Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Stock abbreviation: Semcorp Stock code: 002812 Announcement No.: 2024 -070
Bond abbreviation: Energy Convertible Bond Bond code: 128095
Yunnan Energy New Material Co., Ltd.
2023 Annual Report
April 2024
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Yunnan Energy New Material Co., Ltd. 2023 Annual Report
2023 Annual Report
Section 1 Important Notes, Contents and Definitions
The Board of Directors and its members, the Supervisory Committee and
its members and the senior management warrant that the contents of the
Annual Report are truthful, accurate and complete, without any false
statement, misrepresentation or major omission, and that they are jointly and
severally liable for them.
Paul Xiaoming Lee (the Company’s person in charge), Li Jian (the person
in charge of finance) and Deng Jinhuan (the person in charge of the accounting
department) hereby declare and warrant that the contents of the financial
statements in this Annual Report are truthful, accurate and complete. All
Directors were present at the Board meeting to review this Annual Report.
The future plans, development strategies and other forward-looking
descriptions in this report do not constitute material commitments of the
Company to investors. Investors and related persons should be fully aware of
the risks in connection therewith and should understand the difference
between plan, forecast and commitment. Investors are advised to pay attention
to investment risks.
For details, please refer to the “3. Risks the Company May Face” under
the “XI. Outlook for the Company’s Future Prospects” in the Section 3
“Management Discussion and Analysis” of this report.
The proposed profit distribution plan of the Company as considered and
approved by the Board is: Based on 967,343,387 shares which is the
Company’s total share capital of 977,755,643 shares as at 11 April 2024 minus
10,412,256 shares held in the Company's repurchase special securities account,
a cash dividend of RMB15.51 (tax inclusive) per 10 shares will be distributed
to all shareholders, 0 bonus shares will be issued (tax inclusive), and no share
will be converted from reserve into share capital.
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Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Contents
Section 1 Important Notes, Contents and Definitions..........................3
Section 2 Company Profile & Key Financial Indicators......................4
Section 3 Management Discussion and Analysis.................................. 6
Section 4 Corporate Governance............................................................7
Section 5 Environment and Social Responsibiliy................................. 9
Section 6 Significant Events.................................................................. 10
Section 7 Share Changes and Shareholder Details.............................12
Section 8 Details about Preferred Shares............................................ 13
Section 9 Details about bonds............................................................... 15
Section 10 Financial Report.................................................................. 16
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Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Documents Available for Inspection
I. Financial statements signed and sealed by the legal representative, the person in charge of finance and the person in charge
of the accounting department of the Company.
II. The original copies of all documents and announcements of the Company which have been publicly disclosed in newspapers
designated by theChina Securities Regulatory Commission during the Reporting Period.
III. The original text of the 2023 annual report signed by the chairman of the Board of Directors.
IV. The place where the above documents are maintained: the Company’s Securities Department.
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Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Definitions
Terms Definitions
Energy Technology, this Company, the
Yunnan Energy New Material Co., Ltd.
Company
Actual controller, Paul Xiaoming Lee family Paul Xiaoming Lee, Li Xiaohua, Yan Ma, YanYang Hui, Sherry Lee, Jerry Yang Li
Hongta Plastic Yunnan Hongta Plastic Co., Ltd., a wholly-owned subsidiary of the Company
Dexin Paper Yunnan Dexin Paper Co., Ltd., a wholly-owned subsidiary of the Company
Hongchuang Packaging Yunnan Hongchuang Packaging Co., Ltd., a controlled subsidiary of the Company
Shanghai Energy Shanghai Energy New Material Technology Co., Ltd., a controlled subsidiary of the Company
Zhuhai Energy Zhuhai Energy New Material Technology Co., Ltd., a subsidiary of the Company
Wuxi Energy Wuxi Energy New Material Technology Co., Ltd., a subsidiary of the Company
Jiangsu Energy Jiangsu Energy New Materials Technology Co., Ltd., a subsidiary of the Company
Chongqing Energy Chongqing Energy New Material Technology Co., Ltd., a subsidiary of the Company
Yuxi Energy Yuxi Energy New Materials Co., Ltd., a subsidiary of the Company
Xiamen Energy Xiamen Energy New Materials Co., Ltd., a subsidiary of the Company
Newmi Tech Chongqing Energy Newmi Technological Co., Ltd., a subsidiary of the Company
Jiangxi Tonry Jiangxi Tonry New Energy Technology Development Co., Ltd., a subsidiary of the Company
Jiangsu Ruijie Jiangsu Ruijie New Materials Technology Co., Ltd., a subsidiary of the Company
Jiangsu Sanhe Jiangsu Sanhe Battery Material Technology Co., Ltd., a subsidiary of the Company
Jiangxi Ruijie Jiangxi Ruijie New Materials Technology Co., Ltd., a subsidiary of the Company
Jiangxi Energy Jiangxi Energy New Materials Technology Co., Ltd., a subsidiary of the Company
Jiangxi Enpo Jiangxi Enpo New Materials Co., Ltd., a subsidiary of the Company
Hubei Energy Hubei Energy New Materials Technology Co., Ltd., a subsidiary of the Company
Suzhou GreenPower Suzhou GreenPower New Energy Materials Co., Ltd., a subsidiary of the Company
SEMCORP Hungary KFT SEMCORP Hungary Korlátolt Felelsség Társaság (Hungary), a subsidiary of the Company
Heyi Investment Yuxi Heyi Investment Co., Ltd., a shareholder holding more than 5% of the Company’s shares
Heli Investment Yuxi Heli Investment Co., Ltd., an employee stock ownership platform of the Company
General Meeting of Shareholders The general meeting of shareholders of Yunnan Energy New Material Co., Ltd.
Board of Directors The Board of Directors of Yunnan Energy New Material Co., Ltd.
Supervisory Committee The supervisory committee of Yunnan Energy New Material Co., Ltd.
CSRC China Securities Regulatory Commission
SZSE Shenzhen Stock Exchange
Company Law Company Law of the People’s Republic of China
Securities Law Securities Law of the People’s Republic of China
Articles of Association Articles of Association of Yunnan Energy New Material Co., Ltd.
China Securities Journal, Shanghai Securities Journal, Securities Times, Securities Daily, Cninfo
Designated information disclosure media
(www.cninfo.com.cn)
RMB, RMB10 thousand, RMB100 million RMB, RMB10 thousand, RMB100 million
Reporting Period, this Reporting Period January 1, 2023 to December 31, 2023
Same period last year January 1, 2022 to December 31, 2022
Rechargeable battery, which mainly depends on the lithium ion moving between the positive and
Lithium-ion battery, lithium battery negative electrodes. It generally uses materials containing lithium as the electrodes, and is the
representative of modern high-performance batteries
In the structure of lithium battery, the separator is one of the key inner components. Its main
Lithium battery separator, the separator function is to separate the positive and negative electrodes of the battery, preventing the short
circuit arising from the contact between the two electrodes, current conduction and overheating
The separator immersed in the electrolyte of lithium battery is widely distributed with nano-scale
Base film, base separator micropores on its surface for lithium ions to move freely between the positive and negative
electrodes
Coating film, coated separator The separator with coating treatment
A process technique of lithium battery separator, also known as phase separation process or
thermally induced phase separation process, is to add small molecules with high boiling point as
porogen to polyolefin, heat and melt them into a uniform state, extrude the casting sheet by screw,
Wet-process, Wet-processing
extract the porogen with organic solvent after simultaneous or sequential biaxial stretching, and
then obtain microporous separator material through post-processing such as stretching heat setting
process
Also known as melt-stretching process, including unidirectional stretching process, biaxial
stretching process and blow molding process. It refers to a preparation process of melting and
Dry-process, Dry-processing extruding polyolefin resin into crystalline thin polymer film, which is crystallized and annealed
to obtain a high crystallinity structure, and then further stretching at high temperature to peel off
the crystalline interface to form porous structure
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Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Cigarette label Cigarette packaging, commonly known as “cigarette pack”
Composite packaging materials for aseptic filling of dairy products or non-carbonated soft
Aseptic packaging
drinks
Specialty paper refers to the paper with special functions, a general term for all kinds of special
Specialty paper purpose paper or art paper. The term “specialty paper” in this report mainly refers to special
packaging paper
The separator made by stretching and processing (such as corona, coating, etc.) the thick film
BOPP film
made of polymer polypropylene melt at a certain temperature and speed in a special stretcher
Cigarette film BOPP film used for the packaging of cigarette, also known as “BOPP cigarette film”
Flat film BOPP film for general packaging, also known as “BOPP flat film”
Aluminum laminated composite film for lithium-ion pouch cell, a packaging material for
Aluminum laminated film
lithium-ion batteries, which protects the internal materials of lithium-ion batteries
The convertible corporate bonds of RMB1.6 billion issued on February 11, 2020 with a code of
Convertible Bonds, Energy Convertible Bonds
128095
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Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Section 2 Company Profile & Key Financial Indicators
I. Corporate Information
Stock Name Energy Technology Stock Code 002812
Stock name prior to change (If any) Innovation Co., Ltd.
