined in accordance with the relevantprovisions of Accounting Standards for Enterprises No.37-Presentation of Financial Instruments. Onthe presumption that the fair value of the commercial substance and swapped-in assets orswapped-out assets can be reliably measured, the initial investment cost of long-term equityinvestments swapped in for non-monetary assets are based on the fair value of swapped assets andrelated taxes payable, unless there is solid evidence that the fair value of the swapped assets is morereliable; for non-monetary asset exchanges that do not meet the above presumption, the carryingamount of the swapped assets and related taxes payable shall be used as the Initial investment costof long-term equity investments. The initial investment cost of long-term equity investmentsobtained through debt restructuring is determined on the basis of the fair value of the waived claims.The expenses, taxes and other necessary expenses directly related to the acquisition of long-termequity investments are also included in the investment cost.For the additional investment that can exert significant influence on the invested unit orimplement joint control but does not constitute control, the cost of long-term equity investmentsis the original holding determined in accordance with ”Accounting Standards for BusinessEnterprises No.22-Recognition and Measurement of Financial Instruments”. The sum of the fairvalue of equity investment plus the newly added investment cost is used as the initial investmentcost under equity method. If the originally held equity investment is classified as other equityinstruments investment, the difference between its fair value and carrying amount, and thecumulative fair value change originally included in other comprehensive income should betransferred to directly to retained earnings.
3. Subsequent measurement and recognition of profit or loss of long-term equity investments
(1) Long-term equity investments measured at cost
The Company uses the cost method to account for long-term equity investments in subsidiaries.Apart from the cash dividends or profits declared but not yet paid that included in the acquisitionof the investment, the Company recognizes the investment income in accordance with the cashdividends or profits declared to be issued by the investee in the current period.
(2) Long-term equity investments under equity method
For long-term equity investments in associates and joint ventures, the equity method is used.
If the initial investment cost of long-term equity investments calculated by the equity methodis greater than the fair value share of the identifiable net assets of the investee when investing, theinitial investment cost of long-term equity investments will not be adjusted; the initial investment
cost of long-term equity investments is less than the fair value share of the investee’s identifiablenet assets at the time of purchase, the difference should be included in profit or loss for the currentperiod, while adjusting the cost of long-term equity investments. After acquiring long-term equityinvestments, if the accounting policy and accounting period adopted by the investee areinconsistent with the Company, the financial statements of the investee shall be adjusted accordingto the Company's accounting policies and accounting period, and recognize the investment gain orloss and other comprehensive income etc. The investment income and other comprehensiveincome shall be the share of the net profit or loss and other comprehensive income of the investee,and the carrying amount of long-term equity investments is adjusted; The Company recognizes itsshare of the investee’s net profits or losses based on the fair values of the investee’s individualseparately identifiable assets at the time of acquisition, after making appropriate adjustmentsthereto in conformity with the accounting policies and accounting periods of the Company.According to the profits or cash dividends declared to be distributed by the investee, the carryingamount of long-term equity investments is reduced accordingly; adjust the carrying amount of long-term equity investments and include in owners' equity. The unrealized internal transaction gainsand losses that occur between the Company and associates and joint ventures are calculated basedon the ratio enjoyed by the Company and are offset, and investment income is recognized on thisbasis. Unrealized internal transaction losses with the investee that belong to assets impairment lossare fully recognized.
When the Company confirms that it should share the losses of the investee, it will be processedin the following order: First, offset the carrying amount of Long-term equity investments. Secondly,if the carrying amount of long-term equity investments is not enough to offset, continue torecognise the investment loss and offset the carrying amount of long-term receivable items to thelimit of carrying amounts of other long-term equity that substantially constitute net investment inthe investee. After the above-mentioned treatment, if the Company still undertakes additionalobligations according to the investment contract or agreement, the estimated liabilities shall berecognized according to the obligations assumed and included in the current investment losses. Ifthe investee realizes a net profit in a later period, the Company resumes the recognition of the profitsharing amount after the income makes up for the unrecognized loss sharing amount.During the period of holding the investment, the investee is included in the consolidatedfinancial statements based on the amount attributable to the investee in the consolidated financialstatements' net profit, other comprehensive income and changes in other owners ‘equity.If the Company’s assets invested in joint ventures and associates constitute a business, and theinvestor acquires long-term equity investments but does not obtain control, the fair value of theinvestment business is used as the initial basis for the new investment cost of long-term equityinvestments. The difference between the initial investment cost and the carrying amount of theinvested business is included in profit or loss for the current period. If the assets sold by theCompany to a joint venture or an associate constitute a business, the difference between theconsideration received and the carrying amount of the business shall be included in profit or lossfor the current period. If the assets purchased by the Company from associates and joint venturesconstitute business, they shall be accounted for in accordance with the provisions of ”AccountingStandards for Business Enterprises No.20-Business Combinations”, and the profits or losses relatedto the transaction shall be fully recognised.
4. Disposal of long-term equity investments
For the disposal of Long-term equity investments, the difference between the Carrying amountand the actual consideration received shall be included in profit or loss for the current period.
(1) Disposal of long-term equity investments under equity method
For long-term equity investments that are accounted for using the equity method, if theremaining equity after disposal is still accounted for using the equity method, when disposing of theinvestment, the same basis as the investee directly disposes of related assets or liabilities shall beused and the relevant share of other comprehensive income in the accounting treatment. Owners
‘equity confirmed by the investee in addition to changes in net profit or loss, other comprehensiveincome and profit distribution, and owners’ equity are carried forward to profit or loss for thecurrent period according to the sharing.If the joint control or significant influence on the investee is lost due to the disposal of part ofthe equity investment, etc., the remaining equity after disposal shall be accounted according to thefinancial instrument recognition and measurement standards. The difference between the fair valueand carrying of the day when the joint control or significant influence is lost the amount is includedin profit or loss for the current period. The other comprehensive income of the original equityinvestment confirmed by the equity method of accounting shall be accounted for on the same basisas the investee ‘s direct disposal of related assets or liabilities when the equity method of accountingis terminated. Owners ‘equity confirmed by the investee in addition to changes in Owners’ equityother than net profit or loss, Other comprehensive income and profit distribution, all transferred toprofit or loss for the current period when the equity method of accounting is terminated.
(2) Disposal of long-term equity investments under cost method
Long-term equity investments that are accounted for using the cost method, and the remainingequity is still accounted for using the cost method after disposal. Other comprehensive incomerecoginsed by adopting equity method accounting or financial instrument recognition andmeasurement standard accounting before obtaining control of the investee is treated on the samebasis as the invested unit directly disposes of related assets or liabilities, and is treated according toshare of profit or loss for the current period. Changes in owners’ equity other than net profit or loss,other comprehensive income and net profit distribution in the investee’s net assets recognized bythe equity method of accounting are carried forward to profit or loss for the current periodaccording to the share.When the Company can no longer exercise control over an investee due to dilution ofshareholding by issuance of new shares to other investors by the investee but the Company can stillexercise joint control of or significant influence on the investee, the difference between theCompany’s share of the increment of net assets in investee by the new shareholding percentageafter new share issuance and the pro-rata portion of carrying value of long term equity investmentfor the decreased shareholding percentage is recognized in profit or loss in the current period. Theremaining equity investment is accounted for equity method as if it was acquired since initialacquisition.
When the Company can no longer exercise control over an investee due to partial disposal ofequity investment or other reasons and the remaining equity investment after disposal can exercisejoint control of or significant influence over an investee, the remaining equity investment isaccounted for under equity method and re-measured by equity method as if it has been acquiredsince date of acquisition. Where the remaining equity investment can no longer exercise jointcontrol of or significant influence over an investee, the remaining equity investment is accountedfor in accordance with Accounting Standard for Business Enterprises No.22-Recognization andMeasurement of Financial Instruments and the difference between the fair value and the carryingamount at the date of the loss of control is charged to profit or loss for the current period.
The Company's control over an investee is lost through multiple disposals and the multipledisposals shall be viewed as one single transaction, the multiple disposals is accounted for one singletransaction which result in the Company's loss of control over the investee. Each difference betweenthe consideration received and the book value of the investment disposed is recognized in othercomprehensive income and reclassified in full to profit or loss at the time when control over theinvestee is loss.
20. Investment properties
(1). If the measurement of cost model is adopted:
Depreciation or Amortization Method
1. Investment properties refer to real estate held to earn rent or capital appreciation, or both.Including land use rights that have been leased, land use rights that are held and ready to betransferred after value-added, leased buildings (including buildings used for rent after self-construction or development activities are completed, and future use during construction ordevelopment of leased buildings).
2. Investment properties are initially measured according to cost, and subsequentmeasurement is made using the cost model. For subsequent expenditures related to Investmentproperties, if the economic benefits related to the asset are likely to flow in and their costs can bereliably measured, then they are included in the cost of Investment properties. Other subsequentexpenditures are included in profit or loss for the current period when they occur.
3. For Investment Properties measured by the cost model, depreciation or amortization isprovided using the same method as fixed assets and intangible assets.
4. When the purpose of Investment properties is changed to self-use, from the date of change,the Investment properties are converted into fixed assets or intangible assets, and the carryingamount before conversion is used as the credit value after conversion. When the purpose of self-used real estate or Inventories is changed to earn rent or capital appreciation, from the date ofchange, the Fixed assets or Intangible assets are converted into Investment properties andconverted into Investment properties measured by the cost model to the carrying amount beforeconversion As the booked value after conversion; when converted to Investment propertiesmeasured by fair value model, the fair value on the conversion date is used as the booked valueafter conversion.
5. When Investment Properties are disposed of, or permanently withdrawn from use and it isexpected that no financial benefits can be obtained from their disposal, the recognition of theinvestment properties is terminated. Investment properties sold, transferred, scrapped or damagedare deducted from their carrying amount and related taxes and are included in profit or loss for thecurrent period.
21. Fixed assets
(1). Recognition conditions
√适用 □不适用
Fixed assets refer to tangible assets fulfill the following characteristics: (1) held for theproduction of goods, provision of labor services, lease or operation and (2) the service life exceedsone fiscal year.
Fixed assets are recognized if it meet the following conditions: (1) The economic benefitsrelated to the fixed assets are likely to flow into the enterprise and (2) The cost of the fixed assetscan be measured reliably. Subsequent expenditures related to fixed assets, if they meet the aboverecognition conditions, are included in the cost of fixed assets; those that do not meet the aboverecognition conditions are included in profit or loss for the current period when incurred.
(2). Depreciation method
√适用 □不适用
| Category | Depreciation method | Useful life (years) | Estimate residual value (%) | Annual depreciation rate (%) |
| Property and buildings | Straight line method | 10-30 | 5-10 | 3.00-9.50 |
| Specific equipment | Straight line method | 3-20 | 5-10 | 4.50-31.67 |
| General equipment | Straight line method | 3-15 | 5-10 | 6.00-31.67 |
| Transportation equipment | Straight line method | 2-15 | 5-10 | 6.00-47.50 |
| Ship | Straight line method | 25 | Light Displacement Tonnage x Expected scrap price | 3.07 |
Note:
(1) The renovation costs of the fixed assets that meet the capitalization conditions will beaccrued separately in the shorter period of the two renovation periods and the useful life of thefixed assets.
(2) For the fixed assets that have been impaired, the cumulative impairment provision of fixedassets shall be deducted from the calculation of depreciation rate.
(3) The Company shall review the useful life, estimated net residual value and depreciationmethod of the fixed assets at least at the end of the year.
22. Construction in progress
√适用 □不适用
1. Construction in progress while satisfying economic benefits is likely to flow in, and costs canbe reliably measured are recognised. Construction in progress is measured at the actual costincurred before the construction of the asset reaches its intended status of uses.
2. When Construction in progress reaches the intended status of uses, it will be transferred tofixed assets according to the actual cost of the project. If it has reached the expected usable statusbut has not yet completed the settlement of completion, it will first be transferred to fixed assetsat the estimated value. After the completion of the final settlement, the original provisionalvaluation will be adjusted according to the actual cost, but the original depreciation will not beadjusted.
3. The specific criteria and timing for the transfer of construction in progress to fixed assets areas follows:
| Item | Criteria and time point for conversion to fixed assets |
| Property and buildings | (1) The main construction project and supporting projects have been substantially completed; (2) The construction project has met the predetermined design requirements and has been inspected, designed, constructed, and supervised by various units; (3) If the construction project has reached the predetermined usable state but has not yet undergone completion settlement, it will be transferred to fixed assets based on the estimated value of the actual construction cost from the date of reaching the predetermined usable state. |
| Machine equipment | (1) The relevant equipment and other supporting facilities have been installed; (2) The equipment that needs to be commissioned or trial-produced can maintain normal and stable operation for a period of time after commissioning; (3) The production equipment can stably produce qualified products; (4) The equipment has been accepted by the relevant departments of asset management. |
23. Borrowing costs
√适用 □不适用
Borrowing costs, including interest on borrowings, amortization of discounts or premiums,other relevant expenses, and exchange differences due to foreign currency borrowings.
1. Principle of borrowing costs capitalization
Borrowing costs incurred by the Company, which can be directly attributed to the acquisition,construction or production of assets that meet the capitalization conditions, are capitalized and
included in the cost of related assets. Other Borrowing costs are recognized as expenses based onthe amount incurred when they occur, and are included in profit or loss for the current period.
2. Capitalization period of borrowing costs
(1) When the following conditions are met at the same time, capitalization begins: 1) Assetexpenditure has occurred; 2) Borrowing costs have occurred; 3) The purchase, construction orproduction activities necessary to make the asset reach the intended use or sale state have begun.
(2) Suspension of capitalization: If an asset that meets the conditions of capitalization isabnormally interrupted during the acquisition, construction or production process, and theinterruption lasts for more than 3 months, the capitalization of Borrowing costs is suspended;Borrowing costs incurred during the interruption are recognized as current expenses, until thepurchase or construction of assets or production activities restart. If the interruption is thenecessary procedure for the acquisition or construction or production of assets that meet thecapitalization conditions to reach the intended status of uses or status of sale, borrowing costs willcontinue to be capitalized.
(3) Cessation of capitalization: Borrowing costs cease to be capitalized when the assetspurchased or constructed or produced that meet the capitalization conditions reach the intendeduse or sale. When part of the assets in the acquisition, construction or production of capitalizedassets are completed separately and can be used separately, the capitalization of borrowing costsof the partial assets will be ceased. If each part of the purchased or constructed asset is completedseparately, but it cannot be used until it is completed or sold externally, the capitalization ofborrowing costs shall be ceased when the asset is completed.
3. Borrowing costs capitalization rate and calculation method of capitalization amount
If specific loans are borrowed for the purchase or construction or production of assets thatmeet the capitalization conditions, the interest expenses actually incurred in the current period ofthe specific loans (including the amortization of discounts or premiums determined in accordancewith the effective interest rate method), minus the amount of interest income obtained from thebank or the investment income obtained by making a temporary investment by the unusedborrowing loans, is the amount of interest that should be capitalized; if the general borrowings areoccupied for the purchase or construction or production of assets that meet the capitalizationconditions, the weighted average amount of asset expenditures on the amount of cumulative assetexpenditure exceeding the specific loans is multiplied by the capitalization rate (weighted averageinterest rate) of the general borrowing to calculate and determine the amount of interest thatshould be capitalized for the general borrowing. During the capitalization period, the amount ofinterest capitalized in each accounting period shall not exceed the amount of interest actuallyincurred by the relevant borrowings in the current period. The exchange differences on the principaland interest of foreign currency special borrowings shall be capitalized during the capitalizationperiod. Other relevant expenses incurred by special borrowings occur before the assets eligible forcapitalization purchased or constructed or produced reach the intended status of use or sale, theyare capitalized; Other relevant expenses incurred in general borrowings are included in profit or lossfor the current period when incurred. If there is a discount or premium on the loans, the amount ofdiscount or premium that should be amortized in each accounting period is determined accordingto the effective interest rate method, and the amount of interest in each period is adjusted.
24. Biological assets
□适用 √不适用
25. Oil and gas assets
□适用 √不适用
26. Intangible assets
(1). Measurement, useful life, impairment test
√适用 □不适用
1. Initial measurement of intangible assets
Intangible assets are initially measured at cost. The cost of externally purchased intangibleassets includes the purchase price, related taxes and other expenses directly attributable to theasset for its intended use. If the payment for the purchase of intangible assets is delayed beyondthe normal credit conditions and is essentially of a financing nature, the cost of the intangible assetsis determined on the basis of the present value of the purchase price. Debt restructuring acquiresthe intangible assets used by the debtor to pay off debts, and the book value is determined on thebasis of the fair value of the waived claims and other costs that can be directly attributed to the taxand other costs incurred in bringing the asset to its intended use. Intangible assets obtained fromdebtor to pay off debts under debt restructuring, its book value is determined on the basis of thefair value of the waived claims and other costs that can be directly attributed to the tax and othercosts incurred in bringing the asset to its intended use. Under the presumption that the exchangeof non-monetary assets has commercial substance and the fair value of the assets exchanged in orout can be reliably measured, the intangible assets exchanged in the swap of non-monetary assetsare stated at fair value of the assets swapped and related taxes as the cost of swapping intangibleassets, unless there is strong evidence that the fair value of the swapped assets is more reliable; fornon-monetary asset exchanges that do not meet the above presumption, the book value of theswapped assets and related taxes payable are used as the cost of intangible assets, and there is norecognition of any profit or loss.
Expenses related to intangible assets are included in the cost of intangible assets if the relatedeconomic benefits are likely to flow into the Company and the costs can be reliably measured.Expenditures for other items other than these are included in profit or loss for the current periodwhen they occur.
The acquired land use rights are usually accounted for as intangible assets. For self-development and construction of buildings and other buildings, related land use rights expendituresand building construction costs are accounted for as intangible assets and fixed assets, respectively.In the case of purchased properties and buildings, the relevant price will be allocated between theland use rights and the buildings. If it is difficult to allocate them reasonably, all of them will betreated as fixed assets.
2. Intangible asset useful life, the basis for its determination, estimation, amortization methodor review procedures
According to the contract rights or other legal rights, industry, history experience, and otherrelevant experts to determine a combination of factors, reasonably determine the intangible assetcan bring economic benefits for the Company, as intangible assets with limited useful life; notWhere the intangible assets are reasonably determined to bring economic benefits to the Company,they are regarded as intangible assets with uncertain service life.
For intangible assets with a finite useful life, the following factors are usually considered whenestimating the useful life: (1) the usual life cycle of the products produced using the asset and theinformation available on the service life of similar assets; (2) technology, process, etc. The currentsituation of the country and the estimation of the future development trend; (3) the market demandfor the products produced by the asset or the provision of labor services; (4) the expected actionsof current or potential competitors; (5) the maintenance of the asset Expected maintenanceexpenditures that bring economic benefits, and the Company's ability to pay for relatedexpenditures; (6) Relevant legal regulations or similar restrictions on the asset's control period, suchas concession periods, lease periods, etc . ; (7) There is correlation of the useful life of other assets.The estimated useful life of intangible assets with finite useful life:
| Item | Basis of estimated useful life | Period (years) |
| Software | Expected benefit period | 5 years |
| Special technology | Expected benefit period | 10 years |
| Land use rights | Registered useful life of land use rights | 50 years |
Intangible assets with a finite useful life are amortized systematically and rationally within theuseful life according to the expected realization method of the economic benefits related to theintangible asset. If the expected realization method cannot be reliably determined, the straight-linemethod is used. Intangible assets with uncertain useful life are not amortized, but the useful life ofthe intangible assets is reviewed every year and an impairment test is conducted.At the end of each year, the Company reviews the useful life and amortization method ofintangible assets with a finite useful life. If it is different from the previous estimate, the originalestimate is adjusted and the accounting estimate is changed; it is estimated that an intangible assetcan no longer be given if the enterprise brings future economic benefits, the book value of thisintangible asset will be transferred to profit or loss for the current period.
(2). Accounting policy for internal research and development expenditures
√适用 □不适用
The expenditures of internal research and development projects are divided into expendituresin the research phase and expenditures in the development phase. Criteria for dividing researchstage and development stage: the planned investigation stage for acquiring new technologies andknowledge should be determined as the research stage, which has the characteristics of planningand exploration; The application of research results or other knowledge to a plan or design beforecommercial production or use to produce new or substantially improved materials, devices,products and other stages should be determined as the development stage, which is targeted andlikely to produce results characteristics.
Expenditures for the research phase of internal research and development projects areincluded in profit or loss for the current period when they occur. Expenses during the developmentphase of an internal research and development project that meet the following conditions arerecognized as intangible assets: (1) it is technically feasible to complete the intangible asset so thatit can be used or sold; (2) it is Intention to use or sell; (3) The way in which intangible assets generateeconomic benefits, including the ability to prove that the products produced using the intangibleassets exist in the market or the intangible assets themselves exist in the market, and the intangibleassets will be used internally, can prove their usefulness; (4) sufficient technical, financial resourcesand other resources support to complete the development of the intangible asset and the ability touse or sell the intangible asset; (5) The expenditure attributable to the development stage of theintangible asset can be reliably measured. If the above conditions are not met, it will be included inprofit or loss for the current period when it occurs; if there is no way to distinguish between researchphase expenditure and development phase expenditure, all research and development expenditureincurred will be included in profit or loss for the current period.
If the company sells products or by-products produced during the research and developmentprocess (hereinafter referred to as trial operation sales), it shall conduct accounting treatment forthe related income and costs of trial operation sales in accordance with the provisions of“Accounting Standards for Business Enterprises No. 14 – Revenue” and “Accounting Standards forBusiness Enterprises No. 1 – Inventory”, and include them in the current profit or loss. Before sellingthe products or by-products produced during the trial operation, they shall be recognized asinventory in accordance with the provisions of “Accounting Standards for Business Enterprises No.
1 – Inventory”, and they shall be recognized as related assets in accordance with the assetrecognition conditions in other relevant accounting standards for business enterprises.
27. Long-term asset impairment
√适用 □不适用
Long-term equity investments, investment property and productive biological assets measuredusing the cost model, fixed assets, construction in progress, oil and gas assets, right-of-use assets,intangible assets, goodwill and other long-term assets are subject to impairment if there areindication of the following:
1. The market price of assets has fallen sharply in the current period, and the decline issignificantly higher than the expected decline due to the passage of time or normal use;
2. The economic, technical or legal environment in which the enterprise operates and themarket in which the assets are located will undergo major changes in the current period or in thenear future, thereby adversely affecting the enterprise;
3. The market interest rate or other market investment return rate has increased in the currentperiod, which affects the discount rate of the enterprise's calculation of the present value of theexpected future cash flow, resulting in a substantial reduction in the asset's recoverable amount;
4. There is evidence that the asset has become obsolete or its physical has been damaged;
5. Assets have been or will be idle, terminated or planned to be disposed of in advance;
6. Evidence from internal reports of the Company indicates that the economic performance ofthe asset has been or will be lower than expected, such as the net cash flow created by the asset orthe realized operating profit (or loss) is far below (or higher than) the expected amount, etc . ;
7. Other indications that assets may have been impaired.
If there is any indication of impairment of the above-mentioned long-term assets on thebalance sheet date, an impairment test shall be conducted. If the result of the impairment testindicates that the recoverable amount of the asset is lower than its book value, the impairmentprovision shall be made according to the difference and included in the impairment loss. Therecoverable amount is the higher of the net value of the asset's fair value minus disposal costs andthe present value of the asset's expected future cash flow. The method for determining the fairvalue is detailed in this note; the disposal expenses include legal expenses related to the disposal ofassets, related taxes, handling fees, and direct expenses incurred to bring the asset to a saleablestatus; the expected future cash flow of the asset is determined according to the present value ofexpected future cash flow generated during the continuous use of the asset and at the time of finaldisposal, and an appropriate discount rate is selected to determine the discounted amount.
The asset impairment provision is calculated and determined on the basis of individual assets.If it is difficult to estimate the recoverable amount of an individual asset, the asset group to whichthe asset group belongs determines the recoverable amount of the asset group. An asset group isthe smallest asset portfolio that can independently generate cash inflows.
The goodwill presented separately in the financial statements will be allocated to the assetgroup or combination of asset groups that is expected to benefit from the synergy effect of thebusiness combination during the impairment test. If the test results indicate that the recoverableamount of the asset group or combination of asset groups containing the allocated goodwill is lowerthan its book value, the corresponding impairment loss is recognized. The amount of impairmentloss is offset against the book value of goodwill allocated to the asset group or combination of assetgroups, and then proportionally based on the proportion of the book value of other assets in theasset group or combination of asset groups other than goodwill.
Goodwill and intangible assets with indefinite useful life are tested for impairment at least atthe end of each year.
Once assets impairment loss is recognised, it will not be reversed in the future period.
28. Long-term deferred expenses
√适用 □不适用
Long-term deferred expenses are accounted for based on actual expenditures and amortizedevenly over the benefit period or the prescribed period. If the long-term deferred expense itemcannot benefit the future accounting period, all the amortized value of the item that has not beenamortized shall be transferred to profit or loss for the current period, of which:
Improvement expenditures incurred on leased fixed assets shall be amortized evenly over theremaining useful life of the leased assets if it can be reasonably determined that the ownership ofthe leased assets will be obtained at the expiration of the lease term. If it cannot be reasonablydetermined that the ownership of the leased asset can be obtained at the expiration of the leaseterm, it shall be amortized equally over the shorter of the remaining lease term and the remaininguseful life of the leased asset.
The decoration costs incurred by the leased fixed assets, if it can be reasonably determinedthat the ownership of the leased assets will be obtained at the expiration of the lease term, shall beamortized equally between the interval between two decorations and the shorter period of theremaining useful life of the leased assets. If it cannot be reasonably determined that the ownershipof the leased asset can be obtained at the expiration of the lease term, the leased asset shall beamortized equally over the shorter of the interval between two decorations, the remaining leaseterm and the remaining useful life of the leased asset.
29. Contract liabilities
√适用 □不适用
Contract liabilities is the Company's obligation to transfer goods to customers for theconsideration that has been received or receivable from customers. The Company presented thenet amount of contract assets offsetting with contract liabilities when they are aroused in the samecontract.
30. Employee benefits
(1). Accounting treatment of short-term employee benefits
√适用 □不适用
Employee benefits refer to all forms of consideration or compensation given by the Companyin exchange for service rendered by employees or for the termination of employment relationship.Employee benefits include short-term employee benefits, post-employment benefits, terminationbenefits and other long-term employee benefits. Benefits provided to the employee’s spouse,children, dependents, family members of deceased employees, or other beneficiaries are alsoemployee benefits.
According to their liquidities, employee benefits are presented as ”employee benefits payable”and “long-term employee benefits payable” on the balance sheet.
In the accounting period in which employees have rendered services, the Company recognizedthe employee wages, bonus, social security contributions according to regulations such as medicalinsurance, work injury insurance and maternity insurance as well as housing funds as liability, andcharged to profit or loss for the current period or cost of relevant assets. If employee benefits arenon-monetary benefits, if they can be measured reliably, they shall be measured at fair value. If theliability is not expected to be settled wholly in twelve months after the balance sheet date, and theamount is significant, the liability is measured at the discounted amount.
(2). Accounting treatment of Post-employment benefits
√适用 □不适用
Post-employment benefit plan includes defined contribution plans and defined benefit plans.Defined contribution plans are post-employment benefit plans under which a corporate pays fixedcontributions into an escrow fund and will have no further obligation. Defined benefit plans arepost-employment benefit plans other than defined contribution plans.
(1) Defined contribution plans
The Company pays basic pension insurance and unemployment insurance for employees inaccordance with the relevant regulations of the current government. In the accounting periodswhich employees rendered services, the amount of defined contribution plan is recognized asliability and charged to profit or loss for the current period or cost of relevant assets.
(3). Accounting treatment of employee termination benefits
√适用 □不适用
Termination benefits is recognized on the earlier of either the Company cannot unilaterallywithdraw the termination benefits provided by the labor relationship cancellation plan or theredundancy proposal, and the Company recognises the costs or expenses related to therestructuring related to the payment of the termination benefits. Termination benefits expensesare included in profit or loss for the current period. However, if the termination benefits are notexpected to be fully paid within twelve months after the end of this reporting period, it is treatedas other long-term employee benefits.
Employee internal retirement plans are handled on the same principle as the above dismissalbenefits. The Company will include the salary and social insurance contribution of early retiredpersonnel from the date when the employee ceases to provide services to the normal retirementdate, and shall be included in profit or loss for the current period (termination benefits) when theconditions for recognising the estimated liabilities are met. Financial compensation after the officialretirement date (such as the normal pension pension) will be treated as post-employment benefits.
(4). Accounting treatment of other long-term employee benefits
√适用 □不适用
Other long-term employee benefits provided by the Company to the employees satisfied theconditions for classifying as a defined contributions plan; those benefits are accounted for inaccordance with the above requirements relating to defined contribution plan, but the movementof net liabilities or assets in re-measurement of defined benefit plan is recorded in profit or loss forthe current period or cost of relevant assets.
31. Provision of liabilities
√适用 □不适用
A provision is recognized as a liability when an obligation related to a contingency satisfied allof the following conditions: (1) The obligation is a present obligation of the Company; (2) It isprobable that an outflow of economic benefits will be required to settle the obligation; (3) Theamount of the obligation can be measured reliably.
Provisions are initially measured at the best estimate of the payment to settle the associatedobligations and consider the relevant risk, uncertainty and time value of money. If the impact oftime value of money is significant, the best estimate is determined as its present value of futurecash outflow. The Company reviews the carrying amount of provisions at the balance sheet dateand adjusts the carrying amount to reflect the best estimate.
The best estimates are divided into the following situations: If the required expenditure existsin a continuous range (or interval), and the probability of various results in the range is the same,the best estimate is based on the middle value of the range: namely The average of the lower limitamount is determined. The required expenditure does not exist in a continuous range (or interval),
or although there is a continuous range, but the possibility of various results in this range is not thesame, if contingencies involve a single item, the best estimate is based on the amount most likelyto occur; if contingencies involve multiple items, the best estimate is calculated and determinedbased on various possible results and related probabilities.If all or part of the expenses required to pay off the provisions of the Company are expected tobe compensated by a third party, when the compensation amount is basically determined to bereceived, it is separately recognized as an asset, and the recognized compensation amount does notexceed the carrying amount of the provisions.Carrying amount of the provisions are reviewed on each balance sheet date. If there is solidevidence that the carrying amount cannot reflect the current best estimate, the carrying amountshall be adjusted according to the current best estimate.
32. Share-based payments
√适用 □不适用
1. Category of share-based payment
The Company's share-based payment is a transaction that grants equity instruments orassumes liabilities determined on the basis of equity instruments in order to obtain servicesprovided by employees (or other parties). Includes Share-based payment settled with equity andshare-based payment settled with cash.
2. Determination method of fair value of equity instruments
(1) If there is an active market, it shall be determined according to the quoted price the activemarket; (2) If there is no active market, it shall be determined by using valuation techniques,including reference to the prices used in recent market transactions conducted by parties who arefamiliar with the situation and voluntarily trade, reference to the current fair value, discounted cashflow method and option pricing model of other financial instruments that are substantially the same.
3. Basis in determination of best estimate of exercisable equity instruments
On each balance sheet date during the vesting period, the Company makes the best estimatebased on the latest information on the number of employees with exercisable rights and otherfollow-up information, and corrects the number of equity instruments expected to exercise. On theexercise date, the number of equity instruments expected to be exercised should be consistent withthe actual exercisable amount.
4. Accounting treatment of share-based payment
(1) Share-based payment settled by equity
If the equity-settled share-based payment is exchanged for employees to provide services, andthe right is available immediately after the grant, the relevant cost or expense will be included inthe fair value of equity instruments on the grant date, and the capital reserve will be adjustedaccordingly. If the exercise right is available only after completing the service within the vestingperiod or meeting the prescribed performance conditions, on each balance sheet date during thevesting period, based on the best estimate of the number of available rights Equity instruments andthe fair value of the equity instruments on its grant date, the services obtained in the current periodare included in the relevant costs or expenses, and the capital reserve is adjusted accordingly. Afterthe exercisable date, no adjustment will be made to the recognised costs or expenses and the totalowner’s equity.
For the equity-settled Share-based payment is exchanged for the services of the other party, ifthe fair value of the services of the other party can be reliably measured, it is measured accordingto the fair value of the service of the other party. If the fair value of the other party’s services cannotbe measured reliably but the equity value of equity instruments can be measured reliably, it ismeasured in accordance with the fair value of equity instruments on the date of service acquisition,included in the relevant costs or expenses, and the owners ‘equity is increased accordingly.
(2) Share-based payment settled in cash
Share-based payment settled in cash in exchange for employee services, and the right toexercise immediately after the grant, the Company’s fair value of the liabilities assumed are includedin the relevant costs or expenses on the grant date, and the liabilities are increased accordingly.Share-based payment settled in cash that can be exchanged for employee services after completingthe services within the waiting period or meeting the prescribed performance conditions, based onthe best estimate of the right to exercise on each balance sheet date during the vesting period andthe fair value of the Company’s liabilities, the services obtained in the current period are includedin the relevant costs or expenses and corresponding liabilities. On each balance sheet date andsettlement date before the settlement of the relevant liabilities, the fair value of the liabilities isremeasured, and the changes are included in profit or loss for the current period.
(3) Modify and terminate share-based payment plan
If the modification increases the fair value of equity instruments granted, the Company willrecognise the increase in the cost of services obtained in accordance with the increase in fair valueof equity instruments. If the modification increases the number of equity instruments awarded, theCompany will recognize the increase in the fair value of equity instruments accordingly as anincrease in access to services. If the Company revises the conditions of exercise rights in a mannerbeneficial to employees, the Company considers the revised conditions of exercise rights whendealing with the conditions of exercise rights.
If the modification reduces the fair value of the equity instruments granted, the Companycontinues to recognize the services based on amount of fair value of the equity instruments on thegrant date, regardless of the decrease in the fair value of the equity instruments. If the modificationreduces the number of granted equity instruments, the Company treats the reduction as acancellation of the granted equity instruments. If the vesting conditions are modified in a way thatis unfavorable to the employees, the modified vesting conditions shall not be considered whendealing with the vesting.
If the share-based payment settled by equity is cancelled, it will be treated as an acceleratedexercise on the cancellation date, and the unrecognized amount will be recognised immediately(Amount that should be recognised in the remaining vesting period is immediately included in profitor loss for the current period, and capital reserve is also recognised). Employees or other partiescan choose to meet the non-feasible rights conditions but not met within the waiting period, as acancellation of equity settlement of share-based payment. However, if a new Equity instrument isawarded, and the equity instruments granted on the grant date of the new equity instruments aredeemed to replace the equity instruments that were cancelled, then the authorized replacementequity instruments are processed in the same way as the modification of terms and conditions ofthe original equity instruments.
5．Involving share-based payment transactions between companies within the scope ofconsolidation of the Company, between the Company and the actual controlling party or othershareholders of the Company, or between the Company and other companies in the group to whichthe Company belongs, it is accounted in accordance with the relevant provisions of Article 7 of intra-group share-based payment of "Interpretation No. 4 of Accounting Standards for BusinessEnterprises".
33. Preferred shares, perpetual bonds and other financial instruments
□适用 √不适用
34. Revenue
(1). Accounting policies adopted for revenue recognition and measurement
√适用 □不适用
1. General principles of revenue recognition
Under the new revenue standard, the Company determine the timing of revenue recognitionon the basis of transfer of control. The Company recognises revenue when it satisfies a performanceobligation in the contract, i.e. when the customer obtains control of the relevant goods or services.If one of the following conditions is fulfilled, the Company performs its performance obligationwithin a certain period; otherwise, it performs its performance obligation at a point of time: (1)when the customer simultaneously receives and consumes the benefits provided by the Companywhen the Company performs its obligations under the contract; (2) when the customer is able tocontrol the goods in progress in the course of performance by the Company under the contract; (3)when the goods produced by the Company under the contract are irreplaceable and the Companyhas the right to receive payment for performance completed to date during the whole contract term.For performance obligations performed within a certain period, the Company recognisesrevenue by measuring the progress towards complete of that performance obligation within thatcertain period. When the progress of performance cannot be reasonably determined, if the costsincurred by the Company are expected to be compensated, the revenue shall be recognised at theamount of costs incurred until the progress of performance can be reasonably determined.
For performance obligation performed at a point of time, the Company recognises revenue atthe point of time at which the customer obtains control of relevant goods or services. To determinewhether a customer has obtained control of goods or services, the Company considers the followingindications: (1) the Company has the current right to receive payment for the goods, which is whenthe customer has the current payment obligations for the goods; (2) the Company has transferredthe legal title of the goods to the customer, which is when the client possesses the legal title of thegoods; (3) the Company has transferred the physical possession of goods to the customer, which iswhen the customer obtains physical possession of the goods; (4) the Company has transferred all ofthe substantial risks and rewards of ownership of the goods to the customer, which is when thecustomer obtain all of the substantial risks and rewards of ownership of the goods to the customer;
(5) the customer has accepted the goods; (6) other information indicates that the customer hasobtained control of the goods.
When a contract contains two or more performance obligations, the Company will allocate thetransaction price to each individual performance obligation in accordance with the relativeproportion of the stand-alone selling price of the goods promised by each individual performanceobligation on the commencement date of the contract. Revenue is recognised on the transactionprice allocated to each individual performance obligation. The transaction price is the amount ofconsideration that the Company expects to be entitled to receive due to the transfer of goods tocustomers. The amount collected by the Company on behalf of a third party and the amount thatthe Company expects to return to the customer are accounted for as a liability and not included inthe transaction price. For contracts that contain variable consideration, the Company estimates theamount of consideration to which it will be entitled using either the expected value method or themost likely amount. The estimated amount of variable consideration is included in the transactionprice only to the extent that it is highly probable that such an inclusion will not result in a significantrevenue reversal in the future when the uncertainty associated with the variable consideration issubsequently resolved. For contracts that contain significant financing components, the Companydetermines the transaction price based on the amount payable under the assumption that thecustomer pays that amount payable in cash when the control of goods or services is transferred tothe customer. The difference between the transaction price and the contract consideration shall beamortised within the contract period using effective interest rate. For contracts where the periodbetween payment and transfer of the associated goods or services is less than one year, the Groupapplies the practical expedient of not adjusting the transaction price for any significant financingcomponent.