The stock exchange where the shares are listed Shenzhen Stock Exchange
Name of the Company in Chinese 云南恩捷新材料股份有限公司
Short Name of the Company in Chinese 恩捷股份
Name of the Company in English (If any) YUNNAN ENERGY NEW MATERIAL CO., LTD.
Short Name of the Company in English (If any) ENERGY TECHNOLOGY
Legal Representative of the Company Paul Xiaoming Lee
Registered Address No.125, Fuxian Road, High-tech Zone, Yuxi City, Yunnan Province
Postal Code for Registered Address 653100
Historical Changes of the Registered Address of the No
Company
Office Address No.125, Fuxian Road, High-tech Zone, Yuxi City, Yunnan Province
Postal Code for Office Address 653100
Official Website www.semcorp.com
Email groupheadquarter@cxxcl.cn
II. Contact Information
Board Secretary Securities Affairs Representative
Name Yu Xue
Correspondence Address No.125, Fuxian Road, High-tech Zone, Yuxi City, Yunnan Province
Telephone 0877-8888661
Fax 0877-8888677
Email groupheadquarter@cxxcl.cn
III.Information Disclosure and the Place Where the Annual Report is Kept
The website of the stock exchange where the Company Shenzhen Stock Exchange (www.szse.cn)
discloses its annual report
The names and websites of the media where the Securities Times, China Securities Journal, Shanghai Securities Journal, Securities
Company discloses the annual report Daily and Cninfo (www.cninfo.com.cn)
The place where the annual report is kept Securities Department of the Company
IV. Changes of Registration
Unified social credit code 91530000727317703K
When the Company was listed, its main businesses were divided into two categories:
Changes of main businesses since the Company’s listing (1) packaging materials: BOPP films (cigarette film and flat film) and specialty paper
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Yunnan Energy New Material Co., Ltd. 2023 Annual Report
(if any) products (laser transfer anti-counterfeiting paper, direct plating paper and cellophane);
(2) packaging printing products: mainly including cigarette label products and aseptic
packaging products. Upon the completion of major asset restructuring in 2018, the
Company’s main businesses were divided into three categories: (1) film products
(lithium battery separator, cigarette film and flat film); (2) packaging printing products
(cigarette label and aseptic packaging); and (3) packaging products (specialty papers,
holographic anti-counterfeiting electrochemical aluminum and other products).
Mr. Paul Xiaoming Lee and Ms. Sherry Lee, who are shareholders and actual
Changes of controlling shareholders (if any) controllers of the Company and members of Xiaoming Lee’s family, signed the Power
of Attorney for Shareholding on January 14, 2020. Pursuant to the Power of Attorney,
Ms. Sherry Lee fully delegated the shareholders’ rights, such as rights to address
inquiries, propose and vote, in connection with all the shares she held in the Company,
to her father Mr. Paul Xiaoming Lee, for a period of three years from the date of the
Power of Attorney. After the signing of the above-mentioned Power of Attorney for
Shareholding, Mr. Paul Xiaoming Lee has become the single shareholder of the
Company with the largest number of shares with voting right, and the controlling
shareholder of the Company changed from Heyi Investment to Mr. Paul Xiaoming
Lee. The above-mentioned Power of Attorney for Shareholding expired. At present,
Mr. Paul Xiaoming Lee is still the controlling shareholder of the Company.
V. Other Relevant Information
The accounting firm engaged by the Company
The name of the accounting firm Dahua CPAs (SGP)
The office address of the accounting firm 12/F, Building 7, 16 Xi Si Huan Zhong Road, Haidian District, Beijing
The names of the accountants Kang Wenjun and Yao Rui
The sponsor engaged by the Company to perform continuous supervision duties during the Reporting Period
Applicable □Not applicable
Name of sponsor Office address of sponsor Name of sponsor representative Supervision duration
21/F, CITIC Securities Tower,
CITIC Securities Company From June 20, 2023 to December
No. 48 Liangmaqiao Road, Wang Jiaji and Liu Chunqin
Limited 31, 2024
Chaoyang District, Beijing
The financial adviser engaged by the Company to perform continuous supervision duties during the Reporting Period
□Applicable not applicable
VI. Key Accounting Data and Financial Indicators
Whether the Company is required to retroactively adjust or restate prior years’ accounting data
□Yes No
The lower of the Company’s net profits before and after the deduction of non-recurring gains or losses for the last three fiscal years are negative,
and the audit report for the latest year shows that Company’s ability to continue as a going concern is uncertain
Increase or decrease for
2023 2022 2021
the year over last year
Operating revenue (RMB) 12,042,229,789.30 12,590,925,529.68 -4.36% 7,982,426,810.59
Net profits attributable to shareholders of the listed
2,526,688,570.92 4,000,461,964.37 -36.84% 2,717,628,798.01
company (RMB)
Net profits attributable to shareholders of the listed
company(excluding non-recurring profit and loss) 2,461,257,928.99 3,839,792,123.08 -35.90% 2,567,054,537.19
(RMB)
Net cash flows from operating activities (RMB) 2,667,453,259.32 503,587,598.66 429.69% 1,418,645,377.82
Basic earnings per share (RMB/share) 2.68 4.48 -40.18% 3.06
Diluted earnings per share (RMB/share) 2.58 4.46 -42.15% 3.05
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Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Weighted average return on net assets 11.87% 25.39% -13.52% 21.85%
Increase or decrease for
End of 2023 End of 2022 End of 2021
the year over last year
Total assets (RMB) 47,200,916,635.69 38,622,731,492.57 22.21% 26,122,184,844.54
Net assets attributable to shareholders of the listed
26,926,495,494.24 17,726,202,872.37 51.90% 13,831,866,927.31
company (RMB)
□Yes No
The lower of the net profit before and after the deduction of non-recurring gains or losses is negative
□Yes No
VII. Accounting Data Differences under Domestic and Foreign Accounting
Standards
1. Difference between the net profit and net assets of the financial report disclosed in accordance with
the international accounting standards and in accordance with the Chinese accounting standards
□Applicable Not applicable
There was no difference between the net profit and net assets of the financial report of the Company disclosed in accordance with the international
accounting standards and in accordance with the Chinese accounting standards during the Reporting Period.
2. Difference between the net profit and net assets of the financial report disclosed in accordance with
the overseas accounting standards and in accordance with the Chinese accounting standards
□Applicable Not applicable
There was no between the net profit and net assets of the financial report of the Company disclosed in accordance with the overseas accounting
standards and in accordance with the Chinese accounting standards during the Reporting Period.
VIII. Key Financial Indicators by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 2,568,465,530.97 3,000,010,371.70 3,524,931,659.68 2,948,822,226.95
Net profits attributable to shareholders of the listed company 649,239,029.72 755,422,136.90 748,899,694.20 373,127,710.10
Net profits attributable to shareholders of the listed
627,858,465.64 716,050,741.18 710,064,403.06 407,284,319.11
company (excluding non-recurring profit and loss)
Net cash flows from operatingactivities 726,077,344.95 544,779,211.99 1,782,153,270.14 -385,556,567.76
Whether the above financial indicators or their sums are materially different from those disclosed in the quarterly and interim reports of the
Company
□Yes No
IX. Items and Amounts of Non-Recurring Gains or Losses
Applicable □Not applicable
Unit: RMB
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Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Item Amount in 2023 Amount in 2022 Amount in 2021 Description
Gains and losses from the disposal of non-current assets -2,635,244.01 -4,869,891.53 -1,303,244.16
Government subsidies recognized in current profit or loss
(except for those closely related to the Company’s normal
business and are in line with national policies and in 91,546,051.06 171,995,624.29 140,888,128.01
accordance with defined criteria that have a continuing
impact on the Company's profit or loss)
Gains or losses from changes in fair value arising from
financial assets and financial liabilities held by non-financial
corporation, and gains or losses from disposal of financial
assets and financial liabilities, excluding the effective 15,433,062.02 21,836,255.17 137,194.34
hedging business related to the Company’s normal business
operations
Gains or losses on entrusted investments or assets
management 27,838,099.70 25,422,322.79
Reversal of the provisions for impairment of receivables
102,906.06 2,078,410.35 11,749,733.34
subject to separate impairment test
One-off share-based payment expense recognized as a result
of cancellation and modification of the share incentive -21,942,152.71
scheme
Non-operating income and expenses other than above-
-44,249.00 818,785.95 4,316,746.86
mentioned items
Other items within the definition of non-recurring gains or
589,416.97 5,824,344.40 5,038,461.95
losses
Less: effect of the income tax 12,614,212.47 56,380,407.08 27,937,401.47
Effect of minority equities 5,004,935.99 8,471,379.96 7,737,680.84
Total 65,430,641.93 160,669,841.29 150,574,260.82 --
Details of other profit or loss items that fall within the meaning of non-recurring gain or loss:
□Applicable Not applicable
The Company has no details of other profit or loss items that fall within the meaning of non-recurring gain or loss.
The reason for the Company to define the non-recurring profit or loss items illustrated in the Information Disclosure and Presentation Rules for
Companies Making Public Offering of Securities No. 1 – Non-recurring Profit or Loss as recurring profit or loss items
□Applicable Not applicable
The Company did not define the non-recurring profit or loss items illustrated in the Information Disclosure and Presentation Rules for Companies
Making Public Offering of Securities No. 1 –Non-recurring Profit or Loss as recurring profit or loss items.
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Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Section 3 Management Discussion and Analysis
I. Industry Overview of the Company during the Reporting Period
The Company shall comply with the disclosure requirements set out in “Rubber and Plastic Products Manufacturing” under “Chemical Industry
Related Business” in the Self-Disciplinary Regulatory Guidelines for Companies Listed on the Shenzhen Stock Exchange No. 3 – Industry
Information Disclosure.
1. Industry conditions and the industry position of the Company
In 2023, with increasing global attention on green, low-carbon, and sustainable development, more than 150 countries set ambitious goals for
carbon neutrality. At the United Nations Climate Change Conference, nearly 200 countries reached a milestone agreement - "UAE Consensus",
marking the first consensus in nearly three decades on transitioning the energy system from fossil fuels to clean energy. In view of the strong
growth momentum of global new energy vehicle market, countries intensified efforts to promote the development of the new energy industry
centered around lithium battery technology. Guided by China's national strategic goals of carbon neutrality and carbon peaking, the new energy
vehicle and energy storage industries will continue to maintain the rapid development momentum. As one of the four key materials of lithium
batteries, lithium battery separators are widely used in electric vehicles, consumer electronics, energy storage batteries, and other fields, playing a
pivotal role in driving the development of China's and even global new energy industries.
As a leading company in the lithium battery separator industry, the Company not only possesses significant competitiveness in global production
capacity, product quality, cost-effectiveness, and technological research and development, but also has successfully integrated into the supply chain
systems of the vast majority of mainstream lithium battery manufacturers worldwide. Our products cover the three major fields of power,
consumer electronics, and energy storage, with abundant application scenarios. In 2023, the Company maintained its leading position in the
industry, with both production capacity and shipment volume of separator products ranking first in the industry.
2. Industry development trends
The rapid development of the global new energy vehicle industry and energy storage market, along with the continuous expansion of the lithium
battery industry market, has brought vast market potential and historic development opportunities for the lithium battery separator industry.
According to the China Lithium-ion Battery Separator Industry Development White Paper (2024) released by research institution EV Tank in
collaboration with China YiWei Institute of Economics, the shipment volume of lithium-ion battery separators in China increased by 32.8% year-
on-year in 2023, reaching 17.69 billion square meters. Specifically, the shipment volume of wet-process separators reached 12.94 billion square
meters, while that of dry-process separators reached 4.75 billion square meters. EV Tank stated in the white paper that the global shipment volume
of lithium-ion battery separators exceeded 21 billion square meters in 2023, and the global share of shipments from Chinese separator companies
had surpassed 83% in the same year.
(1) The separator industry has vast market potential and high production capacity requirements
From a global perspective, China has taken the lead in the development of electric vehicles, while overseas regions such as Europe and America
are rapidly catching up. Given the enormous growth potential of overseas new energy vehicle and lithium battery markets, the Gaogong Industry
Institute (GGII) predicts that global lithium battery shipments will exceed 4TWh by 2030. The penetration rate of new energy vehicles in overseas
markets is still lower compared to domestic markets; therefore, the growth rate of overseas markets is expected to surpass that of domestic markets
in the future. As an indispensable key raw material in lithium battery manufacturing, the stable and reliable production capacity and product quality
of lithium battery separators is crucial for separator companies to undertake large-scale orders from downstream customers. Leveraging their
production capacity, product and technology R&D advantages, separator manufacturers can continuously deepen cooperation with core customers,
thereby helping them to further expand market share and enhance market influence.
(2) The importance of enhancing research and development innovation capabilities and optimizing product and customer structures become more
prominent
Lithium batteries are the core components of new energy vehicles. As the market gradually transitions from policy-oriented to market-driven,
manufacturers have increasingly stringent requirements for key performance attributes of lithium batteries, such as safety, range capacity, and
lifespan. The continuous advancement of lithium battery technology imposes higher requirements on the performance improvement and
technological iteration of separator products. Therefore, separator companies that possess core technologies and independent R&D and innovation
capabilities will have better development prospects and potential.
Since the beginning of 2023, the competition in the separator industry has become increasingly fierce, and optimizing product and customer
structures has become one of the trends in the development of separator companies. Coating inorganic ceramic materials, PVDF, aramid, and other
materials on the base film can effectively enhance the puncture resistance and heat resistance of lithium battery separators, improving the safety
and lifespan of batteries. Compared with base films, coated films are better able to meet the key performance requirements of lithium batteries for
separators, offering higher product added value. Therefore, separator companies that possess the core technology of high-quality coated films have
better development prospects, and increasing the shipment volume of coated films helps enhance the comprehensive profitability. Meanwhile,
separator companies need to continuously develop new products to ensure that they possess new production capabilities. In terms of specific
product features, improving the heat resistance, mechanical strength, and other performance aspects of separator products to meet the safety and
lifespan requirements of lithium batteries, while meeting the demand for slimming to enhance the energy density and range of lithium batteries,
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Yunnan Energy New Material Co., Ltd. 2023 Annual Report
remains a trend in separator product development. In terms of optimizing customer structure, we must ramp up efforts in the maintenance and
development of key customers while in exploring overseas markets and accelerating global outreach.
In addition, the Company has diverse product lines in multiple product segments such as BOPP film, aseptic packaging, and aluminum-plastic film.
After approximately 30 years of steady development of the BOPP film industry in China, the technology has become increasingly mature, while
the market competition has also become fiercer. In the future, the development direction of the industry will focus more on manufacturing
differentiated products that meet customer demands, such as cigarette pack wrapping film and laser film. These products will be widely used in
packaging segments such as cigarettes and food, which have enormous market potential. With the continuous expansion of the terminal market, the
BOPP film industry will also be poised for new growth opportunities.