2. Specific revenue recognition principle
Based on actual situation, the Company recognizes revenue when the following conditions aremet:
(1) Sales of product: Domestic sales revenue is recognised when the control of the product hasbeen transferred to the purchaser, the continued management and control of the product is nolonger implemented, the payment has been recovered or the evidence for payment has beenobtained and the relevant economic benefits are likely to flow in, and the cost of the product canbe reliably measured. Export sale revenue is recognised on the export date shown on the exportdeclaration of the goods after the goods are shipped according to the customer's requirements, thepayment has been recovered or the receipt of the payment has been obtained and the relevanteconomic benefits are likely to flow in, the cost of the product can be reliably measured.
(2) Futures brokerage business: The net transaction fee charged by the Company from thecustomers (deducting the transaction fee payable by the Company to exchange company) isrecognized as the net fee income when the daily payment is settled with the customer.
(2). Differences in accounting policies for revenue recognition due to the
adoption of different business models for similar businesses
□适用 √不适用
35. Contract cost
□适用 √不适用
35. Government grants
√适用 □不适用
1. Category of government grants
Government grants refer to the Company's obtain of monetary or non-monetary assets fromthe government without consideration. It is divided into government grants related to assets andgovernment grants related to income.
Government grants related to assets refer to government grants acquired by the Company andused to purchase or construct or form long-term assets, including financial grants for the purchaseof fixed assets or intangible assets, and financial discounts for dedicated loans for fixed assets, etc . ;Government grants related to income refer to government grants other than government grantsrelated to assets. Government grants should be distinguished between that related to assets andrelated to income and apply different accounting treatment. If it is difficult to distinguish, the overallclassification is classified as government grants related to income
The specific standards adopted by the Company in the classification of government grants are:
(1) The grant objects specified in the Government grants document are used to purchase orconstruct or form long-term assets, or the expenditures of the subsidies are mainly used to purchaseor construct or form long-term assets, they are classified as government grants related to assets.
(2) The government grants obtained according to the government documents that are all ormainly used to compensate the expenses or losses in the future period or the government grantsthat have occurred, and are classified as government grants related to income.
(3) If the government document does not clearly specify the target of the grant, theGovernment grants will be divided into Government grants of Related to assets or Governmentgrants of Related to income in the following ways: 1) Government documents specify the specificproject targeted by the grant, the expenditure amount is divided by relative ratio of that formingthe asset and the expenditure amount included in the expense according to the budget of thisparticular project. The ratio needs to be reviewed on each balance sheet date and changed ifnecessary.2) Government documents only use general expressions and do not indicate specificitems, it is regarded as government grants related to income.
2. Timing of recognition of government grants
The Company usually recognises and measures the government grants according to the actualamount received when they are actually received. However, for the end of the period, there is solidevidence that it can meet the relevant conditions stipulated by the financial support policy. It isexpected that the financial support funds can be received, and it is measured according to theAmount receivable. Government grants measured according to Amount receivable should also meetthe following conditions:
(1) It is based on the financial support item officially released by the local financial departmentand proactively disclosed in accordance with the “Government Information Disclosure Regulations”and its financial fund administrative methods, and its administrative methods should be inclusive(any enterprise that meets the prescribed conditions can apply), not specifically for specificenterprises;
(2) The Amount of the subsidy receivable has been confirmed by the authority governmentdepartment, or it can be reasonably calculated according to the relevant regulations of the officiallyreleased financial fund management method, and it is expected that there will be no significantuncertainty in its amount;
(3) The relevant grant approval has clearly promised the payment period, and the payment isguaranteed by the corresponding financial budget, so it can be reasonably guaranteed that it canbe received within the specified period;
(4) According to the specific situation of the Company and the subsidy, other relevantconditions (if any) that should be met.
3. Accounting treatment of government grants
Government grants are monetary assets, measured by the amount received or receivable; non-monetary assets, measured by the fair value; if the fair value of non-monetary assets cannot bereliably obtained, measured by the nominal amount. Government grants measured in nominalamount are directly included in profit or loss for the current period.
The Company adopts the gross method for Government grants, the specific accountingtreatment is as follows:
Government grants related to assets are recognized as deferred income, and are included inprofit or loss for the current period in a reasonable and systematic way within the useful life of therelevant assets. When related assets are sold, transferred, scrapped or damaged before the end ofthe useful life, the relevant deferred income balance is transferred to the profit or loss of the assetdisposal period.
Government grants related to income, which are used to compensate the related cost or lossof the Company in the future period, are recognized as deferred income, and are included in profitor loss for the current period during the period when the related cost or loss is recognized. Thecompensation for the related costs or losses incurred by the enterprise is directly included in profitor loss for the current period.
The policy discount loans obtained by the Company are divided into the following twosituations and are separately accounted for:
(1) if the government makes the payment of subsidy to the bank offering the loan, the actualamount of money received by the loan is recorded as the book amount, and the borrowing costsare calculated according to the loan principle and the preferential interest rate of the policy.
(2) If the government makes the payment of subsidy directly to the Company, the interestsubsidy is reducing the borrowing costs.
If the recoginsed government grants need to be returned, the returned will be accounted inthe current period for in the following situations:
(1) that initially deducted the carrying amount of the asset, is recognized by increasing thecarrying amount of the asset;
(2) if there exists of the related deferred income balance, then the deferred income balance isreduced by the amount repayable, any excess is charged to profit or loss for the current period.
(3) In other cases, it is directly included in profit or loss for the current period.
The distinguishing principles of government grants included in different profit or loss items are:
Government grants related to the daily activities of the Company, included in other income oroffsetting related costs according to the economic business substance; Government grants notrelated to the daily activities of the Company, included in non-operating income and expenses.
37. Deferred tax assets and deferred tax liabilities
√适用 □不适用
1. Recognition and measurement of deferred tax assets and deferred tax liabilitiesThe Company uses the balance sheet liability method to recognize deferred income tax basedon the temporary difference between the carrying amount of assets, liabilities, and the balancesheet date and the tax base. The Company's current income tax and deferred income tax areincluded in profit or loss for the current period as income tax expenses or credit, but excludingincome tax arising from: (1) business combination; (2) transactions or matter recognised directly inowners' equity; (3) according to the "Accounting Standards for Business Enterprises No. 37 -Presentation of Financial Instruments" and other regulations, the dividend payment of financialinstruments classified as equity instruments can be deducted before corporate income taxaccording to tax policies and the distributed profits come from transactions or matters previouslyrecognized in owners’ equity.The Company recognizes a deferred tax asset for the carry forward of deductible temporarydifferences, deductible losses and tax credits to subsequent periods, to the extent that it is probablethat future taxable profits will be available against which the deductible temporary differences,deductible losses and tax credits can be utilized, except for those incurred in the followingtransactions:
(1) This transaction is not a business combination, and neither affects accounting profits noraffects taxable income (or deductible losses) when it occurs. Additionally, the initially recognizedassets and liabilities do not generate equal taxable temporary differences and deductible temporarydifferences;
(2) The deductible temporary differences associated with investments in subsidiaries,associates and joint ventures, the corresponding deferred tax asset is recognized when both of thefollowing conditions are satisfied: it is probable that the temporary difference will reverse in theforeseeable future and it is probable that taxable profits will be available in the future against whichthe temporary difference can be utilized.
All the taxable temporary differences are recognized as deferred tax liabilities except for thoseincurred in the following transactions:
(1) Initial recognition of goodwill, or initial recognition of assets or liabilities arising fromtransactions with the following characteristics: the transaction is not a business combination, andneither affects accounting profits nor affects taxable income (or deductible losses) at the time ofthe transaction, and the initially recognized assets and liabilities do not generate equal taxabletemporary differences and deductible temporary differences;
(2) The taxable temporary differences associated with investments in subsidiaries, associatesand joint ventures, and the Company is able to control the timing of the reversal of the temporarydifference and it is probable that the temporary difference will not reverse in the foreseeable future.
The difference between the carrying amount of assets and liabilities and their tax base (If theitems that have not been recognized as assets and liabilities can be determined in accordance withthe provisions of the tax law, the tax base, the difference between the tax base and the bookamount), is calculate and recognized deferred tax assets or deferred tax liabilities according to theapplicable tax rate during the period when the assets are expected to be recovered or the liabilitiesare paid off.
For individual transactions that are not business combinations and do not affect accountingprofits or taxable income (or deductible losses) at the time of transaction, and the initial recognitionof assets and liabilities results in equal taxable temporary differences and deductible temporary
differences, the company recognizes the corresponding deferred income tax liabilities and deferredincome tax assets at the time of transaction for the taxable temporary differences and deductibletemporary differences arising from the initial recognition of assets and liabilities in the transaction.
Deferred tax assets recognsied are limited to the amount of taxable income that is likely to beused to offset the deductible temporary differences. On the balance sheet date, if there is solidevidence that it is likely to obtain sufficient taxable income in the future period to offset thedeductible temporary difference, the deferred tax assets that have not been recognized in theprevious accounting period are recognized. The carrying amount of deferred tax assets is reviewedregularly. If it is likely that sufficient taxable income cannot be obtained in the future to offset thebenefits of deferred tax assets, the carrying amount of deferred tax assets will be written down.When it is likely to obtain sufficient taxable income, the amount written down will be reversed.
2. When the Company has the legal right to settle on a net basis and intends to settle on a netbasis or acquire assets and settle liabilities simultaneously, the Company's current income tax assetsand current income tax liabilities are presented in net amounts after offset.
When the Company have the legal right to settle the current income tax assets and currentincome tax liabilities in net, and the deferred tax assets and deferred tax liabilities are related to theincome tax levied by the same tax collection department on the same taxpayer or differenttaxpayers, but in each future period of significant deferred tax assets and liabilities reversal, thetaxpayer involved intends to settle the current income tax assets and liabilities in net amount orobtain assets and settle liabilities at the same time and deferred tax liabilities are presented in netamount after offset.
38. Leases
√适用 □不适用
Leasing refers to a contract in which the lessor transfers the right to use an asset to the lesseefor a certain period of time in exchange for consideration.
On the contract commencement date, the Company assesses whether the contract is a leaseor contains a lease. If one party in the contract transfers the right to control the use of one or moreidentified assets for a certain period of time in exchange for consideration, then the contract is alease or contains a lease.
If the contract includes multiple separate leases, the lessee and lessor will split the contractand perform accounting for each separate lease separately. If the contract includes both leases andnon-leases, the lessee and lessor will split the leases and non-leases.
As a lessee, the basis for determining and accounting for simplified processing of short-term
leases and low-value asset leases
√适用 □不适用
(1) Right-of-use assets
At the commencement date of lease term, the Company recognizes right-of-use assets forleases (excluding short-term leases and leases of low-value assets). Right-of-use assets aremeasured initially at cost. Such cost comprises: the amount of the initial measurement of leaseliability; lease payments made at or before the inception of the lease less any lease incentivesalready received (if there is a lease incentive); initial direct costs incurred by the Company; the costsof the Company expected to be incurred for dismantling and removing the leased asset, restoringthe site on which the leased asset is located or restoring it to the condition as agreed in the termsof the lease.
The Company accrues depreciation for the right-of-use assets on straight-line method. If thereis reasonable certainty that the Company will obtain the ownership of a leased asset at the end ofthe lease term, the Company depreciates the right-of-use asset from the commencement date to
the end of the useful life of the underlying asset; otherwise, the Company depreciates the leasedasset from the commencement date to the earlier of the end of the useful life of the right-of-useasset or the end of the lease term.
(2) Lease liabilities
At the commencement date of lease term, the Company recognizes lease liabilities for leases(excluding short-term leases and leases of low-value assets). Lease liabilities are initially measuredbased on the present value of outstanding lease payment. Lease payment include: fixed payments(including in-substance fixed payments), less any lease incentives (if there is a lease incentive);variable lease payment that are based on an index or a rate; amounts expected to be payable underthe guaranteed residual value provided by the Company; the exercise price of a purchase option ifthe Company is reasonably certain to exercise that option; payments of penalties for terminatingthe lease option, if the lease term reflects that the Company will exercise that option. The Companyadopts the interest rate implicit in the lease as the discount rate. If that rate cannot be determinedreasonably, the Company’s incremental borrowing rate is used.
The Company shall calculate the interest expenses of lease liabilities over the lease term at thefixed periodic interest rate, and include it into profit or loss in the period or cost of relevant assets.Variable lease payments not included in the measurement of lease liabilities are charged to profitor loss in the period or cost of relevant assets in which they actually arise.
After the commencement date of lease term, if the following circumstances occur, theCompany re-measures the lease liability in accordance with the lease payments after modification:
when the assessment results of the purchase, extension or termination option or the actual exercisecondition changes, or the actual exercise of the lease renewal option or the lease termination optionis inconsistent with the original assessment result; Changes in the expected payable amount basedon guaranteed residual value; Changes in the index or ratio used to determine lease payments. Forthe lease modification that cause the lease liabilities to be remeasured, the Company adjusts thecarrying value of the right-of-use assets accordingly. If the carrying value of the right-of-use assethas been reduced to zero, but the lease liability still needs to be further reduced, the Company willinclude the remaining amount in the profit or loss for the current period.
(3) Short-term leases and leases of low-value assets
The right-of-use asset and lease liability are not recognized by the Company for short-termleases and leases of low-value assets, and the relevant lease payments are included in profit or lossin the period or costs of relevant assets in each period of the lease term on a straight-line basis.Short-term leases are defined as leases with a lease term of not more than 12 months from thecommencement date and excluding a purchase option. Leases of low-value assets are defined asleases with underlying low value when new. Where the Company subleases or expects to subleasea leased asset, the original lease shall not belong to a lease of low-value asse
(4) Lease modification
The Company will account for the lease modification as a separate lease if the lease changesand meets the following conditions: the lease change expands the scope of lease by increasing therights to use one or more leased assets; the increased consideration and the individual price of theexpanded part of the lease are equivalent to the amount adjusted for the contract.
If the lease change is not accounted for as a separate lease, the Company shall re-allocate theconsideration of a changed contract, re-determine the lease term, and remeasure the leaseliabilities by the present value calculated from the changed lease payments and revised discountrate on the effective date of the lease change.Lease classification criteria and accounting treatment methods for lessors
√适用 □不适用
At the commencement date of lease term, the Company classifies leases as financing leasesand operating leases. A financing lease is a lease that transfers substantially all the risks and rewardsincidental to ownership of a leased asset, irrespective of whether the ownership of the asset iseventually transferred. An operating lease is a lease other than a finance lease.
As a sub-leasing lessor, the Company classifies the sub-leases based on the right-of-use assetsof the original leases. If the original lease is a short-term lease and the Company chooses not torecognize the right-of-use asset and lease liability for the original lease, the Company classifies thesublease as an operating lease.
(1) Accounting treatment of operating leases
The lease payments derived from operating leases are recognized as rental income on astraight-line basis over the respective lease terms. Initial direct costs relating to operating leases tobe incurred by the Company shall be capitalized and then included in the current income by stagesat the same base as the recognition of rental income over the lease term. The variable leasepayments not included in the measurement of lease payments shall be recognized in profit or lossin the period in which they are occurred.
(2) Accounting treatment of financing leases
At the commencement date of lease term, the Company recognizes financing lease receivableand derecognizes the underlying assets. The Company initially measures financing lease receivablein the amount of net investment in the lease. Net investment in the lease is the sum of present valueof unguaranteed residual value and the lease payments receivable at the commencement date oflease term, discounted at the interest rate implicit in the lease.
The Company calculates and recognizes interest income in each period during the lease term,based on a constant periodic interest rate. The derecognition and impairment losses of financinglease receivable are accounted for in accordance with this note. Variable lease payments notincluded in the measurement of the net investment in the lease are included in profit or loss in theperiod in which they are occurred.
3. Sale and leaseback transactions
The Company determines whether the asset transfer in the sale and leaseback transaction is asale in accordance with principles described in this note.
(1) As a lessee
If the asset transfer in the sale and leaseback transaction is a sale, the Company, as a lessee,measures the right-of-use assets formed by the sale and leaseback based on the part of the bookvalue of the original assets related to the use rights obtained from the leaseback, and recognizerelevant gains or losses only for the right to transfer to the lessor; if the transfer of assets in the saleand leaseback transaction is not a sale, the Company, as a lessee, continues to recognize thetransferred assets and recognizes a financial liability equal to the transfer income. For details ofaccounting treatment for financial liabilities, please see this note.
(2) As a lessor
If the transfer of assets in the sale and leaseback transaction is a sale, the Company, as a lessor,accounts for asset purchase, and accounts for asset lease in accordance with policies in theaforementioned “2. The Company as a lessor”; if the transfer of assets in the sale and leasebacktransaction is not a sale, the Company, as a lessor, does not recognize the transferred assets, butrecognizes a financial asset equal to the transfer income. For details of accounting treatment forfinancial assets, please see this note.
39. Other significant accounting policies and accounting estimates
√适用 □不适用
(1)Fair value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in anorderly transaction between market participants at the measurement date. The Company measuresrelated assets or liabilities at fair value assuming the assets or liabilities are exchanged in an orderlytransaction in the principal market; in the absence of a principal market, assuming the assets orliabilities are exchanged in an orderly transaction in the most advantageous market. Principalmarket (or the most advantageous market) is the market that the Company can normally enter intoa transaction on measurement date.
The Company uses valuation techniques that are appropriate in the circumstances and forwhich sufficient data are available to measure fair value, considering the ability of a marketparticipant to generate an economic benefit from the best use of the asset, or the ability to generatean economic benefit from the sale of the asset to another market participant who can put it to thebest use, maximizing the use of relevant observable inputs, and using unobservable inputs only ifthe observable inputs aren’t available or impractical.Fair value level for assets and liabilities measured or disclosed at fair value in the financialstatements are determined according to the significant lowest level input to the entiremeasurement: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assetsor liabilities that the Company can access at the measurement date; Level 2 inputs are inputs otherthan quoted prices included within Level 1 that are observable for the assets or liabilities, eitherdirectly or indirectly; Level 3 inputs are unobservable inputs for the assets or liabilities, includinginterest rates that cannot be directly observed or verified by observable market data, stock volatility,future cash flows of disposal obligations assumed in business combinations, financial forecastsmade using own data, etc. On each balance sheet date, the company reassesses the assets andliabilities that are continuously measured at fair value recognized in the financial statements todetermine whether there is a conversion between the fair value measurement levels.
(2) Share repurchase
If the shares of the company are purchased for reasons such as reducing registered capital orrewarding employees, the actual amount paid shall be treated as treasury shares. If the repurchasedshares are canceled, the difference between the total face value of the shares calculated based onthe par value of the canceled shares and the number of canceled shares and the actual amount paidfor the repurchase shall be used to offset the capital reserve, if the capital reserve is insufficient foroffsetting, and offset against retained earnings. If rewarding the repurchased shares to theemployees of the company belongs to equity-settled share payment, when the employees exercisetheir rights to purchase the company's shares and receive the price, the cost of the treasury sharesdelivered to the employees will be transferred out of the capital reserve (other capital reserve)cumulative recorded during the waiting period.
(3)Hedging
1. Hedging includes fair value hedging / cash flow hedging / overseas operating net investmenthedging.
2. For hedging instruments that meet the following conditions, hedging accounting methodsare used: (1) The hedging relationship consists only of eligible hedging instruments and hedgedinstruments; (2) At the beginning of hedging, the Company formally designated hedging instrumentand hedged items, and prepared written documents on the hedging relationship and the Company'srisk management strategy and risk management objectives for hedging; (3) The hedging relationshipmeets the hedging validity requirement.
When the hedging meets the following conditions at the same time, the Company determinesthat the hedging relationship meets the requirements for hedging effectiveness: (1) There is aneconomic relationship between the hedged item and the hedging instrument; (2) Among thechanges in value caused by the economic relationship between hedged items and hedginginstruments, the impact of credit risk does not dominate; (3) The hedging ratio of the hedgingrelationship is equal to the ratio of the actual number of hedged items of the Company to the actualnumber of hedging instruments, but does not reflect the imbalance of the relative weight of thehedged items and hedging instruments.
The Company continuously evaluates whether the hedging relationship meets therequirements of hedging effectiveness on the hedging start date and later. The hedging relationshipno longer meets the hedging effectiveness requirements due to the hedging ratio, but if the riskmanagement objectives of the designated hedging relationship have not changed, the Company willrebalance the hedging relationship.
3. Accounting treatment of hedging
(a) Fair value hedge
1) Gains or losses from hedging instruments are included in profit or loss for the current period.If hedging instruments are hedged against non-tradable equity instruments (or their components)that are selected to be measured at fair value and whose changes are included in othercomprehensive income, the gains or losses generated by the hedging instruments are included inother comprehensive income.
2) Profit or loss for the current period of the hedged item due to risk exposure is calculated asprofit or loss for the current period, while adjusting the carrying amount of the confirmed hedgeditem not measured at fair value. Hedged items are debt instruments (or their components) that aremeasured at fair value and whose changes are included in other comprehensive income. The gainsor losses resulting from the hedged risk exposure are included in profit or loss for the current period,without adjustment its carrying amount; If the hedged item is a non-tradable equity instrumentinvestment (or its component) measured at fair value and its changes are included in othercomprehensive income, the gain or loss resulting from the hedged risk exposure is included in othercomprehensive income, not adjusting its carrying amount.
If the hedged item is an unrecognized commitment (or its component), the cumulative changein fair value due to the hedged risk after the hedge relationship is designated is recognized as anasset or liability, and the relevant gains or losses are included profit or loss for each relevant period.When fulfilling the definite commitment to obtain assets or assume liabilities, the initial recognitionamount of the asset or liability is adjusted to include the cumulative change in the fair value of theconfirmed hedged item.
If the hedged item is a financial instrument (or a component thereof) measured at amortizedcost, the adjustment made by the Company to the carrying amount of the hedged item will beamortized at the actual interest rate recalculated on the amortization date and included in profit orloss for the current period. If the hedged item is a debt instrument measured at fair value and itschanges are included in other comprehensive income (components thereof), the accumulatedrecognized hedging gains or losses are amortized in the same manner and included in profit or lossfor the current period, but does not adjust the carrying amount of the debt instrument (or itscomponents).
(b) Cash flow hedge
1) The part of the hedging instrument gains or losses that belongs to the effective hedging isincluded in other comprehensive income as a cash flow hedge reserve, and the invalid part isincluded in profit or loss for the current period. The amount of cash flow hedge reserve is recognisedaccording to the lower of the absolute value of the following two items: ①Accumulated gains orlosses of hedging instruments since hedging;②The cumulative change in the present value of theexpected future cash flow of the hedged item since hedging.
2) The hedged item is an expected transaction, and the expected transaction causes theCompany to subsequently recognize a non-financial asset or non-financial liability, or the expectedtransaction of non-financial assets and non-financial liabilities forms a certain commitmentapplicable to fair value hedge accounting, the Company transfers out the cash flow hedging reserveamount originally recognized in other comprehensive income and includes it in the initialrecognition amount of the asset or liability.
3) Other cash flow hedges, the amount of cash flow hedge reserves originally included in othercomprehensive income, are transferred out during the same period when the hedged expectedtransaction affects profit or loss, and are included in profit or loss for the current period.
(c) Net investment hedges for overseas operations
The portion of the gains or losses formed by hedging instruments that are effective hedges isincluded in other comprehensive income, and when disposing of overseas operations, they aretransferred out and included in profit or loss for the current period The part of the loss that belongsto the invalid hedge is included in profit or loss for the current period.
(4) Restricted shares
In the equity incentive plan, the Company grants restricted stock to the motivated employee.The motivated employee subscribes for the stock first. If the unlocking conditions specified in theequity incentive plan are not subsequently met, the Company repurchases the stock at the priceagreed in advance. If the restricted stock issued to employees has completed the capital increaseprocedures such as registration according to relevant regulations, on the grant date, the Companywill recognise the share capital and capital reserve (Share capital premium) based on thesubscription paid by the employees. Treasury shares and other payables are recognize for therepurchase obligations.
(5) Significant accounting judgments and estimates
In the process of applying the accounting policy of the Company, due to the inherentuncertainty of the operating activities, the Company needs to make judgments, estimates andassumptions on the carrying amount of the report items that cannot be accurately measured. Thesejudgments, estimates and assumptions are based on the Company's management's past historicalexperience and made on the basis of considering other relevant factors. These judgments, estimatesand assumptions will affect the reported amount of income, expenses, assets and liabilities and thedisclosure of contingent liabilities on the balance sheet date. However, the actual results caused bythe uncertainty of these estimates may be different from the current estimates of the Company'smanagement, which will cause significant adjustments to the carrying amount of assets or liabilitiesaffected in the future. The Company regularly reviews the aforementioned judgments, estimatesand assumptions on the basis of continuous operation. If the changes in accounting estimates onlyaffect the current period of change, the number of impacts will be recognised in the current periodof change. If the changes affect both the current period and the future period, the number ofimpacts will be confirmed in the current period and future period of change. As of the balance sheetdate, the Company needs to make judgments, estimates and assumptions on the financialstatement items as follows:
1. Classification of lease
When the company acts as a lessor, according to the provisions of the Accounting Standardsfor Business Enterprises No. 21 - Leases, leases are classified as operating leases and financial leases.When determining the classification, management needs to make analysis and judgment onwhether all risks and rewards related to the ownership of leased assets have been substantiallytransferred to the lessee.
2. Impairment of financial instruments
The Company uses the expected credit loss model to assess impairment of receivables and debtinvestments measured at amortized cost, receivables financing measured at fair value and changesincluded in other comprehensive income, and other debt investments. The use of the expectedcredit loss model involves significant management judgments and estimates. The key parametersof expected credit loss measurement include default probability, default loss rate and default riskexposure. The Company considers the quantitative analysis of historical statistical data and forward-looking information to establish default probability, default loss rate and default risk exposuremodel. The difference between the actual financial instrument impairment result and the originalestimate will affect the carrying amount of the financial instrument and the accrual or reversal ofcredit impairment losses during the period when the estimate is changed.
3. Provision for decline in value in inventories
According to Inventories accounting policy, the Company measures according to the lower ofcost and net realizable value. For inventories whose cost is higher than net realizable value andobsolete and unsalable, provision for decline in value of inventories is recognized. Impairment tonet realizable value is based on the assessment of the marketability of Inventories and its netrealizable value. Appraisal of Inventories impairment requires management to make judgments andestimates based on factors such as the purpose of holding Inventories and the impact of events afterthe balance sheet date. The difference between the actual result and the original estimate will affect
the carrying amount of Inventories and the accrual of Inventory Provision for decline in value orreturn during the period when the estimate is changed.
4. Impairment of non-financial non-current assets
On the balance sheet date, the Company judges whether there is any sign of possibleimpairment of Non-current assets other than financial assets. For intangible assets with uncertainservice life, in addition to the annual impairment test, when there are signs of impairment, animpairment test is also conducted. Non-current assets other than financial assets are tested forimpairment when there are signs that their book amount is not recoverable.When the carrying amount of an asset or asset group is higher than the recoverable amount,which is the higher of the fair value minus the disposal cost and the present value of the expectedfuture cash flow, it indicates that an impairment has occurred.The net value of fair value minus disposal expenses is determined by referring to the salesagreement price or observable market price of similar assets in fair transactions, minus theincremental costs that can be directly attributed to the disposal of the asset. When predicting thepresent value of future cash flows, it is necessary to make a significant judgment on the output,selling price, related operating costs of the asset (or asset group), and the discount rate used incalculating the present value. When estimating the recoverable amount, the Company will use allrelevant information that can be obtained, including the prediction of production, selling price andrelated operating costs based on reasonable and supportable assumptions.The Company assesses whether goodwill is impaired at least annually and requires an estimateof the use value of the asset group to which goodwill is allocated. When estimating the value in use,the Company needs to estimate the future cash flow from the asset group, and at the same timechoose an appropriate discount rate to calculate the present value of the future cash flow.
5. Depreciation and amortization
After considering the residual value of the investment properties measured at cost model, fixedassets and Intangible assets, the Company depreciates and amortizes it according to the straight-line method during the service life. The Company regularly reviews the service life to determine theamount of depreciation and amortization expenses to be included in each reporting period. Theservice life is determined by the Company based on the previous experience of similar assets andthe expected technical update. If the previous estimates change significantly, the depreciation andamortization expenses will be adjusted in the future.
6. Deferred tax assets
To the extent that there is likely to be enough taxable profits to offset losses, the Companyrecognizes deferred tax assets for all unutilized tax losses. This requires the Company's managementto use a lot of judgment to estimate the time and amount of future taxable profits, combined withtax planning strategies to determine the amount of deferred tax assets that should be recognised.
7. Income tax
In the normal business activities of the Company, there are certain uncertainties in the final taxtreatment and calculation of some transactions. Whether certain items can be paid before taxesrequires the approval of the tax authorities. If the final determination result of these tax matters isdifferent from the originally estimated amount, the difference will have an impact on the currentincome tax and deferred income tax during the final determination period.
8. Fair value measurement
Certain assets and liabilities of the Company are measured at fair value in the financialstatements. When estimating the fair value of an asset or liability, the Company uses the observablemarket data available; if the Level 1 input value is not available, a third-party qualified assessmentagency is employed for valuation. The Company's management works closely with it to determinethe appropriate valuation techniques and input values for related models. Relevant informationabout the valuation techniques and input values used in the process of determining the fair valueof various assets and liabilities are disclosed in this note.
40. Changes in significant accounting policies and accounting estimates
(1). Changes in significant accounting policies
√适用 □不适用
Unit: Yuan Currency: RMB
| The content and reason of accounting policy changes | Name of the report item that is significantly affected | Affected amount |
| The Ministry of Finance issued the "Accounting Standards for Business Enterprises Interpretation No. 16" (Cai Kuai [2022] No. 31, hereinafter referred to as "Interpretation No. 16") on November 30, 2022. The company will implement the provisions of "The accounting treatment of deferred income tax related to assets and liabilities arising from a single transaction that is not applicable to initial recognition exemption" from January 1, 2023. |
Unless otherwise specified, the data listed in this section are in RMB yuan.【Note1】The accounting treatment of deferred income tax related to assets and liabilities arisingfrom a single transaction that does not apply to the exemption from initial recognition is explainedin the 16th provision. For a single transaction that is not a business combination and does not affectaccounting profits or taxable income (or deductible losses) at the time of the transaction, and theinitial recognition of assets and liabilities results in equal taxable temporary differences anddeductible temporary differences, the provisions of Accounting Standards for Business EnterprisesNo. 18 - Income Tax regarding the exemption from initial recognition of deferred income taxliabilities and deferred income tax assets do not apply. The enterprise recognizes the correspondingdeferred income tax liabilities and deferred income tax assets separately at the time of thetransaction for the taxable temporary differences and deductible temporary differences arisingfrom the initial recognition of assets and liabilities in the transaction.The Company will implement the provisions of Interpretation No. 16, "Accounting Treatment forDeferred Income Tax Not Applicable to Initial Recognition Exemption for Assets and LiabilitiesArising from a Single Transaction," starting from January 1, 2023. The initial implementation of thisinterpretation will have no significant impact on the financial statements.
(2). Changes in significant accounting estimates
□适用 √不适用
(3). From 2023, the first implementation of new accounting standards orinterpretations of standards involving adjustments to the financialstatements at the beginning of the year of initial implementation
□适用 √不适用
41. Others
□适用 √不适用
VI. Taxation
1. Major taxes and their tax rates
Major taxes and their tax rates
√适用 □不适用
| Taxes | Tax basis | Tax rate % |
| Value-added tax | Value-added generated during the sale of goods or provision of taxable services | Calculated and paid according to tax rates of 3%, 5%, 6%, 9%, and 13%. The export goods implement the tax policy of "exemption, credit and refund", and the tax refund rate is 13%. |
| Consumption tax | taxable sales volume | Gasoline: 1.52 yuan/liter Diesel: 1.20 yuan / liter Aviation kerosene: 1.20 yuan / liter Naphtha: 1.52 yuan/liter Solvent oil：1.52 yuan/liter lubricating oil: 1.52 yuan/liter Fuel oil: 1.20 yuan / liter[note1] |
| Urban maintenance and construction tax | Turnover tax payable | 7%, 5%, etc. |
| Education surcharge | Turnover tax payable | 3% |
| Local education surcharges | Turnover tax payable | 2% |
| Enterprise income tax | Subject to taxable profit | [note2] |
[note1]From July 1, 2023, according to the provisions of the Announcement on the Implementationof the Consumption Tax Policy for Some Refined Oil Products (Announcement No. 11 of the Ministryof Finance and the State Administration of Taxation) issued by the Ministry of Finance and the StateAdministration of Taxation, (1) alkylate oil (isooctane) will be subject to consumption tax inaccordance with gasoline; (2) petroleum ether, crude white oil, light white oil, and some industrialwhite oil (No. 5, No. 7, No. 10, No. 15, No. 22, No. 32, No. 46) will be subject to consumption tax inaccordance with solvent oil; (3) mixed aromatic hydrocarbons, heavy aromatic hydrocarbons, mixedC8, stable light hydrocarbons, light oil, and light coal tar will be subject to consumption tax inaccordance with naphtha; (4) aerospace kerosene will be temporarily exempted from consumptiontax with reference to aviation kerosene.[note2] Description of the income tax rate for enterprises with different tax ratesIf there are different taxpayers of enterprise income tax rate, disclosure description
√适用 □不适用
| Entity | Income tax rate(%) |
| Jiangsu Hengli Chemical Fiber Co., Ltd. | 15% |
| Jiangsu Hengke Advanced Materials Co. Ltd. | 15% |
| Nantong Teng'an Logistics Co., Ltd | 20% |
| Jiangsu Xuanda Polymer Materials Co., Ltd | 15% |
| Jiangsu Deli Chemical Fiber Co., Ltd. | 15% |
| Suzhou Hengli Chemical New Material Co., Ltd. | 20% |
| Suzhou Binglin Trading Co., Ltd. | 20% |
| Kanghui New Material Technology Co., Ltd. | 15% |
| Suqian Kanghui New Material Co., Ltd. | 20% |
| Shenzhen Ganghui Trading Co., Ltd. | 20% |
| Hengli Logistics (Dalian) Co., Ltd. | 20% |
| Hengli Petrochemical (Hainan) Co., Ltd. | 15% |
| Hengli Energy (Hainan) Co., Ltd. | 15% |
| Suzhou Hengli Energy Chemical Import & Export Co., Ltd. | 20% |
| Hengli Aviation Oil Co., Ltd. | 20% |
| Hengli Logistics (Dalian) Co., Ltd. | 20% |
| Suzhou Textile Group Network E-commerce Co., Ltd | 20% |
| Hengli Chemical (Suqian) Co., Ltd. | 20% |
| Hengli Oil (Suqian) Co., Ltd. | 20% |
| Hengli Tongshang New Energy Co., Ltd. | 20% |
| Hengli Energy Import and Export Co., Ltd. | 20% |
| Hengli New Energy (Shanghai) Co., Ltd. | 20% |
| Hengli Yuanshang Technology (Suzhou) Co., Ltd. | 20% |
| Suzhou Hengli Jinshang Energy Technology Co., Ltd. | 20% |
| Hengli Petrochemical Sales (Haikou) Co., Ltd. | 20% |
| Hengli Energy Chemical (Sanya) Co., Ltd. | 15% |
| Dalian Henglixing Gemstone Chemical Trading Co., Ltd. | 20% |
| Dalian Hengli Gaoyuan Sales Co., Ltd. | 20% |
| Nantong Hengli Maoyuan Petrochemical Trading Co., Ltd. | 20% |
| Hengli Petrochemical Sales (Shenzhen) Co., Ltd. | 20% |
| Hengli Fuel Oil (Hainan) Co., Ltd | 20% |
| Shanghai Hengli Fuel Oil Co., Ltd | 20% |
| Huizhou Hengli Chemical Sales Co., Ltd | 20% |
| Hengli (Zhoushan) Energy and Chemical Co., Ltd | 20% |
| Dalian Hengli New Energy Sales Co., Ltd | 20% |
| HENGLI PETROCHEMICAL CO., LIMITED | 16.50% |
| HENGLI PETROCHEMICAL INTERNATIONAL PTE. LTD. | 5% |
| HENGLI OILCHEM PTE. LTD. | 17% |
| HENGLI SHIPPING INTERNATIONAL PTE. LTD. | 0% |
| Others taxpayers other than the above | 25% |
2. Tax incentive
√适用 □不适用
1．Consumption tax incentiveAccording to “Notice on Continuing the Implementation of Part of the Consumption Tax Policyfor Naphtha Fuel Oil” (Cai Shui [2011] No. 87) issued by the Ministry of Finance, the People's Bankof China and the State Administration of Taxation, "Notice on Improving the Consumption TaxRebate Policy for the Production of Vinyl Aromatic Chemical Products from Naphtha Fuel Oil" (CaiShui [2013] No. 2) issued by Ministry of Finance, People's Bank of China, General Administration ofCustoms and State Administration of Taxation, "Interim Measures for Consumption Tax Refund(Exemption) for Naphtha and Fuel Oil Used in the Production of Ethylene and Aromatic ChemicalProducts" (Announcement of the State Administration of Taxation [2012] No. 36) issued by the StateAdministration of Taxation, and "Announcement on Consumption Tax Refund of Naphtha Fuel OilProduction of Vinyl Aromatic Chemical Products" (Announcement No. 29 [2013] of the StateAdministration of Taxation and the General Administration of Customs) issued by StateAdministration of Taxation and General Administration of Customs, production enterprises thatimplement the fixed-point direct supply plan, sell naphtha and fuel oil within the planned quantitylimit, and issue a special invoice for the value-added tax of the Chinese character anti-counterfeitingversion with the "DDZG" logo, are exempt from consumption tax. Hengli Petrochemical (Dalian)Refining Co., Ltd. is eligible for tax rebate and enjoys the preferential policy of consumption taxrebate paid for the procurement process. At the same time, the implementation of the fixed-pointdirect supply plan meets the above conditions and enjoys the preferential policy of exemptingconsumption tax from the sales process.
According to the "Notice on Continuing to Increase Consumption Tax of Refined Oils" (Cai Shui[2015] No. 11) issued by the Ministry of Finance and the State Administration of Taxation,consumption tax for diesel, aviation kerosene and fuel oil has been increased from RMB 1.1 per liter
to RMB 1.2 per liter, and aviation kerosene continued to suspend the collection of consumption tax.Hengli Petrochemical (Dalian) Refining Co., Ltd. enjoys the preferential policy of suspending thecollection of consumption tax for the sale of aviation kerosene.