In recent years, China's aseptic packaging market has gradually established a product system with mature technology and diverse product types,
capable of meeting the needs of aseptic filling of various liquids. The primary application areas of aseptic packaging are concentrated in the food
and beverage industries such as liquid dairy products and non-carbonated beverages. With the continuous prosperity of the domestic economy and
the increase in urban residents' income, consumer mindset and health awareness have gradually improved, leading to a rapid growth momentum in
the consumption of dairy products and non-carbonated beverages. At the same time, the increasing attention from both the government and
consumers on food safety has led to stricter requirements for packaging materials, especially aseptic packaging materials, resulting in rising
demands. Although international packaging giants still dominate the market due to their first-mover advantage, with the continuous progress of
domestic material technology and production technology, the domestic aseptic packaging market is poised for rapid growth opportunities. Looking
ahead, leveraging cost-effectiveness advantages, domestic manufacturers are expected to gradually expand their products from the mid-to-low-end
market to the high-end aseptic packaging market. As a result, the market share of domestic aseptic packaging manufacturers is expected to
gradually increase.
Aluminum laminated film, as a crucial encapsulation material for pouch cells, represents one of the most technically challenging aspects in the
pouch cell industry chain, exerting significant influence on the quality of pouch cells. Compared to cylindrical and prismatic batteries, pouch
batteries demonstrate evident advantages in energy density, cycle life, safety, and flexibility. In the realm of consumer electronics which seeks
high-capacity and lightweight, pouch cells have become the mainstream choice, with their penetration rate surpassing 80% in mobile phones and
laptops, and approaching saturation in tablet batteries. In the field of traction batteries, the European and American new energy vehicle markets
show a strong preference for pouch power batteries. With continuous advancements in battery technology and declining costs, the competitiveness
of pouch batteries is gradually improving. An increasing number of automotive manufacturers are opting for pouch cells as the power source for
new energy vehicles, further driving the growth of pouch cell shipments. It is anticipated that, driven by downstream lithium battery demand, the
market demand for pouch cells and aluminum laminated film will continue to expand, with the market size of aluminum laminated film expected to
grow continuously in the coming years.
3. Industry policies
As an indispensable core component in lithium battery manufacturing, the Company's main product - lithium battery separators, has received
significant attention and support from national policies. In recent years, the government has issued a series of related industrial policies for this
sector, as detailed below:
Date Issuing Authority Name of Policy or Regulation Main Content
August Technology to Support Carbon Propose the action plan for low-carbon and zero-carbon technology
Nine departments
2022 Emission Peak and Carbon research in urban and rural construction and Transportation, focusing on
including MOST,
Neutral Implementation Plan recent breakthroughs in basic research in key areas such as new energy
NDRC and MIIT
(2022-2030) development and cutting-edge energy storage
November Guiding lithium battery enterprises to moderately expand production scale
2022 as needed under the premise of stable supply of key materials, sufficient
Notice on Promoting the
investment in research and development innovation, and adequate
Coordinated and Stable
MIIT, SAMR supporting funds. It's important to optimize the industrial regional layout,
Development of the Lithium-ion
avoid low-level homogeneous development and vicious competition, and
Battery Industry Supply Chain
establish a development pattern led by innovation, prioritizing technology,
fair competition, and orderly expansion.
January Promote the intelligent upgrading of basic material production, enhance the
Guiding Opinions on Promoting
2023 production of silicon materials, silicon wafers, energy storage battery
the Development of the Energy
MIIT materials, and high-performance batteries. Improve the mechanization and
Electronics Industry (Draft for
automation levels of packaging, storage, and transportation to enhance
Comments)
product consistency and stability.
February Circular on the Organization of
The goal is to significantly increase the level of electrification for vehicles,
2023 Eight departments Pilot Zones for the Full
aiming to reach 80% in urban public transportation, taxis, sanitation, postal
including MIIT Electrification of Public Sector
and express delivery, and urban logistics distribution sectors
Vehicles
June 2023 Decision on Amending the
“Measure on the Parallel Adjust the method of point calculation and the upper limit of points;
MIIT, MOF, MOC,
Administration of the Corporate establish a flexible point trading mechanism, explore the establishment of a
GAC, and SAMR
Average Fuel Consumption and points pool system; optimize other points management systems.
New Energy Vehicle Credits of
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Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Passenger Vehicle Enterprises”
June 2023 Announcement on Renewal of
During the period from 1 January 2024 to 31 December 2025, new energy
the Vehicle Purchase Tax
MOF, STA, MIIT vehicles are exempt from vehicle purchase tax, with each new energy
Exemption Policy for New
passenger car eligible for a tax exemption of up to RMB30,000
Energy Vehicles
September The goal is to enhance the adjustment capacity of the power system,
2023 promote the consumption and absorption of renewable energy, and
Basic Rules for the Electricity
NDRC, NEA facilitate the transformation of the power system towards a clean, low-
Spot Market (Trial)
carbon, safe, and efficient direction
II. Main Businesses of the Company during the Reporting Period
The Company shall comply with the disclosure requirements for the chemical industry set forth in the Self-Disciplinary Regulatory Guidelines for
Companies Listed on the Shenzhen Stock Exchange No. 3 – Industry Information Disclosure
Procurement model for major raw materials:
Unit: RMB
Whether there are
Average price in the
Proportion in total significant changes Average price in the
Major raw materials Procurement model second half of the
procurement amount in settlement first half of the year
year
methods
Raw material A Market procurement 32.82% No 23.27 24.30
Raw material B Market procurement 24.24% No 12.16 11.92
Raw material C Market procurement 11.48% No 7.48 7.35
Raw material D Market procurement 8.02% No 7.40 6.80
Energy procurement costs account for over 30% of total production costs
□Applicable Not applicable
Production technology for major products
Phase in
Information about key
Major products production Patent technology Strengths in product R&D
technical personnel
technology
The Company has built a well-established R&D team
The Company's R&D team over the years, covering a wide range of research
for lithium battery separators areas including separator and coating production
has achieved a series of equipment, improvements in separator preparation
accomplishments in processes and raw materials, coating processes,
All are employees of
improving production slurry formulations, recycling and energy-saving
the Company, who
efficiency and lithium battery technologies, as well as the development of forward-
continue to carry out
Lithium battery Industrializ separator business. Currently, looking technological reserve projects. The
R&D projects and
separator ation there are a total of 407 valid Company's pioneering online coating technology has
proactively respond to
patents, including 34 further enhanced the quality and production
the needs of
international patents. efficiency of coated film products. Additionally, the
downstream customers
Additionally, 258 patents are Company's lithium battery separator R&D team not
currently under application, only customizes the development of various new
including 102 international products for downstream customers but also
patent applications. collaborates with them to develop products that meet
diverse customer needs.
The Company has accumulated nearly thirty years of
All are employees of
experience in technical research and development.
the Company, who Currently, there are 60 valid
Leveraging a well-established R&D team within the
develop relevant patents, including 6 invention
Industrializ Company's research institute system, the Company
BOPP film products in proactive patents and 54 utility model
ation can develop related products according to customer
response to the needs patents; 1 patent is currently
needs. It is one of the few domestic enterprises
of downstream under application.
capable of producing anti-counterfeiting printed
customers
cigarette films.
All are employees of
Currently, there are 41 valid
the Company, who
patents, including 2 invention Leveraging a well-established R&D team within the
develop relevant
Aseptic Industrializ patents, 30 utility model Company's research institute system, the Company
products based on
packaging ation patents, and 9 design patents; can develop related products according to customer
demands of the market
2 patents are currently under needs to meet diverse customer needs.
and downstream
application.
customers
Production capacity of major products
Major products Designed capacity Capacity utilization Capacity under Investment in construction
13
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
rate construction
Part of the production lines of
Chongqing Energy (Phase II), Jiangsu
Chongqing Energy (Phase
200 million square Energy, and Hubei Energy have been
Lithium battery separator 83.22% II), Jiangsu Energy, Hubei
meters put into operation, while the
Energy, Yuxi Energy
construction of Yuxi Energy is
underway
1 relocation production 1 relocation production line in
BOPP film 70,000 tons 70.40%
line in installation installation
Ma'anshan Aseptic The construction work of the Ma'anshan
5.2 billion
Aseptic packaging 82.42% Packaging Production Aseptic Packaging Production Base is
packaging boxes
Base currently underway
Note: In the above table, the production capacity of lithium-ion battery separator parent roll is calculated based on the normal wear caused by
rotation speed, width and downtime for maintenance, and the time weighted for production line put in operation. In addition, depending on the
different products, the final products are sold after cutting, coating and other processes. The wear and tear vary from different processes, and the
output of the final product is different from that of the parent roll.