2. Enterprise income tax incentive to high-tech enterprises
Jiangsu Hengli Chemical Fiber Co., Ltd. obtained the "High-tech Enterprise Certificate" (No.:
GR202132007328) issued by Jiangsu Provincial Department of Science and Technology, JiangsuProvincial Department of Finance, and Jiangsu Provincial Taxation Bureau of the StateAdministration of Taxation on 30 November 2021. The validity period is three years, and theenterprise income tax rate for the current year is calculated at a reduced rate of 15%.Jiangsu Hengke Advanced Materials Co. Ltd. obtained the "High-tech Enterprise Certificate"(No.: GR202232005286) issued by the Jiangsu Provincial Department of Science and Technology,the Jiangsu Provincial Department of Finance, and the Jiangsu Provincial Taxation Bureau of theState Administration of Taxation on 22 November 2022. The validity period is three years, and theenterprise income tax rate for the current year is calculated at a reduced rate of 15%.
Jiangsu Deli Chemical Fiber Co., Ltd. obtained the "High-tech Enterprise Certificate" (No.:
GR202032006951) issued by the Jiangsu Provincial Department of Science and Technology, theJiangsu Provincial Department of Finance, and the Jiangsu Provincial Taxation Bureau of the StateAdministration of Taxation on 2 December 2020. The validity period is three years, and theenterprise income tax rate for the current year is calculated at a reduced rate of 15%.Jiangsu Xuanda Polymer Materials Co., Ltd. obtained the High-tech Enterprise Certificate (No.GR202332019613) issued by the Jiangsu Provincial Department of Science and Technology, theJiangsu Provincial Department of Finance, and the Jiangsu Provincial Taxation Bureau of the StateAdministration of Taxation on December 13, 2023。 The validity period is three years, and theenterprise income tax rate for the current year is calculated at a reduced rate of 15%.Kanghui New Material Technology Co., Ltd. obtained the "High-tech Enterprise Certificate" (No.:
GR202121000541) issued by the Liaoning Provincial Department of Science and Technology, theLiaoning Provincial Department of Finance, and the Liaoning Provincial Taxation Bureau of the StateAdministration of Taxation on 24 September 2021. The validity period is three years, and theenterprise income tax rate for the current year is calculated at a reduced rate of 15%.3．Enterprise income tax incentive to small and low-profit enterprisesSuzhou Hengli Chemical Fiber New Material Co., Ltd. and other 26 companies meet theidentification standards of small low-profit enterprises. The portion of taxable income not exceeding3 million yuan is reduced by 25% and included in the taxable income, and the enterprise income taxis paid at a rate of 20%.
4．Other enterprise income tax incentiveHENGLI PETROCHEMICAL INTERNATIONAL PTE. LTD. is registered in Singapore, and the incometax rate is 17%. It was approved to enter the Singapore Global Trader Project on 1 September 2018,and enjoys a 5% income tax rate this year.
HENGLI OILCHEM PTE. LTD. is registered in Singapore, and the income tax rate is 17%. It wasapproved to enter the Singapore Global Trader Project on 1 May 2020, and enjoys a 10% income taxrate this year.
HENGLI SHIPPING INTERNATIONAL PTE. LTD. is registered in Singapore, and the income tax rateis 17%. It received a tax incentive called Maritime Sector Incentive (MSI) on 22 January 2020, andenjoys a 0% income tax rate for this year.
Hengli Petrochemical (Hainan) Co., Ltd., Hengli Energy (Hainan) Co., Ltd. and Hengli EnergyChemical (Sanya) Co., Ltd. are encouraged industrial enterprises registered and operating in HainanFree Trade Port. According to the "Notice of the Ministry of Finance and the State Administration ofTaxation on the Preferential Policies for Enterprise Income Tax in Hainan Free Trade Port" (Cai Shui[2020] No. 31), the enterprise income tax is levied at a reduced tax rate of 15% this year.
3. Others
□适用 √不适用
VII. Notes to the items of consolidated financial statements
1. Cash and bank balances
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance |
| Cash on hand | 609,377.49 | 1,305,525.78 |
| Cash at bank | 13,557,873,658.60 | 19,815,265,793.15 |
| Other monetary funds | 6,910,556,113.05 | 8,256,950,806.64 |
| Interest receivables not yet due | 2,883,754.27 | |
| Deposit in financial company | ||
| Total | 20,469,039,149.14 | 28,076,405,879.84 |
| Including: Total amount of money deposited abroad | 1,690,168,335.12 | 6,512,853,828.05 |
Other note:
For details of funds with limited ownership or use rights such as mortgage, pledge, seizure,freezing, and attachment, see the note " Ownership or using rights of assets subject to restriction "in this section.
For details of cash and bank balances in foreign currency, please refer to the description of “Items inforeign currencies” in this note.
2.Financial assets held for trading
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance | Specify the reason and basis |
| Financial assets measured at fair value and the changes of which are included in the current profit and loss | 298,830,073.13 | 604,414,444.44 | / |
| Including： | |||
| Derivative financial assets | 48,652,243.29 | 490,430,590.59 | / |
| Investment in debt instruments | 131,265,471.64 | 2,000,000.00 | / |
| Bank wealth management and structured deposits | 37,890,000.00 | 65,000,000.00 | / |
| Fund trust and asset management products | 81,022,358.20 | 46,983,853.85 | / |
| Financial assets designated to be measured at fair value with changes recognized in current profit and loss | |||
| Including： | |||
| Total | 298,830,073.13 | 604,414,444.44 | / |
3. Derivative financial assets
□适用 √不适用
4. Notes receivable
(1). Notes receivable by category
□适用 √不适用
(2). Notes receivable pledged by the company at the end of the period
□适用 √不适用
(3). At the end of the period, the company has endorsed or discounted notes receivableon the Balance sheet date Not yet expiry
□适用 √不适用
(4). Disclosure by method of provision for bad debts
□适用 √不适用
Provision for bad debts on individual basis:
□适用 √不适用
Provision for bad debts on portfolio basis:
□适用 √不适用
According to the expected credit loss general model to accrual provision for bad debts:
□适用 √不适用
Basis for dividing each stage and proportion of bad debt provision：
□适用 √不适用
Explanation of the significant change in the book balance of notes receivable due to changes inprovisions for losses incurred during the current period:
□适用 √不适用
(5). Provision for bad debts
□适用 √不适用
The amount of bad debt provision recovered or reversed in the current period is important:
□适用 √不适用
Other note
□适用 √不适用
(6). Notes receivable actually written off in this period
□适用 √不适用
The important write-off of notes receivable:
□适用 √不适用
Notes for write-off of notes receivable:
□适用 √不适用
Other note
□适用 √不适用
5. Accounts receivable
(1). Disclosure by ageing
√适用 □不适用
Unit: Yuan Currency: RMB
| Ageing | Closing balance | Beginning balance |
| Within one year | ||
| Including: Within one year | ||
| Within one year | 555,164,763.19 | 385,851,852.51 |
| Subtotal of within one year | 555,164,763.19 | 385,851,852.51 |
| 1 to 2 years | 178.36 | 2,206,917.74 |
| 2 to 3 years | 59.26 | 178.30 |
| Over 3 years | ||
| 3 to 4 years | 168.29 | 43.09 |
| 4 to 5 years | 31.24 | 1,398,627.09 |
| Over 5 years | 3,333,868.92 | 1,935,251.49 |
| Total | 558,499,069.26 | 391,392,870.22 |
(2). Disclosure by method of provision for bad debts
√适用 □不适用
Unit: Yuan Currency: RMB
| Category | Closing balance | Beginning balance | ||||||||
| Book balance | Provision for bad debts | Carrying amount | Book balance | Provision for bad debts | Carrying amount | |||||
| Amount | Ratio (%) | Amount | Provision ratio (%) | Amount | Ratio (%) | Amount | Provision ratio (%) | |||
| Provision for bad debts on individual basis | ||||||||||
| Including: | ||||||||||
| Provision for bad debts on portfolio basis | 558,499,069.26 | 100.00 | 20,083,809.93 | 3.60 | 538,415,259.33 | 391,392,870.22 | 100.00 | 18,946,943.53 | 4.84 | 372,445,926.69 |
| Including: | ||||||||||
| Total | 558,499,069.26 | / | 20,083,809.93 | / | 538,415,259.33 | 391,392,870.22 | / | 18,946,943.53 | / | 372,445,926.69 |
Provision for bad debts on individual basis:
□适用 √不适用
Provision for bad debts on portfolio basis:
√适用 □不适用
Provision for bad debts on portfolio basis: Ageing analysis portfolio, High credit rating portfolio
Unit: Yuan Currency: RMB
| Name | Closing balance | ||
| Accounts receivable | Provision for bad debts | Provision ratio (%) | |
| Ageing analysis portfolio | 338,328,746.30 | 20,083,809.93 | 5.94 |
| High credit rating portfolio | 220,170,322.96 | - | - |
| Total | 558,499,069.26 | 20,083,809.93 | 3.60 |
Confirmation criteria and notes for bad debt provision by portfolio:
√适用 □不适用
Provision for bad debts by ageing portfolio is as below:
| Ageing | Book balance | Provision for bad debts | Provision ratio (%) |
| Within one year(including one year) | 334,994,440.23 | 16,749,722.03 | 5.00 |
| 1-2 years | 178.36 | 35.66 | 20.00 |
| 2-3 years | 59.26 | 23.70 | 40.00 |
| 3-4 years | 168.29 | 134.63 | 80.00 |
| 4-5 years | 31.24 | 24.99 | 80.00 |
| Over 5 years | 3,333,868.92 | 3,333,868.92 | 100.00 |
| Subtotal | 338,328,746.30 | 20,083,809.93 | 5.94 |
According to the expected credit loss general model to accrual provision for bad debts:
□适用 √不适用
(3). Provision for bad debts
√适用 □不适用
Unit: Yuan Currency: RMB
| Category | Beginning balance | Movement in the year | Closing balance | |||
| Accrual | Recovery or reversal | Transfer or written-off | Other movement | |||
| Provision for bad debts on individual basis | - | - | - | - | - | - |
| Provision for bad debts on portfolio basis | 18,946,943.53 | 1,136,866.40 | 20,083,809.93 | |||
| Total | 18,946,943.53 | 1,136,866.40 | 20,083,809.93 | |||
Including significant amount of recovery or reversal of provision for bad debts:
□适用 √不适用
Other note
□适用 √不适用
(4). Accounts receivable written-off during the year
□适用 √不适用
The important write-off of accounts receivable:
□适用 √不适用
Notes for write-off of accounts receivable:
□适用 √不适用
(5). Accounts receivable due from the top five debtors
√适用 □不适用
The Company’s top five year-end balances for accounts receivable in total ofRMB409,614,545.47, accounting for 73.34% of the total account balance of year-end balances ofaccounts receivable, and the corresponding year-end balance of provision for bad debts isRMB10,370,302.09.
Other note
√适用 □不适用
For details of accounts receivable in foreign currency at year end, please refer to the “Itemsin foreign currencies” in this note.
6. Contract assets
(1). Information of contract assets
□适用 √不适用
(2). The amount and reasons for major changes in the carrying amount during the reportingperiod
□适用 √不适用
(3). Disclosure by method of provision for bad debts
□适用 √不适用
Provision for bad debts on individual basis:
□适用 √不适用
Provision for bad debts on portfolio basis:
□适用 √不适用
According to the expected credit loss general model to accrual provision for bad debts:
□适用 √不适用
Basis for dividing each stage and proportion of bad debt provision：
□适用 √不适用
Explanation of the significant change in the book balance of notes receivable due to changes inprovisions for losses incurred during the current period:
□适用 √不适用
(4) Provision for impairment of contract assets in the period
□适用 √不适用
The important write-off of contract assets:
□适用 √不适用
Notes for write-off of contract assets:
□适用 √不适用
Other note:
□适用 √不适用
7. Receivables financing
(1) Classification of receivables financing
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance |
| Bank acceptance bills | 3, 574, 549, 065.24 | 2, 168, 347, 608.90 |
| Letter of credit | 595, 498, 497.19 | 118, 923, 620.36 |
| Letter of guarantee |
| Total | 4, 170, 047, 562.43 | 2, 287, 271, 229.26 |
(2) Pledged receivables financing at year end
Unit: Yuan Currency: RMB
| Item | Amount pledged at year end |
| Bank acceptance bills | 2, 873, 535, 149.86 |
| Subtotal | 2, 873, 535, 149.86 |
(3) Receivables financing that the Company has endorsed or discounted at the end of the periodand has not yet expired on the balance sheet date
Unit: Yuan Currency: RMB
| Item | Amount derecognized at year end | Amount not derecognized at year end |
| Bank acceptance bills | 4, 951, 960, 275.83 | - |
| Letter of credit | 81, 350, 000.00 | - |
| Subtotal | 5, 033, 310, 275.83 | - |
(4) Disclosure by classification of provision for bad debts
Unit: Yuan Currency: RMB
| Category | Closing balance | Beginning balance | ||||||||
| Book balance | Provision for bad debts | Carrying amount | Book balance | Provision for bad debts | Carrying amount | |||||
| Amount | Ratio (%) | Amount | Provision ratio (%) | Amount | Ratio (%) | Amount | Provision ratio (%) | |||
| Provision for bad debts on individual basis | ||||||||||
| Including: | ||||||||||
| Provision for bad debts on portfolio basis | 4,170,047,562.43 | 100.00 | - | - | 4,170,047,562.43 | 2, 287, 271, 229.26 | 100.00 | - | - | 2, 287, 271, 229.26 |
| Including: | ||||||||||
| Low risk group | 4, 170, 047, 562.43 | - | - | 4, 170, 047, 562.43 | 2, 287, 271, 229.26 | 2, 287, 271, 229.26 | ||||
| Total | 4, 170, 047, 562.43 | / | / | 4, 170, 047, 562.43 | 2, 287, 271, 229.26 | / | / | 2, 287, 271, 229.26 |
Provision for bad debts on individual basis:
□适用 √不适用
Notes for bad debts on individual basis:
□适用 √不适用
Provision for bad debts on portfolio basis:
√适用 □不适用
Changes and fair value changes of receivables financing:
√适用 □不适用Provision for bad debts on portfolio basis: low risk group
Unit: Yuan Currency: RMB
| Portfolio | Closing balance | ||
| Receivable financing | Provision for bad debts | Provision ratio (%) | |
| Low risk group | 4, 170, 047, 562.43 | - | - |
| Total | 4, 170,047, 562.43 | ||
According to the expected credit loss general model to accrual provision for bad debts:
□适用 √不适用
Basis for dividing each stage and proportion of bad debt provision：
□适用 √不适用
Explanation of the significant change in the book balance of receivables financing due to changesin provisions for losses incurred during the current period:
□适用 √不适用
(5) Provision for bad debts
□适用 √不适用
The significant amount of provision for bad debt recovered or reversed in the current period:
□适用 √不适用
Other note:
√适用 □不适用
(6). Receivable financing written-off during the year
□适用 √不适用
The important write-off of receivables financing:
□适用 √不适用
Notes for write-off of receivables financing:
□适用 √不适用
(7) Changes in the increase or decrease of receivables financing and fair value during the year:
| Item | Beginning balance | Change in cost in current period | Changes in Fair value for the year | Closing balance |
| Bank acceptance bills | 2, 168, 347, 608.90 | 1, 406, 201, 456.34 | - | 3, 574, 549, 065.24 |
| Letter of credit | 118, 923, 620.36 | 476, 574, 876.83 | - | 595, 498, 497.19 |
| Total | 2, 287, 271, 229.26 | 1, 882, 776, 333.17 | - | 4, 170, 047,562.43 |
Continued
| Item | Cost in beginning of year | Cost at year end | Cumulative fair value change | Accumulated loss allowance recognized in other comprehensive income |
| Bank acceptance bills | 2, 168, 347, 608.90 | 3, 574, 549, 065.24 | - | - |
| Letter of credit | 118, 923, 620.36 | 595, 498, 497.19 | - | - |
| Total | 2, 287, 271, 229.26 | 4, 170, 047, 562.43 | - | - |
Other note:
√适用 □不适用
For details of receivables financing in foreign currency at year end, please refer to the “Items inforeign currencies” in this note.
8. Prepayments
(1). Prepayments by ageing
√适用 □不适用
Unit: Yuan Currency: RMB
| Ageing | Closing balance | Beginning balance | ||
| Amount | Ratio (%) | Amount | Ratio (%) | |
| Within one year | 1, 732, 994, 594.34 | 99.85 | 1, 995, 497, 560.96 | 99.90 |
| 1 to 2 years | 1, 454, 511.64 | 0.08 | 914, 039.58 | 0.05 |
| 2 to 3 years | 139, 039.58 | 0.01 | 60, 900.00 | 0.00 |
| Over 3 years | 970, 390.00 | 0.06 | 996, 320.00 | 0.05 |
| Total | 1, 735, 558, 535.56 | 100.00 | 1, 997, 468, 820.54 | 100.00 |
Note to significant prepayment was ageing over 1 year but not settled:
At the end of the period, there was no significant prepayments with aging over 1 year.
(2). Prepayments due from the top five debtors
√适用 □不适用
The top five of the Company's prepayments balance at year end is in total of RMB1, 186, 879,
318.84, which accounted for 68.39% of the prepayments balance.
Other note:
√适用 □不适用
No obvious signs of impairment were found in the prepayments at the end of the period, so noprovision for bad debts was made.
9. Other receivables
Presented by item
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance |
| Interest receivable | ||
| Dividends receivable | ||
| Other receivables | 809, 207, 973.41 | 701, 520, 929.51 |
| Total | 809, 207, 973.41 | 701, 520, 929.51 |
Other note:
□适用 √不适用
Interest receivable
(1). Interest receivable by category
□适用 √不适用
(2). Significant overdue interest
□适用 √不适用
(3). Information of provision for bad debts
□适用 √不适用
Provision for bad debts on individual basis:
□适用 √不适用
Notes for provision for bad debts on individual basis:
□适用 √不适用
Provision for bad debts on portfolio basis:
□适用 √不适用
(4). Provision for bad debts based on the general model of expected credit losses
□适用 √不适用
Basis for dividing each stage and proportion of provision for bad debt:
NoneExplanation of the significant change in the book balance of interest receivable due to changes inprovisions for losses incurred during the current period:
□适用 √不适用
(5)Provision for bad debts Provision for bad debts
□适用 √不适用
The significant amount of provision for bad debt recovered or reversed in the current period:
□适用 √不适用
Other note:
□适用 √不适用
(6)Interest receivable written-off during the year
□适用 √不适用
The important write-off of Interest receivable:
□适用 √不适用
Notes for write-off of Interest receivable:
□适用 √不适用
Dividends receivable
(1). Dividends receivable
□适用 √不适用
(2). Dividends receivable for ageing over 1 year
□适用 √不适用
(3). Information of provision for bad debts
□适用 √不适用
Provision for bad debts on individual basis:
□适用 √不适用
Notes for provision for bad debts on individual basis:
□适用 √不适用
Provision for bad debts on portfolio basis:
□适用 √不适用
(4). Provision for bad debts based on the general model of expected credit losses
□适用 √不适用
Basis for dividing each stage and proportion of provision for bad debt:
NoneExplanation of the significant change in the book balance of interest receivable due to changes inprovisions for losses incurred during the current period:
□适用 √不适用
(5)Provision for bad debts Provision for bad debts
□适用 √不适用
The significant amount of provision for bad debt recovered or reversed in the current period:
□适用 √不适用
Other note:
□适用 √不适用
(6)Dividends receivable written-off during the year
□适用 √不适用
The important write-off of dividends receivable:
□适用 √不适用
Notes for write-off of dividends receivable:
□适用 √不适用
Other note:
□适用 √不适用
Other receivables
(1). Disclosure by ageing
√适用 □不适用
Unit: Yuan Currency: RMB
| Ageing | Book balance at year end | Book balance in beginning of year |
| Within one year | ||
| Including: Within one year | ||
| Within a year | 401, 459, 574.96 | 165, 840, 417.30 |
| Subtotal of within one year | 401, 459, 574.96 | 165, 840, 417.30 |
| 1 to 2 years | 4, 799, 022.80 | 5, 246, 567.23 |
| 2 to 3 years | 3, 284, 016.04 | 549, 209, 336.49 |
| Over 3 years | ||
| 3 to 4 years | 525, 933, 831.04 | 162, 125.09 |
| 4 to 5 years | - | 61, 949.45 |
| Over 5 years | 617, 660.15 | 969, 186.65 |
| Total | 936, 094, 104.99 | 721, 489, 582.21 |
(2). Disclosure by nature
√适用 □不适用
Unit: Yuan Currency: RMB
| Nature | Book balance at year end | Book balance in beginning of year |
| Deposits and security deposits | 273, 009, 259.42 | 173, 905, 111.33 |
| Petty cash | 389, 094.11 | 214, 479.92 |
| Tax refund receivable | 555, 809, 007.74 | 525, 512, 156.24 |
| Others | 106, 886, 743.72 | 21, 857, 834.72 |
| Total | 936, 094, 104.99 | 721, 489, 582.21 |
(3). Information of provision for bad debts
√适用 □不适用
Unit: Yuan Currency: RMB
| Provision for bad debts | First stage | Second stage | Third stage | Total |
| Expected credit loss within next 12 months | Expected credit loss for lifetime (no credit impairment occurred) | Expected credit loss for lifetime (credit impairment has occurred) | ||
| Balance of 1 January 2023 | 19, 968, 652.70 | 19, 968, 652.70 | ||
| Balance of 1 January 2023 movement in the year | ||||
| --transfer to second stage | ||||
| --transfer to third stage | ||||
| --Reverse to second stage | ||||
| --Reverse to first stage | ||||
| Provision for the year | 106, 917, 478.88 | - | 106, 917, 478.88 | |
| Reversal in the year |
| Transfer in the year | ||||
| Write-off in the year | ||||
| Other movement | ||||
| Balance of 31 December 2023 | 126, 886, 131.58 | - | 126, 886, 131.58 |
Basis for dividing each stage and proportion of bad debt provision:
The basis for dividing each stage is detailed in the note "Impairment of Financial Instruments".
Note on the significant changes in other receivables book balance that have changed the loss provisionin the current period:
□适用 √不适用
Basis for accruing bad debt provision for the current period and assessing whether the credit risk offinancial instruments has increased significantly:
√适用 □不适用
The basis, input values, assumptions and other information used to determine the provision for baddebts amount and the assessment of whether the credit risk of financial instruments have increasedsignificantly since initial confirmation are detailed in the note “Credit Risk”.
(4). Provision for bad debts
√适用 □不适用
Unit: Yuan Currency: RMB
| Category | Beginning balance | Movement in the year | Closing balance | |||
| Accrual | Recovery or reversal | Transfer or written-off | Other movement | |||
| Provision for bad debts on individual basis | 105, 102, 431.25 | 105, 102, 431.25 | ||||
| Provision for bad debts on portfolio basis | 19, 968, 652.70 | 1, 815, 047.63 | 21, 783, 700.33 | |||
| Total | 19, 968, 652.70 | 106, 917, 478.88 | 126, 886, 131.58 | |||
Including significant amount of recovery or reversal of provision for bad debts:
□适用 √不适用
Other note
□适用 √不适用
(5). Other receivables written-off during the year
□适用 √不适用
The important write-off of other receivables:
□适用 √不适用
Notes for write-off of other receivables:
□适用 √不适用
(6). Other receivables due from the top five debtors
√适用 □不适用
The Company’s top five year-end balances for other receivables in total of RMB883, 444,
127.13, accounting for 94.38% of the total account balance of year-end balances of otherreceivables, and the corresponding year-end balance of provision for bad debts is RMB121, 560,
806.28.
(7). Other receivables reported due to centralized management of funds
□适用 √不适用
Other note
√适用 □不适用
For details of other receivables in foreign currency at year end, please refer to the “Items inforeign currencies” in this note.
10. Inventories
(1). Inventories by category
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance | ||||
| Book balance | Provision for decline in value of inventories/ Provision for impairment of contract performance cost | Carrying amount | Book balance | Provision for decline in value of inventories/ Provision for impairment of contract performance cost | Carrying amount | |
| Raw materials | 20, 470, 206, 061.43 | 293, 925, 021.84 | 20, 176, 281, 039.59 | 26, 646, 539, 686.49 | 2, 049, 373, 134.60 | 24, 597, 166, 551.89 |
| Work-in-progress | ||||||
| Finished goods | 9, 396, 210, 938.49 | 161, 038, 212.47 | 9, 235, 172, 726.02 | 8, 998, 161, 737.10 | 580, 505, 207.54 | 8, 417, 656, 529.56 |
| Reusable materials | 24, 541, 576.36 | - | 24, 541, 576.36 | 29, 606, 740.62 | - | 29, 606, 740.62 |
| Consumptive biological assets | ||||||
| Contract performance cost | ||||||
| Semi-finished goods | 1, 802, 418, 715.55 | 138, 728, 785.93 | 1, 663, 689, 929.62 | 4, 966, 032, 363.76 | 498, 854, 488.20 | 4, 467, 177, 875.56 |
| Subcontracting processing materials | 167, 869, 374.32 | - | 167, 869, 374.32 | 323, 903, 773.78 | 323, 903, 773.78 | |
| Total | 31, 861, 246, 666.15 | 593, 692, 020.24 | 31, 267, 554, 645.91 | 40, 964, 244, 301.75 | 3, 128, 732, 830.34 | 37, 835, 511, 471.41 |
[Note] At the end of the period, the carrying amount of inventories subject to restriction is nil.
(2). Provision for decline in value of inventories and provision for impairment of contract
performance cost
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Beginning balance | Increase | Decrease | Closing balance | ||
| 2, 049, 373, 134.60 | 293, 925, 021.84 | - | 2, 049, 373, 134.60 | - | 293, 925, 021.84 | |
| Raw materials | ||||||
| Work-in-progress | 580, 505, 207.54 | 161, 038, 212.47 | - | 580, 505, 207.54 | - | 161, 038, 212.47 |
| Finished goods | - | |||||
| Reusable materials | ||||||
| Consumptive biological assets | ||||||
| Contract performance cost | ||||||
| Semi-finished goods | 498, 854, 488.20 | 138, 728, 785.93 | 498, 854, 488.20 | 138, 728, 785.93 | ||
| Issued goods | - | |||||
| Total | 3, 128, 732, 830.34 | 593, 692, 020.24 | 3, 128, 732, 830.34 | 593, 692, 020.24 | ||
Reasons for reversal of provision for decline in value of inventories in the current period
√适用 □不适用
| Category | Specific basis for determining net realizable value | Reasons for reversal of provision for decline in value of inventories and impairment of contract performance cost |
| Raw materials | The estimated selling price of the product produced minus the estimated cost to completion, estimated selling expenses and related custom duty | The products produced have been sold in the current period |
| Finished goods | Estimated selling price minus estimated selling expenses and related custom duty | Sold in current period |
| Semi-finished goods | The estimated selling price of the product produced minus the estimated cost to completion, estimated selling expenses and related custom duty | The products produced have been sold in the current period |
(3). Capitalization of borrowing costs amount in closing balance of inventories
□适用 √不适用
(4). Contract performance cost amortization amount
□适用 √不适用
11. Assets held-for-sale
□适用 √不适用
12. Non-current assets due within one year
□适用 √不适用
Debt investment due within one year
□适用 √不适用
Other debt investment due within one year
□适用 √不适用
Notes for non-current assets due within one year:
None
13. Other current assets
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance |
| Costs of obtaining a contract | ||
| Receivables of returned goods | ||
| VAT carry forward | 3, 646, 315, 465.30 | 1, 751, 009, 054.30 |
| VAT input tax pending for verification | 83, 407, 970.83 | 114, 550, 349.25 |
| Prepaid enterprise income tax | 1, 128, 660, 218.80 | 1, 784, 931, 735.30 |
| Receivable settlement guarantee | 10, 049, 604.49 | 10, 049, 607.23 |
| Receivable of monetary security deposits | 1, 773, 531, 217.52 | 702, 583, 473.71 |
| Receivable of pledged security deposits | 27, 533, 400.00 | 88, 252, 384.00 |
| Treasury bond reverse repurchase | 125, 000, 000.00 | 17, 349, 000.00 |
| Others | 999.61 | |
| Total | 6, 794, 497, 876.94 | 4, 468, 726, 603.40 |
Other noteNone
14. Debts investment
(1). Information of debts investment
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance |
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Corporate bonds | 20, 427, 397.26 | 20, 427, 397.26 | ||||
| Total | 20, 427, 397.26 | - | 20, 427, 397.26 |
Changes in the provision for impairment of debt investment in the current period:
□适用 √不适用
(2). Important debts investment at the end of the period
□适用 √不适用
(3). Information of provision for impairment
□适用 √不适用
Basis for dividing each stage and proportion of bad debt provision:
None
Note on the significant changes in debt investment book balance that have changed the loss provision inthe current period:
□适用 √不适用
Basis for accruing bad debt provision for the current period and assessing whether the credit risk offinancial instruments has increased significantly:
□适用 √不适用
Other note
□适用 √不适用
(4) Debt investment written-off during the year
□适用 √不适用
The important write-off of debt investment:
□适用 √不适用
Notes for write-off of debt investment:
□适用 √不适用
Other note
□适用 √不适用
15. Other debt investments
(1). Information of other debt investments
□适用 √不适用
(2). Important other debt investments at the end of the period
□适用 √不适用
(3). Information of provision for impairment
□适用 √不适用
Note on the significant changes in other investment book balance that have changed the loss provisionin the current period:
□适用 √不适用
Basis for accruing bad debt provision for the current period and assessing whether the credit risk offinancial instruments has increased significantly
□适用 √不适用
(4) Other debt investment written-off during the year
□适用 √不适用
The important write-off of other investment:
□适用 √不适用
Notes for write-off of other debt investment:
□适用 √不适用
Other note
□适用 √不适用
16. Long-term receivables
(1). Information of long-term receivables
□适用 √不适用
(2). Information of provision for bad debts
□适用 √不适用
Provision for bad debts on individual basis:
□适用 √不适用
Notes for provision for bad debts on individual basis:
□适用 √不适用
Provision for bad debts on portfolio basis:
□适用 √不适用
(3). Information of provision for impairment
□适用 √不适用
Basis for dividing each stage and proportion of bad debt provision:
NoneNote on the significant changes in debt investment book balance that have changed the loss provision inthe current period:
□适用 √不适用
Basis for accruing bad debt provision for the current period and assessing whether the credit risk offinancial instruments has increased significantly:
□适用 √不适用
Other note
□适用 √不适用
(4) Long-term receivables written-off during the year
□适用 √不适用
The important write-off of Long-term receivables:
□适用 √不适用
Notes for write-off of Long-term receivables:
□适用 √不适用
Other note
□适用 √不适用
Other note
□适用 √不适用
17. Long-term equity investment
(1) Long-term equity investment
√适用 □不适用
Unit: Yuan Currency: RMB
| Investee | Beginning balance | Movement in the year | Closing balance | Closing balance of provision for impairment | |||||||
| Additional investment | Decrease in investment | Investment income/loss recognized under the equity method | Adjustment of other comprehensive income | Changes of other equity | Announced distribution of cash dividend or profit | Provision for impairment | Others | ||||
| I. Joint ventures | |||||||||||
| Subtotal | |||||||||||
| II. Associates | |||||||||||
| Wuxi Xishang Bank Co., Ltd. | 559, 215, 493.16 | 77, 638, 436.12 | 636, 853, 929.28 | ||||||||
| Chenju(Suzhou) Science and Technology Innovation Development Co., Ltd | 10, 000, 000.00 | -853, 575.43 | 9, 146, 424.57 | ||||||||
| Subtotal | 559, 215, 493.16 | 10, 000, 000.00 | 76, 784, 860.69 | 646, 000, 353.85 | |||||||
| Total | 559, 215, 493.16 | 10, 000, 000.00 | 76, 784, 860.69 | 646, 000, 353.85 |
(2) Impairment test of long-term equity investment
√适用 □不适用
Other note
At the end of the period, there was no obvious sign of impairment of long-term equityinvestment, so no Provision for impairment.The recoverable amount is determined by the net amount of fair value less disposal expenses
□适用 √不适
The recoverable amount is determined by the present value of the expected future cash flows
□适用 √不适
The reasons for the significant inconsistencies between the aforementioned information and theinformation used in previous years' impairment tests or external information
□适用 √不适
The reasons for the discrepancies between the information used in the company's previousannual impairment test and the actual situation in the current year
□适用 √不适
Other notes:
None
18. Other equity instruments investment
(1). Information of other equity instruments investment
□适用 √不适用
(2). Description of the circumstances of derecognition in the current period
□适用 √不适用
Other note:
□适用 √不适用
19. Other non-current financial assets
□适用 √不适用
Other note:
□适用 √不适用
20. Investment properties
Investment properties measurement model
(1). Investment properties measured at cost model
Unit: Yuan Currency: RMB
| Item | Housing and buildings | Land use rights | Construction in progress | Total |
| I. Book value | ||||
| 1.Beginning balance | 179, 089, 223.35 | 34, 797, 725.56 | 213, 886, 948.91 | |
| 2.Increase | 40, 124, 407.39 | 40, 124, 407.39 | ||
| (1)Purchase | ||||
| (2)Inventories\Fixed assets\Transfer from construction in progress | 40, 124, 407.39 | 40, 124, 407.39 | ||
| (3)Addition by business combination | ||||
| 3.Decrease | ||||
| (1)Disposal | ||||
| (2)Other decrease | ||||
| 4.Closing balance | 219, 213, 630.74 | 34, 797, 725.56 | 254, 011, 356.30 | |
| II. Accumulated depreciation and amortisation | ||||
| 1.Beginning balance | 42, 797, 752.57 | 6, 817, 383.54 | 49, 615, 136.11 | |
| 2.Increase | 11, 294, 774.91 | 695, 954.71 | 11, 990, 729.62 | |
| (1)Amortisation for the year | 8, 541, 678.85 | 695, 954.71 | 9, 237, 633.56 | |
| (2)Inventories/Fixed assets/Transfer from construction in progress | 2, 753, 096.06 | - | 2, 753, 096.06 | |
| 3.Decrease | ||||
| (1)Disposal | ||||
| (2)Other decrease | ||||
| 4.Closing balance | 54, 092, 527.48 | 7, 513, 338.25 | 61, 605, 865.73 | |
| III. Provision for impairment | ||||
| 1.Beginning balance | ||||
| 2.Increase | ||||
| (1) Provision | ||||
| 3.Decrease | ||||
| (1)Disposal | ||||
| (2)Other decrease | ||||
| 4.Closing balance | ||||
| IV. Carrying amount | ||||
| 1.Carrying value at year end | 165, 121, 103.26 | 27, 284, 387.31 | 192, 405, 490.57 | |
| 2.Carrying value at beginning of year | 136, 291, 470.78 | 27, 980, 342.02 | 164, 271, 812.80 | |
(2). Information of investment properties without property certificate
□适用 √不适用
(3) Impairment test of investment real estate using cost measurement model
□适用 √不适用
Other note :
□适用 √不适用
21. Fixed assets
Presented by item
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance |
| Fixed assets | 129, 987, 346, 509.40 | 118, 718, 591, 050.99 |
| Fixed assets for disposal |
| Total | 129, 987, 346, 509.40 | 118, 718, 591, 050.99 |
Other note:
□适用 √不适用
Fixed assets
(1). Details of fixed assets
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Housing and buildings | Machinery and equipment | Special equipment | Transportation tools | General equipment | Ship | Total |
| I. Book value: | |||||||
| 1.Beginning balance | 33, 086, 356, 269.20 | 123, 986, 255, 776.62 | 492, 140, 359.38 | 552, 130, 256.65 | 559, 634, 194.27 | 158, 676, 516, 856.12 | |
| 2.Increase | 3, 940, 910, 259.83 | 16, 393, 731, 747.02 | 46, 242, 755.20 | 307, 897, 243.56 | 20, 688, 782, 005.61 | ||
| (1)Purchase | 40, 485, 195.47 | 46, 242, 755.20 | 104, 086, 239.08 | 190, 814, 189.75 | |||
| (2)Transfer from construction in progress | 3, 940, 910, 259.83 | 15, 960, 323, 381.98 | 19, 901, 233, 641.81 | ||||
| (3)Addition by business combination | |||||||
| (4)Others | 783,784,267.00 | 97,377.68 | 1,082,114.19 | 784,963,758.87 | |||
| 3.Decrease | 786,746.20 | 65,824,167.78 | 10,449,755.43 | 13,942,060.98 | 91,002,730.39 | ||
| (1)Disposal or scrap | 786,746.20 | 65,824,167.78 | 10,449,755.43 | 13,942,060.98 | 91,002,730.39 | ||
| (2)Others | |||||||
| 4.Closing balance | 33,086,356,269.20 | 123,986,255,776.62 | 492,140,359.38 | 552,130,256.65 | 559,634,194.27 | 158,676,516,856.12 | |
| II. Accumulated depreciation | |||||||
| 1.Beginning balance | 6, 965, 049, 388.03 | 32, 134, 137, 981.45 | 338, 937, 353.86 | 384, 990, 317.48 | 134, 810, 764.31 | 39, 957, 925, 805.13 | |
| 2.Increase | 1, 469, 773, 021.82 | 7, 569, 103, 970.10 | 59, 429, 357.93 | 245, 715, 207.40 | 17, 190, 622.32 | 9, 361, 212, 179.58 | |
| (1) Provision | 1, 469, 773, 021.82 | 7, 272, 476, 668.13 | 59, 429, 357.93 | 57, 778, 030.54 | 17, 190, 622.32 | 8, 876, 647, 700.75 | |
| 2)Business | 296, 627, 301.97 | 187, 937, 176.86 | 484, 564, 478.83 | ||||
| combination | |||||||
| 3.Decrease | 7, 987, 087.64 | 29, 481, 499.20 | 14, 584, 596.51 | 10, 931, 174.34 | 62, 984, 357.69 | ||
| (1)Disposal or scrap | 5, 233, 991.58 | 29, 481, 499.20 | 14, 584, 596.51 | 10, 931, 174.34 | 60, 231, 261.63 | ||
| (2)Others | 2, 753, 096.06 | 2, 753, 096.06 | |||||
| 4.Closing balance | 8, 426, 835, 322.21 | 39, 673, 760, 452.35 | 383, 782, 115.28 | 619, 774, 350.54 | 152, 001, 386.63 | 49, 256, 153, 627.02 | |
| III. Provision for impairment | |||||||
| 1.Beginning balance | |||||||
| 2.Increase | |||||||
| (1) Provision | |||||||
| 3.Decrease | |||||||
| (1)Disposal or scrap | |||||||
| 4.Closing balance | |||||||
| IV. Carrying amount | |||||||
| 1.Carrying value at year end | 28, 551, 561, 070.50 | 100, 665, 707, 162.54 | 133, 936, 989.45 | 228, 508, 479.28 | 407, 632, 807.64 | 129, 987, 346, 509.40 | |
| 2.Carrying value at beginning of year | 26, 121, 306, 881.17 | 91, 852, 117, 795.17 | 153, 203, 005.52 | 167, 139, 939.17 | 424, 823, 429.96 | 118, 718, 591, 050.99 | |
[Note ] At the end of the period, fixed assets with cost of RMB8, 508, 444, 797.05 had been fullydepreciated and still in use.
(2). Fixed assets with temporary idle
□适用 √不适用
(3). Fixed assets held under Operating lease rent-out
□适用 √不适用
(4). Fixed assets without property certificate
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Carrying amount | Reasons for not completing the certificate of title |
| Housing and buildings | 1, 926, 567, 405.83 | Still in application process |
Other note:
□适用 √不适用
(5). Impairment test of fixed assets
□适用 √不适用
Fixed assets for disposal
□适用 √不适用
22. Construction in progress
Presented by item
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance |
| Construction in progress | 47, 030, 792, 783.72 | 25, 624, 425, 938.86 |
| Construction materials | 1, 793, 344, 903.73 | 1, 663, 065, 560.22 |
| Total | 48, 824, 137, 687.45 | 27, 287, 491, 499.08 |
Other note:
□适用 √不适用
Construction in progress
(1). Information of construction in progress
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Annual output of 1.6 million tons of high-performance resin and new material projects | 14, 273, 491, 274.08 | 14, 273, 491, 274.08 | 1, 368, 039, 931.40 | 1, 368, 039, 931.40 | ||
| Annual output of 5 million tons of PTA project | 5, 038, 408, 887.77 | 5, 038, 408, 887.77 | 8, 624, 681, 423.33 | 8, 624, 681, 423.33 | ||
| Project with an annual output of 800,000 tons of functional polyester film and functional plastics | 3, 590, 326, 402.15 | 3, 590, 326, 402.15 | 1, 769, 790, 066.84 | 1, 769, 790, 066.84 | ||
| Annual production of 600,000 tons of functional polyester film, functional film and 3 billion square meters of lithium battery diaphragm project | 3, 324, 025, 442.09 | 3, 324, 025, 442.09 | 157, 195, 108.43 | 157, 195, 108.43 | ||
| New Material Industrial Park Phase II Project | 3, 918, 297, 921.06 | 3, 918, 297, 921.06 | 77, 845, 538.17 | 77, 845, 538.17 | ||
| Other sundry projects | 16, 886, 242, 856.57 | 16, 886, 242, 856.57 | 13, 626, 873, 870.69 | 13, 626, 873, 870.69 | ||
| Total | 47, 030, 792, 783.72 | 47, 030, 792, 783.72 | 25, 624, 425, 938.86 | - | 25, 624, 425, 938.86 |
(2). Changes in significant construction in progress
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Budget | Beginning balance | Increase | Transfer to fixed assets | Other decrease | Closing balance | Proportion of cumulative input to budget (%) | Progress % | Cumulative amount of interest capitalisation | Including: interest capitalised in the year | Capitalization rate for the year (%) | Source of fund |
| Annual output of 1.6 million tons of high-performance resin and new material projects | 19.988 billion | 1, 368, 039, 931.40 | 14, 581, 253, 914.45 | 1, 675, 802, 571.77 | 14, 273, 491, 274.08 | 79.79 | Equipment installation and partial trial production | 218, 219, 461.95 | 216, 066, 711.95 | 4.20 | Self-financing and Loans | |
| Annual output of 5 million tons of PTA project | 11.45billion | 8, 624, 681, 423.33 | 2, 147, 738, 924.59 | 5, 734, 011, 460.15 | - | 5, 038, 408, 887.77 | 94.08 | Project constructions | 393, 090, 172.29 | 291, 069, 491.60 | 3.74 | Self-financing and Loans |
| Project with an annual output of 800,000 tons of functional polyester film and functional plastics | 11.125 billion | 1, 769, 790, 066.84 | 2, 854, 236, 629.76 | 1, 033, 700, 294.45 | - | 3, 590, 326, 402.15 | 41.57 | Equipment installation and partial trial production | 128, 151, 450.53 | 100, 554, 944.67 | 3.82 | Self-financing and Loans |
| Annual production of 600,000 tons of functional polyester film, functional film and 3 billion square meters of lithium battery diaphragm project | 12.494 billion | 157, 195, 108.43 | 3, 166, 830, 333.66 | 3, 324, 025, 442.09 | 26.60 | Construction and equipment installation | 27, 987, 427.76 | 27, 574, 094.42 | 3.20 | Self-financing and Loans | ||
| New Material Industrial Park Phase II Project | 7.868 billion | 77, 845, 538.17 | 3, 840, 452, 382.89 | 3, 918, 297, 921.06 | 49.80 | Construction and equipment installation | 54, 516, 112.49 | 53, 814, 993.99 | 4.11 | Self-financing and Loans | ||
| Total | 62.925 billion | 11, 997, 552, 068.17 | 26, 590, 512, 185.35 | 8, 443, 514, 326.37 | 30, 144, 549, 927.15 | / | / | 821, 964, 625.02 | 689, 080, 236.63 | / | / |
(3). Provision for impairment of construction in progress
□适用 √不适用
(4). Impairment test of construction in progress
□适用 √不适用
Other note
√适用 □不适用
Construction materials
(4). Information of construction materials
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Special materials | 1, 557, 731, 537.32 | 1, 557, 731, 537.32 | 1, 662, 714, 399.07 | 1, 662, 714, 399.07 | ||
| Special equipment | 235, 613, 366.41 | 235, 613, 366.41 | 351, 161.15 | 351, 161.15 | ||
| Total | 1, 793, 344, 903.73 | 1, 793, 344, 903.73 | 1, 663, 065, 560.22 | 1, 663, 065, 560.22 | ||
Other note:
At the end of the period, there were no obvious indication of impairment of construction inprogress, so no provision for impairment was provided.
23. Productive biological assets
(1). Productive biological assets using cost measurement model
□适用 √不适用
(2). Impairment test of productive biological assets using cost measurement model
□适用 √不适用
The recoverable amount is determined by the net amount of fair value less disposal expenses:
□适用 √不适用
The recoverable amount is determined based on the present value of the expected future cashflow:
□适用 √不适用
The reasons for the significant inconsistencies between the aforementioned information and theinformation used in previous years' impairment tests or external information:
□适用 √不适用
The reasons for the significant discrepancy between the information used in the company'sprevious year's impairment test and the actual situation in the current year:
□适用 √不适用
(3). Productive biological assets using the fair value measurement model
□适用 √不适用
Other note
□适用 √不适用
24. Oil and gas assets
(1) Information of oil and gas assets:
□适用 √不适用
(2). Impairment test of oil and gas assets:
□适用 √不适用
Other notes:
NoneThe recoverable amount is determined by the net amount of fair value less disposal expenses:
□适用 √不适用
The recoverable amount is determined based on the present value of the expected future cashflow:
□适用 √不适用
The reasons for the significant inconsistencies between the aforementioned information and theinformation used in previous years' impairment tests or external information:
□适用 √不适用
The reasons for the significant discrepancy between the information used in the company'sprevious year's impairment test and the actual situation in the current year:
□适用 √不适用
Other notes:
None
25. Right-of-use assets
(1) Information of right-of-use-assets
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Housing and buildings | Others | Total |
| I. Book value | |||
| 1.Beginning balance | 161, 773, 372.63 | 7, 106, 282.50 | 168, 879, 655.13 |
| 2.Increase | 25, 513, 870.05 | 25, 513, 870.05 | |
| Leases | 24, 494, 067.04 | 24, 494, 067.04 | |
| Others | 1, 019, 803.01 | 1, 019, 803.01 | |
| 3.Decrease | 3, 089, 090.98 | 3, 089, 090.98 | |
| Disposal | 3, 089, 090.98 | 3, 089, 090.98 | |
| 4.Closing balance | 184, 198, 151.70 | 7, 106, 282.50 | 191, 304, 434.20 |
| II. Accumulated depreciation | |||
| 1.Beginning balance | 80, 857, 714.71 | 177, 657.06 | 81, 035, 371.77 |
| 2.Increase | 35, 672, 178.43 | 177, 657.06 | 35, 849, 835.49 |
| (1) Provision | 35, 044, 718.81 | 177, 657.06 | 35, 222, 375.87 |
| (2)Others | 627, 459.62 | 627, 459.62 | |
| 3.Decrease | 2, 713, 522.79 | 2, 713, 522.79 | |
| (1)Disposal | 2, 713, 522.79 | 2, 713, 522.79 | |
| 4.Closing balance | 113, 816, 370.34 | 355, 314.12 | 114, 171, 684.46 |
| III. Provision for impairment | |||
| 1.Beginning balance | |||
| 2.Increase | |||
| (1) Provision | |||
| 3.Decrease | |||
| (1)Disposal | |||
| 4.Closing balance | |||
| IV. Carrying amount | |||
| 1.Carrying value at year end | 70, 381, 781.36 | 6, 750, 968.38 | 77, 132, 749.74 |
| 2.Carrying value at beginning of year | 80, 915, 657.92 | 6, 928, 625.44 | 87, 844, 283.36 |
Other note:
None
(2). Impairment test of right-of-use-assets:
□适用 √不适用
Other notes:
At the end of the period, there were no obvious indication of impairment of right-of –use assets,so no provision for impairment was provided.The recoverable amount is determined by the net amount of fair value less disposal expenses:
□适用 √不适用
The recoverable amount is determined based on the present value of the expected future cashflow:
□适用 √不适用
The reasons for the significant inconsistencies between the aforementioned information and theinformation used in previous years' impairment tests or external information:
□适用 √不适用
The reasons for the significant discrepancy between the information used in the company'sprevious year's impairment test and the actual situation in the current year:
□适用 √不适用
Other notes:
None
26. Intangible assets
(1). Details of intangible assets
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Land use rights | Patent rights | Non-patented technology | Patent technology | Software usage rights | Total |
| I. Book value | ||||||
| 1.Beginning balance | 8, 973, 407, 576.68 | 1, 297, 936, 126.76 | 188, 481, 292.75 | 10, 459, 824, 996.19 | ||
| 2.Increase | 434, 998, 316.14 | 7, 868, 380.07 | 343, 170.34 | 443, 209, 866.55 | ||
| (1)Purchase | 434, 998, 316.14 | 7, 868, 380.07 | 328, 171.64 | 443, 194, 867.85 | ||
| (2)In-house research and development | ||||||
| (3)Addition by business combination | ||||||
| (4)Others | 14, 998.70 | 14, 998.70 | ||||
| 3.Decrease | 2, 842, 533.00 | 4, 436, 317.00 | 7, 278, 850.00 | |||
| (1)Disposal | 2, 842, 533.00 | 4, 436, 317.00 | 7, 278, 850.00 | |||
| 4.Closing balance | 9, 405, 563, 359.82 | 1, 305, 804, 506.83 | 184, 388, 146.09 | 10, 895, 756, 012.74 | ||
| II. Accumulated amortisation | ||||||
| 1.Beginning balance | 974, 068, 535.98 | 460, 056, 741.08 | 100, 924, 050.79 | 1, 535, 049, 327.85 | ||
| 2.Increase | 187, 482, 613.70 | 107, 915, 858.18 | 35, 634, 529.18 | 331, 033, 001.06 | ||
| (1) Provision | 187, 482, 613.70 | 107, 915, 858.18 | 35, 628, 198.02 | 331, 026, 669.90 | ||
| (2)Others | 6, 331.16 | 6, 331.16 | ||||
| 3.Decrease | 710, 633.25 | 4, 436, 317.00 | 5, 146, 950.25 | |||
| (1)Disposal | 710, 633.25 | 4, 436, 317.00 | 5, 146, 950.25 | |||
| 4.Closing balance | 1, 160, 840, 516.43 | 567, 972, 599.26 | 132, 122, 262.97 | 1, 860, 935, 378.66 | ||
| III. Provision for impairment | ||||||
| 1.Beginning balance | ||||||
| 2.Increase | ||||||
| (1) Provision | ||||||
| 3.Decrease | ||||||
| (1)Disposal | ||||||
| 4.Closing balance | ||||||
| IV. Carrying amount | ||||||
| 1.Carrying value at year end | 8, 244, 722, 843.39 | 737, 831, 907.57 | 52, 265, 883.12 | 9, 034, 820, 634.08 | ||
| 2.Carrying value at beginning of year | 7, 999, 339, 040.70 | 837, 879, 385.68 | 87, 557, 241.96 | 8, 924, 775, 668.34 | ||
At the end of the period, the intangible assets formed through the Company's internal researchand development accounted for 0% of the balance of intangible assets.
(2). Land use rights pending for ownership certificates
□适用 √不适用
Other note:
√适用 □不适用
(2). Impairment test of intangible assets:
□适用 √不适用
Other notes:
27. Goodwill
(1). Book value of goodwill
√适用 □不适用
Unit: Yuan Currency: RMB
| Investee or matters formed the goodwill | Beginning balance | Increase | Decrease | Closing balance | ||
| Formation by business combination | Others | Disposal | Others | |||
| Hengli Futures Co., Ltd. | 77,323,123.69 | 77,323,123.69 | ||||
| Total | 77,323,123.69 | 77,323,123.69 | ||||
(2). Provision for impairment of goodwill
□适用 √不适用
(3). Information about goodwill's Assets group or Assets group Portfolio
√适用 □不适用
| Item | Determination method of assets group or assets group portfolio | Operating segment and basis | Whether the assets group or the assets group portfolio is consistent with the assets group or the assets group portfolio determined on previous year |
| Hengli Futures Co., Ltd. | Hengli Futures Co., Ltd. is mainly engaged in futures brokerage business, and there is an active market which can bring independent cash flow and can be identified as a separate assets group. | Headquarters and other business divisions | Yes |
Changes in assets group or the assets group portfolio:
□适用 √不适用
Other notes:
□适用 √不适用
(4). Determination method and basis of recoverable amount
(1) Important assumptions and basis
①Assumption of relatively stable macroeconomic environment: The value of any asset isdirectly related to its macroeconomic environment. In this evaluation, it is assumed that the socialindustrial policy, tax policy and macro environment remain relatively stable, and there are no major
changes in interest rates and exchange rates, so as to ensure that the evaluation conclusion has areasonable period of use.
②Continuing operation assumption; it is assumed that the operating business of the assetsgroup portfolio business entity is legal and can maintain its continuous operation status in the future.
③Assuming that the current and future operators of the assets group portfolio business entityare responsible, and their company management has the ability to assume their duties, steadilypromote the company's development plan, and maintain a good business situation.
④Assuming that there are no significant changes in interest rates, exchange rates, taxbenchmarks, tax rates, and policy-related fees.
⑤Assuming that the enterprise's business scope, business model, and business scale do notundergo significant changes based on its existing management methods and management level.
The recoverable amount is determined by the net amount of fair value less disposal expenses：
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Book value | Recoverable amount | Impairment amount | Determination methods of fair value and disposal expenses | key parameter | Basis for determining key parameters |
| Hengli Futures Co., Ltd. | 825, 028, 603.31 | 880, 647, 513.91 | NOTE | NOTE | NOTE | |
| Total | 825, 028, 603.31 | 880, 647, 513.91 | / | / | / |
The recoverable amount of the asset group of Hengli Futures Co., Ltd. is determined based onthe fair value estimated using the market method. Due to the difficulty in collecting complete datarelated to transaction cases and the inability to understand whether there are non-fair value factorsinvolved, this valuation is not suitable for using the transaction case comparison method. There aremature listed companies in the futures industry in China that can be selected for analysis andcomparison, so the listed company comparison method can be used.
Specifically, the listed company comparison method generally first selects listed companiesthat are in the same industry as the assets group portfolio and that are actively traded ascomparable companies, and then calculate the market value of the comparable companies basedon the trading stock prices. Secondly, select one or several value ratio parameters of comparablecompanies (usually including profitability, assets, revenue and other specific parameters) as"analysis parameters", Then calculate the Ratio relationship between the Market price value ofcomparable companies and the selected analysis parameters - called the ratio multiplier (Multiples).The ratio multiplier needs to be adjusted before being applied to the corresponding analysisparameters of the Assets group portfolio to reflect the difference between the comparablecompany and the assets group portfolio. Apply the above-mentioned adjusted ratio multiplier tothe corresponding analysis parameters of the assets group portfolio to obtain the fair value of theevaluation object. Expressed in the formula as follows:
Fair value of assets group portfolio＝Analysis Parameters × Modified Ratio Multiplier
Including: Adjusted ratio multiplier = ratio multiplier of comparable companies ×comprehensive correction factorThe recoverable amount is determined based on the present value of the expected future cash flow:
□适用 √不适用
The reasons for the significant inconsistencies between the aforementioned information and theinformation used in previous years' impairment tests or external information:
□适用 √不适用
The reasons for the significant discrepancy between the information used in the company'sprevious year's impairment test and the actual situation in the current year:
□适用 √不适用
(5). Performance commitments and corresponding goodwill impairment.There is a performance commitment when forming goodwill, and the reporting period or theprevious reporting period is within the performance commitment period
□适用 √不适用
Other notes:
√适用 □不适用
Calculation process of goodwill impairment loss:
| Item | Hengli Futures Co., Ltd. |
| Carrying amount of goodwill ① | 77, 323, 123.69 |
| Balance of provision for impairment of goodwill② | - |
| Carrying amount of goodwill ③＝①-② | 77, 323, 123.69 |
| Value of goodwill attributable to minority interests not recognised ④ | - |
| Goodwill that not include the value attributable to minority interests not recognised ⑤=④+③ | 77, 323, 123.69 |
| Goodwill that not include the value attributable to minority interests not recognized apportioned to each assets group ⑥ | 77, 323, 123.69 |
| Carrying amount of the assets group⑦ | 747, 705, 479.62 |
| Carrying amount of the Assets group that contains the overall Goodwill ⑧=⑥+⑦ | 825, 028, 603.31 |
| Recoverable amount of assets group or assets group portfolio ⑨ | 880, 647, 513.91 |
| Impairment loss of goodwill(⑩ is larger than zero)⑩=⑧-⑨ | - |
| Impairment loss of goodwill attributable to the Company | - |
28. Long-term deferred expenses
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Beginning balance | Increase | Amortization | Other Decrease | Closing balance |
| Catalyst | 2, 006, 246, 987.84 | 680, 813, 893.77 | 605, 671, 957.63 | 90, 878, 073.01 | 1, 990, 510, 850.97 |
| Renovation costs | 13, 258, 839.53 | 1, 150, 156.54 | 4, 568, 883.00 | 9, 840, 113.07 | |
| Others | 7, 787, 497.48 | 19, 305, 638.84 | 10, 353, 902.54 | 16, 739, 233.78 | |
| Total | 2, 027, 293, 324.85 | 701, 269, 689.15 | 620, 594, 743.17 | 90, 878, 073.01 | 2, 017, 090, 197.82 |
Other note:
None
29. Deferred tax assets/ Deferred tax liabilities
(1). Deferred tax assets before offsetting
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance | ||
| Deductible temporary differences | Deferred income tax Assets | Deductible temporary differences | Deferred income tax Assets | |
| Provision for impairment of assets | ||||
| Unrealized profit of internal transactions | 412, 690, 533.91 | 78, 137, 133.59 | 409, 148, 379.92 | 82, 162, 633.20 |
| Deductible tax loss | ||||
| Provision for bad debts | 141, 521, 467.34 | 32, 321, 835.61 | 37, 255, 045.83 | 6, 467, 483.08 |
| Provision for decline in value of inventories | 593, 692, 020.24 | 148, 000, 080.83 | 3, 098, 438, 279.83 | 771, 996, 515.83 |
| Changes in fair value included in current profit or loss (decrease) | 2, 236, 900.00 | 357, 706.00 | 35, 555, 513.32 | 5, 428, 978.62 |
| Non-deducted tax losses | - | - | 102, 511, 722.17 | 15, 376, 758.33 |
| Government grants | 108, 569, 721.67 | 17, 112, 458.25 | 62, 610, 844.67 | 10, 218, 626.70 |
| Total | 1, 258, 710, 643.16 | 275, 929, 214.28 | 3, 745, 519, 785.74 | 891, 650, 995.76 |
(2). Deferred tax liabilities before offsetting
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance | ||
| Taxable temporary difference | Deferred income tax liabilities | Taxable temporary difference | Deferred income tax liabilities | |
| Increase in value by assets appraisal of business combination not under common contract | ||||
| Changes in fair value of other debt investments | ||||
| Changes in fair value of other equity instrument investments | ||||
| Changes in fair value included in current profit or loss (increase) | 7, 154, 954.88 | 1, 073, 243.23 | 1, 275, 910.00 | 144, 415.50 |
| Initial investment cost of long-term equity investment calculated by equity method is less than the share of the owner's equity of the investee | 79, 415, 493.16 | 11, 912, 323.97 | 79, 415, 493.16 | 11, 912, 323.97 |
| Fixed assets accelerated depreciation | 175, 094, 282.97 | 28, 724, 901.12 | 27, 431, 069.87 | 6, 857, 767.47 |
| Total | 261, 664, 731.01 | 41, 710, 468.32 | 108, 122, 473.03 | 18, 914, 506.94 |
(3). Net amount of deferred tax assets or liabilities after offsetting
√适用 □不适用
| Item | Closing offset amount of deferred income tax assets and liabilities | Closing balance of deferred income tax assets or liabilities after offsetting | Beginning offset amount of deferred income tax assets and liabilities | Beginning balance of deferred income tax assets or liabilities after offsetting |
| Deferred tax assets | 767, 665, 496.49 | 395, 962.70 | 597, 699, 655.87 | 576, 250.70 |
| Deferred tax liabilities | 767, 665, 496.49 | 597, 699, 655.87 |
(4). Details of unrecognized deferred tax assets
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance |
| Deductible temporary differences | ||
| Deductible tax loss | ||
| Provision for bad debts | 5, 448, 474.18 | 1, 660, 550.40 |
| Provision for decline in value of inventories | 30, 294, 550.51 | |
| Changes in fair value included in current profit or loss (decrease) | 19, 398, 032.46 | 2, 211, 972.77 |
| Non-deducted tax losses | 517, 363, 979.05 | 643, 594, 926.11 |
| Provisions | ||
| Lease contracts | 749, 826.22 | 169, 949.22 |
| Unrealized profit of internal transactions | 29, 407, 240.29 | |
| Total | 572, 367, 552.20 | 677, 931, 949.01 |
(5). Deductible tax loss of unrecognized deferred income tax assets will expire in thefollowing year
√适用 □不适用
Unit: Yuan Currency: RMB
| Year | Amount at year end | Amount in beginning of year | Note |
| 2023 | 3, 756, 883.17 | ||
| 2024 | 141, 469.44 | 7, 265, 192.25 | |
| 2025 | 8, 658, 531.46 | 12, 852, 807.92 | |
| 2026 | 11, 028, 640.97 | 305, 271, 327.23 | |
| 2027 | 114, 109, 282.66 | 201, 662, 394.07 | |
| 2028 | 193, 742, 534.41 | ||
| 2032 | 189, 683, 520.11 | 112, 786, 321.47 | |
| Total | 517, 363, 979.05 | 643, 594, 926.11 | / |
Other note:
□适用 √不适用
30. Other non-current assets
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance | |||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | ||
| Costs of obtaining a contract | |||||||
| Contract performance cost | |||||||
| Return cost receivable | |||||||
| Contract assets | |||||||
| Prepayment for purchase of long-term assets | 3, 381, 887, 915.12 | 3, 381, 887, 915.12 | 6, 212, 936, 138.56 | 6, 212, 936, 138.56 | |||
| Unrealized gains and losses on | 112, 912, 218.28 | 112, 912, 218.28 | |||||
| sale and leaseback | ||||||
| Futures membership Investment | 1, 400, 000.00 | 1, 400, 000.00 | 1, 400, 000.00 | 1, 400, 000.00 | ||
| Total | 3, 383, 287, 915.12 | 3, 383, 287, 915.12 | 6, 327, 248, 356.84 | - | 6, 327, 248, 356.84 |
Other note:
None
31. Ownership or using rights of assets subject to restriction
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance | ||||||
| Book value | Carrying amount | Type of restriction | Restricted situation | Book value | Carrying amount | Type of restriction | Restricted situation | |
| Cash and bank balances | 5, 252, 895, 794.26 | 5, 252, 895, 794.26 | Pledge | Pledge cash and bank balances to obtain financing credit from financial institutions | 7, 617, 632, 104.18 | 7, 617, 632, 104.18 | Pledge | Pledge cash and bank balances to obtain financing credit from financial institutions |
| Cash and bank balances | 70, 269, 522.55 | 70, 269, 522.55 | Pledge | Security deposits for trading in futures and financial derivatives | 12, 586, 192.00 | 12, 586, 192.00 | Pledge | Security deposits for trading in futures and financial derivatives |
| Cash and bank balances | 119, 600, 000.00 | 119, 600, 000.00 | Freezing | Freezing funds involved in litigation | 119, 600, 000.00 | 119, 600, 000.00 | Freezing | Freezing funds involved in litigation |
| Financial assets held for trading | 10, 000, 000.00 | 10, 000, 000.00 | Pledge | Pledge financial assets held for trading to obtain financing | ||||
| credit from financial institutions | ||||||||
| Receivables financing | 2, 873, 535, 149.86 | 2, 873, 535, 149.86 | Pledge | Pledge notes receivable to obtain financing credit from financial institutions | 1, 469, 571, 971.78 | 1, 469, 571, 971.78 | Pledge | Pledge notes receivable to obtain financing credit from financial institutions |
| Fixed assets | 108, 294, 533, 612.66 | 80, 505, 745, 109.76 | Mortgage | Mortgage fixed assets to obtain financing credit from financial institutions | 107, 498, 280, 667.52 | 85, 436, 371, 528.20 | Mortgage | Mortgage fixed assets to obtain financing credit from financial institutions |
| Fixed assets | 4, 647, 436, 155.66 | 1, 649, 966, 499.72 | Mortgage | Mortgage is used to provide security for the sale and leaseback contract | 2, 798, 943, 881.83 | 1, 546, 266, 735.52 | Mortgage | Mortgage is used to provide security for the sale and leaseback contract |
| Intangible assets | 5, 067, 120, 570.14 | 4, 492, 197, 052.63 | Mortgage | Mortgage intangible assets to obtain financing credit from financial institutions | 4, 263, 597, 293.43 | 3, 781, 381, 873.08 | Mortgage | Mortgage intangible assets to obtain financing credit from financial institutions |
| Construction in progress | 24, 014, 095, 335.45 | 24, 014, 095, 335.45 | Mortgage | Mortgage construction in progress to obtain financing credit from financial institutions | 675, 737, 980.77 | 675, 737, 980.77 | Mortgage | Mortgage construction in progress to obtain financing credit from financial institutions |
| Total | 150, 339, 486, 140.58 | 118, 978, 304, 464.23 | / | / | 124, 465, 950, 091.51 | 100, 669, 148, 385.53 | / | / |
Other note:
None
32. Short-term loans
(1). Short-term loans by category
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance |
| Pledge loans | 2, 776, 068, 898.60 | 1, 222, 816, 658.22 |
| Mortgage loans | 4, 684, 217, 467.66 | 5, 151, 321, 326.22 |
| Guaranteed loans | 22, 362, 489, 683.61 | 24, 740, 778, 066.47 |
| Unsecured loans | 10, 932, 592, 766.04 | 5, 017, 843, 728.97 |
| Discount of commercial acceptance bills | 26, 239, 681, 665.48 | 33, 184, 139, 033.20 |
| Total | 66, 995, 050, 481.39 | 69, 316, 898, 813.08 |
Note to short-term loans by category:
The reason for the discrepancy between the disclosure of the beginning balance of short-termloans and the 2022 annual report is that the item of accrued interest was allocated to the item ofpledge loans, mortgage loans, guaranteed loans, and unsecured loans.
(2). Short-term loans that have been overdue and not repaid
□适用 √不适用
Including important short-term loans that have been overdue and not repaid are as follows:
□适用 √不适用
Other notes:
□适用 √不适用
33. Financial liabilities held for trading
√适用 □不适用
Unit: Yuan Currency: RMB
Other note:
□适用 √不适用
| Item | Beginning balance | Closing balance | Specified reasons and basis |
| Financial liabilities held for trading | 346, 020, 729.70 | 190, 324, 330.67 | / |
| Including: | |||
| Derivative financial liabilities | 346, 020, 729.70 | 190, 324, 330.67 | / |
| Designated as financial liabilities at fair value through profit or loss | |||
| Including: | |||
| Total | 346, 020, 729.70 | 190, 324, 330.67 | / |
34. Derivative financial liabilities
□适用 √不适用
35. Notes payable
(1). Notes payable presented by item
√适用 □不适用
Unit: Yuan Currency: RMB
| Category | Closing balance | Beginning balance |
| Commercial acceptance bills | 8, 134, 202, 672.24 | 8, 848, 668, 508.73 |
| Bank acceptance bills | 1, 584, 564, 190.99 | 1, 250, 537, 334.72 |
| Letter of credit | 2, 283, 686, 725.30 | 10, 504, 570, 026.82 |
| Total | 12, 002, 453, 588.53 | 20, 603, 775, 870.27 |
Bills payable overdue but still unpaid at year end is RMB 0.
36. Accounts payable
(1). Accounts payable presented by item
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance |
| Within 1 year | 13, 746, 679, 951.78 | 7, 538, 599, 735.57 |
| 1 to 2 years | 1, 223, 853, 715.40 | 574, 101, 327.24 |
| 2 to 3 years | 176, 810, 898.80 | 404, 729, 363.36 |
| Over 3 years | 451, 323, 029.94 | 351, 879, 572.73 |
| Total | 15, 598, 667, 595.93 | 8, 869, 309, 998.90 |
(2). Significant accounts payable aging over 1 year
□适用 √不适用
Other note
√适用 □不适用
For details of accounts payable in foreign currencies, see the note “Items in foreigncurrencies”.
37. Advances from customers
(1). Advance from customers presented by item
□适用 √不适用
(2). Significant advance from customers with ageing over one year
□适用 √不适用
(3). Amount and reason for significant changes in the carrying amount during the
reporting period
□适用 √不适用
Other note
□适用 √不适用
38. Contract liabilities
(1). Information of contract liabilities
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance |
| Within 1 year | 8, 474, 131, 199.60 | 12, 042, 290, 821.83 |
| 1 to 2 years | 12, 597, 237.07 | 34, 506, 243.07 |
| 2 to 3 years | 3, 887, 634.70 | 11, 816, 872.03 |
| Over 3 years | 11, 771, 197.56 | 2, 369, 389.54 |
| Total | 8, 502, 387, 268.92 | 12, 090, 983, 326.47 |
(2). Significant contract liabilities with ageing over one year
□适用 √不适用
(3). The amount and reasons for significant changes in the carrying amount during the
reporting period
□适用 √不适用
Other note:
□适用 √不适用
39. Employee benefits payables
(1). Employee benefits payable
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Beginning balance | Increase | Decrease | Closing balance |
| I. Short-term employee benefits | 475, 189, 408.73 | 4, 796, 253, 622.35 | 4, 771, 785, 551.91 | 499, 657, 479.17 |
| II. Post-employment benefits -Defined contribution plans | 1, 320, 371.45 | 302, 721, 307.14 | 303, 061, 641.20 | 980, 037.39 |
| III. Termination benefits | ||||
| IV. Others benefits due within one year | ||||
| Total | 476, 509, 780.18 | 5, 098, 974, 929.49 | 5, 074, 847, 193.11 | 500, 637, 516.56 |
(2). Short-term employee benefits
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Beginning balance | Increase | Decrease | Closing balance |
| I. Salaries, bonus and allowances | 474, 799, 762.21 | 4, 413, 290, 623.14 | 4, 389, 199, 532.08 | 498, 890, 853.28 |
| II. Staff welfare | 29, 713.49 | 79, 710, 337.46 | 79, 726, 036.54 | 14, 014.41 |
| III. Social insurances | 259, 417.88 | 165, 307, 581.53 | 165, 391, 796.32 | 175, 203.09 |
| Including: Medical insurance | 236, 762.93 | 136, 710, 995.53 | 136, 775, 375.54 | 172, 382.92 |
| Work injury insurance | 12, 114.62 | 17, 576, 330.33 | 17, 585, 624.78 | 2, 820.17 |
| Maternity insurance | 10, 540.33 | 11, 020, 255.68 | 11, 030, 796.01 | |
| IV. Housing fund | 81, 456.00 | 105, 076, 746.30 | 104, 580, 793.90 | 577, 408.40 |
| V. Union funds and staff education | 19, 059.15 | 32, 798, 917.26 | 32, 817, 976.41 | |
| VI. Vocation leave | ||||
| VII. Short-term profit sharing plan | ||||
| VIII. Compensation for termination of labor relations | 54, 206.24 | 54, 206.24 | ||
| IX. Others | 15, 210.42 | 15, 210.42 | ||
| Total | 475, 189, 408.73 | 4, 796, 253, 622.35 | 4, 771, 785, 551.91 | 499, 657, 479.17 |
(3). Defined contribution plans
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Beginning balance | Increase | Decrease | Closing balance |
| 1.Basic pension insurance | 1, 275, 512.09 | 292, 861, 888.98 | 293, 172, 157.94 | 965, 243.13 |
| 2.Unemployment insurance | 44, 859.36 | 9, 859, 418.16 | 9, 889, 483.26 | 14, 794.26 |
| 3.Corporate annuity plan | ||||
| Total | 1, 320, 371.45 | 302, 721, 307.14 | 303, 061, 641.20 | 980, 037.39 |
Other note:
√适用 □不适用
The Company participates in the pension insurance and unemployment insurance plansestablished by government agencies in accordance with the regulations. Apart from this, theCompany no longer undertakes further payment obligations, and the corresponding expendituresare included in the current profit or loss or the cost of related assets when incurred.
40. Taxes payable
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance |
| Value-added tax | 266, 538, 160.39 | 12, 771, 830.29 |
| Consumption tax | 557, 275, 099.44 | 709, 805, 522.32 |
| Business tax | ||
| Enterprise income tax | 370, 596, 086.66 | 106, 928, 407.84 |
| Individual income Tax | ||
| Urban maintenance and construction tax | 57, 017, 069.39 | 49, 277, 199.63 |
| Property tax | 34, 240, 076.04 | 31, 071, 196.33 |
| Stamp duty | 79, 049, 841.45 | 59, 377, 203.13 |
| Land use tax | 18, 747, 915.44 | 16, 817, 664.16 |
| Education surcharge | 24, 457, 717.74 | 21, 118, 876.28 |
| Local education surcharges | 16, 305, 145.15 | 14, 079, 250.85 |
| Withholding individual income Tax | 11, 642, 729.83 | 11, 736, 272.81 |
| Withholding value-added tax | ||
| Environmental protection tax | 3, 731, 893.02 | 3, 030, 289.52 |
| Total | 1, 439, 601, 734.55 | 1, 036, 013, 713.16 |
Other note:
None
41. Other payables
Presented by item
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance |
| Interest payable | ||
| Dividends payable | ||
| Other payables | 416, 224, 941.72 | 382, 263, 173.05 |
| Total | 416, 224, 941.72 | 382, 263, 173.05 |
Other note:
□适用 √不适用
(2)Interest payable
Presented by category:
□适用 √不适用
Overdue significant interest payable：
□适用 √不适用
Other note:
□适用 √不适用
(3) Dividends payable
Presented by category:
□适用 √不适用
(4) Other payables
Other payables by nature
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance |
| Security deposits | 141, 520, 538.30 | 135, 894, 155.27 |
| Current accounts | 250, 137, 634.54 | 223, 906, 378.05 |
| Others | 24, 566, 768.88 | 22, 462, 639.73 |
| Total | 416, 224, 941.72 | 382, 263, 173.05 |
(2). Significant other payables aging over 1 year
□适用 √不适用
Other note:
√适用 □不适用
For details of other payables in foreign currencies, see the note “Items in foreign currencies”.