Product categories in major chemical parks
Major chemical park Product category
Shanghai Energy, Zhuhai Energy, Wuxi Energy, Jiangxi Tonry, Suzhou
GreenPower, Chongqing Energy, Newmi Tech, Jiangsu Energy, Hubei Lithium battery separator
Energy, Hungary Energy, Jiangxi Energy
Hongta Plastics, Chengdu Hongta Plastic BOPP film
Hongchuang Packaging Aseptic packaging
Environmental Impact Assessment (EIA) approvals being applied for or newly obtained during the Reporting Period
Applicable □Not applicable
During the Reporting Period, Hongchuang Packaging (Anhui) Co., Ltd. received the environmental impact assessment approval of “Ma Jing
Kai Huan Shen [2023] No. 36” issued by the Ecology and Environment Bureau of Ma'anshan Economic and Technological Development Zone. As
at the end of the Reporting Period, the environmental impact assessment approvals of Jiangxi Tonry and Jiangxi Enpo were in progress. Up to now,
the environmental impact assessment approvals of “Gao Huan Ping Zi [2024] No. 2” and “Gao Huan Ping Zi [2024] No. 12” issued by Yichun
Gao'an Ecology and Environment Bureau have been obtained.
Abnormal production shutdowns occurring in the listed company during the Reporting Period
□Applicable Not applicable
Relevant approvals, permits, qualifications and their validity periods
□Applicable Not applicable
Conducting petroleum processing and petroleum trading business
□Yes No
Conducting fertilizer business
□Yes No
Conducting pesticide business
□Yes No
Conducting chlor-alkali and soda ash businesses
□Yes No
III. Analysis of Core Competitiveness
1. Scale advantage
As of the end of the Reporting Period, the Company is a world leader in terms of the production scale of wet-processed lithium battery separator,
and has the largest lithium battery separator supply capacity in the world. The Company is the world's largest supplier of lithium battery separator,
ranking No. 1 globally in terms of market share. The scale advantage of the Company is mainly reflected in cost control and sales expansion. The
Company has the ability to take large-scale orders from leading battery manufacturers such as LGES, CATL, CALB, EVE and Gotion High-tech.
Furthermore, the Company’s scale advantage also helps improve production efficiency and procurement advantage, effectively reducing costs. In
terms of cost control, the Company’s scale advantage firstly improves its cost advantage in raw materials procurement as large-scale centralized
procurement makes the Company’s raw materials costs lower than that of its industry peers. Secondly, the Company’s huge sales scale brings a
large number of orders to the Company, so that the Company can effectively reduce the frequency of downtime during production and effectively
reduce costs caused by downtime through reasonable production scheduling. As a result, the Company leads its peers in terms of operating rate and
capacity utilization rate. In terms of sales development, the concentration of the lithium battery industry is increasing day by day. The existing and
14
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
under-construction production lines of domestic first-class lithium battery manufacturers boast huge production scale. Therefore, whether the
suppliers have a supply capacity to meet the current and future demand of world-class lithium battery manufacturers is the first consideration in
their selection of suppliers. As the world’s largest lithium battery separator supplier, the Company boasts a competitive advantage thanks to its
sufficient supply capacity.
2. Cost advantage
The Company has long been committed to the development and improvement of the production technology for advanced wet-processed lithium
battery separators. Thanks to the continuous improvement of production equipment and process technique by the Company’s production
management and technical teams, the Company leads its industry peers in terms of output from a single production equipment line of lithium
battery separators and further reduces unit depreciation, energy consumption and labor costs. Moreover, thanks to its continuous improvement of
production technology and production management, the Company also leads its peers in terms of yield coefficient and first pass yield of lithium
battery separators. Besides, the Company has continually improved the recovery efficiency of auxiliary materials, and its consumption of auxiliary
materials is far lower than that of competitors in the industry. On the whole, the Company’s cost advantage is brought forth by the integration of
continuous improvement of production equipment and production technology, sustained investment in R&D, constant improvement of production
management, strong market development ability and huge production scale, giving the Company a long-term competitive edge.
3. Product advantage
The Company has long been committed to the R&D of lithium battery separators and creating value for customers with high-quality products and
excellent services. Mainstream lithium battery manufacturers, especially world-class lithium battery manufacturers, have strict requirements for
material quality. As one of the core materials for lithium batteries, the separator has high technical barrier and its performance directly affects the
discharge capacity, cycle life and safety of lithium battery. Lithium battery manufacturing has extremely high requirements on separators in terms
of properties, such as the size, distribution uniformity and consistency of separator micropores. Mainstream lithium battery manufacturers apply a
long system verification process, covering product, process and production flow, when selecting material suppliers. The Company has successfully
cooperated with most domestic mainstream lithium battery manufacturers, and is included in the most demanding overseas power battery supply
chain systems. The quality of our products has been recognized by many lithium battery manufacturers. In addition, the Company has continually
invested in the development of new products and carried out product research and forward-looking technical reserve while meeting customers’
demand for customized products. The Company has become a supplier with the most diversified lithium battery separator products to meet various
demands of different customers.
4. R&D advantage
The Company has established a R&D team with a sound system through years of accumulation. Its R&D scope covers separator and coating
production equipment, improvement of separator preparation process, raw & auxiliary materials, coating process, slurry formula, recovery and
energy saving technologies as well as the R&D of forward-looking technical reserve projects. The Company’s R&D team of lithium battery
separator has made a series of achievements in improving production efficiency, enhancing the quality of lithium battery separators and developing
new products. The Company now has 420 effective patents (including 34 international patents) and 291 ongoing patent applications (including 120
international patent applications). The Company's innovative online coating technology further improves the quality and production efficiency of
coating film products. The Company’s R&D team of lithium battery separator can not only customize a variety of new products for downstream
customers, but also jointly develop products with downstream customers to meet their diversified needs.
5. Talent advantage
The lithium battery separator industry is currently an emerging industry in China with a history of only over a decade. With the rapid growth of the
global energy industry in recent years, there are insufficient talents and a lack of qualified professionals in the lithium battery separator industry.
Relying on a talent pool accumulated through more than 20 years of engagement in the BOPP film industry, which is similar to the lithium battery
separator industry, the Company has established a well-functioning talent incentive mechanism to recruit talents worldwide. As of the end of the
Reporting Period, the Company had more than 180 employees with a master’s degree or above working in the lithium battery separator segment,
and has set up a core technological R&D team composed of professional R&D staff from the United States, Japan, South Korea and other countries.
Furthermore, through long-term efforts, the Company has established complete professional teams in production management, system construction,
quality control, market expansion and equipment design, installation and maintenance, etc. All teams of the Company have achieved fruitful results
in their respective professional fields to jointly help the Company become an internationally competitive leader in the lithium battery separator.
6. Market and customer resources advantages
In 2023, the Company continued to maintain a leading position in the wet-processed lithium battery separator market. So far, the Company has
entered the supply chain system of most mainstream lithium battery manufacturers in the world, including overseas lithium battery production
giants (e.g. Panasonic, Samsung and LGES, and a leading overseas automobile manufacturer) and domestic mainstream lithium battery enterprises
(e.g. CATL, EVE, CALB, BYD, Gotion High-tech, Farasis Energy and Lishen). The Company has established stable and sound partnerships with
downstream customers, with in-depth technical exchanges during cooperation. Therefore, the Company has a profound understanding of customer
needs, and can quickly respond to customer needs and provide corresponding services. With the rapid development of the industry and continuous
unleashing of its production capacity, the Company is poised to grow along with its downstream customers.
15
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
IV. Analysis on Main Businesses
1. Overview
In 2023, driven by the goal of carbon emissions reduction, the global new energy EV market and energy storage market continued the robust
growth momentum. However, affected by factors such as downstream destocking and cost reduction requirements, the concentrated release of new
capacity by separator enterprises, and intensified market competition, the overall product prices in separator industry have been continuously
decreasing for a year. In 2023, the Company's operating income was RMB12.042 billion, representing a year-on-year decrease of 4.36%, and the
net profit attributable to shareholders of the listed company was RMB2.527 billion, representing a year-on-year decrease of 36.84%.