42. Liabilities held-for-sale
□适用 √不适用
43. Non-current liabilities due within one year
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance |
| Long-term loans due within one year | 12, 022, 605, 362.19 | 7, 054, 740, 475.94 |
| Bonds payable due within one year | 1, 015, 294, 281.98 | 2, 030, 618, 280.89 |
| Long-term payables due within one year | 421, 574, 624.56 | 228, 838, 610.93 |
| Lease liabilities due within one year | 38, 597, 381.39 | 34, 830, 877.25 |
| Total | 13, 498, 071, 650.12 | 9, 349, 028, 245.01 |
Other note:
1．Long-term loans due within one year
| Category | Closing balance | Beginning balance |
| Unsecured loans | 2, 038, 956, 504.33 | 907, 763, 820.68 |
| Guaranteed loans | 2, 550, 943, 972.65 | 518, 367, 019.77 |
| Mortgage loans | 7, 432, 704, 885.21 | 5, 628, 609, 635.49 |
| Subtotal | 12, 022, 605, 362.19 | 7, 054, 740, 475.94 |
2．Bonds payable due within one year
| Bond name | Face value | Coupon rate(%) | Issuance date | Term | Issuance amount | Beginning balance |
| 22 Hengli Petrochemical CP001 | 1, 000, 000, 000.00 | 3.03 | 2022/6/1 | 1year | 1, 000, 000, 000.00 | 1, 017, 281, 918.22 |
| 22 Hengli Petrochemical CP002 | 1, 000, 000, 000.00 | 3.18 | 2022/7/25 | 1year | 1, 000, 000, 000.00 | 1, 013, 336, 362.67 |
| 23 Hengli Petrochemical CP001 | 1, 000, 000, 000.00 | 3.53 | 2023/7/19 | 1year | 1, 000, 000, 000.00 | |
| Subtotal | 3, 000, 000, 000.00 | - | - | - | 3, 000, 000, 000.00 | 2, 030, 618, 280.89 |
Continued:
| Bond name | Bonds issued in this period | Accrued interest for the current period | Amortization of excess discount | Current repayment | Closing balance | Default or not |
| 22 Hengli Petroche | 13, 018, 081.78 | 1, 030, 300, 000.00 | NO |
| mical CP001 | ||||||
| 22 Hengli Petrochemical CP002 | 18, 463, 637.33 | 1, 031, 800, 000.00 | NO | |||
| 23 Hengli Petrochemical CP001 | 1, 000, 000, 000.00 | 16, 237, 678.21 | -943, 396.23 | 1, 015, 294, 281.98 | NO | |
| Subtotal | 1, 000, 000, 000.00 | 47, 719, 397.32 | -943, 396.23 | 2, 062, 100, 000.00 | 1, 015, 294, 281.98 | - |
3．Long-term payables due within one year
| Item | Closing balance | Beginning balance |
| Lease payment | 509, 232, 241.76 | 267, 373, 159.72 |
| Less: Unrecognized financing expenses | 87, 657, 617.20 | 38, 534, 548.79 |
| Subtotal | 421, 574, 624.56 | 228, 838, 610.93 |
4．For details of non-current liabilities in foreign currencies, see the note “Items in foreigncurrencies”.
44. Other current liabilities
Information of other current liabilities
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance |
| Short-term bonds payable | ||
| Payables of returned goods | ||
| Output VAT pending for transfer | 1, 098, 844, 994.24 | 1, 564, 174, 590.75 |
| Notes receivable not derecognised | ||
| Payable of monetary security deposits | 3, 575, 114, 707.32 | 1, 714, 584, 516.80 |
| Payable of pledged security deposits | 27, 533, 400.00 | 88, 252, 384.00 |
| Futures risk reserve | 16, 792, 003.62 | 15, 076, 976.64 |
| Payable of Futures Investor Protection Fund | 68, 751.02 | 39, 089.66 |
| Total | 4, 718, 353, 856.20 | 3, 382, 127, 557.85 |
Increase and decrease of short-term bonds payable:
□适用 √不适用
Other note:
□适用 √不适用
45. Long term loans
(1). Long term loans by category
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance |
| Pledge loans | - | |
| Mortgage loans | 60, 400, 028, 956.12 | 46, 526, 719, 607.47 |
| Guaranteed loans | 3, 477, 610, 377.93 | 5, 344, 182, 213.19 |
| Unsecured loans | 6, 743, 267, 198.21 | 6, 476, 251, 530.06 |
| Total | 70, 620, 906, 532.26 | 58, 347, 153, 350.72 |
Note to long term loans by category:
None.Other notes:
√适用 □不适用
For details of long term loans in foreign currencies, see the note “Items in foreign currencies”.
46. Bonds payable
(1). Bonds payable
□适用 √不适用
(2). Specific information of bonds payable: (Excluding preferred stocks, perpetualbonds and other financial instruments classified as financial liabilities)
□适用 √不适用
(3). Note to convertible corporate bonds:
□适用 √不适用
Accounting treatment and judgment basis for equity transfer:
□适用 √不适用
(4). Notes on other financial instruments classified as financial liabilitiesBasic information on preferred shares, perpetual bonds and other financial instruments issued atthe end of the period
□适用 √不适用
Table of changes in financial instruments such as preferred shares and perpetual bonds issued atthe end of the period
□适用 √不适用
Explanation of the basis for the classification of other financial instruments into financial liabilities:
□适用 √不适用
Other note:
□适用 √不适用
47. Lease liabilities
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance |
| 1 to 2 years | 24, 232, 615.59 | 26, 859, 744.59 |
| 2 to 3 years | 9, 681, 451.08 | 16, 863, 368.50 |
| 3 to 4 years | 3, 863, 081.41 | 6, 737, 278.38 |
| 4 to 5 years | 77, 023.76 | 2, 688, 301.03 |
| Over 5years | 3, 662, 312.61 | 2, 602, 187.41 |
| Total | 41, 516, 484.45 | 55, 750, 879.91 |
Other note:
None
48. Long-term payables
Presented by item
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance |
| Long-term payables | 2, 079, 460, 266.51 | 852, 833, 333.34 |
| Specific payables | 6, 000, 000.00 | 6, 000, 000.00 |
| Total | 2, 085, 460, 266.51 | 858, 833, 333.34 |
Other note:
□适用 √不适用
Long-term payables
(1). Long-term payables by nature
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance |
| Finance lease payables | 2, 673, 505, 087.92 | 1, 163, 373, 159.72 |
| Less: Unrecognized financing expenses | -172, 470, 196.85 | -81, 701, 215.45 |
| Less: Long-term payables due within one year | -421, 574, 624.56 | -228, 838, 610.93 |
| Subtotal | 2, 079, 460, 266.51 | 852, 833, 333.34 |
Other note:
For details of long-term payables in foreign currencies, see the note “Items in foreign currencies”.
Specific payables
(2). Specific payables by nature
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Beginning balance | Increase | Decrease | Closing balance | Reason of formation |
| R&D and industrialization of ultra-high-strength creep-resistant polyester industrial fibers | 6, 000, 000.00 | - | 6,000,000.00 | Funds appropriated by the government need to be confirmed after acceptance | |
| Total | 6, 000, 000.00 | - | 6,000,000.00 | / |
Other note:
None
49. Long-term employee benefits payable
□适用 √不适用
(1). Table of long-term employee benefits payables
□适用 √不适用
(2). Changes in defined benefit plans
Present value of defined benefit plan obligation：
□适用 √不适用
Plan assets：
□适用 √不适用
Net liabilities (net assets) of defined benefit plans:
□适用 √不适用
Description of the content of the defined benefit plan and its associated risks, as well as its impacton the company's future cash flow, timing, and uncertainty:
□适用 √不适用
Description of major actuarial assumptions and sensitivity analysis results for defined benefitplans:
□适用 √不适用
Other notes：
□适用 √不适用
50. Provision for liabilities
□适用 √不适用
51. Deferred income
Deferred income
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Beginning balance | Increase | Decrease | Closing balance | Reason of formation |
| Government grants | 3, 376, 501, 714.84 | 877, 850, 492.50 | 305, 260, 322.98 | 3, 949, 091, 884.36 | - |
| Total | 3, 376, 501, 714.84 | 877, 850, 492.50 | 305, 260, 322.98 | 3, 949, 091, 884.36 | / |
Other note:
√适用 □不适用
Please refer to the description of "Government Subsidy" for details of the projects involvinggovernment subsidy and the apportionment method.
52. Other non-current liabilities
□适用 √不适用
53. Share capital
√适用 □不适用
Unit: Yuan Currency: RMB
| Beginning balance | Increase or decrease (+, -) | Closing balance | |||||
| Issuance New shares | Bonus shares | Capital reserve converted to shares | Others | Subtotal | |||
| Total shares | 7,039,099,786.00 | 7,039,099,786.00 | |||||
Other note:
None
54. Other equity instruments
(1). Basic information on preferred shares, perpetual bonds and other financial
instruments issued at the end of the period
□适用 √不适用
(2). Table of changes in financial instruments such as preferred shares and perpetual
bonds issued at the end of the period
□适用 √不适用
Changes of other equity instruments in the current period, reasons for the changes, and basis forrelevant accounting treatment:
□适用 √不适用
Other note:
□适用 √不适用
55. Capital reserve
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Beginning balance | Increase | Decrease | Closing balance |
| Capital premium(Capital premium) | 18, 604, 956, 168.08 | 18, 604, 956, 168.08 |
| Other capital reserve | 81, 559, 959.68 | 77, 070, 049.22 | 158, 630, 008.90 | |
| Total | 18, 686, 516, 127.76 | 77, 070, 049.22 | 18, 763, 586, 176.98 |
Other note, including the increase and decrease in the current period, and the reason for thechange:
In this period, due to the recognition of share payment expenses in the employee stock ownershipplan, the company increased the capital reserve by RMB77, 070, 049.22.
56. Treasury shares
□适用 √不适用
57. Other comprehensive income
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Beginning balance | Movement during the period | Closing balance | |||||
| Amount before tax | Less: transferred to profit or loss in current year | Less: Included in other comprehensive income in the previous period and transferred to retained earnings in the current period | Less: Income tax expenses | Amount attributable to parent company after tax | Amount attributable to minority interests after tax | |||
| I. Other comprehensive income not reclassified into profit or loss subsequently | ||||||||
| Including: Changes in amount on remeasurement of defined benefit plan | ||||||||
| Other comprehensive income not reclassified to profit or loss under equity method | ||||||||
| Changes in fair value of other equity instrument investments | ||||||||
| Changes in the fair value of the enterprise’s own credit risk | ||||||||
| II. Other comprehensive income that will be reclassified into profit or loss subsequently | -50, 052, 317.06 | 40, 427, 663.98 | 40, 427, 663.98 | -9, 624, 653.08 | ||||
| Including: Other comprehensive income that will be transferred to profit or loss under equity method | ||||||||
| Changes in fair value of other debt investments | ||||||||
| Reclassification of financial assets recognized in other comprehensive income | ||||||||
| Provision for credit loss of other debt investments |
| Cash flows hedge reserve | -54, 062, 644.32 | 6, 252, 291.04 | 6, 252, 291.04 | -47, 810, 353.28 | ||||
| Translation difference of foreign currency financial statements | 4, 010, 327.26 | 34, 175, 372.94 | 34, 175, 372.94 | 38, 185, 700.20 | ||||
| Total other comprehensive income | -50, 052, 317.06 | 40, 427, 663.98 | 40, 427, 663.98 | -9, 624, 653.08 |
Other note, including the adjustment of the initial recognition amount of the hedged item for the effective part of the cash flow hedging profit or loss:
None.
58. Special reserve
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Beginning balance | Increase | Decrease | Closing balance |
| Safety production fee | 1, 602, 239.79 | 428, 804, 002.16 | 321, 048, 118.43 | 109, 358, 123.52 |
| Total | 1, 602, 239.79 | 428, 804, 002.16 | 321, 048, 118.43 | 109, 358, 123.52 |
Other note , including the increase and decrease in the current period, and the reason for thechange:
None
59. Surplus reserve
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Beginning balance | Increase | Decrease | Closing balance |
| Statutory surplus reserve | 905, 565, 700.75 | 89, 753, 070.62 | 995, 318, 771.37 | |
| Discretionary surplus reserve | ||||
| Reserve funds | ||||
| Enterprise expansion fund | ||||
| Others | ||||
| Total | 905, 565, 700.75 | 89, 753, 070.62 | 995, 318, 771.37 |
Note , including the increase and decrease in the current period, and the reason for the change:
The Company appropriates the statutory surplus reserve at 10% of its net profit in accordancewith the “Company Law” and the Company's articles of association. If the accumulated amount ofthe statutory surplus reserve reaches more than 50% of the Company's registered capital, theappropriation will cease.
60. Undistributed profits
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year |
| Closing balance of prior year | 26, 279, 812, 029.77 | 31, 118, 454, 108.29 |
| Add: adjustments on beginning balance of undistributed profits | ||
| Beginning balance after adjustment | 26, 279, 812, 029.77 | 31, 118, 454, 108.29 |
| Add: Net profit attributable to parent company for the current year | 6, 904, 603, 862.76 | 2, 318, 303, 166.69 |
| Less: Appropriation of statutory surplus reserve | 89, 753, 070.62 | 47, 454, 461.35 |
| Appropriation of discretionary surplus reserve | ||
| Appropriation of general risk reserve | ||
| Appropriation for dividends to ordinary shares | 7, 109, 490, 783.86 | |
| Dividend to ordinary shares converted to share capital |
| Closing balance of undistributed profits | 33, 094, 662, 821.91 | 26, 279, 812, 029.77 |
Adjustment of undistributed profits at the beginning of the period:
1.Due to the retroactive adjustment of the "Accounting Standards for Business Enterprises" and itsrelated new regulations, the Undistributed profits at the beginning of the period was affected RMB0.
2.Due to changes in accounting policies, the undistributed profit at the beginning of the period wasaffected RMB 0.
3. Due to the correction of major accounting errors, the undistributed profit at the beginning of theperiod was affected RMB 0.
4.Changes in the scope of consolidation under common control, affecting the undistributed profitat the beginning of the period RMB 0.
5.Total impact of other adjustments on undistributed profit at the beginning of the period RMB 0.
61. Operating income and operating cost
(1). Operating income and operating cost
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year | ||
| Revenue | Cost | Revenue | Cost | |
| Primary operations | 233, 199, 632, 798.64 | 207, 605, 430, 263.55 | 221, 683, 819, 060.46 | 203, 871, 767, 587.67 |
| Other operations | 1, 591, 039, 597.24 | 778, 421, 663.81 | 639, 764, 909.42 | 205, 829, 478.78 |
| Total | 234, 790, 672, 395.88 | 208, 383, 851, 927.36 | 222, 323, 583, 969.88 | 204, 077, 597, 066.45 |
(2).Information of operating income and operating costs
√适用 □不适用
Unit: Yuan Currency: RMB
| Contract classification | Current year | Total | ||
| operating revenue | operating costs | operating revenue | operating costs | |
| Product type | ||||
| Refining products | 119, 961, 394, 781.18 | 97, 736, 740, 789.33 | 119, 961, 394, 781.18 | 97, 736, 740, 789.33 |
| PTA | 72, 607, 325, 755.38 | 73, 593, 225, 397.55 | 72, 607, 325, 755.38 | 73, 593, 225, 397.55 |
| Polyester products | 34, 115, 424, 080.06 | 30, 568, 324, 767.59 | 34, 115, 424, 080.06 | 30, 568, 324, 767.59 |
| Others | 6, 515, 488, 182.02 | 5, 707, 139, 309.08 | 6, 515, 488, 182.02 | 5, 707, 139, 309.08 |
| Classified by geographical region | ||||
| Domestic | 217, 520, 294, 831.77 | 192, 952, 054, 100.03 | 217, 520, 294, 831.77 | 192, 952, 054, 100.03 |
| Overseas | 15, 679, 337, 966.87 | 14, 653, 376, 163.52 | 15, 679, 337, 966.87 | 14, 653, 376, 163.52 |
| Total | 233, 199, 632, 798.64 | 207, 605, 430, 263.55 | 233, 199, 632, 798.64 | 207, 605, 430, 263.55 |
Other notes:
□适用 √不适用
(3). Note on performance obligations :
□适用 √不适用
(4). Description of apportionment to remaining performance obligations:
□适用 √不适用
(5) Major contract changes or major transaction price adjustments:
□适用 √不适用
Other note:
1. The total operating revenue of the top five customers of the Company this year was RMB21,284, 161, 483.40, which accounted for 9.07% of the total operating revenue.
2. Relevant revenue and cost of trial sales
| Product name | Current year | Prior year |
| Revenue of trial sales | 9, 277, 198, 784.14 | 315, 105, 406.95 |
| Cost of trial sales | 9, 165, 652, 787.68 | 283, 157, 002.19 |
The trial operation sales in this period are the external sales of products before the fixed assetsreach the intended usable state.
62. Taxes and surcharges
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year |
| Consumption tax | 7, 677, 485, 422.84 | 5, 424, 150, 546.27 |
| Business tax | ||
| Urban maintenance and construction tax | 566, 340, 116.73 | 418, 477, 747.17 |
| Education surcharge | 242, 762, 663.24 | 179, 555, 517.95 |
| Resource tax | ||
| Property tax | 145, 837, 535.56 | 130, 772, 143.92 |
| Land use tax | 80, 522, 979.26 | 72, 788, 042.28 |
| Vehicle and vessel use tax | ||
| Stamp duty | 307, 783, 577.26 | 271, 455, 396.57 |
| Local education surcharge | 161, 841, 775.49 | 119, 701, 395.73 |
| Environmental protection tax | 17, 236, 683.01 | 13, 321, 650.94 |
| Security for the disabled | ||
| Others | 823, 161.04 | 796, 739.83 |
| Total | 9, 200, 633, 914.43 | 6, 631, 019, 180.66 |
Other note:
Please refer to the explanation of “Taxation” for details of the payment standard.
63. Selling expenses
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year |
| Logistics transportation fee | ||
| Staff salaries | 171, 749, 149.81 | 177, 239, 467.21 |
| Travel expenses | 4, 046, 898.34 | 4, 163, 862.29 |
| Warehousing related costs | 89, 354, 564.98 | 180, 463, 279.95 |
| Business entertainment expenses | 1, 920, 017.46 | 1, 227, 474.04 |
| Office expenses | 17, 366, 721.02 | 22, 468, 241.55 |
| Other expenses | 9, 035, 691.88 | 7, 206, 851.74 |
| Total | 293, 473, 043.49 | 392, 769, 176.78 |
Other note:
None
64. Administrative expenses
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year |
| Staff salaries | 833, 916, 942.06 | 849, 247, 603.21 |
| Depreciation and amortization | 633, 265, 117.08 | 587, 247, 400.89 |
| Office expenses | 424, 368, 720.48 | 368, 450, 540.43 |
| Travel expenses | 47, 548, 901.05 | 39, 577, 984.82 |
| Business entertainment expenses | 20, 965, 070.22 | 18, 400, 622.78 |
| Other expenses | 37, 303, 218.65 | 26, 374, 511.63 |
| Total | 1, 997, 367, 969.54 | 1, 889, 298, 663.76 |
Other note:
None
65. Research and development expenses
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year |
| Staff salaries | 426, 960, 232.93 | 383, 500, 164.71 |
| Direct materials | 668, 829, 148.62 | 512, 323, 117.51 |
| Fuel and power | 136, 857, 584.58 | 137, 112, 098.62 |
| Depreciation and amortization | 103, 301, 638.38 | 112, 721, 585.17 |
| Others | 35, 079, 881.83 | 39, 054, 037.39 |
| Total | 1, 371, 028, 486.34 | 1, 184, 711, 003.40 |
Other note:
None
66. Financial expenses
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year |
| Interest expenses | 5, 836, 304, 435.57 | 5, 182, 887, 891.00 |
| Including: Interest expenses on lease liabilities | 4, 137, 699.03 | 5, 022, 089.58 |
| Less: Interest capitalized | -1, 264, 460, 002.56 | -549, 982, 061.04 |
| Less: Interest income | -468, 581, 267.39 | -332, 736, 566.09 |
| Less: Fiscal interest discount | -4, 347, 712.06 | |
| Net exchange gain or loss | 976, 349, 386.10 | -333, 939, 778.59 |
| Handling fees and others | 289, 499, 031.16 | 321, 141, 965.40 |
| Total | 5, 364, 763, 870.82 | 4, 287, 371, 450.68 |
Other note:
None
67. Other income
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year |
| Government grants received in current period | 630, 488, 011.59 | 1, 277, 081, 247.00 |
| Amortization of deferred income | 302, 860, 322.98 | 314, 769, 087.30 |
| Receive Tax Withholding Fee | 3, 295, 205.93 | 3, 692, 791.90 |
| Tax reduction and exemption | 78, 985, 705.21 | |
| Total | 1, 015, 629, 245.71 | 1, 595, 543, 126.20 |
Other note:
None.
68. Investment income
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year |
| Income from long-term equity investment by equity method | 76, 784, 860.69 |
| Gain from disposal of long-term equity investment | ||
| Investment income of financial assets held for trading during the holding period | ||
| Investment income of other equity investment instruments during the holding period | ||
| Interest income from debts investment during the holding period | ||
| Interest income from other debt investments during the holding period | ||
| Gain from disposal of Financial assets held for trading | 61, 342, 743.03 | -322, 324.78 |
| Investment income from disposal of other equity instruments investment | ||
| Gains from disposal of debts investment | ||
| Gain from disposal of other debt investments | ||
| Gains from debt restructuring | ||
| Gains from disposal of receivables financing | -174, 694, 586.97 | |
| Total | -36, 566, 983.25 | -322, 324.78 |
Other note:
1. Important items of long-term equity investment income accounted for using the equity method
| Investee | Current year | Prior year | Reasons for the increase or decrease in this period compared to the previous year |
| Wuxi Xishang Bank Co., Ltd. | 77, 638, 436.12 | - | Changes in the profit of the investee |
| Chenju(Suzhou) Science and Technology Innovation Development Co., Ltd | -853, 575.43 | - | Changes in the profit of the investee |
| Total | 76, 784, 860.69 | - | - |
2. The company does not have significant restrictions on the repatriation of investment income.
69. Gain from net exposure of hedging
□适用 √不适用
70. Gains from changes in fair value
√适用 □不适用
Unit: Yuan Currency: RMB
| Source of gains from changes in fair value | Current year | Prior year |
| Financial assets held for trading | 558, 832, 667.08 | 454, 544, 350.02 |
| Including: Gains from changes in fair value arising from derivative financial instruments | 559, 183, 971.69 | 456, 756, 322.79 |
| Gains from changes in fair value of non-derivative financial instruments | -351, 304.61 | -2, 211, 972.77 |
| Financial liabilities held for trading | -188, 282, 293.17 | -500, 223, 920.74 |
| Investment properties measured at fair value | ||
| Total | 370, 550, 373.91 | -45, 679, 570.72 |
Other note:
None
71. Credit impairment loss
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year |
| Bad debts of notes receivable | ||
| Bad debts of accounts receivable | -1, 136, 866.40 | 3, 803, 043.71 |
| Bad debts of other receivables | -106, 917, 478.88 | -6, 176, 849.83 |
| Impairment loss of debts investment | ||
| Impairment loss of other debt investments | ||
| Bad debt of long-term receivables | ||
| Impairment losses related to financial guarantees | ||
| Total | -108, 054, 345.28 | -2, 373, 806.12 |
Other note:
None
72. Assets impairment loss
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year |
| I. Bad debt loss | ||
| II. Impairment loss on decline in value of inventories and contract performance cost | -593, 692, 020.24 | -3, 128, 732, 830.34 |
| III. Impairment loss of long-term equity investment | ||
| IV. Impairment loss of investment properties | ||
| V. Impairment loss of fixed assets | ||
| VI. Impairment loss of construction materials | ||
| VII. Impairment loss of construction in progress | ||
| VIII. Impairment loss of productive biological assets | ||
| IX. Impairment loss of oil and gas assets | ||
| X. Impairment loss of intangible assets | ||
| XI. Impairment loss of goodwill | ||
| XII. Others | ||
| Total | -593, 692, 020.24 | -3, 128, 732, 830.34 |
Other note:
None
73. Gains from disposal of assets
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year |
| Gains from disposal of non-current assets not classified as held for sale | -3, 063, 798.81 | -3, 332, 571.69 |
| Including: Fixed assets | -869, 904.40 | -3, 494, 458.02 |
| Right-of-use assets | -111, 362.80 | 161, 886.33 |
| Intangible assets | -2, 082, 531.61 | |
| Total | -3, 063, 798.81 | -3, 332, 571.69 |
Other note:
None
74. Non-operating income
Information of non-operating income
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year | Amount included in non-recurring gains and losses |
| Total gains on disposal of non-current assets | 54, 459.02 | 2, 016, 853.08 | 54, 459.02 |
| Including: Gain from disposal of fixed assets | 54, 459.02 | 2, 016, 853.08 | 54, 459.02 |
| Gain from disposal of intangible assets | |||
| Gains on barter trade of non-monetary assets | |||
| Accept donation | |||
| Government grants | |||
| Indemnity income | 14, 739, 212.12 | 10, 523, 745.24 | 14, 739, 212.12 |
| Carbon emissions trading revenue | 56, 603, 773.59 | 56, 603, 773.59 | |
| Initial investment cost of the long-term equity investment calculated by the equity method is less than the share of the owner's equity of the investee | 79, 415, 493.16 | ||
| Others | 8, 418, 013.15 | 13, 374, 625.74 | 8, 418, 013.15 |
| Total | 79, 815, 457.88 | 105, 330, 717.22 | 79, 815, 457.88 |
Other note:
□适用 √不适用
75. Non-operating expenses
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year | Amount included in non-recurring gains and losses |
| Total losses on disposal of non-current assets | 1, 555, 570.10 | 7, 478, 374.56 | 1, 555, 570.10 |
| Including: Loss on disposal of fixed assets | 1, 555, 570.10 | 7, 478, 374.56 | 1, 555, 570.10 |
| Loss on disposal of intangible assets | |||
| Losses on barter trade of non-monetary assets | |||
| External donation | 102, 003, 000.00 | 939, 000.00 | 102, 003, 000.00 |
| Fines payment | 399, 000.00 | 14, 125.81 | 399, 000.00 |
| Compensation, liquidated damages | 142, 433.50 | 306, 000.00 | 142, 433.50 |
| Tax late fee | 616, 116.01 | 9, 966, 608.00 | 616, 116.01 |
| Provision for litigation losses | |||
| Others | 1, 675, 568.66 | 1, 977, 149.82 | 1, 675, 568.66 |
| Total | 106, 391, 688.27 | 20, 681, 258.19 | 106, 391, 688.27 |
Other note:
None
76. Income tax expenses
(1). Income tax expenses
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year |
| Current income tax | 1, 330, 070, 239.55 | 776, 954, 787.70 |
| Deferred income tax | 638, 698, 030.86 | -685, 413, 122.59 |
| Total | 1, 968, 768, 270.41 | 91, 541, 665.11 |
(2). Reconciliation between income tax expenses and accounting profit
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year |
| Profits before tax | 8, 873, 232, 207.19 |
| Expected income tax expenses at applicable tax rates | 2, 218, 308, 051.80 |
| Effect of different tax rates applied by subsidiaries | -328, 913, 138.60 |
| Adjustment for income tax in previous years | 14, 155, 493.36 |
| Effect of non-taxable income | -60, 452, 218.84 |
| Effect of non-deductible costs, expenses and losses | 311, 668, 825.62 |
| Effect of using the deductible temporary differences or deductible losses for which no deferred tax asset was recognized in previous period | -135, 675, 028.70 |
| Effect of deductible temporary differences or deductible losses for which no deferred tax asset was recognized this year | 47, 987, 369.72 |
| The impact of additional deduction of research and development expenses | -98, 324, 540.76 |
| Effect of tax rates adjustment | 13, 456.81 |
| Income tax expenses | 1, 968, 768, 270.41 |
Other note:
□适用 √不适用
77. Other comprehensive income
√适用 □不适用
For details of other comprehensive income, please refer to the description of “Other comprehensiveincome” in note 57.
78. Notes to cash flow statement
(1). Cash related to operating activities
Cash received from other operating activities
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year |
| Recover of bank security deposits | 2, 487, 038, 979.97 | 2, 717, 429, 397.12 |
| Interest income received | 457, 661, 248.69 | 329, 903, 553.79 |
| Revenue from labor services and rental services received | 115, 117, 600.04 | 82, 592, 034.32 |
| Government grants income received | 1, 512, 686, 216.15 | 1, 974, 073, 764.50 |
| Security deposit received | 50, 093, 354.25 | 155, 476, 221.27 |
| Receive the emissions trading revenue | 60, 000, 000.00 | |
| Receive the customer’s futures transaction reserve fund | 757, 796, 509.61 | 622, 380, 717.69 |
| Net amount received from others payments and current accounts | 56, 170, 549.33 | 54, 436, 482.72 |
| Total | 5, 496, 564, 458.04 | 5, 936, 292, 171.41 |
Note to cash received from other operating activities:
None
Cash paid for other operating activities
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year |
| Payment of security deposit to banks | 1, 282, 883, 169.62 | 2, 487, 038, 979.97 |
| Expenses paid in cash | 925, 939, 345.05 | 1, 067, 439, 713.14 |
| Payment of security deposits | 55, 930, 165.11 | 39, 943, 686.24 |
| Net amount paid for others payments and current accounts | 208, 723, 191.68 | 40, 617, 426.82 |
| Total | 2, 473, 475, 871.46 | 3, 635, 039, 806.17 |
Note to Cash paid for other operating activities:
None
(2).Cash related to investment activities
Cash received from major investing activities
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year |
| Receipts of the redemption of financial products | 910, 000, 000.00 | 39, 000, 000.00 |
| Receipts of margin deposit for futures contract | 1, 002, 917, 428.98 | 230, 197, 278.69 |
| Withdrawal of treasury bond reverse repurchase investment | 1, 063, 238, 000.00 | 1, 547, 438, 000.00 |
| Receipts of other investments such as bond funds | 1, 496, 165, 096.54 | 433, 517, 745.71 |
| Total | 4, 472, 320, 525.52 | 2, 250, 153, 024.40 |
Note to Cash received from other investing activities:
None
Cash paid for major investing activities
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year |
| Payment of investment in financial products | 855, 000, 000.00 | 94, 000, 000.00 |
| Payment of treasury bond reverse repurchase investment | 1, 220, 389, 000.00 | 1, 409, 925, 000.00 |
| Payment of other investments such as bond funds | 1, 618, 046, 706.05 | 433, 517, 745.71 |
| Total | 3, 693, 435, 706.05 | 1, 937, 442, 745.71 |
Note to Cash paid for major nvesting activities:
None
Other cash received relating to investing activities:
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year |
| Withdraw the bank guarantee | 1, 165, 527, 839.07 | 273, 421, 460.73 |
| Margin received for commodity futures contracts | 129, 638, 118.47 | 65, 358, 947.08 |
| Net other receipts and current accounts | 18, 904, 666.78 | 9, 122, 082.64 |
| Total | 1, 314, 070, 624.32 | 347, 902, 490.45 |
Note to cash received related to investment activities:
None
Other cash paid relating to investing activities
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year |
| Margin paid for commodity futures contracts | 242, 207, 168.35 | 129, 114, 882.39 |
| Bank guarantee deposit paid | 634, 499, 614.62 | 1, 165, 527, 839.07 |
| Other payments and net current accounts | 11, 996, 480.27 | 20, 985, 976.52 |
| Total | 888, 703, 263.24 | 1, 315, 628, 697.98 |
(3) Cash related to financing activities
Cash received for other financing activities
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year |
| Recover of bank security deposits | 4, 118, 655, 079.75 | 3, 352, 867, 653.01 |
| Recover security deposits of financing leases | 23, 250, 000.00 | |
| Received financing lease payments | 3, 520, 000, 000.00 | |
| Net amount of cash received from the sale of treasury shares | 382, 298, 725.15 | |
| Total | 7, 661, 905, 079.75 | 3, 735, 166, 378.16 |
Note to Cash received for other financing activities:
None
Cash paid for other financing activities
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year |
| Payment of principal and interest of Hengli Group’s borrowings | 170, 000, 000.00 | |
| Payment of security deposit to banks | 3, 525, 382, 532.58 | 4, 118, 655, 079.75 |
| Payment related to leases | 2, 234, 645, 253.91 | 193, 495, 397.24 |
| Cash paid for other financing activities | 25, 211, 778.44 | |
| Total | 5, 785, 239, 564.93 | 4, 482, 150, 476.99 |
Note to Cash paid for other financing activities:
None
Changes in liabilities arising from financing activities
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Beginning balance | Increase | Decrease | Closing balance | ||
| Cash changes | Non-cash changes | Cash changes | Non-cash changes | |||
| Bank loans | 134, 718, 792, 639.74 | 104, 717, 625, 805.89 | 16, 445, 116, 890.30 | 95, 381, 893, 382.68 | 10, 861, 079, 577.41 | 149, 638, 562, 375.84 |
| Other payables - dividends payable | 34, 003.40 | 34, 003.40 | ||||
| Bonds payable (including those within one year) | 2, 030, 618, 280.89 | 999, 000, 000.00 | 48, 719, 397.32 | 2, 062, 100, 000.00 | 943, 396.23 | 1, 015, 294, 281.98 |
| Lease liabilities (including those within one year) [Note] | 90, 581, 757.16 | 62, 188, 913.57 | 39, 137, 220.23 | 33, 519, 584.66 | 80, 113, 865.84 | |
| Long-term payables (including those within one year) | 1, 081, 671, 944.27 | 3, 520, 000, 000.00 | 307, 067, 582.44 | 2, 193, 524, 919.48 | 214, 179, 716.16 | 2, 501, 034, 891.07 |
| Total | 137, 921, 664, 622.06 | 109, 236, 625, 805.89 | 16, 863, 126, 787.03 | 99, 676, 689, 525.79 | 11, 109, 722, 274.46 | 153, 235, 005, 414.73 |
[Note] The VAT related to the payment of rental is RMB1, 983, 114.21
(4) Note to Presenting Cash Flow on a Net Basis :
□适用 √不适用
(5) Significant activities and financial impacts that do not involve current cash receiptsand payments but affect the financial status of the enterprise or may affect the cash flowof the enterprise in the future
√适用 □不适用
| Item | Current year | Prior year |
| Bill endorsement transfer for payment of goods | 3, 105, 895, 310.18 | 3, 814, 448, 539.56 |
79. Supplement to cash flow statement
(1). Supplement to cash flow statement
√适用 □不适用
Unit: Yuan Currency: RMB
| Supplement information | Current year | Prior year |
| 1．Reconciliation of net profit to cash flow from operating activities: | ||
| Net profit | 6, 904, 463, 936.78 | 2, 318, 036, 950.22 |
| Add: Provision for impairment of assets | 593, 692, 020.24 | 3, 128, 732, 830.34 |
| Credit impairment loss | 108, 054, 345.28 | 2, 373, 806.12 |
| Depreciation of fixed assets, depletion of oil and gas assets, and depreciation of productive biological assets | 8, 825, 594, 625.40 | 8, 567, 512, 312.81 |
| Amortization of right-of-use assets | 32, 918, 601.09 | 33, 675, 038.15 |
| Amortization of intangible assets | 254, 303, 592.07 | 261, 164, 423.95 |
| Amortization of long-term deferred expenses | 617, 798, 491.85 | 680, 489, 913.08 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (Gain as in “-”) | 3, 063, 798.81 | 3, 332, 571.69 |
| Loss on retirement of fixed assets (Gain as in “-”) | 1, 501, 111.08 | 5, 461, 521.48 |
| Losses on changes in fair value (Gain as in “-”) | -370, 550, 373.91 | 45, 679, 570.72 |
| Financial expenses (Gain as in “-”) | 4, 640, 958, 566.54 | 4, 444, 197, 476.00 |
| Investment losses (Gain as in “-”) | -138, 127, 603.72 | 322, 324.78 |
| Decrease in deferred tax assets (Increase as in “-”) | 615, 902, 069.48 | -703, 400, 163.02 |
| Increase in deferred tax liabilities (Decrease as in “-”) | 22, 795, 961.38 | 17, 987, 040.43 |
| Decrease in inventories (Increase as in “-”) | 5, 972, 116, 203.83 | -7, 090, 734, 574.98 |
| Decrease in operating receivables (Increase as in “-”) | -366, 059, 086.40 | 5, 237, 905, 008.94 |
| Increase in operating payables (Decrease as in “-”) | -4, 369, 558, 472.13 | 9, 119, 876, 604.91 |
| Others | 186, 922, 341.30 | -118, 641, 872.19 |
| Net cash flows from operating activities | 23, 535, 790, 128.97 | 25, 953, 970, 783.43 |
| 2．Significant investment or finance activities not involving cash: | ||
| Conversion of debt into capital | ||
| Convertible bonds mature within one year | ||
| Right-of-use assets formed by leasing | 24, 494, 067.04 | 27, 164, 265.16 |
| 3．Net increase / (decrease) in cash and cash equivalents: | ||
| Cash and bank balance as at end of year | 15, 025, 322, 771.34 | 20, 323, 703, 829.39 |
| Less: cash and bank balance at beginning of year | 20, 323, 703, 829.39 | 9, 589, 548, 876.75 |
| Add: cash equivalents at end of year | ||
| Less: cash equivalents at beginning of year | ||
| Net increase in cash and cash equivalents | -5, 298, 381, 058.05 | 10, 734, 154, 952.64 |
(2). Net cash paid for acquisition of subsidiaries during the year
□适用 √不适用
(3). Net cash received from disposal of subsidiaries during the year
□适用 √不适用
(4). Details of cash and cash equivalents
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance |
| I. Cash | 15, 025, 322, 771.34 | 20, 323, 703, 829.39 |
| Including: Cash on hand | 609, 377.49 | 1, 305, 525.78 |
| Cash at bank readily available for payment | 12, 956, 437, 868.43 | 18, 837, 045, 793.15 |
| Other monetary fund readily available for payment | 2, 068, 275, 525.42 | 1, 485, 352, 510.46 |
| Cash at central bank available on demand | ||
| Deposits with banks and other financial institutions | ||
| Interbank lending | ||
| II. Cash equivalents | ||
| Including: bonds investment mature within 3 months | ||
| III. Cash and cash equivalents as at closing balance | 15, 025, 322, 771.34 | 20, 323, 703, 829.39 |
| Including: Restricted cash and cash equivalents held by the Company or subsidiaries of the Group |
(5) Situation where the using rights of cash and bank balances subject to restriction is still
listed as cash and cash equivalents
□适用 √不适用
(6) Monetary funds not classified as cash and cash equivalents
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year | Reason of restriction |
| Loan guarantee deposit | 3, 525, 382, 532.57 | 3, 838, 471, 603.38 | Not to be used casually |
| Bank acceptance deposit | 296, 007, 837.30 | 506, 369, 384.04 | Not to be used casually |
| Letter of credit deposit | 948, 463, 593.21 | 2, 414, 021, 116.76 | Not to be used casually |
| Bond guarantee | 2, 157, 102.00 | 150, 000.00 | Not to be used casually |
| Forward foreign exchange margin | 10, 586, 192.00 | Not to be used casually | |
| Futures trading restricted margin | 70, 269, 522.55 | 2, 000, 000.00 | Not to be used casually |
| restricted time deposit certificate | 480, 884, 729.18 | 858, 620, 000.00 | Not to be used casually |
| Other restricted bank deposits | 119, 600, 000.00 | 119, 600, 000.00 | Not to be used casually |
| Unexpired interest receivable | 951, 060.99 | 2, 883, 754.27 | Not to be used casually |
| Total | 5, 443, 716, 377.80 | 7, 752, 702, 050.45 | / |
Other notes:
□适用 √不适用
80. Notes to Items in the Statement of Changes in Owner's EquityExplain the "other" items and the adjustment amount for the adjustment of the balance at theend of the previous year:
□适用 √不适用
81. Items in foreign currencies
(1). Items in foreign currencies
√适用 □不适用
Unit: Yuan
| Item | Closing balance in foreign currency | Conversion rate | Converted into RMB at year end balance |
| Cash and bank balances | - | - | |
| Including: US Dollar | 228, 745, 260.41 | 7.0827 | 1, 620, 134, 055.93 |
| Euro | 1, 459, 206.53 | 7.8592 | 11, 468, 195.96 |
| Hong Kong dollars | 8, 062, 199.64 | 0.90622 | 7, 306, 126.56 |
| Japanese Yen | 3, 697.00 | 0.050213 | 185.64 |
| Singapore dollar | 2, 765, 282.79 | 5.3772 | 14, 869, 478.61 |
| Swiss Franc | 0.09 | 8.4184 | 0.76 |
| British pounds | 72.21 | 9.0411 | 652.86 |
| Korean won | 1, 600.00 | 0.005513 | 8.82 |
| Accounts receivable | - | - | |
| Including: US Dollar | 32, 453, 150.29 | 7.0827 | 229, 855, 927.54 |
| Euro | 1, 433, 004.36 | 7.8592 | 11, 262, 267.86 |
| Receivables financing | - | - |
| Including: US Dollar | 108, 989, 669.64 | 7.0827 | 772, 043, 132.63 |
| Other receivables | - | - | |
| Including: US Dollar | 36, 120, 161.88 | 7.0827 | 255, 828, 270.54 |
| Notes payable | - | - | |
| Including: US Dollar | 297, 081, 634.04 | 7.0827 | 2, 104, 140, 089.42 |
| Euro | 13, 938, 649.72 | 7.8592 | 109, 546, 635.88 |
| Accounts payable | - | - | |
| Including: US Dollar | 526, 205, 342.04 | 7.0827 | 3, 726, 954, 576.07 |
| Euro | 150, 206, 369.36 | 7.8592 | 1, 180, 501, 898.07 |
| Swiss Franc | 1, 783, 610, 991.94 | 0.050213 | 89, 560, 458.74 |
| Other payables | - | - | |
| Including: US Dollar | 23, 814, 259.44 | 7.0827 | 168, 669, 255.34 |
| Non-current liabilities due within one year | - | - | |
| Including: US Dollar | 54, 269, 231.75 | 7.0827 | 384, 372, 687.71 |
| Euro | 5, 659, 424.16 | 7.8592 | 44, 478, 546.36 |
| Long term loans | - | - | |
| Including: US Dollar | 850, 000, 000.00 | 7.0827 | 6, 020, 295, 000.00 |
| Euro | 33, 936, 458.48 | 7.8592 | 266, 713, 414.49 |
Other note:
None
(2). Explanation of overseas operating entities, including for important overseas
operating entities, the main overseas business location, bookkeeping functionalcurrency and selection basis should be disclosed, and the reasons for changes inbookkeeping functional currency should also be disclosed
√适用 □不适用
| Name | Place of business | Reporting currency | Selection basis |
| HENGLI PETROCHEMICAL CO., LIMITED | China Hong Kong | US Dollar | The currency of the primary economic environment in which the business operates is US Dollar |
| HENGLI PETROCHEMICAL INTERNATIONAL PTE. LTD. | Singapore | US Dollar | The currency of the primary economic environment in which the business operates is US Dollar |
| HENGLI OILCHEM PTE. LTD. | Singapore | US Dollar | The currency of the primary economic environment in which the business operates is US Dollar |
| HENGLI SHIPPING INTERNATIONAL PTE. LTD. | Singapore | US Dollar | The currency of the primary economic environment in which the business operates is US Dollar |
82. Lease
(1) As leasee
√适用 □不适用
Variable lease payments not included in the measurement of lease liabilities
□适用 √不适用
Simplify the processing of short-term leases or rental fees for low-value assets
√适用 □不适用
| Item | Current year |
| Short-term leases | 4, 968, 272.71 |
| Rental fees for low-value assets | - |
| Total | 4, 968, 272.71 |
After-sale leaseback transaction and judgment basis
√适用 □不适用
In the after-sale leaseback transaction business of the company, the leased property belongs to thecompany at the end of the lease term and does not meet the criteria for sale. The company usesafter-sale leaseback transactions for financing, which is not a common business practice forcompanies.
Total cash outflow related to leasing 2, 234, 645, 253.91(Unit: Yuan Currency: RMB )
(2) As leasor
Operating lease as a lessor
√适用 □不适用
Unit: Yuan Currency:RMB
| Item | Rental income | Including: income related to variable lease payments not included in the lease receipt amoun |
| Houses and buildings | 12, 306, 376.38 | - |
| Total | 12, 306, 376.38 | - |
Financial leasing as a lessor
□适用 √不适用
Adjustment table of undiscounted lease receipts and net lease investment
□适用 √不适用
Undiscounted lease receipts in the next five years
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Annual undiscounted lease receipts | |
| Closing balance | Beginning balance | |
| First year | 10, 845, 440.54 | 11, 011, 481.76 |
| Second year | 2, 177, 766.12 | 8, 667, 674.42 |
| Third year | 544, 441.53 | - |
| The fourth year | - | - |
| Fifth year | - | - |
| Total undiscounted lease receipts after five years | - | - |
(3) Confirm the profit or loss of financial leasing sales as a manufacturer or distributor
□适用 √不适用
Other notes:
None.
83. Others
□适用 √不适用
VIII Research and Development Expenditures
(1). Listed by nature of expenses
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year |
| Staff salaries | 426, 960, 232.93 | 383, 500, 164.71 |
| Direct materials | 668, 829, 148.62 | 512, 323, 117.51 |
| Fuel and power | 136, 857, 584.58 | 137, 112, 098.62 |
| Depreciation and amortization | 103, 301, 638.38 | 112, 721, 585.17 |
| Others | 35, 079, 881.83 | 39, 054, 037.39 |
| Total | 1, 371, 028, 486.34 | 1, 184, 711, 003.40 |
| Including: Expensed R&D expenditure | 1, 371, 028, 486.34 | 1, 184, 711, 003.40 |
| Capitalized R&D expenditure | - |
Other notes：
None
(2). Expenditure of research and development projects meet capitalized conditions
□适用 √不适用
Important capitalized research and development projects
□适用 √不适用
Provision for impairment of development expenditure
□适用 √不适用
Other notes：
None
Important outsourcing projects in research
□适用 √不适用
IX. Changes in scope of consolidation
1. Business combination not under common control
□适用 √不适用
2. Business combination under common control
□适用 √不适用
3. Reverse acquisition
□适用 √不适用
4. Disposal of subsidiaries
Whether there are transactions or events that result in the loss of control over subsidiaries in thecurrent period :
□适用 √不适用
Other note:
□适用 √不适用
Whether there are situations that the investment in a subsidiary is disposed of through multipletransactions and control is lost in the current period:
□适用 √不适用
Other note:
□适用 √不适用
5. Changes in the scope of consolidation for other reasons
Explain the changes in the scope of consolidation caused by other reasons (such as theestablishment of new subsidiaries, liquidation of subsidiaries, etc.) and related situations:
√适用 □不适用
1． Increase in scope of consolidation
| Company name | Mode of acquisition of equity | Equity acquisition date | Contribution amount | Contribution ratio |
| Luzhou Hengli Energy Sales Co., Ltd | New established | 2023/04/27 | 10000 ten thousand yuan | 100% |
| Hengli Fuel Oil (Hainan) Co., Ltd | New established | 2023/05/17 | 10000 ten thousand yuan | 100% |
| Shanghai Hengli Fuel Oil Co., Ltd | New established | 2023/05/30 | 10000 ten thousand yuan | 100% |
| Hengli (Zhoushan) Energy and Chemical Co., Ltd | New established | 2023/03/28 | 10000 ten thousand yuan | 100% |
| Hengli Petrochemical Trading Co., Ltd | New established | 2023/04/24 | 10000 ten thousand yuan | 100% |
| Huizhou Hengli Jinshang Trading Co., Ltd | New established | 2023/08/28 | 10000 ten thousand yuan | 100% |
| Huizhou Hengli Chemical Sales Co., Ltd | New established | 2023/11/15 | 5000 ten thousand yuan | 100% |
| Hengli International Trade Co., Ltd | New established | 2023/10/08 | 10000 ten thousand yuan | 100% |
2. Decrease in scope of consolidation for other reasons
| Company name | Disposal method | Disposal date of equity | Net assets on disposal date | Net profit from the beginning of the period to date of disposal |
| Kanghui Kunshan New Material Technology Co., Ltd | Deregistered | 2023/06/26 | - | 5.6 |
| Hengli Logistics (Dalian) Co., Ltd | Deregistered | 2023/06/27 | - | - |
| Hengli Chemical (Suqian) Co., Ltd | Deregistered | 2023/01/10 | - | - |
| Hengli Oil Products (Suqian) Co., Ltd | Deregistered | 2023/01/10 | - | - |
| Suzhou Baocheng Weiye | Deregistered | 2023/01/20 | - | - |
| Petrochemical Trading Co., Ltd | ||||
| Suzhou Jinzhan Hengyuan Petrochemical Trading Co., Ltd | Deregistered | 2023/01/03 | - | - |
3. Absorption merger
There is no merger or acquisition in this period.
6. Others
□适用 √不适用
X. Interests in other entities
1. Interests in subsidiaries
(1). Group structure
√适用 □不适用
| Name of subsidiary | Place of business | Registered capital | Place of registration | Nature of business | Shareholding (%) | Acquisition method | |
| Direct | Indirect | ||||||
| Jiangsu Hengli Chemical Fiber Co., Ltd. | China | 220800 ten thousand yuan | No. 1, Hengli Road, Nanma Industrial Zone, Shengze Town, Wujiang City, Jiangsu Province | Manufacturing | 99.99 | 0.01 | Business combination not under common control |
| Jiangsu Hengke Advanced Materials Co. Ltd. | China | 278000 ten thousand yuan | Hengli Textile New Material Industrial Park, Binjiang New District (Wuji Town), Tongzhou City, Nantong City | Manufacturing | 100.00 | Business combination under common control | |
| Nantong Teng’an Logistics Co., Ltd. | China | 50 ten thousand yuan | No. 1, Kaisha Road, Binjiang New District, Tongzhou City, Nantong City | Transportation industry | 100.00 | Established by investment | |
| Jiangsu Xuanda Polymer Material Co., Ltd. | China | 205000 ten thousand yuan | Textile New Material Industrial Park, Wujie Town, Tongzhou District, Nantong City | Manufacturing | 100.00 | Established by investment | |
| Jiangsu Deli Chemical Fiber Co., Ltd. | China | 75073.87 ten thousand yuan | No. 599, Huanghe South Road, Sucheng Economic Development Zone, Suqian City | Manufacturing | 100.00 | Business combination not under common control | |
| Hengli Futures Co., Ltd. | China | 75000 ten thousand yuan | 02, 03, 04, Floor 7, No. 308, Jinkang Road, China (Shanghai) Pilot Free Trade Zone | Other financial industry | 100.00 | Business combination not under common control | |
| Hengli Hengxin Industry and Trade (Shanghai) Co., Ltd. | China | 20000 ten thousand yuan | Floor 7, No. 308, Jinkang Road, China (Shanghai) Pilot Free Trade Zone (nominal floor, actual floor 6th floor) 01 | Wholesale and retail | 100.00 | Established by investment | |
| Suzhou Susheng Thermal Power Co., Ltd. | China | 26700 ten thousand yuan | Tanqiu Village, Shengze Town, Wujiang | Manufacturing | 100.00 | Business combination under common control | |
| Suzhou Binglin Trading Co., Ltd. | China | 500 ten thousand yuan | Room 202, Building 8, No. 1, Hengli Road, Nanma Industrial Zone, Shengze Town, Wujiang District, Suzhou | Wholesale and retail | 100.00 | Established by investment | |
| Sichuan Hengli New Material Co., Ltd. | China | 10000 ten thousand yuan | No. 10, Section 2, Lingang Avenue, South Sichuan Lingang Area, Sichuan Free Trade Zone | Manufacturing | 100.00 | Established by investment | |
| Hengli New Materials (Suqian) Co., Ltd. | China | 100000 ten thousand yuan | No. 88, Gangcheng Road, Yangbei Street, Sucheng District, Suqian City | Manufacturing | 100.00 | Established by investment | |
| Suzhou Hengli Chemical New Material Co., Ltd. | China | 10000 ten thousand yuan | Room 203, Building 8, No. 1, Hengli Road, Nanma Industrial Zone, Shengze Town, Wujiang District, Suzhou City, Jiangsu Province | Wholesale industry | 100.00 | Established by investment | |
| Kanghui New Material Technology Co., Ltd. | China | 167796.5802 ten thousand yuan | Yingkou Xianrendao Energy and Chemical Industry Zone | Manufacturing | 66.33 | 33.67 | Business combination under common control |
| Comfort International Trade (Jiangsu) Co., Ltd. | China | 5000 ten thousand yuan | Room 201, Building 8, No. 1, Hengli Road, Nanma Industrial Zone, Shengze Town, Wujiang District | Wholesale and retail | 100.00 | Established by investment | |
| Suqian Kanghui New Material Co., Ltd. | China | 50000 ten thousand yuan | Shop 125, Property 77, Huaihai Property Material Decoration City, Suqian Economic and Technological Development Zone | Manufacturing | 100.00 | Established by investment |
| Kanghui Dalian New Material Technology Co., Ltd. | China | 64000 ten thousand yuan | Complex Building No. 298, Changsong Road, Changxing IsLand Economic Zone, Dalian, Liaoning Province | Manufacturing | 100.00 | Established by investment | |
| Jiangsu Kanghui New Material Technology Co., Ltd. | China | 250000 ten thousand yuan | The Yangtze River Delta Ecological Green Integration Development Demonstration Zone (No.558 Fenhu Avenue, Lili Town, Wujiang District, Suzhou City) | Manufacturing | 100.00 | Established by investment | |
| Kanghui Nantong New Material Technology Co., Ltd. | China | 200000 ten thousand yuan | Hengli Textile New Material Industrial Park, Wujie Town, Tongzhou District, Nantong City | Manufacturing | 100.00 | Business combination under common control | |
| Hengli Investment (Dalian) Co., Ltd. | China | 627000 ten thousand yuan | Former Xingang Primary School, Xingang Village, Changxing IsLand Economic Zone, Dalian, Liaoning Province | Industrial Investment | 100.00 | Business combination under common control | |
| Hengli Petrochemical (Dalian) Co., Ltd. | China | 589000 ten thousand yuan | Former Xingang Primary School, Xingang Village, Changxing IsLand Economic Zone, Dalian, Liaoning Province | Manufacturing | 100.00 | Established by investment | |
| Hengli Shipping (Dalian) Co., Ltd. | China | 2000 ten thousand yuan | Xingang Village, Changxing IsLand Economic Zone, Dalian, Liaoning Province (formerly Xingang Primary School) | Transportation industry | 100.00 | Business combination not under common control | |
| Hengli Petrochemical Co.,Limited | China Hong Kong | 1000 ten thousand Hong Kong dollars | Flat 1906, 19/F, Harbour Centre, 25 Harbour Road, Wanchai, Hong Kong | Wholesale and retail | 100.00 | Established by investment | |
| Shenzhen Ganghui Trading Co., Ltd. | China | 10000 ten thousand yuan | Unit 6101-03, Block A, Kingkey 100 Property, 5016 Shennan East Road, Guiyuan Street, | Wholesale and retail | 100.00 | Business combination under common control |
| Luohu District, Shenzhen | |||||||
| Hengli Storage and Transportation (Dalian) Co., Ltd | China | 1000 ten thousand yuan | No. 298, Changsong Road, Changxing Island Economic Zone, Dalian, Liaoning Province | Transportation industry | 100.00 | Established by investment | |
| Hengli Concrete (Dalian) Co., Ltd. | China | 2000 ten thousand yuan | Xingang Village, Changxing IsLand Economic Zone, Dalian, Liaoning Province (formerly Xingang Primary School) | Manufacturing | 100.00 | Business combination under common control | |
| Hengli Petrochemical (Huizhou) Co., Ltd. | China | 227740 ten thousand yuan | No. 26, Xiayong Petrochemical Avenue Middle, Daya Bay, Huizhou (Plant No. 2 (R&D)) | Manufacturing | 100.00 | Established by investment | |
| Hengli Petrochemical (Dalian) Refining Co., Ltd. | China | 1759633 ten thousand yuan | No. 298, Changsong Road, Changxing IsLand Economic Zone, Dalian, Liaoning Province | Manufacturing | 100.00 | Business combination under common control | |
| Hengli Petrochemical International Pte. Ltd. | Singapore | 3035.6844 ten thousand U.S dollar | 9 STRAITS VIEW #08-11 MARINA ONE WEST TOWER SINGAPORE(018937) | Wholesale and retail | 100.00 | Established by investment | |
| Hengli Oilchem Pte. Ltd. | Singapore | 2500 ten thousand Singapore Dollar | 9 STRAITS VIEW #08-11 MARINA ONE WEST TOWER SINGAPORE(018937) | Wholesale and retail | 79.00 | Established by investment | |
| Hengli Shipping International Pte. Ltd. | Singapore | 50 ten thousand U.S dollar | 9 STRAITS VIEW #08-11 MARINA ONE WEST TOWER SINGAPORE(018937) | Transportation industry | 100.00 | Established by investment | |
| Hengli Energy (Hainan) Co., Ltd. | China | 15000 ten thousand U.S dollar | Room 801, Building A, Sunshine Financial Plaza, Jiyang District, Sanya City, Hainan Province | Wholesale and retail | 100.00 | Established by investment | |
| Hengli Petrochemical (Hainan) Co., Ltd. | China | 10000en thousand U.S dollar | Room 205-1328, No.181 Xingyang Avenue, Jiangdong New | Wholesale and retail | 100.00 | Established by investment |
| District, Haikou City, Hainan Province | |||||||
| Suzhou Hengli Chemical Import & Export Co., Ltd. | China | 11000 ten thousand U.S dollar | No. 1801, Pangjin Road, Wujiang Economic and Technological Development Zone, Suzhou City, Jiangsu Province | Wholesale and retail | 100.00 | Established by investment | |
| Suzhou Hengli Energy Chemical Import & Export Co., Ltd. | China | 5000 ten thousand U.S dollar | Room 301, Building 5, No. 1518, Linhu Avenue, Lili Town, Wujiang District, Suzhou City | Wholesale and retail | 100.00 | Established by investment | |
| Shenzhen Shengang Trading Co., Ltd. | China | 5000 ten thousand yuan | No. 5016, Shennan East Road, Guiyuan Street, Luohu District, Shenzhen ,Unit 6101-03B, Block A, Kingkey 100 Building | Wholesale and retail | 100.00 | Business combination under common control | |
| Hengli Refining Products Sales (Dalian) Co., Ltd. | China | 10000 ten thousand yuan | OSBL Project - Public Works Office Building No. 298, Changsong Road, Changxing IsLand Economic Zone, Dalian, Liaoning Province | Wholesale and retail | 100.00 | Established by investment | |
| Hengli Aviation Oil Co., Ltd. | China | 1000 ten thousand yuan | No. 298, Changsong Road, Changxing IsLand Economic Zone, Dalian, Liaoning Province | Wholesale and retail | 100.00 | Established by investment | |
| Hengli Oilchem (Suzhou) Co., Ltd. | China | 10000 ten thousand yuan | 2302, Property 88, Suzhou Central Plaza, Suzhou Industrial Park, Suzhou Area, China (Jiangsu) Pilot Free Trade Zone | Wholesale and retail | 100.00 | Established by investment | |
| Hengli Energy (Suzhou) Co., Ltd. | China | 10000 ten thousand yuan | Room 2301, Property 88, Suzhou Central Plaza, Suzhou Industrial Park, Suzhou Area, | Wholesale and retail | 100.00 | Established by investment |
| China (Jiangsu) Pilot Free Trade Zone | |||||||
| Suzhou Hengli Chemical Polymer Co., Ltd. | China | 10360 ten thousand yuan | East side of East Bridge, Lili Town, Wujiang District, Suzhou City | Wholesale and retail | 100.00 | Established by investment | |
| Hengli Petrochemical (Dalian) Chemical Co., Ltd. | China | 457495 ten thousand yuan | No. 298, Changsong Road, Changxing IsLand Economic Zone, Dalian, Liaoning Province | Manufacturing | 100.00 | Established by investment | |
| Hengli Petrochemical (Dalian) New Material Technology Co., Ltd. | China | 650000 ten thousand yuan | Complex Building No. 298, Changsong Road, Changxing IsLand Economic Zone, Dalian, Liaoning Province | Manufacturing | 100.00 | Established by investment | |
| Hengli Petrochemical Utilities (Dalian) Co., Ltd. | China | 30000 ten thousand yuan | Complex Building No. 298, Changsong Road, Changxing IsLand Economic Zone, Dalian, Liaoning Province | Manufacturing | 100.00 | Established by investment | |
| Dalian Hengzhong Special Materials Co., Ltd. | China | 1800 ten thousand yuan | Dispatching Center, No. 3 Renshan Street, Changxing Island Economic Zone, Dalian, Liaoning Province | Manufacturing | 65.00 | Established by investment | |
| Suzhou Textile Group Network E-commerce Co., Ltd. | China | 500 ten thousand yuan | No. 1, Hengli Road, Nanma Industrial Zone, Shengze Town, Wujiang District | Wholesale and retail | 100.00 | Established by investment | |
| Hengli Petrochemical Sales Co., Ltd. | China | 5000 ten thousand yuan | Room 1688, Property 2, No. 215, Lianhe North Road, Fengxian District, Shanghai | Wholesale and retail | 100.00 | Established by investment | |
| Hengli (Eastern China) Petrochemical Sales Co., Ltd. | China | 5000 ten thousand yuan | 2401, No. 3099, Chang’an Road, Songling Town, Wujiang District, Suzhou City | Wholesale and retail | 100.00 | Established by investment | |
| Hengli (Southern China) Petrochemic | China | 20000 ten thousand yuan | 3202, Luohu Business Center, 2028 Shennan East Road, | Wholesale and retail | 100.00 | Established by investment |
| al Sales Co., Ltd. | Chengdong Community, Dongmen Street, Luohu District, Shenzhen | ||||||
| Hengli (Northern China) Petrochemical Sales Co., Ltd. | China | 5000 ten thousand yuan | Window 1, West Side of the Approval Hall, R&D Property, Xianrendao Economic Development Zone, Yingkou, Liaoning Province | Wholesale and retail | 100.00 | Established by investment | |
| Yuehai Petrochemical (Shenzhen) Co., Ltd. | China | 20000 ten thousand yuan | Room 1401, Main Tower Building, Ocean Shipping Center, No. 59, Linhai Avenue, Nanshan Street, Qianhai Shenzhen-Hong Kong Cooperation Zone, Shenzhen 14002-14003 | Wholesale and retail | 100.00 | Business combination not under common control | |
| Hengli Oil Sales (Suzhou) Co., Ltd. | China | 10000 ten thousand yuan | 2303, Property 88, Suzhou Central Plaza, Suzhou Industrial Park, Suzhou Area, China (Jiangsu) Pilot Free Trade Zone | Wholesale and retail | 100.00 | Established by investment | |
| Hengli Chemical Sales (Suzhou) Co., Ltd. | China | 10000 ten thousand yuan | 2304, Property 88, Suzhou Central Plaza, Suzhou Industrial Park, Suzhou Area, China (Jiangsu) Pilot Free Trade Zone | Wholesale and retail | 100.00 | Established by investment | |
| Hengli North Energy Sales Co., Ltd. | China | 10000 ten thousand yuan | No. 3, Unit 1, 21st Floor, Office Property B, Victoria Plaza, No.56 Gangxing Road, Zhongshan District, Dalian City, Liaoning Province | Wholesale and retail | 100.00 | Established by investment | |
| Hengli Tongshang New Energy Co., Ltd. | China | 10000 ten thousand yuan | Room 813, Free Trade Building, Dalian Free Trade Zone, Liaoning Province | Wholesale and retail | 100.00 | Established by investment |
| Hengli Tongshang New Material Co., Ltd. | China | 10000 ten thousand yuan | Service Apartment, Building 14, Suzhou Bay View Garden, No. 777, Fengqing Street, East Taihu Lake Ecotourism Resort (Taihu New Town), Wujiang District, Suzhou City | Wholesale and retail | 100.00 | Established by investment | |
| Hengli Energy Import and Export Co., Ltd. | China | 10000 ten thousand yuan | Room F1-A-1026, Building A2, No. 8, Qicun Road, Suzhou Area, China (Jiangsu) Pilot Free Trade Zone | Wholesale and retail | 100.00 | Established by investment | |
| Hengli Nenghua (Shanghai) Trading Co., Ltd. | China | 10000 ten thousand yuan | Room 702-7, No. 719 Shengui Road, Minhang District, Shanghai | Wholesale and retail | 100.00 | Established by investment | |
| Hengli Hengyuan Supply Chain (Shanghai) Co., Ltd. | China | 20000 ten thousand yuan | Room 101, Floor 1, Building 1, No. 99, Shuanghui Road, Lingang New Area, China (Shanghai) Pilot Free Trade Zone | Wholesale and retail | 100.00 | Established by investment | |
| Hengli New Energy (Shanghai) Co., Ltd. | China | 10000 ten thousand yuan | Room 502, No. 99, Huangpu Road, Hongkou District, Shanghai | Wholesale and retail | 100.00 | Established by investment | |
| Hengli Yuanshang Technology (Suzhou) Co., Ltd. | China | 10000 ten thousand yuan | Room 2507, Building 88, Suzhou Central Plaza, Suzhou Industrial Park, Suzhou Area, China (Jiangsu) Pilot Free Trade Zone | Wholesale and retail | 100.00 | Established by investment | |
| Suzhou Hengli Jinshang Energy Technology Co., Ltd. | China | 10000 ten thousand yuan | Room 2506, Building 88, Suzhou Center Plaza, Suzhou Industrial Park, Suzhou Area, China (Jiangsu) Pilot Free Trade Zone | Wholesale and retail | 100.00 | Established by investment | |
| Dalian Hengli Fine Chemical | China | 10000 ten thousand yuan | No. 5, 21st Floor, No. 52, Gangxing Road, Zhongshan | Wholesale and retail | 100.00 | Established by |
| Sales Co., Ltd. | District, Dalian City, Liaoning Province | investment | |||||
| Hengli Petrochemical Sales (Haikou) Co., Ltd. | China | 10000 ten thousand yuan | Hefeng Homeland, Meilan District, Haikou City, No. 63-1, Qiongshan Avenue, Jiangdong New District, Haikou City, Hainan Province-5449 | Wholesale and retail | 100.00 | Established by investment | |
| Hengli Energy Chemical (Sanya) Co., Ltd. | China | 10000 ten thousand yuan | Room 805, Building A, Yahua Xiangxie, Sanya Bay Road, Tianya District, Sanya City, Hainan Province | Wholesale and retail | 100.00 | Established by investment | |
| Dalian Hengli Petrochemical Sales Co., Ltd. | China | 10000 ten thousand yuan | No. 4, 21st Floor, No. 52, Gangxing Road, Zhongshan District, Dalian City, Liaoning Province | Wholesale and retail | 100.00 | Established by investment | |
| Dalian Hengli Gold Merchant Sales Co., Ltd. | China | 10000 ten thousand yuan | No. 62, Changxing Road, Changxing Island Economic Zone, Dalian, Liaoning Province | Wholesale and retail | 100.00 | Established by investment | |
| Dalian Hengli New Energy Sales Co., Ltd. | China | 10000 ten thousand yuan | No. 62, Changxing Road, Changxing Island Economic Zone, Dalian, Liaoning Province | Wholesale and retail | 100.00 | Established by investment | |
| Dalian Henglixing Gemstone Chemical Trading Co., Ltd. | China | 10000 ten thousand yuan | No. 6, 21st Floor, No. 52, Gangxing Road, Zhongshan District, Dalian City, Liaoning Province | Wholesale and retail | 100.00 | Established by investment | |
| Dalian Hengli Gaoyuan Sales Co., Ltd. | China | 10000 ten thousand yuan | Office Dormitory Building, No. 6, No. 76, Jinghai Street, Changxing Island Economic Zone, Dalian, Liaoning Province | Wholesale and retail | 100.00 | Established by investment | |
| Hengli Energy Chemical (Shenzhen) Co., Ltd. | China | 10000 ten thousand yuan | Room 3201, Luohu Business Center, No. 2028, Shennan East Road, Chengdong | Wholesale and retail | 100.00 | Established by investment |
| Community, Dongmen Street, Luohu District, Shenzhen | |||||||
| Nantong Hengli Maoyuan Petrochemical Trading Co., Ltd. | China | 1000 ten thousand yuan | Room 101, Building 5, Kaisha Village, Wujie Town, Tongzhou District, Nantong City, Jiangsu Province | Wholesale and retail | 100.00 | Established by investment | |
| Suzhou Hengli New Energy Sales Co., Ltd. | China | 10000 ten thousand yuan | Room 501-04, Building A, Building 1, Taihu East Bank Business Center, No. 4088 Kaiping Road, Wujiang District, Suzhou City, Jiangsu Province | Wholesale and retail | 100.00 | Established by investment | |
| Suzhou Hengli Fine Chemical Sales Co., Ltd. | China | 10000 ten thousand yuan | Room 501-3, Building A, Building 1, Taihu East Bank Business Center, No. 4088 Kaiping Road, East Taihu Lake Eco-tourism Resort (Taihu New Town), Wujiang District, Suzhou City | Wholesale and retail | 100.00 | Established by investment | |
| Hengli Petrochemical Sales (Shenzhen) Co., Ltd. | China | 10000 ten thousand yuan | No. 1406, Main Tower, Ocean Shipping Center, No. 59, Linhai Avenue, Nanshan Street, Qianhai Shenzhen-Hong Kong Cooperation Zone, Shenzhen-14057, 14058 | Wholesale and retail | 100.00 | Established by investment | |
| Luzhou Hengli Energy Sales Co., Ltd | China | 10000 ten thousand yuan | No. 1, 2nd Floor, Building 19, Yingtian Intelligent Terminal Industrial Park, Luzhou Comprehensive Bonded Zone | Wholesale and retail | 100.00 | Established by investment | |
| Hengli Fuel Oil (Hainan) Co., Ltd | China | 10000 ten thousand yuan | Room G003, No. 2 Office Building, Bonded Port | Wholesale and retail | 100.00 | Established by |
| Area, Xinying Bay District, Yangpu Economic Development Zone, Hainan Province | investment | ||||||
| Shanghai Hengli Fuel Oil Co., Ltd | China | 10000 ten thousand yuan | Room A-522, No. 188, Yesheng Road, Lingang New Area, China (Shanghai) Pilot Free Trade Zone | Wholesale and retail | 100.00 | Established by investment | |
| Hengli (Zhoushan) Energy and Chemical Co., Ltd | China | 10000 ten thousand yuan | Room 402-76, Warehouse 1, Area B, No. 86, Dacheng 4th Road, High-tech Industrial Park, Dinghai District, Zhoushan City, China (Zhejiang) Pilot Free Trade Zone | Wholesale and retail | 100.00 | Established by investment | |
| Hengli Petrochemical Trading Co., Ltd | China | 10000 ten thousand yuan | Room 2602, Building 88, Suzhou Central Square, Suzhou Industrial Park, Suzhou Area, China (Jiangsu) Pilot Free Trade Zone | Wholesale and retail | 100.00 | Established by investment | |
| Huizhou Hengli Jinshang Trading Co., Ltd | China | 10000 ten thousand yuan | No. 26, Xianong Petrochemical Avenue, Daya Bay, Huizhou (No. 2 factory building (R&D)) | Wholesale and retail | 100.00 | Established by investment | |
| Huizhou Hengli Chemical Sales Co., Ltd | China | 5000 ten thousand yuan | No. 26 Xiachong Petrochemical Avenue Central, Daya Bay, Huizhou (Building 2 (R&D)) | Wholesale and retail | 100.00 | Established by investment | |
| Hengli International Trade Co., Ltd | China | 10000 ten thousand yuan | Room 501-2606, Building 88, Suzhou Central Plaza, Suzhou Industrial Park, Suzhou Area, China (Jiangsu) Pilot Free Trade Zone | Wholesale and retail | 100.00 | Established by investment |
Reason of difference between shareholding ratio and voting right ratio in the subsidiary:
There are no subsidiaries with a shareholding ratio different from the voting right ratio.
Basis for holding half or less of the voting rights but still controlling the investee:
There were no subsidiaries in the current period that the parent company had half or less of thevoting rights and was included in the scope of the consolidated financial statements.
Basis of control in structured entity included in the scope of the consolidation:
There are no important structured entity included in the scope of the consolidation in this period.
Basis for determining whether a company is an agent or a principal:
None
Other note:
In this period, there was no equity investment in which the parent company had more than half ofthe voting rights but failed to exercise control.
(2). Significant non-wholly-owned subsidiaries
□适用 √不适用
(3). Key financial information of important non-wholly owned subsidiaries
□适用 √不适用
(4). Significant restrictions on the use of corporate group assets and the settlement ofcorporate group debts
□适用 √不适用
(5). Financial support or other support provided to structured entities included in the
scope of consolidated financial statements
□适用 √不适用
Other note:
□适用 √不适用
2. Transactions in which the share of ownership interest in a subsidiarychanges and the subsidiary is still controlled
□适用 √不适用
3. Interests in joint ventures or associates
□适用 √不适用
4. Significant joint venture
□适用 √不适用
5. Interests in structured entities not included in the scope of consolidated financialstatementsExplanation on structured entities not included in the scope of consolidated financial statements:
√适用 □不适用
On 31 December 2023, the structured entities related to the Company but not included in thescope of this financial statement are mainly engaged in asset management business, manageclient assets and provide clients with investment management services for securities, futures andother financial products. The total assets of such structured entities on 31 December 2023 wereRMB738.5488 million.
6. Others
□适用 √不适用
XI. Government grants
1、 Government grants recognized based on the receivable amount at the end of the reporting
period
□适用 √不适用
Reasons for not receiving the expected amount of government grant at the expected time
□适用 √不适用
2、 Liability items involving government grants
√适用 □不适用
Unit: Yuan Currency: RMB
| Financial statement items | Beginning balance | Increased grants amount in this period | Amount included in non-operating income in this period | Transferred to other income in this period | Other changes in this period | Closing balance | Related to assets/revenues |
| Deferred income | 3, 376, 501, 714.84 | 877, 850, 492.50 | - | 305, 260, 322.98 | - | 3, 949, 091, 884.36 | Related to assets |
3、 Government grants included in the current profit or loss
√适用 □不适用
Unit: Yuan Currency: RMB
| Type | Current year | Prior year |
| Related to assets | 302, 860, 322.98 | 315, 654, 639.40 |
| Related to revenues | 637, 235, 723.65 | 1, 278, 595, 694.90 |
| Total | 940, 096, 046.63 | 1, 594, 250, 334.30 |
Other notes：
None
XII. Risk of financial instruments
√适用 □不适用
1. Risk of financial instruments
(I) Various risks arising from financial instruments
The Company faces risks of various financial instruments in its daily activities, mainly includingcredit risk, market risk and liquidity risk. The Company's main financial instruments include cash andbank balances, equity investment, debt investment, loans, accounts receivable, accounts payable,etc. For details of each financial instrument, please refer to the relevant items in this Note. The risksassociated with these financial instruments and the risk management policies adopted by theCompany to reduce these risks are as follows:
The board of directors is responsible for planning and establishing the Company's riskmanagement structure, formulating the Company's risk management policies and related guidelines,and supervising the implementation of risk management measures. The Company has formulatedrisk management policies to identify and analyze the risks faced by the Company. These riskmanagement policies specify specific risks and cover many aspects such as market risk, credit riskand liquidity risk management. The Company regularly assesses changes in the market environmentand the Company's operating activities to determine whether to update risk management policiesand systems. The Company's risk management is carried out by the risk management committee inaccordance with the policies approved by the board of directors. The Risk Management Committeeidentifies, evaluates and avoids related risks through close cooperation with the Company’s otherbusiness departments. The Company's internal audit department conducts regular audits on riskmanagement controls and procedures, and reports the audit results to the Company's auditcommittee.
The Company diversifies the risk of financial instruments through appropriate diversifiedinvestments and business portfolios, and reduces risk concentrated on a single industry, a specificregion, or a specific counterparty by formulating appropriate risk management policies.
1. Market risk
Market risk of financial instruments refers to the risk that the fair value or future cash flow offinancial instruments will fluctuate due to changes in market price, including foreign exchange raterisk, interest rate risk and other price risk.
(1). Foreign exchange rate risk
Exchange rate risk refers to the risk that the fair value of financial instruments or future cashflows will fluctuate due to changes in foreign exchange rates. The Company's main operations arelocated in China, Hong Kong, Singapore, domestic business is settled in RMB, export business ismainly settled in US dollar, and overseas operating companies are settled in US dollar, so theCompany's determined foreign currency assets and liabilities and future foreign currencytransactions (Foreign currency assets and liabilities and foreign currency transactions are mainlydenominated in US dollar.) were exposed to foreign exchange rate risk. Related foreign currencyassets and foreign currency liabilities include: Cash and bank balances, Accounts receivable,Receivable financing, Other receivables, Accounts payable, Notes payable, Other payables, Short-term loans, and Non-current liabilities due within one year. Amount of financial assets and foreigncurrency financial liabilities dominated in foreign currency and converted into RMB can be found in“Items in foreign currencies” in this note.
The Company pays close attention to the impact of exchange rate changes on the Company'sexchange rate risk, and matches foreign currency income with foreign currency expenditure asmuch as possible to reduce foreign exchange risk. In addition, the Company also signed forwardforeign exchange contracts to prevent the exchange risk of the Company's revenue settled in USdollars. At the end of the current period, the foreign exchange risks faced by the Company mainlyoriginated from financial assets and liabilities denominated in US dollar. Amount of foreign currencyfinancial assets and foreign currency financial liabilities converted into RMB is shown in “Items inforeign currencies” in this note.