(1) Focusing on the lithium battery separator business, pursuing global expansion, and optimizing product and customer structures
During the Reporting Period, the Company continued to focus on the separator business and optimize its product and customer structure. In 2023,
the Company's revenue from lithium battery separator business reached RMB10.082 billion. Despite a slight year-on-year decrease due to
intensified market competition and overall price decline, the proportion of higher value-added coated film products increased. Additionally, the
Company's overseas sales revenue grew significantly by 51.45% year-on-year, accounting for a higher proportion of total revenue. According to
EV Tank's China Lithium-ion Battery Separator Industry Development White Paper (2024), as of the end of 2023, the Company had maintained its
leading market share for six consecutive years. The Company's customer base is now covering major global lithium battery manufacturers and
large automobile companies. During the Reporting Period, the Company established partnerships with several global battery giants, including
receiving a supplier nomination letter and signing capacity lock-in agreements. Furthermore, the Company's products and services received
recognition from customers, earning titles such as LGES's "Excellent Partner of 2023" and "S-level Supplier", Ningde Times' "2023 Annual Safety
Production Progress Award", EVE Energy's "Joint Innovation" Award, CALB's "Diamond Supplier" title, Lision's "Strategic Partner" title,
Sunwoda's "Best Strategic Partner" title, Gotion High tech's "Outstanding Contribution" award, Farasis Energy's "Quality Progress Award", and
DFD New Energy's "Strategic Partner" title.
In the long term, the prospects for the development of the new energy vehicle and energy storage industries are promising, especially in overseas
markets where there is ample room for growth. A group of outstanding enterprises, represented by new energy vehicle manufacturers and
downstream lithium battery manufacturers, are accelerating their overseas expansion. With the further expansion of their domestic and overseas
production capacity, their demand for lithium battery separators in the market will also increase accordingly. Based on factors such as supply
continuity and security, enterprises with large-scale, high-quality production capacity and solid supply capabilities are more likely to be favored by
large-scale customers. The Company's capacity construction projects are steadily progressing. During the Reporting Period, the Company
completed the issuance under the 2021 non-public offering of A shares, raising a total of RMB7.5 billion. The progress of related investment
projects was satisfactory. The Chongqing Energy High-performance Lithium-ion Battery Micropore Separator Project (Phase I) and the Suzhou
GreenPower Lithium Battery Coating Separator Project with an annual output of 200 million square meters were put into production. The
Chongqing Energy High-performance Lithium-ion Battery Micropore Separator Project (Phase II) with 7 production lines has been put into
production. Some production lines of Jiangsu Energy Lithium Traction Battery Separator Industrialization Project have been put into operation,
while the Jiangsu Ruijie EV Lithium Battery Aluminum Laminated Film Industrialization Project was under construction as planned. Other
domestic projects such as Hubei Energy and Yuxi Energy were still progressing in an orderly manner, with some production lines of Hubei Energy
being put into operation during the Reporting Period. The Company's dry-process lithium battery separator project is also progressing steadily,
with the first dry-process separator production line put into operation during the Reporting Period, and the remaining production lines are put into
operation to meet the demand of the energy storage market.
In terms of overseas expansion, the Company's lithium battery separator production base in Hungary has been completed. The first coating film
production line was started during the Reporting Period, and the first base film production line has been fully operational. It is expected that the
Hungary production base will be able to rapidly respond to the demands of customers in Europe and other regions starting from 2024. Furthermore,
Hungary Energy has signed a cooperation agreement with Debrecen University, a well-known public comprehensive research university in
Hungary. The two parties will collaborate on research activities and development projects to further promote the transformation of scientific
research results and cultivate talents with international perspectives for the Company. In addition, to accelerate the progress of the Company's
lithium battery separator project in the United States and to quickly respond to the needs of customers in North America, as well as to increase the
Company's global market share of separator products, the Company adjusted the investment amount for the lithium battery separator project in the
United States to approximately USD276 million in January 2024. This adjustment will involve the construction of 14 production lines with a total
annual capacity of 700 million square meters for lithium battery coated separators. The Company's global market share is expected to further
increase.
(2) Focusing on R&D investment to drive high-quality development through innovation
The Company has always driven high-quality development with innovation. During the Reporting Period, it continued to strengthen its investment
in research and development, with R&D expenses accounting for 6.04% of operating income. As of the end of the Reporting Period, the Company
and its subsidiaries had a total of 606 patents cumulatively, including 396 utility model patents, 164 domestic invention patents, 34 international
patents, and 12 design patents. The Company places importance on international patent layout, with applications for registration for 120
international patents and 175 domestic patents, which have been accepted.
In terms of core product development, the Company made significant progress in several research and development projects during the Reporting
Period. In particular, a new generation of ultra-high-strength, high-porosity base film for power applications, independently developed by the
16
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Company, has entered the promotion stage to enhance the fast-charging performance of lithium batteries. The mass production of a new generation
of separators with low shutdown temperature and high safety has been achieved. In the field of semi-solid-state batteries, the Company has
established Jiangsu Sanhe, a joint venture with Beijing WeLion and Tianmu Guide, for the research and production of semi-solid-state electrolyte-
coated separators and various high-end coated separators. The construction of the first-phase factory for this project has been completed, and two
high-performance coating film production lines have entered the trial production phase.
During the Reporting Period, the Company's innovation ability and level continued to be recognized by the industry and customers. Shanghai
Energy was honored to be listed on the "2023 Shanghai Hardcore Technology Enterprises TOP100" released at the Shanghai Industrial Technology
Innovation Conference, and was distinguished from more than 1,500 outstanding enterprises and was awarded the "National Enterprise
Technology Center" at the conference. The Company was awarded the "Technology Innovation Award" by SVOLT for overcoming technological
difficulties and achieving technological breakthroughs in projects, and was also awarded the "Excellence in Technology Award" by Cosmx in 2023,
which was highly praised by customers. In addition, during the Reporting Period, the Company and the National Innovation Center Par Excellence
announced the establishment of the "NICE-Energy Joint Innovation Center", which will integrate the strengths of both parties to carry out strategic
research, and dedicate itself to make breakthrough in the key technologies, common technologies and cutting-edge technologies of the industry,
which is conducive to further enhancing the core competitiveness of the Company.
(3) Enhancing the Company's internal management level and digital empowerment of "smart manufacturing" of separators
Based on the development prospects of the international market in the new energy industry, the Company is bound to go global, excellent internal
management is the cornerstone of the globalization of enterprises, while cost control is the eternal theme of enterprise development. In the face of
the challenges of the current intensified market competition, the Company actively responded to the situation by hiring an internationally renowned
consulting organization to further enhance the Company's internal operation and management level during the Reporting Period, in order to
consolidate the foundation for the Company's globalization development, and planned to make constant improvements in production, procurement,
market, safety, quality, human resources, informatization, and other aspects. At the same time, based on industrial big data, industrial artificial
intelligence and intelligent control technology, the Company continued to empower the "intelligent manufacturing" of separator, helping to
improve production efficiency. According to the "Cases of 2023 New Generation of Typical IT Products, Applications and Service (First Batch)
List" published by the Ministry of Industry and Information Technology, the Company's IT achievements of the "industrial Internet platform
innovation applications based on new energy lithium battery separator manufacturing scenarios" were successfully selected as industrial Internet
platform - leading innovation application cases on intelligent manufacturing. The Company was moving towards digitalization and
intelligentization.
(4) Steady rise in packaging business
In terms of the packaging business, the Company's BOPP film business achieved steady development during the Reporting Period, with operating
revenue increasing by 11.28% year-on-year. The aseptic packaging business of the Company is operating well. The Company mainly serves large
dairy enterprises and regional well-known dairy enterprises. Through continuous development of new products, it provides customized services for
customers to achieve rapid growth in sales of aseptic packaging products. In 2023, the Company's aseptic packaging business increased
significantly, achieving an operating revenue of RMB0.778 billion, representing a year-on-year increase of 25.47%. The sales volume of the
Company was more than 4.0 billion units, representing a year-on-year increase of more than 30%. The Company's aseptic packaging products have
excellent heat sealability, strong adaptability to different machines, low filling loss and other characteristics, and the product quality and
performance indicators have reached the industry-leading level. The Company will strengthen market development, seize market growth
opportunities with large dairy enterprises and achieve rapid development of aseptic packaging business. As at the end of the Reporting Period,
Hongchuang Packaging's aseptic packaging production base project in Ma'anshan was undergoing infrastructure work.