If all the other variables remain unchanged, the impact of a 5% appreciation or depreciation ofthe RMB against the US dollar on the company's net profit is as follows:
| Exchange rate changes | Impact on Net profit (RMB ten thousand) | |
| Current year | Prior year | |
| Up5% | -41, 759.98 | -48, 908.58 |
| Down5% | 41, 759.98 | 48, 908.58 |
The management believes that 5% reasonably reflects the reasonable range of possiblechanges in the RMB against the US dollar.
(2). Interest rate risk
Interest rate risk refers to the risk that the fair value of financial instruments or future cashflows will fluctuate due to changes in market interest rates. The risks faced by the Company inchanging market interest rates are mainly related to the Company's borrowings with floatinginterest rates. The Company's interest rate risk mainly arises from long-term interest-bearing debtssuch as long-term bank loans and bonds payable. Floating interest rate financial liabilities exposethe Company to cash flow interest rate risk, while fixed interest rate financial liabilities expose theCompany to fair value interest rate risk. The Company determines the relative ratio of fixed rate andfloating rate contracts according to the market environment at that time, and maintains anappropriate combination of fixed and variable rate instruments through regular review andmonitoring.
When other variables remain unchanged, if the borrowing rate calculated at floating interestrates increases or decreases by 50 basis points, the impact on the company's net profit is as follows:
| Interest rate changes | Impact on Net profit (RMB ten thousand) | |
| Current year | Prior year | |
| Up 50 basis points | -41, 340.58 | -29, 996.98 |
| Down 50 basis points | 41, 340.58 | 29, 996.98 |
Management believes that 50 basis points reasonably reflects a reasonable range of possiblechanges in interest rates over the next year.
(3). Other price risks
The Company does not hold equity investments in other listed companies, and there is no otherprice risk.
2. Credit risk
Credit risk refers to the risk that the counterparty of a transaction fails to perform itscontractual obligations, resulting in financial losses to the Company. The Company's credit riskmainly arises from Cash at bank and Receivables.
The Company's cash at bank is mainly deposited in state-owned banks and other large andmedium-sized listed banks. The Company does not expect cash at bank to have significant creditrisk.
For Receivables, the Company sets relevant policies to control credit risk exposure inaccordance with the concentration of customer management credit risk. The Company evaluatesthe debtor's credit qualifications based on the debtor's financial status, external ratings, possibilityof obtaining guarantees from third parties, credit history and other factors such as current marketconditions, and sets the corresponding arrearage amount and credit period. The Company willregularly monitor the credit history of the debtor. For debtors with poor credit records, theCompany will use written reminders, shorten the credit period or cancel the credit period to ensurethat the Company's overall credit risk is within control. Since the Company's Receivables customersare widely dispersed in different regions and industries, there is no significant concentration ofcredit risk in the Company.
The Company does not provide any other guarantees that may subject the Company to creditrisk. The largest credit risk exposure undertaken by the Company is the carrying amount of eachfinancial asset in the balance sheet.
(1). Judgment basis for significant increase in credit risk
The Company assesses on each balance sheet date whether the credit risk of relevant financialinstruments has increased significantly since initial recognition. When determining whether thecredit risk has increased significantly since the initial recognition, the Company considers that it canobtain reasonable and evidence-based information without unnecessary extra cost or effort,including qualitative and quantitative analysis based on the Company's historical data, externalcredit risk rating and forward-looking information. When one or more of the following quantitativeand qualitative standards are met, the Company believes that credit risk has increased significantly:
1) The contract payment has been overdue for more than 30 days.
2) According to the results of external public credit ratings, the debtor’s credit rating droppedsignificantly.
3) There are serious problems in the debtor's production or operation, and the actual orexpected results of the operation have dropped significantly.
4) Significantly adverse changes have occurred in the debtor’s regulatory, economic ortechnological environment.
5) It is expected that the debtor’s business, financial or economic conditions that will meet itsdebt-servicing capacity will undergo significant adverse changes.
6) Other objective evidence shows that financial assets have significantly increased credit risk.
(2). Basis of credit impairment
When evaluating whether the debtor has suffered credit impairment, the Company mainlyconsiders the following factors:
1) The issuer or debtor has significant financial difficulties.
2) The debtor violates the contract, such as interest payment or principal default or overdue,etc.
3) Due to economic or contractual considerations related to the debtor’s financial difficulties,the creditor gives the debtor a concession that would not be made under any other circumstances.
4) The debtor is likely to go bankrupt or undergo other financial restructuring.
5) The issuer or debtor's financial difficulties caused the active market for the financial asset todisappear.
6) Purchase or source a financial asset at a substantial discount, the discount reflects the factthat credit losses have occurred.
(3). Parameters of measurement of expected credit loss
The parameters of expected credit loss measurement are based on whether there has been asignificant increase in credit risk and whether credit impairment has occurred. The Companymeasures the loss provision for different assets with 12 months or the expected lifetime of theentire credit period. The key parameters of expected credit loss measurement include defaultprobability, default loss rate and default risk exposure. The Company considers the quantitativeanalysis of historical statistical data and forward-looking information to establish default probability,default loss rate and default risk exposure model. The relevant definitions are as follows:
1) The probability of default refers to the possibility that the debtor will not be able to meet itsrepayment obligations in the next 12 months or throughout the remaining duration.
2) The default risk exposure refers to the amount that the Company should be reimbursedwhen a default occurs in the next 12 months or throughout the remaining duration.
3) The default loss rate refers to the Company's expectation of the degree of loss in defaultexposure. Depending on the type of counterparty, the method and priority of recourse, and theavailability of collateral or other credit support, the rate of default loss varies.
The Company determines the expected credit loss by predicting the default probability, defaultloss rate and default risk exposure of individual exposures or asset portfolios in the coming months.During the reporting period, there have been no major changes in the expected credit lossestimation techniques or key assumptions.
(4). Forward-looking information included in the expected credit loss model
The assessment of a significant increase in credit risk and the calculation of expected creditlosses involve forward-looking information. Through historical data analysis, the Company hasidentified relevant information that affects the credit risk and expected credit losses of each assetportfolio, such as GDP growth rate and other macroeconomic conditions, and industry developmentstages such as industry cycle stage. The Company predicts the impact of this information on theprobability of default and the rate of default loss on the basis of considering changes in theCompany's future sales strategy or credit policy.
3.Liquidity risk
Liquidity risk refers to the risk of a shortage of funds when an enterprise performs its obligationto settle cash or other financial assets. Liquidity risk is centrally controlled by the Company'sfinancial department. The finance department monitors cash balances, securities that can be cashedat any time, and rolling forecasts of cash flows over the next 12 months to ensure that the Companyhas sufficient funds to repay debts under all reasonable forecasts, meet the Company’s operatingneeds, and reduce the impact of cash flow fluctuations.
The financial liabilities and off-balance sheet guarantee items held by the company areanalyzed according to the maturity period of the undiscounted remaining contractual cash flow (unit:
RMB):
| Item | Closing balance | ||||
| Within a year | 1 to 2 years | 2 to 3 years | Over three years | Total | |
| Bank borrowing | 8, 816, 488.06 | 1, 166, 222.44 | 1, 308, 678.55 | 6, 010, 008.31 | 17, 301, 397.36 |
| Financial liabilities held for trading | 19, 032.43 | - | - | - | 19, 032.43 |
| Notes payable | 1, 200, 245.36 | - | - | - | 1, 200, 245.36 |
| Accounts payable | 1, 559, 866.76 | - | - | - | 1, 559, 866.76 |
| Other payables | 41, 622.49 | - | - | - | 41, 622.49 |
| Lease liabilities | 4, 188.18 | 2, 577.97 | 1, 009.84 | 1, 055.12 | 8, 831.11 |
| Long-term payables | 50, 923.22 | 88, 241.72 | 109, 148.72 | 19, 036.84 | 267, 350.51 |
| Bonds payable | 103, 530.00 | - | - | - | 103, 530.00 |
| Total financial liabilities and contingent liabilities | 10, 099, 557.28 | 1, 257, 042.13 | 1, 418, 837.11 | 6, 030, 100.26 | 18, 805, 536.79 |
Continued
| Item | Beginning balance | ||||
| Within a year | 1 to 2 years | 2 to 3 years | Over three years | Total | |
| Bank borrowing | 7, 995, 908.34 | 1, 442, 535.62 | 982, 147.48 | 4, 578, 830.32 | 14, 999, 421.76 |
| Financial liabilities held for trading | 34, 602.07 | - | - | - | 34, 602.07 |
| Notes payable | 2, 060, 377.59 | - | - | - | 2, 060, 377.59 |
| Accounts payable | 886, 931.00 | - | - | - | 886, 931.00 |
| Other payables | 38, 226.32 | - | - | - | 38, 226.32 |
| Lease liabilities | 3, 727.65 | 3, 164.20 | 1, 545.50 | 1, 630.60 | 10, 067.95 |
| Long-term payables | 26, 731.55 | 38, 100.00 | 51, 500.00 | - | 116, 331.55 |
| Bonds payable | 203, 061.83 | - | - | - | 203, 061.83 |
| Total financial liabilities and contingent liabilities | 11, 249, 566.35 | 1, 483, 799.82 | 1, 035, 192.98 | 4, 580, 460.92 | 18, 349, 020.07 |
The financial liability amounts disclosed in the table above represent undiscounted contractualcash flows and may therefore differ from the carrying amount in the balance sheet.(IV) Capital managementThe goal of the Company's capital management policy is to ensure that the Company cancontinue to operate, so as to provide returns for shareholders and benefit other stakeholders, whilemaintaining the optimal capital structure to reduce the cost of capital. In order to maintain or adjustthe capital structure, the Company may adjust the amount of dividends paid to shareholders, returncapital to shareholders, issue new shares or sell assets to reduce debt. The Company monitors thecapital structure on the basis of the asset-liability ratio (ie total liabilities divided by total assets). Asof 31 December 2023, the Company's asset-liability ratio was 76.98% (31 December 2022: 78.08%).
2. Hedging
(1) The company carries out hedging business for risk management
□适用 √不适用
Other notes:
□适用 √不适用
(2) The company carries out eligible hedging business and applies hedge accounting
□适用 √不适用
Other notes:
□适用 √不适用
(3) The company conducts hedging business for risk management, and expects to achieve
risk management objectives but has not applied hedge accounting:
□适用 √不适用
Other notes:
□适用 √不适用
3. Transfer of financial assets
(1) Classification of Transfer Methods
□适用 √不适用
(2) Financial assets derecognized due to transfer
□适用 √不适用
(3) Transfer of financial assets that continue to be involved
□适用 √不适用
Other notes:
□适用 √不适用
XIII. Disclosure of fair value
1. Fair value of assets and liabilities measured at fair value at the end of the period
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Fair value at year end | |||
| Level 1 fair value measurement | Level 2 fair value measurement | Level 3 fair value measurement | Total | |
| I. Recurring fair value measurement | ||||
| (I) Financial assets held for trading | 48, 652, 243.29 | 250, 177, 829.84 | - | 298, 830, 073.13 |
| 1.Financial assets at fair value through profit or loss | 48, 652, 243.29 | 250, 177, 829.84 | - | 298, 830, 073.13 |
| (1)Debt instruments investment | - | 131, 265, 471.64 | - | 131, 265, 471.64 |
| (2)Equity instruments investment | - | 81, 022, 358.20 | - | 81, 022, 358.20 |
| (3)Derivative financial assets | 48, 652, 243.29 | - | - | 48, 652, 243.29 |
| (4)Wealth management products and structured deposits | - | 37, 890, 000.00 | - | 37, 890, 000.00 |
| 2. Financial assets designated at fair value through profit or loss | ||||
| (1)Debt instruments investment | ||||
| (2)Equity instruments investment | ||||
| (II) Other debt investments | ||||
| (III) Other equity instruments investment | ||||
| (IV) Investment properties | ||||
| 1.Land use rights for rental | ||||
| 2.Leased buildings | ||||
| 3.Land use rights that are held and ready to be transferred after appreciation | ||||
| (V) Biological assets | ||||
| 1.Consumptive biological assets | ||||
| 2.Productive biological assets | ||||
| (VI) Receivables financing | - | - | 4, 170, 047, 562.43 | 4, 170, 047, 562.43 |
| Total assets measured at fair value on recurring basis | 48, 652, 243.29 | 250, 177, 829.84 | 4, 170, 047, 562.43 | 4, 468, 877, 635.56 |
| (VI) Financial liabilities held for trading | 190, 324, 330.67 | - | - | 190, 324, 330.67 |
| 1.Financial liabilities at fair value through profit or loss | 190, 324, 330.67 | - | - | 190, 324, 330.67 |
| Including: Issued trading bonds | - | - | - | - |
| Derivative financial liabilities | 190, 324, 330.67 | - | - | 190, 324, 330.67 |
| Others | ||||
| 2.Designated as financial liabilities at fair value through profit or loss | ||||
| Total liabilities measured at fair value on recurring basis | 190, 324, 330.67 | - | - | 190, 324, 330.67 |
| II. Non-recurring fair value measurement | ||||
| (I) Assets held-for-sale |
| Total assets measured at fair value on a non-recurring basis | ||||
| Total liabilities measured at fair value on a non-recurring basis |
2. The basis for determining the market value of the continuous and non-continuous Level 1 fairvalue measurement
√适用 □不适用
For futures contracts with an active market price, the fair value is determined based on thequotation on the balance sheet date.
3. Continuous and non-continuous Level 2 fair value measurement using valuation techniques
and qualitative and quantitative information on important parameters
√适用 □不适用
For debt instrument investments, wealth management products, structured deposits, fundtrusts, and asset management products held by the company, valuation techniques are used todetermine their fair value. The valuation model used is the discounted cash flow model/marketquotes or dealer quotes for similar instruments.
4. Continuous and non-continuous Level 3 fair value measurement using valuation techniques
and qualitative and quantitative information on important parameters
√适用 □不适用
For receivables financing that is not traded in an active market, the carrying amount is similarto the fair value, and the carrying amount is used as the fair value.
5. Continuous third-level fair value measurement items, reconciliation information between
book value at the beginning and end of the period and sensitivity analysis of unobservable
parameters
□适用 √不适用
6. Continuing fair value measurement items, conversions between levels during the current
period, reasons for the conversions and policies for determining the timing of the conversions
□适用 √不适用
7. Valuation technology changes during the period and reasons for the changes
□适用 √不适用
8. Fair value of financial assets and financial liabilities not measured at fair value
√适用 □不适用
The Company's financial assets and financial liabilities measured at amortised cost mainlyinclude: Cash and bank balances, Note receivables, Accounts receivable, Other receivables, Short-term loans, Notes payable, Accounts payable, Other payables, Non-current liabilities due withinone year, Long term loans, etc. The difference between the carrying amount of the financial assetsand financial liabilities that the Company does not measure at fair value and their fair value areimmaterial.
9. Others
□适用 √不适用
XIV. Related party and related party transactions
1. Information of parent company
√适用 □不适用
Unit: ten thousand yuan Currency: RMB
| Name of parent company | Place of registration | Nature of business | Registered capital | Shareholding ratio of parent company to the Company (%) | Parent company's voting right ratio (%) |
| Hengli Group Co., Ltd. | Wujiang, Jiangsu | Industrial Investment | 200,200.00 | 29.84 | 29.84 |
Description of the parent company of the company
The Company’s ultimate controlling party is the couple of Chen Jianhua and Fan Hongwe. ChenJianhua and Fan Hongwei directly held 11.24% shares of the Company and through Hengli GroupCo., Ltd. and other 5 companies to hold 64.21% of shares of the Company, and totally held75.45%of shares of the Company.The ultimate controlling party of this enterprise is Chen Jianhua and his wife Fan Hongwei.Other note:
None
2. The Company's subsidiaries
For the details of the subsidiaries of the company, please refer to the notes
√适用 □不适用
For details of the Company's subsidiaries, please refer to “Interests in subsidiaries”.
3. The Company's joint ventures and associates
For the important Joint ventures or associates of the company, please refer to the notes
□适用 √不适用
The situation of other joint ventures or associates that had related party transactions with thecompany in the current period, or had balances with the company in the previous period is asfollows
□适用 √不适用
Other note
□适用 √不适用
4. Other related party
√适用 □不适用
| Name of other related party | Other related party and its relationship with the Company |
| Dalian Henghan Investment Co., Ltd. | Companies controlled by the actual controlling party of the Company |
| Guangdong Songfa Ceramics Co., Ltd. | Entity controlled by our parent company |
| Suzhou Wujiang Tongli Lake Tourist Resort Co., Ltd. | Entity controlled by our parent company |
| Suzhou Hengli Real Estate Co., Ltd. | Entity controlled by our parent company |
| Hengli Industrial Investment (Suzhou) Co., Ltd. | Entity controlled by our parent company |
| Suzhou Gufeng Asset Management Co., Ltd. | Entity controlled by our parent company |
| Hengli Cloud Business Technology Co., Ltd. | Entity controlled by our parent company |
| Wujiang Huajun Textile Co., Ltd. | Entity controlled by our parent company |
| Jiangsu Boyada Textile Co., Ltd. | Entity controlled by our parent company |
| Jiangsu Deshun Textile Co., Ltd. | Entity controlled by our parent company |
| Jiangsu Dehua Textile Co., Ltd. | Entity controlled by our parent company |
| Hengli (Suzhou) Textile Sales Co., Ltd. | Entity controlled by our parent company |
| Sichuan Hengli Smart Textile Technology Co., Ltd. | Entity controlled by our parent company |
| Hengli (Guizhou) Textile Intelligent Technology Co., Ltd. | Entity controlled by our parent company |
| Jiangsu Pejie Textile Intelligent Technology Co., Ltd. | Entity controlled by our parent company |
| Suqian Lishun Property Co., Ltd. Hengli Hotel Branch | Companies controlled by the actual controlling party of the Company |
| Suqian Bailong Garden Technology Co., Ltd. | Companies controlled by the actual controlling party of the Company |
| Hengli Real Estate (Dalian) Co., Ltd. | Companies controlled by the actual controlling party of the Company |
| Dalian Victoria Property Service Co., Ltd. | Companies controlled by the actual controlling party of the Company |
| Dalian Kangjia Property Service Co., Ltd. | Companies controlled by the actual controlling party of the Company |
| Suzhou Tongli Red Wine Co., Ltd. | Companies controlled by the actual controlling party of the Company |
| Suzhou Tonglihong Electronic Commerce Co., Ltd. | Companies controlled by the actual controlling party of the Company |
| Suzhou Hengli Intelligent Technology Co., Ltd. | Companies controlled by the actual controlling party of the Company |
| Suzhou Hengli System Integration Co., Ltd. | Companies controlled by the actual controlling party of the Company |
| Jiangsu Changshun Textile Co., Ltd. | Companies controlled by the actual controlling party of the Company |
| Nantong Deji Concrete Co., Ltd. | Companies controlled by the actual controlling party of the Company |
| Hengli Import and Export Co., Ltd. | Entity controlled by our parent company |
| Jiangsu Wu Jiangsu Zhouwan Hengli International Hotel Co., Ltd. | Entity controlled by our parent company |
| Hengli Engine (Dalian) Co., Ltd. | Companies controlled by the actual controlling party of the Company |
| Hengli Precision Casting (Dalian) Co., Ltd. | Companies controlled by the actual controlling party of the Company |
| Hengli Green Building Materials (Dalian) Co., Ltd. | Companies controlled by the actual controlling party of the Company |
| Hengli Shipbuilding (Dalian) Co., Ltd. | Companies controlled by the actual controlling party of the Company |
| Hengli Equipment Manufacturing (Dalian) Co., Ltd. | Companies controlled by the actual controlling party of the Company |
| Hengli Comprehensive Service (Dalian) Co., Ltd. | Companies controlled by the actual controlling party of the Company |
| Hengli Energy Management Service (Dalian) Co., Ltd. Yingkou Hehai Bridge Gas Station Branch | Companies controlled by close family members of the actual controlling party of the Company |
| Hengli International Hotel (Suqian) Co., Ltd | Companies controlled by the actual controlling party of the Company |
| Hengli Marine Engineering (Dalian) Co., Ltd | Companies controlled by the actual controlling party of the Company |
| Hengli Energy Management Service (Jiangsu) Co., Ltd. Nantong Yangkou Port Gas Station | Companies controlled by close family members of the actual controlling party of the Company |
| Hengli Energy Management Service (Suzhou) Co., Ltd | Companies controlled by close family members of the actual controlling party of the Company |
| Hengli Heavy Industry Group Co., Ltd | Companies controlled by the actual controlling party of the Company |
| Jiangsu Hengli Charity Foundation | Entity controlled by our parent company |
| Wujiang Sunan Rural Micro-credit Co., Ltd | Entity controlled by our parent company |
Other noteNone
5. Related party transactions
(1). Purchase and sale of goods, acceptance and provision of labor servicesProcurement of goods / acceptance of labor services
√适用 □不适用
Unit: Yuan Currency: RMB
| Related party | Nature of transaction | Current year | Approved transaction amount (if applicable) | Whether the transaction limit is exceeded (if applicable) | Prior year |
| Jiangsu Boyada Textile Co., Ltd. | Others | 23, 951.15 | 100, 000.00 | No | 139, 598.21 |
| Suzhou Wujiang Tongli Lake Tourist Resort Co., Ltd. | Others | 88, 874.00 | 1, 950, 000.00 | No | 32, 656.90 |
| Hengli Technology (Dalian) Co., Ltd. | Others | - | - | No | 1, 058, 490.57 |
| Jiangsu Deshun Textile Co., Ltd. | Others | 1, 636, 122.16 | 3, 000, 000.00 | No | 1, 348, 731.38 |
| Jiangsu Deshun Textile Co., Ltd. | Steam | 1, 533, 394.95 | 2, 000, 000.00 | - | |
| Jiangsu Dehua Textile Co., Ltd. | Others | 5, 847, 923.57 | 7, 000, 000.00 | 7, 728, 404.83 | |
| Suqian Lishun Property Co., Ltd. Hengli Hotel Branch | Others | 329, 392.72 | 500, 000.00 | No | 326, 001.41 |
| Suqian Bailong Garden Technology Co., Ltd. | Fixed assets | 1, 583, 934.00 | 1, 600, 000.00 | No | 940, 980.00 |
| Dalian Kangjia Property Service Co., Ltd. | Others | 4, 922, 687.31 | 5, 500, 000.00 | No | 8, 067, 922.44 |
| Nantong Jinchuan Logistics Co., Ltd. | Others | - | - | No | 72, 415.65 |
| Suzhou Taihu Brewing Co., Ltd. | Others | - | - | No | 5, 998, 351.85 |
| Suzhou Tongli Red Wine Co., Ltd. | Others | 147, 847.00 | 1, 272, 000.00 | No | 160, 796.46 |
| Suzhou Hengli Intelligent Technology Co., Ltd. | Others | 45, 985, 849.08 | 55, 000, 000.00 | No | 21, 655, 660.40 |
| Suzhou Hengli System Integration Co., Ltd. | Fixed assets, etc | 13, 087, 680.39 | 24, 000, 000.00 | No | 15, 183, 078.76 |
| Nantong Deji Concrete Co., Ltd. | Concrete mortar | 24, 250, 531.57 | 45, 000, 000.00 | No | 149, 444, 036.86 |
| Suzhou Tonglihong Electronic Commerce Co., Ltd. | Others | 3, 011, 539.56 | 4, 000, 000.00 | No | 3, 398, 870.13 |
| Guangdong Songfa Ceramics Co., Ltd. | Others | 80, 009.64 | 200, 000.00 | No | 42, 175.22 |
| Jiangsu Pejie Textile Intelligent Technology Co., Ltd. | Others | 991, 728.43 | 1, 200, 000.00 | No | 1, 620, 797.94 |
| Suzhou Gufeng Asset Management Co., Ltd. | Others | 2, 185, 917.88 | 3, 500, 000.00 | No | 2, 317, 278.91 |
| Suzhou Oak Bay No. 9 Catering Co., Ltd. | Others | - | - | No | 10, 847.00 |
| Suqian Kangtai Investment Co., Ltd. | Others | - | - | No | 299, 311.93 |
| Hengli Import and Export Co., Ltd. | Others | 169, 939.00 | 600, 000.00 | No | 191, 091.30 |
| Hengli Energy Management Service (Jiangsu) Co., Ltd. | Others | - | - | No | 513, 274.34 |
| Jiangsu Wu Jiang Su Zhou Wan Hengli International Hotel Co., Ltd. | Others | 970, 549.48 | 1, 500, 000.00 | No | 299, 685.91 |
| Sichuan Hengli Smart Textile Technology Co., Ltd. | Others | 1, 752, 691.69 | 2, 000, 000.00 | No | 5, 962, 003.40 |
| Suzhou Tongzui Trading Co., Ltd. | Others | - | - | No | 10, 088.50 |
| Dalian Victoria Property Service Co., Ltd. | Others | 5, 979, 302.45 | 6, 500, 000.00 | No | 1, 624, 223.77 |
| Hengli (Guizhou) Textile Intelligent Technology Co., Ltd. | Others | 533, 366.81 | 600, 000.00 | No | 5, 781, 546.55 |
| Hengli (Guizhou) Textile Intelligent Technology Co., Ltd. | Machine equipment | 1, 464, 159.29 | 1, 600, 000.00 | - | |
| Hengli International Hotel (Suqian) Co., Ltd | Others | 89, 895.45 | 150, 000.00 | No | - |
| Hengli Marine Engineering (Dalian) Co., Ltd | Others | 3, 495, 575.23 | 3, 550, 000.00 | No | - |
| Hengli Green Building Materials (Dalian) Co., Ltd | Engineering materials, etc | 11, 597, 337.37 | 11, 650, 000.00 | No | - |
| Yingkou Hehai Bridge Gas Station Branch of Hengli Energy Management Service (Dalian) Co., Ltd | Finished oil | 260, 495.44 | 300, 000.00 | No | - |
| Hengli Shipbuilding (Dalian) Co., Ltd | Others | 1, 752, 212.38 | 1, 800, 000.00 | No | - |
| Hengli Heavy Industry Group Co., Ltd | Others | 486, 716.81 | 500, 000.00 | No | - |
| Hengli Equipment Manufacturing (Dalian) Co., Ltd | Engineering materials, etc | 189, 866, 254.91 | 292, 500, 000.00 | No | - |
| Jiangsu Hengli Charity Foundation | Others | 38, 400.00 | 100, 000.00 | No | - |
Sales of goods / provision of services
√适用 □不适用
Unit: Yuan Currency: RMB
| Related party | Nature of transaction | Current year | Prior year |
| Jiangsu Boyada Textile Co., Ltd. | Polyester Yarn | 208, 640, 252.11 | 87, 580, 730.31 |
| Jiangsu Boyada Textile Co., Ltd. | Steam | 8, 965, 416.13 | 10, 558, 594.50 |
| Jiangsu Boyada Textile Co., Ltd. | Others | 198, 723.96 | 189, 354.31 |
| Jiangsu Boyada Textile Co., Ltd. | Refined oil | 305, 975.57 | - |
| Wujiang Huajun Textile Co., Ltd. | Steam | 40, 103.35 | 83, 788.97 |
| Wujiang Huajun Textile Co., Ltd. | Others | 1, 599.24 | 358.11 |
| Wujiang Huajun Textile Co., Ltd. | Polyester Yarn | 663.97 | - |
| Jiangsu Deshun Textile Co., Ltd. | Polyester Yarn | 124, 149, 644.53 | 82, 864, 669.02 |
| Jiangsu Deshun Textile Co., Ltd. | Others | 153, 641.73 | 158, 503.41 |
| Jiangsu Dehua Textile Co., Ltd. | Polyester Yarn | 63, 867, 811.29 | 53, 775, 042.74 |
| Jiangsu Dehua Textile Co., Ltd. | Others | 86, 418.82 | 45, 185.47 |
| Sichuan Hengli Smart Textile Technology Co., Ltd. | Polyester Yarn | 398, 169, 463.06 | 178, 975, 907.35 |
| Jiangsu Pejie Textile Intelligent Technology Co., Ltd. | Polyester Yarn | 371, 255, 430.92 | 162, 430, 422.95 |
| Jiangsu Pejie Textile Intelligent Technology Co., Ltd. | Others | 36, 617.69 | 13, 602.01 |
| Nantong Deji Concrete Co., Ltd. | Others | - | 95, 650.09 |
| Jiangsu Changshun Textile Co., Ltd. | Polyester Yarn | - | 915, 276.11 |
| Hengli (Guizhou) Textile Intelligent Technology Co., Ltd. | Polyester Yarn | 231, 835, 864.48 | 86, 349, 012.89 |
| Hengli Cloud Business Technology Co., Ltd. | Refined oil | 22, 575, 772.03 | - |
| Hengli Cloud Business Technology Co., Ltd. | Others | 8, 952.38 | 8, 616.29 |
| Hengli Engine (Dalian) Co., Ltd. | Refined oil and Others | 504, 719.29 | 1, 987, 528.30 |
| Hengli Precision Casting (Dalian) Co., Ltd. | Refined oil and Others | 925, 895.93 | 1, 729, 444.34 |
| Hengli Green Building Materials (Dalian) Co., Ltd. | Refined oil and Others | 2, 604, 414.46 | 1, 061, 766.91 |
| Hengli Shipbuilding (Dalian) Co., Ltd. | Refined oil and Others | 2, 760, 539.05 | 14, 294, 980.10 |
| Hengli Equipment Manufacturing (Dalian) Co., Ltd. | Refined oil and Others | 857, 751.11 | 1, 552, 929.25 |
| Hengli Comprehensive Service (Dalian) Co., Ltd. | Others | 126, 431.79 | 2, 271, 070.75 |
| Hengli Energy Management (Guangdong) Co., Ltd. Guangzhou Huadu Gas Station | Refined oil | - | 1, 477, 353.99 |
| Hengli (Suzhou) Textile Sales Co., Ltd | Others | 153.73 | - |
| Hengli Marine Engineering (Dalian) Co., Ltd | Refined oil | 1, 776, 720.23 | - |
| Hengli Import and Export Co., Ltd | Others | 1, 567, 666.90 | - |
| Yingkou Hehai Bridge Gas Station Branch of Hengli Energy Management Service (Dalian) Co., Ltd | Refined oil | 869, 823.72 | - |
| Yingkou Hehai Bridge Gas Station Branch of Hengli Energy Management Service (Dalian) Co., Ltd | Others | 24, 145.14 | - |
| Hengli Energy Management Service (Suzhou) Co., Ltd | Refined oil | 1, 029, 223.01 | - |
| Suzhou Hengli Real Estate Co., Ltd | Others | 57, 335.61 | - |
Note to purchase and sale of goods, acceptance and provision of labor services
□适用 √不适用
(2). Related entrusted management/contracting and entrusted management/contractingThe company's entrusted management/contracting situation table:
□适用 √不适用
Note to custodian/contracting situation with related party
□适用 √不适用
The company's entrusted management/outsourcing situation
√适用 □不适用
Unit: Yuan Currency: RMB
| Name of entrusting party/contracting party | Name of entrusted party/subcontractor | Entrustment/Outsourced Assets Type | Start date of Entrustment/Outsourced | Entrustment/Outsourcing termination Date | Pricing basis for custody fee/package fee | Custody fee/outsourcing fee included in current period |
| Hengli (Northern | Hengli Energy Management | Other assets custodian | 2022-09-15 | 2042-09-14 | Market price | 1, 834, 862.39 |
| China) Petrochemical Sales Co., Ltd. | Service (Dalian) Co., Ltd. Yingkou Hehai Bridge Gas Station Branch | |||||
| Hengli East China Petrochemical Sales Co., Ltd | Hengli Energy Management Service (Jiangsu) Co., Ltd. Nantong Yangkou Port Gas Station | Other assets custodian | 2023-04-01 | 2043-03-31 | Market price | 1, 376, 146.79 |
Note to entrusted management/outsourcing with related party
□适用 √不适用
(3). Rental with related party
The Company’s as lessor:
√适用 □不适用
Unit: Yuan Currency: RMB
| Tenant | Category of lease assets | Rental income included in current period | Rental income recognised in prior year |
| Nantong Jinchuan Logistics Co., Ltd. | Transportation equipment | - | 147, 492.62 |
| Hengli (Suzhou) Textile Sales Co., Ltd. | Property and real estate | 1, 705, 275.24 | 1, 705, 275.19 |
| Hengli Real Estate (Dalian) Co., Ltd. | Property and real estate | 2, 183, 815.52 | 1, 633, 324.64 |
| Hengli Heavy Industry Group Co., Ltd | Property and real estate | 7, 128, 440.37 | - |
| Wujiang Sunan Rural Microfinance Co., Ltd | Property and real estate | 18, 481.65 | - |
| Hengli Shipbuilding (Dalian) Co., Ltd | Property and real estate | 1, 270, 363.60 | - |
The Company’s as leasee:
√适用 □不适用
Unit: Yuan Currency: RMB
| Landlord | Category of lease assets | Rental charge of short-term leases and low-value asset leases under simplified method (if applicable) | Variable lease payments not included in the measurement of lease liabilities(if applicable) | Rent paid | Interest expense of lease liabilities | Increase of Right-of-use assets | |||||
| Current year | Prior year | Current year | Prior year | Current year | Prior year | Current year | Prior year | Current year | Prior year | ||
| Jiangsu Deshun Textile Co., Ltd. | Property and real estate | 3, 163, 259.60 | 114, 285.71 | - | - | 3, 163, 259.60 | 114, 285.71 | - | -4, 913, 558.14 | ||
| Jiangsu Boyada Textile Co., Ltd. | Property and real estate | 1, 805, 013.11 | 1, 026, 248.88 | - | - | 1, 805, 013.11 | 1, 026, 248.88 | - | -5, 429, 649.95 | ||
| Hengli Industrial Investment (Suzhou) Co., Ltd. | Property and real estate | - | - | - | - | 11, 859, 286.39 | 10, 965, 782.42 | 792, 391.95 | 1, 261, 139.54 | - |
Note to rental with related party
□适用 √不适用
(4). Guarantee with related parties
The Company as a guarantor
□适用 √不适用
The company as the guaranteed party
√适用 □不适用
Unit: Yuan Currency: RMB
| Guarantor | Guaranteed Amount | Start date of guarantee | Guarantee expiry date | Whether the guarantee has been fulfilled |
| Chen Jianhua, Fan Hongwei | 11, 319, 990, 991.77 | 2021/8/20 | 2031/8/20 | No |
| Chen Jianhua, Fan Hongwei [Note 1] | 2, 770, 902, 552.03 | 2023/3/10 | 2024/11/22 | No |
| Chen Jianhua, Fan Hongwei [Note 2] | 996, 595, 126.62 | 2023/5/29 | 2038/5/21 | No |
| Chen Jianhua, Fan Hongwei [Note 3] | 430, 000, 000.00 | 2023/11/14 | 2024/11/15 | No |
| Chen Jianhua, Fan Hongwei [Note 4 | 894, 800, 000.00 | 2023/1/17 | 2025/12/31 | No |
| Chen Jianhua, Fan Hongwei[Note 5] | 2, 674, 084, 333.98 | 2023/5/24 | 2038/5/16 | No |
| Chen Jianhua, Fan Hongwei[Note 6] | 1, 724, 950, 000.00 | 2019/9/25 | 2026/12/20 | No |
| Chen Jianhua, Fan Hongwei[Note7] | 854, 580, 000.00 | 2020/10/30 | 2026/12/20 | No |
| Chen Jianhua, Fan Hongwei, Hengli Group Co., Ltd. | 11, 316, 082, 621.89 | 2022/4/18 | 2024/12/10 | No |
| Chen Jianhua, Fan Hongwei, Hengli Group Co., Ltd. [Note 8] | 300, 000, 000.00 | 2023/2/1 | 2024/1/25 | No |
| Chen Jianhua, Fan Hongwei, Hengli Group Co., Ltd. [Note 9] | 170, 000, 000.00 | 2023/2/21 | 2024/12/7 | No |
| Chen Jianhua, Fan Hongwei, Hengli Group Co., Ltd. [Note10] | 10, 245, 820, 000.00 | 2023/6/29 | 2033/6/15 | No |
| Hengli Group Co., Ltd. | 5, 687, 789, 805.08 | 2022/11/29 | 2024/11/28 | No |
| Hengli Group Co., Ltd. [Note11] | 360, 000, 000.00 | 2020/2/20 | 2028/2/19 | No |
| Hengli Group Co., Ltd. [Note12] | 2, 663, 810, 000.00 | 2022/2/26 | 2027/1/26 | No |
| Hengli Group Co., Ltd. [Note13] | 1, 208, 210, 000.00 | 2015/4/24 | 2029/1/28 | No |
| Chen Jianhua, Fan Hongwei, Hengli Group Co., Ltd. , Jiangsu Boyada Textile Co., Ltd. , Jiangsu Deshun Textile Co., Ltd., | 25, 399, 999, 999.98 | 2018/5/3 | 2033/5/2 | No |
| Jiangsu Dehua Textile Co., Ltd. , Wujiang Chemical Fiber Weaving Factory Co., Ltd. [Note 14] | ||||
| Chen Jianhua, Fan Hongwei, Hengli Group Co., Ltd. , Jiangsu Boyada Textile Co., Ltd. , Jiangsu Deshun Textile Co., Ltd., Jiangsu Dehua Textile Co., Ltd. , Wujiang Chemical Fiber Weaving Factory Co., Ltd. [Note 15] | USD900, 000, 000.00 | 2018/5/3 | 2033/5/2 | No |
| Chen Jianhua, Fan Hongwei, Jiangsu Boyada Textile Co., Ltd. , Jiangsu Deshun Textile Co., Ltd., Jiangsu Dehua Textile Co., Ltd. , Wujiang Chemical Fiber Weaving Factory Co., Ltd. [Note 16] | 7, 169, 500, 000.02 | 2019/12/19 | 2034/12/19 | No |
Guarantee with related parties
√适用 □不适用
[Note 1]: The Company also placed security deposits to provide pledge guarantee.[Note 2]: The Company provides mortgage guarantee with the construction in progress.[Note 3]: The Company also provides mortgage guarantees with property and real estate, and landuse rights.[Note 4]: The Company also provides mortgage guarantees with property and real estate, machineequipment, land use rights.[Note 5]: The Company also provides mortgage guarantees with property and real estate and theconstruction in progress[Note 6]: The Company also provides mortgage guarantees with land use rights.[Note 7]: The Company also provides mortgage guarantees with property and real estate.[Note 8]: The Company also provides mortgage guarantees with property and real estate, machineequipment, and land use rights.[Note 9]: The Company also provides mortgage guarantees with property and real estate and landuse rights.[Note 10]: The Company also provides mortgage guarantees with property and real estate and theconstruction in progress[Note 11]: The Company also provides mortgage guarantees with property and real estate.[Note 12]: The Company also provides mortgage guarantees with property and real estate and landuse rights.[Note 13]: The Company also provides mortgage guarantees with land use rights.[Note 14]: The Company also provides mortgage guarantees for property and real estate, land use
rights, Construction in progress and machinery and equipment.[Note 15]: The Company also provides mortgage guarantees for property and real estate, land userights, Construction in progress and machinery and equipment.[Note 16]: The Company also provides mortgage guarantees for property and real estate, land userights, Construction in progress and machinery and equipment.
(5). Loans and borrowings with related parties
□适用 √不适用
(6). Assets transfer and debt restructuring with related parties
√适用 □不适用
Unit: Yuan Currency: RMB
| Related party | Nature of transaction | Current year | Prior year |
| Hengli Real Estate (Dalian) Co., Ltd. | Property and real estate, etc. | - | 1, 323, 285, 775.22 |
| Jiangsu Deshun Textile Co., Ltd. | Machinery and equipment | - | 135, 024.36 |
| Hengli (Suzhou) Textile Sales Co., Ltd. | Transportation tools | - | 25, 512.50 |
| Jiangsu Boyada Textile Co., Ltd. | Machinery and equipment | - | 288, 346.30 |
| Jiangsu Dehua Textile Co., Ltd. | Machinery and equipment | - | 128, 481.40 |
| Suzhou Hengli System Integration Co., Ltd. | Machinery and equipment | - | 95, 398.23 |
| Suzhou Wujiang Tongli Lake Tourist Resort Co., Ltd. | Machinery and equipment | - | 55, 981.42 |
| Nantong Kane Polymer Material Co., Ltd. | Property and real estate, etc. | - | 2, 003, 608, 814.83 |
| Sichuan Hengli Intelligent Textile Technology Co., Ltd | Property and real estate, etc | 127, 597, 951.89 | - |
(7). Compensation of key management personnel
√适用 □不适用
Unit: ten thousand Yuan Currency: RMB
| Item | Current year | Prior year |
| Compensation of key management personnel | 1, 043.45 | 804.95 |
(8). Other related party transactions
√适用 □不适用
(1)The Company purchases and sells for related parties
Unit: Yuan Currency:RMB
| Name of related party | Transaction content | Current year | Prior year |
| Hengli (Suzhou) Textile Sales Co., Ltd. | Electricity | 543, 475.26 | 544, 678.21 |
| Jiangsu Boyada Textile Co., Ltd. | Electricity | 1, 466, 939.59 | 7, 101, 204.60 |
| Jiangsu Deshun Textile Co., Ltd. | Electricity | 82, 002, 884.88 | 76, 218, 287.89 |
| Sichuan Hengli Smart Textile Technology Co., Ltd. | Electricity | 148, 408, 893.05 | 27, 779, 540.06 |
| Yingkou Hehai Bridge Gas Station Branch of Hengli Energy Management Service (Dalian) Co., Ltd | Electricity | 82, 518.52 | - |
| Nantong Deji Concrete Co., Ltd | Electricity | 65, 179.01 | - |
(2) Related parties purchase and sell for the Company
Unit: Yuan
| Name of related party | Transaction content | Current year | Prior year |
| Jiangsu Deshun Textile Co., Ltd. | Water and electricity | 248, 766.98 | 2, 182, 678.58 |
| Jiangsu Boyada Textile Co., Ltd. | Water and electricity | 35, 717.79 | 547, 224.69 |
| Suzhou Gu Feng Asset Management Co., Ltd | Water and electricity | 183, 151.72 | - |
6. Receivables and payables with related parties
(1). Receivables from related parties
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Related party | Closing balance | Beginning balance | |||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | |||
| Accounts receivable | Jiangsu Deshun Textile Co., Ltd. | - | - | 122, 370.50 | 6, 118.53 | |
| Accounts receivable | Wujiang Huajun Textile Co., Ltd. | 6, 467.04 | 323.35 | 8, 275.50 | 413.78 | |
| Accounts receivable | Hengli Shipbuilding (Dalian) Co., Ltd. | 1, 379, 248.60 | 68, 962.43 | 535, 755.00 | 26, 787.75 | |
| Accounts receivable | Jiangsu Boyada Textile Co., Ltd. | 270.00 | 13.50 | 660, 814.00 | 33, 040.70 | |
| Accounts receivable | Jiangsu Pejie Textile Intelligent Technology Co., Ltd. | - | - | 261, 283.11 | 13, 064.16 | |
| Prepayments | Suzhou Gufeng Asset Management Co., Ltd. | 463, 848.00 | - | 520, 594.50 | - | |
| Prepayments | Jiangsu Boyada Textile Co., Ltd. | 61, 852.60 | - | 70, 000.00 | - | |
| Prepayments | Yingkou Hehai Bridge Gas Station Branch of Hengli Energy Management Service (Dalian) Co., Ltd | 25, 640.20 | - | - | - |
| Other non-current assets | Hengli Equipment Manufacturing (Dalian) Co., Ltd. | 58, 193, 106.40 | - | 26, 366, 322.00 | - |
(2). Payables to related parties
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Related party | Book balance at year end | Book balance in beginning of year |
| Accounts payable | Suzhou Hengli System Integration Co., Ltd. | 1, 976, 292.16 | 1, 405, 000.89 |
| Accounts payable | Suzhou Hengli Intelligent Technology Co., Ltd. | 3, 780, 885.78 | 7, 300.88 |
| Accounts payable | Jiangsu Changshun Textile Co., Ltd. | 97, 788.73 | 97, 788.73 |
| Accounts payable | Jiangsu Dehua Textile Co., Ltd. | 118, 888.47 | 130, 931.49 |
| Accounts payable | Dalian Kangjia Property Service Co., Ltd. | 1, 638, 364.17 | 1, 817, 017.75 |
| Accounts payable | Hengli (Guizhou) Textile Intelligent Technology Co., Ltd. | - | 376, 548.67 |
| Accounts payable | Sichuan Hengli Smart Textile Technology Co., Ltd. | 4, 683, 521.59 | 2, 970, 917.95 |
| Accounts payable | Guangdong Songfa Ceramics Co., Ltd | 75, 313.20 | - |
| Accounts payable | Hengli Green Building Materials (Dalian) Co., Ltd | 431, 375.00 | - |
| Accounts payable | Hengli Equipment Manufacturing (Dalian) Co., Ltd | 13, 651, 844.32 | - |
| Accounts payable | Jiangsu Deshun Textile Co., Ltd | 805, 787.54 | - |
| Accounts payable | Jiangsu Peijie Textile Intelligent Technology Co., Ltd | 354, 575.16 | - |
| Accounts payable | Suzhou Wujiang Tongli Lake Tourism Resort Co., Ltd | 2, 168.00 | - |
| Other payables | Dalian Henghan Investment Co., Ltd. | 19, 750, 000.00 | 19, 750, 000.00 |
| Other payables | Sichuan Hengli Smart Textile Technology Co., Ltd. | 21, 518, 410.47 | 2, 220, 459.94 |
| Other payables | Hengli Green Building Materials (Dalian) Co., Ltd | 303, 113.23 | - |
| Lease liabilities | Hengli Industrial Investment (Suzhou) Co., Ltd. | 123, 005.88 | 10, 516, 284.19 |
Contract assets and contract liabilities arising from related party transactions1．Contract assetsNone2．Contract liabilities
| Name of related party | Closing balance | Beginning balance |
| Jiangsu Boyada Textile Co., Ltd. | 431, 840.13 | 237, 809.14 |
| Wujiang Huajun Textile Co., Ltd. | 730.78 | 727.14 |
| Jiangsu Deshun Textile Co., Ltd. | 904, 053.54 | 148, 515.44 |
| Jiangsu Pejie Textile Intelligent Technology Co., Ltd. | 896, 212.56 | 770, 761.60 |
| Jiangsu Dehua Textile Co., Ltd. | 639, 776.71 | 96, 717.29 |
| Hengli (Suzhou) Textile Sales Co., Ltd. | 68, 538.08 | 68, 538.04 |
| Hengli Shipbuilding (Dalian) Co., Ltd. | 803, 787.59 | 1, 615.22 |
| Hengli (Guizhou) Textile Intelligent Technology Co., Ltd | 1, 801, 538.53 | - |
| Hengli Engine (Dalian) Co., Ltd | 170, 678.94 | - |
| Hengli Ocean Engineering (Dalian) Co., Ltd | 32, 499.58 | - |
| Hengli Precision Casting (Dalian) Co., Ltd | 535, 643.86 | - |
| Hengli Green Building Materials (Dalian) Co., Ltd | 359, 421.83 | - |
| Hengli Equipment Manufacturing (Dalian) Co., Ltd | 281, 934.39 | - |
| Sichuan Hengli Intelligent Textile Technology Co., Ltd | 213, 114.73 | - |
（3）Other project:
□适用 √不适用
7. Commitments with related party
□适用 √不适用
8. Others
□适用 √不适用
XV. Share-based payments
1. Information about share-based payments
□适用 √不适用
Stock options or other equity instruments issued to the public at the end of the period
□适用 √不适用
2. Equity-settled share-based payments
√适用 □不适用
Unit: Yuan Currency: RMB
| Method in determining the fair value of equity instruments at the date of grant | - |
| Important parameters for the fair value of equity instruments on the grant date | - |
| Basis in determining the quantity of exercisable equity instruments | It is expected that the on-the-job employees will eventually obtain the corresponding benefits of the employee share incentive plan |
| Reasons for the significant difference between the current estimate and the previous estimate | None |
| Accumulated amount recorded in capital reserve for equity-settled share-based payments | 371, 449, 176.90 |
Other notes:
None
3. Information on cash-settled share-based payments
□适用 √不适用
4. Share-based payment expenses in the current period
√适用 □不适用
Unit: Yuan Currency: RMB
| Grant object category | Share-based payment expenses settled in equity | Share-based payment expenses settled in cash |
| Company employees | 77, 070, 049.22 | - |
| Total | 77, 070, 049.22 |
Other notes:
None
5. Information on modification and termination of share-based payment
□适用 √不适用
6 Others
□适用 √不适用
XVI. Commitments and contingencies
1. Significant commitments
√适用 □不适用
Important external commitments, nature and amount on the balance sheet date
1. Signed external investment contracts that have not yet been performed or have not been fullyperformed and related financial expenditures
| Item | Closing balance | Beginning balance |
| Commitment to purchase and build long-term assets | 5, 245, 473, 299.61 | 3, 585, 319, 049.57 |
| Unused letter of credit issued | 4, 736, 563, 964.70 | 6, 351, 652, 193.39 |
| Letter of guarantee not due for payment | 81, 303, 948.76 | 258, 707, 203.30 |
| Total | 10, 063, 341, 213.07 | 10, 195, 678, 446.26 |
2. Leases that the lessee has committed but not started and their financial impactAs of the balance sheet date, the future potential cash outflows of the leases that the companyhas committed as a lessee but has not yet started are as follows:
| Item | Closing balance |
| Undiscounted lease payments: | |
| 1 year after balance sheet date | 41, 881, 753.80 |
| 2 years after balance sheet date | 25, 779, 663.21 |
| 3 years after balance sheet date | 10, 098, 433.08 |
| Thereafter | 10, 551, 206.99 |
| Total | 88, 311, 057.08 |
2. Contingencies
(1). Important contingencies existing on the balance sheet date
□适用 √不适用
(2). The company has no important contingencies that need to be disclosed, and it
should also be explained:
□适用 √不适用
3. Others
√适用 □不适用
1．Contingent liabilities arising from pending litigation arbitration and their financial impactThere are no contingent liabilities arising from pending litigation or arbitration.
2. Contingent liabilities arising from providing debt guarantees to other entities and their financialimplications:
The company does not provide debt guarantees for other units.
3．Other contingencies and their financial impact
For bank acceptance bills that have been discounted or endorsed and have not yet expired onthe balance sheet date, please refer to the description of “Receivables financing” in the note.
XVII. Event after balance sheet date
1. Important non-adjusting matters
□适用 √不适用
2. Appropriation of profits
√适用 □不适用
Unit: Yuan Currency: RMB
| Proposed dividend per 10 shares (Yuan) | 5.5 |
| Dividend per 10 shares declared and approved for distribution (Yuan) | 5.5 |
| Profit distribution plan | The 19th meeting of the 9th Board of Directors of the company deliberated and approved the proposed profit distribution plan for 2023: based on the total share capital on the date of equity distribution and registration, a cash |
dividend of RMB 5.50 (including tax) per 10 shares will bedistributed to all shareholders.
3. Sales returned
□适用 √不适用
4. Other event after balance sheet date
□适用 √不适用
XVIII. Other significant events
1. Correction of previous accounting errors
(1). Retrospective restatement method
□适用 √不适用
(2). Prospective application method
□适用 √不适用
2. Debt restructuring
□适用 √不适用
3. Exchange of assets
(1). Exchange of non-monetary assets
□适用 √不适用
(2). Exchange of other assets
□适用 √不适用
4. Annuity plan
□适用 √不适用
5. Discontinued operations
□适用 √不适用
6. Segment information
(1). Basis for determining the reporting segment and accounting policies
√适用 □不适用
According to the Company's internal organizational structure, management requirements andinternal reporting system, the Company mainly operates in three business segments: petrochemicalbusiness segment, polyester business segment, headquarters and other business segments, theCompany's management evaluate the operating results of these segments to determine the allocationof resources and evaluate their performance.
Segment report information is disclosed based on the accounting policies and measurementstandards adopted by each segment when reporting to management. These measurement bases areconsistent with the accounting and measurement bases used in the preparation of financialstatements.
(2). Reporting of segment information
√适用 □不适用
Unit: ten thousand yuan Currency: RMB
| Item | Petrochemical segment | Polyester segment | Headquarters and other business segment | Elimination between segments | Total |
| Segment revenue | 21, 734, 875.06 | 4, 140, 195.82 | 10, 350, 287.62 | -12, 738, 745.99 | 23, 486, 612.51 |
| Including: External revenue | 11, 787, 010.70 | 3, 873, 952.87 | 7, 825, 648.94 | - | 23, 486, 612.51 |
| Inter-segment sales | 9, 947, 864.36 | 266, 242.95 | 2, 524, 638.68 | -12, 738, 745.99 | - |
| Segment cost | 19, 568, 517.88 | 3, 729, 059.04 | 10, 278, 004.15 | -12, 737, 195.88 | 20, 838, 385.19 |
| Segment profit (loss) | 659, 474.79 | 209, 182.41 | 175, 088.79 | -156, 422.76 | 887, 323.23 |
| Total assets | 20, 326, 820.27 | 6, 644, 315.02 | 5, 821, 029.37 | -6, 732, 262.56 | 26, 059, 902.10 |
| Total liabilities | 15, 110, 959.77 | 5, 332, 684.61 | 1, 672, 946.65 | -2, 056, 545.17 | 20, 060, 045.86 |
(3). If the company has no reportable segment, or cannot disclose the total assets andtotal liabilities of each reportable segment, the reasons shall be explained
□适用 √不适用
(4). Other note
□适用 √不适用
7. Other important transactions and events affecting investors' decision-making
√适用 □不适用
1. Pledge of the Company’s shares by the parent Company and the ultimate controller Chen Jianhua,Fan Hongwei:
| Pledgor | Pledgee | Pledge period | Number of pledged shares |
| Hengli Group Co., Ltd. | Huaxia Bank Co., Ltd. Suzhou Branch | 2023/11/8-2026/10/26 | 142, 000, 000.00 |
| Hengli Group Co., Ltd. | Yunnan International Trust Co., Ltd | 2023/4/26-2024/4/28 | 98, 000, 000.00 |
| Hengli Group Co., Ltd. | Zhejiang Merchants Bank Co., Ltd. Suzhou Wujiang Sub-branch | 2023/4/18-2028/4/30 | 38, 000, 000.00 |
| Hengneng Investment (Dalian) Co., Ltd | Industrial International Trust Co., Ltd | 2023/12/29-2025/1/7 | 287, 000, 000.00 |
| Hengli Group Co., Ltd. | China Minsheng Banking Corp., Ltd | [Note] | 71, 000, 000.00 |
| Hengneng Investment (Dalian) Co., Ltd | China Galaxy Securities Co., Ltd | [Note] | 21, 046, 100.00 |
| Hengneng Investment (Dalian) Co., Ltd | Essence Securities Co., Ltd | [Note] | 18, 786, 200.00 |
| Hengneng Investment (Dalian) Co., Ltd | Huatai Securities Co., Ltd | [Note] | 17, 752, 400.00 |
| Hengneng Investment (Dalian) Co., Ltd | Guangfa Securities Co., Ltd | [Note] | 15, 976, 300.00 |
[Note ] The share pledge of Hengli Group is mainly used to provide pledge guarantee for thetrust plan established by employees of Hengli Group and its related subsidiaries. The specific pledgeexpiration date is subject to the actual pledge cancellation registration procedures.
8. Others
√适用 □不适用
Split off the subsidiary Kanghui New Material Technology Co., Ltd. and reorganize it for listing:
On July 4, 2023, the Company held the 10th meeting of the 9th Board of Directors and the 7thmeeting of the 9th Board of Supervisors, and considered and approved the "Proposal on Agreeing tothe Restructuring and Listing of the Company's Subsidiary Kanghui New Material Technology Co., Ltd."The Company agreed to spin off its subsidiary Kanghui New Material Technology Co., Ltd. (hereinafterreferred to as "Kanghui New Material") and use the Company and Jiangsu Hengli Chemical Fiber Co.,Ltd. (hereinafter referred to as "Hengli Chemical Fiber") to subscribe for 100% of the equity of KanghuiNew Material through non-public offering of shares of Dalian Thermal Power Co., Ltd. (hereinafterreferred to as "Dalian Thermal Power"). At the same time, Dalian Thermal Power plans to raisematching funds from no more than 35 specific investors through non-public offering of shares toachieve restructuring and listing.
On October 24, 2023, the application for the spin-off of the subsidiary and restructuring for listingwas accepted by the Shanghai Stock Exchange.
XIX. Notes on important items of parent company's financial statements
1. Accounts receivable
(1). Disclosure by ageing
√适用 □不适用
Unit: Yuan Currency: RMB
| Ageing | Closing balance | Beginning balance |
| Within one year | ||
| Including: Within one year | ||
| Within one year | 1, 270, 363.60 | - |
| Subtotal of within one year | 1, 270, 363.60 | - |
| 1 to 2 years | ||
| 2 to 3 years | ||
| Over 3 years | ||
| 3 to 4 years | ||
| 4 to 5 years | ||
| Over 5 years | ||
| Total | 1, 270, 363.60 | - |
(2). Disclosure by method of provision for bad debts
√适用 □不适用
Unit: Yuan Currency: RMB
| Category | Closing balance | Beginning balance | ||||||||
| Book balance | Provision for bad debts | Carrying amount | Book balance | Provision for bad debts | Carrying amount | |||||
| Amount | Ratio (%) | Amount | Provision ratio (%) | Amount | Ratio (%) | Amount | Provision ratio (%) | |||
| Provision for bad debts on individual basis | ||||||||||
| Including: | ||||||||||
| Provision for bad debts on portfolio basis | 1, 270, 363.60 | 100.00 | 63, 518.18 | 5.00 | 1, 206, 845.42 | |||||
| Including: | ||||||||||
| Ageing analysis portfolio | 1, 270, 363.60 | 100.00 | 63, 518.18 | 5.00 | 1, 206, 845.42 | |||||
| Total | 1, 270, 363.60 | 100.00 | 63, 518.18 | 5.00 | 1, 206, 845.42 | |||||
Provision for bad debts on individual basis:
□适用 √不适用
Provision for bad debts on portfolio basis:
√适用 □不适用
Provision for bad debts on portfolio basis: Ageing analysis portfolio
Unit: Yuan Currency: RMB
| Name | Closing balance | ||
| Accounts receivable | Provision for bad debts | Provision ratio (%) | |
| Ageing analysis portfolio | 1, 270, 363.60 | 63, 518.18 | 5.00 |
| Total | 1, 270, 363.60 | 63, 518.18 | 5.00 |
Confirmation criteria and notes for bad debt provision by portfolio:
√适用 □不适用
Provision for bad debts by ageing portfolio is as below:
| Ageing | Book balance | Provision for bad debts | Provision ratio (%) |
| Within one year(including one year) | 1, 270, 363.60 | 63, 518.18 | 5.00 |
| 1-2 years | - | - | - |
| Ageing | Book balance | Provision for bad debts | Provision ratio (%) |
| 2-3 years | - | - | - |
| 3-4 years | - | - | - |
| 4-5 years | - | - | - |
| Over 5 years | - | - | - |
| Subtotal | 1, 270, 363.60 | 63, 518.18 | 5.00 |
According to the expected credit loss general model to accrual provision for bad debts:
□适用 √不适用
Basis for dividing each stage and proportion of bad debt provisionNone
Note to the significant change in the book balance of accounts receivable due to changes inprovisions for losses incurred during the current period：
□适用 √不适用
(3). Provision for bad debts
√适用 □不适用
Unit: Yuan Currency: RMB
| Category | Beginning balance | Movement in the year | Closing balance | |||
| Accrual | Recovery or reversal | Transfer or written-off | Other movement | |||
| Provision for bad debts on individual basis | - | - | - | - | - | - |
| Provision for bad debts on portfolio basis | - | 63, 518.18 | - | - | - | 63, 518.18 |
| Total | - | 63, 518.18 | - | - | - | 63, 518.18 |
Including significant amount of recovery or reversal of provision for bad debts:
□适用 √不适用
Other notes:
None
(4). Accounts receivable written-off during the year
□适用 √不适用
The important write-off of accounts receivable:
□适用 √不适用
Notes for write-off of accounts receivable:
□适用 √不适用
(5). Accounts receivable and contract assets due from the top five debtors
√适用 □不适用
Unit: Yuan Currency: RMB
| Name of unit | Book balance of account recievables | Book balance of contract asset | Closing balance of accounts receivable and contract assets | Proportion of the total closing balance of accounts receivable and contract assets（%） | Closing balance of bad debt provision |
| Hengli Shipbuilding (Dalian) Co., Ltd | 1, 270, 363.60 | 1, 270, 363.60 | 100.00 | 63, 518.18 | |
| Total | 1, 270, 363.60 | 1, 270, 363.60 | 100.00 | 63, 518.18 |
The Company’s top five year-end balances for accounts receivable in total of RMB1, 270,
363.60, accounting for 100.00% of the total account balance of year-end balances of accountsreceivable, and the corresponding year-end balance of provision for bad debts is RMB63, 518.18.
Other note
□适用 √不适用
2. Other receivables
Presented by item
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance |
| Interest receivable | ||
| Dividends receivable | 81, 550, 000.00 | 800, 000, 000.00 |
| Other receivables | 83, 181, 382.20 | 11, 162, 769.45 |
| Total | 164, 731, 382.20 | 811, 162, 769.45 |
Other note:
□适用 √不适用
Interest receivable
(1). Interest receivable by category
□适用 √不适用
(2). Significant overdue interest
□适用 √不适用
(3). Information of provision for bad debts
□适用 √不适用
Provision for bad debts on individual basis:
□适用 √不适用
Notes for provision for bad debts on individual basis:
□适用 √不适用
Provision for bad debts on portfolio basis:
□适用 √不适用
(4). Provision for bad debts based on the general model of expected credit losses
□适用 √不适用
Basis for dividing each stage and proportion of provision for bad debt:
NoneExplanation of the significant change in the book balance of interest receivable due to changes inprovisions for losses incurred during the current period:
□适用 √不适用
(5)Provision for bad debts Provision for bad debts
□适用 √不适用
The significant amount of provision for bad debt recovered or reversed in the current period:
□适用 √不适用
Other note:
None
(6)Interest receivable written-off during the year
□适用 √不适用
The important write-off of Interest receivable:
□适用 √不适用
Notes for write-off of Interest receivable:
□适用 √不适用
Dividends receivable
(1) Dividends receivable
√适用 □不适用
Unit: Yuan Currency: RMB
| Item (or Investee) | Closing balance | Beginning balance |
| Subtotal of book balance | 81, 550, 000.00 | 800, 000, 000.00 |
| Less: Provision for bad debts | - | - |
| Total | 81, 550, 000.00 | 800, 000, 000.00 |
(2). Important dividends receivable aged over 1 year
□适用 √不适用
(3). Information of provision for bad debts
□适用 √不适用
Provision for bad debts on individual basis:
□适用 √不适用
Notes for provision for bad debts on individual basis:
□适用 √不适用
Provision for bad debts on portfolio basis:
□适用 √不适用
(4). Provision for bad debts based on the general model of expected credit losses
□适用 √不适用
Basis for dividing each stage and proportion of provision for bad debt:
NoneExplanation of the significant change in the book balance of dividends receivable due to changes inprovisions for losses incurred during the current period:
□适用 √不适用
(5) Provision for bad debts Provision for bad debts
□适用 √不适用
The significant amount of provision for bad debt recovered or reversed in the current period:
□适用 √不适用
Other note:
None
(6) Dividends receivable written-off during the year
□适用 √不适用
The important write-off of dividends receivable:
□适用 √不适用
Notes for write-off of dividends receivable:
□适用 √不适用
Other note:
□适用 √不适用
Other receivables
(1). Disclosure by ageing
√适用 □不适用
Unit: Yuan Currency: RMB
| Ageing | Book balance at year end | Book balance in beginning of year |
| Within one year | ||
| Including: Within one year | ||
| Within one year | 87, 047, 433.89 | 11, 723, 262.09 |
| Subtotal of within one year | 87, 047, 433.89 | 11, 723, 262.09 |
| 1 to 2 years | 607, 900.00 | - |
| 2 to 3 years | - | 23, 805.45 |
| Over 3 years | ||
| 3 to 4 years | ||
| 4 to 5 years | - | 56, 935.95 |
| Over 5 years | - | 362, 040.00 |
| Total | 87, 655, 333.89 | 12, 166, 043.49 |
(2). Disclosure by nature
√适用 □不适用
Unit: Yuan Currency: RMB
| Nature | Book balance at year end | Book balance in beginning of year |
| Current accounts | 3, 500, 000.00 | - |
| Deposits and security deposits | 10, 400.00 | 456, 931.40 |
| Others | 84, 144, 933.89 | 11, 709, 112.09 |
| Total | 87, 655, 333.89 | 12, 166, 043.49 |
(3). Information of provision for bad debts
√适用 □不适用
Unit: Yuan Currency: RMB
| Provision for bad debts | First stage | Second stage | Third stage | Total |
| Expected credit loss within next 12 months | Expected credit loss for lifetime (no credit impairment occurred) | Expected credit loss for lifetime (credit impairment has occurred) | ||
| Balance of 1 January 2022 | - | 1, 003, 274.04 | - | 1, 003, 274.04 |
| Balance of 1 January 2022 during the period | - | |||
| --transfer to second stage | - | |||
| --transfer to third stage | - | |||
| --Reverse to second stage | - | |||
| --Reverse to first stage | - | |||
| Provision for the year | - | 3, 470, 677.65 | - | 3, 470, 677.65 |
| Reversal in the year | - | |||
| Transfer in the year | - | |||
| Write-off in the year | - | |||
| Other movement | - | |||
| Balance of 31 December 2021 | 4, 473, 951.69 | - | 4, 473, 951.69 |
Basis for dividing each stage and proportion of bad debt provision:
The basis for dividing each stage is detailed in the note "Impairment of Financial Instruments".Note on the significant changes in other receivables book balance that have changed the loss provision inthe current period:
√适用 □不适用
No significant changes occurred in the provision for losses in the current period
Basis for accruing bad debt provision for the current period and assessing whether the credit risk offinancial instruments has increased significantly:
√适用 □不适用
The basis, input values, assumptions and other information used to determine the provision for baddebts amount and the assessment of whether the credit risk of financial instruments have increasedsignificantly since initial confirmation are detailed in the note “Credit Risk”.
(4). Provision for bad debts
√适用 □不适用
Unit: Yuan Currency: RMB
| Category | Beginning balance | Movement in the year | Closing balance | |||
| Accrual | Recovery or reversal | Transfer or written-off | Other movement | |||
| Provision for bad debts on individual basis | - | - | - | - | - | - |
| Provision for bad debts on portfolio basis | 1, 003, 274.04 | 3, 470, 677.65 | - | - | - | 4, 473, 951.69 |
| Total | 1, 003, 274.04 | 3, 470, 677.65 | - | - | - | 4, 473, 951.69 |
Including, the important reversed or recovered amount of bad debt provision for the current period:
□适用 √不适用
Other notes:
None.
(5). Actual written-off of other receivables in the year
□适用 √不适用
The write-off of importanto ther receivables:
□适用 √不适用
Notes to write-off of other receivables:
□适用 √不适用
(6). Other receivables due from the top five debtors
√适用 □不适用
The Company’s top five year-end balances of other receivables in total is RM87, 652, 433.89,accounting for 99.99% of the total year end balance of other receivables, and the corresponding year-end balance of provision for bad debts is RMB4, 473, 746.69.
(7). Other receivables reported due to centralized management of funds
□适用 √不适用
Other note:
□适用 √不适用
3. Long-term equity investment
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Closing balance | Beginning balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Investment in subsidiaries | 44, 366, 275, 704.93 | - | 44, 366, 275, 704.93 | 44, 316, 275, 704.93 | - | 44, 316, 275, 704.93 |
| Investment in associates and joint ventures | ||||||
| Total | 44, 366, 275, 704.93 | - | 44, 366, 275, 704.93 | 44, 316, 275, 704.93 | - | 44, 316, 275, 704.93 |
(1). Investment in subsidiaries
√适用 □不适用
Unit: Yuan Currency: RMB
| Investee | Beginning balance | Increase | Decrease | Closing balance | Provision for impairment in the year | Closing balance of provision for impairment |
| Jiangsu Hengli Chemical Fiber Co., Ltd. | 10, 808, 919, 000.00 | 10, 808, 919, 000.00 | - | - | ||
| Kanghui New Material Technology Co., Ltd. | 1, 937, 601, 065.09 | 1, 937, 601, 065.09 | - | - | ||
| Suzhou Textile Group Network E-commerce Co., Ltd. | 2, 000, 000.00 | 2, 000, 000.00 | - | - | ||
| Hengli Petrochemical (Dalian) Chemical Co., Ltd. | 4, 619, 719, 782.89 | 4, 619, 719, 782.89 | ||||
| Hengli Petrochemical (Dalian) Refining Co., Ltd. | 17, 516, 472, 093.22 | 17, 516, 472, 093.22 | ||||
| Hengli Investment (Dalian) Co., Ltd. | 9, 381, 563, 763.73 | 9, 381, 563, 763.73 |
| Hengli Petrochemical Sales Co., Ltd. | 50, 000, 000.00 | 50, 000, 000.00 | ||||
| Hengli International Trade Co., Ltd | - | 50, 000, 000.00 | 50, 000, 000.00 | |||
| Total | 44, 316, 275, 704.93 | 50, 000, 000.00 | 44, 366, 275, 704.93 |
(2). Investment in associates and joint ventures
□适用 √不适用
Other note:
None
(3) Impairment test of long-term equity investment
□适用 √不适用
Other noteAt the end of the period, there was no obvious sign of impairment of long-term equityinvestment, so no Provision for impairment.
4. Operating income and operating cost
(1). Operating income and operating cost
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year | ||
| Revenue | Cost | Revenue | Cost | |
| Primary operations | - | - | - | - |
| Other operations | 3, 454, 179.12 | 2, 011, 877.89 | 1, 633, 324.64 | 1, 270, 659.72 |
| Total | 3, 454, 179.12 | 2, 011, 877.89 | 1, 633, 324.64 | 1, 270, 659.72 |
(2). Breakdown information of operating income and operating costs
□适用 √不适用
Other notes:
□适用 √不适用
(3). Note on performance obligations
□适用 √不适用
(4). Description of apportionment to remaining performance obligations :
□适用 √不适用
(5) Significant changes of contracts or Significant transaction price adjustments:
□适用 √不适用
Other note:
None
5. Investment income
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Current year | Prior year |
| Income from long-term equity investment by cost method | 1, 521, 000, 000.00 | 6, 023, 294, 874.00 |
| Income from long-term equity investment by equity method | ||
| Gain from disposal of long-term equity investment | -422, 352.37 | |
| Investment income of financial assets held for trading during the holding period | ||
| Investment income of other equity instruments investment during the holding period | ||
| Interest income from debts investment during the holding period | ||
| Interest income from other debt investments during the holding period | ||
| Gain from disposal of Financial assets held for trading | ||
| Investment income from disposal of other equity instruments investment | ||
| Gains from disposal of debts investment | ||
| Gain from disposal of other debt investments | ||
| Gains from debt restructuring | ||
| Total | 1, 521, 000, 000.00 | 6, 022, 872, 521.63 |
Other note:
None
6. Others
□适用 √不适用
XX. Supplement information
1. Details of non-recurring gain or loss for the year
√适用 □不适用
Unit: Yuan Currency: RMB
| Item | Amount | Note |
| Gain or loss on disposal of non-current assets | -4, 564, 909.89 | |
| Government grants that are included in the profit or loss (closely related to the business of the enterprise, except for government grants that are subject to fixed or quantitative quotas in accordance with national unified standards) | 638, 569, 056.98 | |
| In addition to the effective hedging business related to the normal business operations of the same company, the profit or loss from changes in fair value of financial assets and financial liabilities held by non-financial enterprises, as well as the profit or loss from | 431, 893, 116.94 |
| the disposal of financial assets and financial liabilities | ||
| Fund occupation fees charged to non-financial enterprises included in the current profit or loss | ||
| Profit or loss of entrusting others to invest or manage assets | ||
| Profit or loss from external entrusted loans | ||
| Provision for impairment arising from force majeure such as natural disasters | ||
| Reversal of impairment provision for receivables that have been individually tested for impairment | ||
| The investment cost of the enterprise's acquisition of subsidiaries, associates, and joint ventures is less than the return generated by the fair value of the investee's identifiable net assets when the investment is made. | ||
| Net profit of subsidiaries for the period from beginning of the year to date of acquisition by business combination under common control | ||
| Non-monetary assets exchange profit or loss | ||
| Profit or loss of debt restructuring | ||
| One-time expenses incurred by enterprises due to the discontinuation of related business activities, such as the expenditure for resettling employees | ||
| One-time impact on current profit or loss due to adjustments in tax, accounting, and other laws and regulations | ||
| Share-based payment expenses recognized in one time due to cancellation or modification of equity incentive plans | ||
| For cash-settled share-based payments, after the vesting date, the profit or loss arising from the change in the fair value of employee compensation payable | ||
| Profit or loss arising from changes in fair value of investment real estate subsequently measured using the fair value model | ||
| Gains from transactions with unfair transaction prices | ||
| Profit or loss arising from contingencies unrelated to the company's normal business operations | ||
| Income from custody fees obtained from entrusted operation | ||
| Other non-operating income and expenses other than the above items | -25, 075, 119.31 | |
| Other profit or loss items that meet the definition of non-recurring profit or loss | 7, 339, 987.53 | |
| Less: Income tax impact | 140, 790, 996.05 | |
| Impact amount of minority shareholders' equity (after tax) | ||
| Total | 907, 371, 136.20 |
If the company recognizes items not listed in the "Explanatory Announcement No. 1 on InformationDisclosure by Companies that Offer Securities to the Public - Non-recurring Gains or Losses" as non-recurring gains or losses with significant amounts, and defines the non-recurring gains or losseslisted in the "Explanatory Announcement No. 1 on Information Disclosure by Companies that OfferSecurities to the Public - Non-recurring Gains or Losses" as recurring gains or losses, the reasonsshould be explained.
□适用 √不适用
Other notes:
√适用 □不适用
The impact of the first implementation of the "Explanatory Announcement No. 1 on InformationDisclosure by Companies that Offer Securities to the Public - Non-Recurring Gains or Losses (2023Revision)" on non-recurring gains or losses during comparable accounting periods:
The Company will implement the "Explanatory Announcement No. 1 on Information Disclosure byCompanies that Offer Securities to the Public - Non-Recurring Gains or Losses (2023 Revision)" fromDecember 22, 2023, and will recalculate and present the non-recurring gains or losses for thecomparable accounting period of 2022. The affected non-recurring gains or losses and their amountsare as follows (unit: yuan; currency: RMB):
| Affected non-recurring gain or loss items | Before adjustment | Adjustment amount | After adjustment |
| Government grants that are included in the profit or loss (closely related to the business of the enterprise, except for government grants that are subject to fixed or quantitative quotas in accordance with national unified standards) | 1, 594, 250, 334.30 | -311, 921, 306.08 | 1, 282, 329, 028.22 |
| Income tax impact (decrease in income tax expense is indicated by “-”) | 360, 240, 063.26 | -56, 948, 417.60 | 303, 291, 645.66 |
| Impact of minority shareholders' profit or loss (after tax) | - | - | - |
| Net non-recurring gain or loss attributable to shareholders of the parent company | 1, 273, 018, 054.78 | -254, 972, 888.48 | 1, 018, 045, 166.30 |
2. Return on equity and earnings per share
√适用 □不适用
| Profit in reporting period | Weighted average return on equity (%) | Earnings per share | |
| Basic earnings per share | Diluted earnings per share | ||
| Net profit attributable to the Company’s shareholders | 12.24 | 0.98 | 0.98 |
| Net profit attributable to the shareholders of the Company, excluding non-recurring items | 10.63 | 0.85 | 0.85 |
3. Differences in accounting data under domestic and foreign accounting standards
□适用 √不适用
4. Others
□适用 √不适用
Chairman of the Board: Fan HongweiDate of Board Approval and Submission: 9 April 2024
Revised information
□适用 √不适用