2. Revenue and cost
(1) Breakdown of operating revenue
Unit: RMB
2023 2022
Year-on-year
Proportion in Proportion in increase or decrease
Amount Amount
operating revenue operating revenue
Total operating revenue 12,042,229,789.30 100% 12,590,925,529.68 100% -4.36%
By industry
Manufacturing 11,749,728,885.23 97.57% 12,217,521,522.39 97.03% -3.83%
Other businesses 292,500,904.07 2.43% 373,404,007.29 2.97% -21.67%
By product
Film products 10,763,628,558.00 89.38% 11,250,255,657.25 89.35% -4.33%
Cigarette labels 30,859,185.05 0.26% 129,096,161.72 1.03% -76.10%
Aseptic packaging 777,626,183.85 6.46% 619,760,249.96 4.92% 25.47%
Specialty paper 147,283,740.79 1.22% 192,672,092.83 1.53% -23.56%
Other products 30,331,217.54 0.25% 25,737,360.63 0.20% 17.85%
17
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Other businesses 292,500,904.07 2.43% 373,404,007.29 2.97% -21.67%
By region
Southwest China 1,244,462,107.76 10.33% 1,713,083,683.51 13.61% -27.36%
East China 5,489,000,474.42 45.58% 5,797,739,284.92 46.05% -5.33%
North China 131,870,158.40 1.10% 162,432,864.37 1.29% -18.82%
South Central China 3,091,888,271.61 25.68% 3,248,090,813.64 25.80% -4.81%
Northwest China 22,092,075.52 0.18% 290,175,100.70 2.30% -92.39%
Northeast China 45,904,469.23 0.38% 47,590,945.63 0.38% -3.54%
Overseas regions 2,017,012,232.36 16.75% 1,331,812,836.91 10.58% 51.45%
Note: In the above table, "film products " include BOPP films and lithium battery separators (grade-A and grade-B products of dry-process and
wet-process). In 2023, the operating revenue of lithium battery separator was RMB10,082,122,418.04 (5.22% slight decrease year-on-year),
accounting for 83.72% of the operating revenue.
(2) Industries, products, regions and sales models that account for more than 10% of the Company's operating revenue
or operating profit
Applicable □Not applicable
The Company shall comply with the disclosure requirements for the chemical industry set forth in the Self-Disciplinary Regulatory Guidelines for
Companies Listed on the Shenzhen Stock Exchange No. 3 – Industry Information Disclosure
Unit: RMB
Year-on-year Year-on-year
Year-on-year
Gross increase or increase or
Operating revenue Operating cost increase or decrease
margin decrease in decrease in gross
in operating revenue
operating cost margin
By industry
Manufacturing 11,749,728,885.23 7,486,113,707.42 36.29% -3.76% 17.69% -11.61%
By product
Film products 10,763,628,558.00 6,654,382,003.21 38.18% -4.33% 19.22% -12.21%
By region
Southwest China 1,244,462,107.76 902,364,789.50 27.49% -27.36% -9.27% -14.45%
East China 5,489,000,474.43 3,186,718,242.91 41.94% -5.33% 13.70% -9.71%
South Central China 3,091,888,271.61 2,118,793,939.85 31.47% -4.81% 11.73% -10.14%
Overseas regions 2,017,012,232.36 1,182,486,916.29 41.37% 51.45% 88.63% -11.56%
In 2023, the operating revenue of lithium battery separator under film products was RMB10,082,122,418.04 (5.22% slight decrease year-on-
year), operating cost was RMB6,066,791,977.45 (19.43% increase year-on-year), with a gross margin of 39.83% (slight decrease year-on-year).
Under the circumstances that the statistic specifications for the Company’s data on main business were adjusted during the Reporting Period, the
Company’s data on main business of this past year is calculated based on the adjusted statistic specifications at the end of the Reporting Period.
□Applicable Not applicable
Unit: RMB
Movement in sales
Product name Output Sales Revenue achieved price during the Reason for change
Reporting Period
Lithium battery 7,099 million square 6,200 million square Fierce market
10,082,122,418.04 Decline
separator meters meters competition
In the above table, "lithium battery separator" represents grade-A and grade-B products of dry-process and wet-process.
Operating revenue or net profit arising from offshore operations accounted for 10% or above of the Company’s audited operating revenue or net
profit in the most recent fiscal year
Yes □No
Name of
Impact of tax policy on overseas business
overseas Details of the commencement Company’s response
during the Reporting Period
business
Lithium battery Sales of lithium battery There was no material change in tax policy Expanding overseas capacity and
separator separator products to overseas during the Reporting Period as compared with continuously exploring overseas markets to
18
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
customers through direct sales the same period last year increase market share
(3) Whether the Company's revenue from the sale of physical products is higher than the revenue from service charges
Yes □No
Industry category Item Unit 2023 2022 Year-on-year
increase or decrease
Sales Ton 119,948.70 102,765.07 16.72%
Film products Output Ton 127,773.43 106,761.27 19.68%
Inventory Ton 18,881.63 11,056.90 70.77%
Sales 10,000 boxes 22.29 49.27 -54.76%
Cigarette labels Output 10,000 boxes -0.05 42.97 -100.12%
Inventory 10,000 boxes 0.95 3.18 -70.13%
Sales 10,000 422,136.62 322,228.15 31.01%
Aseptic packaging Output 10,000 428,729.83 328,252.96 30.61%
Inventory 10,000 38,459.95 31,866.74 20.69%
Sales Ton 8,026.38 11,791.64 -31.93%
Specialty paper Output Ton 7,364.27 10,877.02 -32.30%
Inventory Ton 1,786.46 2,448.57 -27.04%
Reasons for a year-on-year change of more than 30% in the relevant data
Applicable □Not applicable
①The significant changes in the sales and output film products were mainly due to the large increase in the output, sales and inventory of
large weight BOPP film products.
②In 2023, the sales of lithium battery separator under film products (grade-A and grade-B products of dry-process and wet-process) was
6,200 million square meters, and the output was 7,099 million square meters, representing a slight year-on-year increase; the inventory was 1,969
million square meters, up largely year-on-year, mainly due to stock preparation.
③The significant increase in the output, sales and inventory of aseptic packaging products was mainly due to the active market expansion of
aseptic packaging business and the increase in operating results.
④The significant decrease in the cigarette labels and specialty paper products is mainly due to the reduction in business scale.
(4) Execution of material sales contracts and material procurement contracts signed by the Company as of the Reporting
Period
□Applicable Not applicable
(5) Breakdown of operating cost
Product category
Unit: RMB
Year-on-
2023 2022 year increase
Product or decrease
Item
category
Percentage of the Percentage of the
Amount Amount
operating cost operating cost
Film products Raw material 3,583,825,915.48 53.86% 2,930,223,822.90 52.50% 22.31%
19
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Labor 521,134,511.83 7.83% 397,348,373.24 7.12% 31.15%
Manufacturing cost 1,314,988,670.49 19.76% 1,430,735,154.33 25.63% -8.09%
Energy and power 1,234,432,905.41 18.55% 823,370,486.37 14.75% 49.92%
Raw material 11,439,116.45 48.15% 41,880,099.43 71.44% -72.69%
Labor 6,464,506.27 27.21% 11,385,802.91 19.42% -43.22%
Cigarette labels
Manufacturing cost 5,053,470.32 21.27% 4,178,744.59 7.13% 20.93%
Energy and power 799,693.93 3.37% 1,175,089.60 2.00% -31.95%
Raw material 568,677,917.68 88.60% 442,144,630.94 91.70% 28.62%
Aseptic Labor 42,628,863.02 6.64% 22,368,092.22 4.64% 90.58%
packaging Manufacturing cost 20,466,257.07 3.19% 13,133,577.93 2.72% 55.83%
Energy and power 10,079,401.67 1.57% 4,492,472.93 0.93% 124.36%
Raw material 100,096,543.76 89.41% 147,608,537.66 93.00% -32.19%
Labor 4,009,313.17 3.58% 3,842,056.17 2.42% 4.35%
Specialty paper
Manufacturing cost 5,930,569.64 5.30% 4,932,633.82 3.11% 20.23%
Energy and power 1,910,737.13 1.71% 2,328,616.99 1.47% -17.95%
Raw material 27,194,586.27 50.20% 20,402,468.26 58.72% 33.29%
Labor 6,625,261.90 12.23% 4,119,488.87 11.86% 60.83%
Other Products
Manufacturing cost 16,663,483.15 30.76% 8,371,308.39 24.09% 99.05%
Energy and power 3,691,982.77 6.81% 1,849,782.05 5.32% 99.59%
In 2023, among the operating costs of the lithium battery separator under film products, raw materials were RMB3,080,921,122.89
(accounting for 50.78% of the operating costs), labor was RMB487,866,060.03 (accounting for 8.04% of the operating costs), manufacturing cost
were RMB1,287,715,097.84 (accounting for 21.23% of the operating costs), and energy and power were RMB1,210,289,696.69 (accounting for
19.95% of the operating costs).
Notes:
① “Film products” include BOPP cigarette film, BOPP flat film and lithium battery separator products.
② “Other products” referred to in the “Breakdown of operating revenue” and “Breakdown of operating cost” in Section IV of this report
mainly include holographic hot stamping foils, film products, packaging films for wrapping by hand, aluminum laminated films, other
miscellaneous products and substandard products. These products account for a small volume of business, and the percentage of the sales of such
products in the total sales is low. Thus, such products belong to the category of other products of main businesses.
③ “Other businesses” referred to in the “Breakdown of operating revenue” in Section IV of this report mainly refers to the Company’s
revenue from the sale of materials, leased assets and the sale of leftover bits and pieces. Other businesses do not belong to the category of the
Company’s main businesses.
(6) Whether the scope of the consolidated financial statements changed during the Reporting Period
Yes □No
The number of companies included in the scope of the consolidated financial statements during the Reporting Period increased by one as compared
with the previous period, without any decrease in the number of such companies. The new subsidiary included in the scope of consolidation during
the Reporting Period is Yunnan Jiechen Packaging Materials Co., Ltd., which is a newly invested subsidiary.
(7) Major changes or adjustments in the Company’s businesses, products or services during the Reporting Period
□Applicable Not applicable
(8) Key customers and suppliers
The Company's key customers
Total sales of the top five customers (RMB) 6,417,871,928.00
Proportion of total sales of the top five customers over total sales for the year 53.29%
Proportion of sales of related parties in the top five customers over total sales for the year 0.00%
20
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Information on the Company’s top five customers
No. Customer name Sales (RMB) Percentage of total sales for the year
1 Customer 1 2,354,630,028.06 19.55%
2 Customer 2 1,394,575,025.37 11.58%
3 Customer 3 1,398,179,548.69 11.61%
4 Customer 4 760,998,770.64 6.32%
5 Customer 5 509,488,555.04 4.23%
Other information on key customers
Applicable □Not applicable
The Company had no connected relationship with the top five customers. Directors, supervisors, senior management, core technicians,
shareholders holding more than 5% of the shares, de facto controllers and other related parties of the Company do not directly or indirectly hold
their interests in the top five customers.
The Company’s key suppliers
Total sales of the top five suppliers (RMB) 3,817,946,411.26
Proportion of total sales of the top five suppliers over total sales for the year 28.54%
Proportion of sales of related parties in the top five suppliers over total sales for the year 0.00%
Information on the Company’s top five suppliers
Percentage of the total purchase
No. Supplier name Purchase amount (RMB)
amount for the year
1 Supplier 1 981,078,879.89 7.33%
2 Supplier 2 945,194,012.35 7.07%
3 Supplier 3 794,020,480.73 5.94%
4 Supplier 4 605,709,466.76 4.53%
5 Supplier 5 491,943,571.53 3.68%
Other information on key suppliers
Applicable □Not applicable
The Company had no connected relationship with the top five suppliers. Directors, supervisors, senior management, core technicians, shareholders
holding more than 5% of the shares, de facto controllers and other related parties of the Company do not directly or indirectly hold their interests in
the top five suppliers.
3. Expenses
Unit: RMB
2023 2022 Year-on-year increase Explanations of
or decrease material changes
Selling expenses 89,338,734.45 74,455,043.47 19.99%
Administrative expenses 383,415,488.72 323,291,931.01 18.60%
Financial expenses 238,639,677.08 211,531,870.97 12.81%
R&D expenses 727,481,001.67 724,297,699.66 0.44%
4. Investment in R&D
Applicable □Not applicable
Expected impacts on the
Names of key R&D
Project purposes Project progress Objectives to be achieved Company's future
projects
development
Improving the
Homogenization of base
competitiveness and sales
Development of ceramic Entering the supply chain film microstructure and
volume of the Company's
coating products featuring of local battery enterprises Product iteration is development of coating
separator products,
low moisture and high in Europe and realizing underway products featuring high
entering the supply chain
heat resistance batch supply heat resistance and low
of overseas high-quality
moisture
customers and increasing
21
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
the Company's market
share
Improving the sales
volume of the Company's
Customer review has been
Development of base separator products,
completed, specifications
films with high safety by Batch supply for a Top Mass production and improving the stickiness
have been signed, and we
using simultaneous biaxial Japanese customer shipment of overseas high-quality
have the mass production
stretching process key customers and
capability
establishing stable
cooperative relations
The added value of the
product is higher than that
of conventional coated
film. The product helps us
Batch supply for a Mass production has been Mass production and
Aramid coating separators enter the supply chain of
Japanese end customer achieved shipment
overseas high-end
customers and improve
the Company's market
share
Improving the
Developing ultra-thin competitiveness and sales
Going through customer
Ultra-thin high-strength 5μm separator for high Mass production and volume of the Company's
validation with mass
separators energy density lithium shipment separator products and
production capability
battery increasing the Company's
market share
With the aid of
technological innovation,
meeting the demand for
Developing high energy
lithium batteries with high
Mass production of semi- density and high safety
Small batch production Mass production and energy density and high
solid-state lithium-ion lithium battery separator
has been achieved shipment safety, enhancing the
conductivity separators with an energy density of
Company’s technical
above 250 wh/kg
leadership and
comprehensive
competitiveness
Improving the
Design and development Customer review has been
Reducing the shutdown competitiveness and sales
of the third-generation completed, specifications
temperature and Mass production and volume of the Company’s
base films with low have been signed, and we
improving the safety of shipment separator products and
shutdown temperature and have the mass production
separators increasing the Company’s
high safety capability
market share
With the aid of
technological innovation,
Basic development of comprehensively
Increasing melting
base films with ultra-high Mass production has been Mass production and improving the safety of
temperature to enhance
melting temperature and achieved shipment separators and enhancing
the safety of separators
high safety the competitiveness of the
Company's products and
technological advantages
Improving the sales
volume of the Company's
separator products,
Mass production of high- Mass production and
Mass production has been Mass production and improving the stickiness
porosity/high-strength shipment for domestic and
achieved shipment of high-quality customers
base films overseas end customers
at home and abroad and
establishing stable
cooperative relations
Reducing costs,
Mass production of new-
improving separator
generation coated films Mass production and
Mass production has been Mass production and bonding performance and
featuring low cost, high shipment for domestic and
achieved shipment increasing the
adherence and high heat- overseas end customers
competitiveness of the
resistance
Company's products
Improving the
competitiveness and sales
Ultra-thin, ultra-high heat- Samples are available, and
Ultra-thin ceramic coated Mass production and volume of the Company’s
resistant coating for the product is at
films shipment separator products and
improving battery safety promotion stage
increasing the Company’s
market share
Improving the
competitiveness and sales
In-line double-sided
Mass production has been Mass production and volume of the Company’s
coating and double-sided Coat 4 layers at once
achieved shipment separator products and
glueing
increasing the Company’s
market share
22
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Improving the
Responding to the high
competitiveness and sales
High puncture strength energy density Samples are available, and
Mass production and volume of the Company’s
and high-porosity base requirements of terminal the product is at
shipment separator products and
films batteries and fast charging promotion stage
increasing the Company’s
capabilities
market share
Improving the
Development of ultra-low competitiveness and sales
cost wet-process films that Mass production and volume of the Company’s
Ultra-low cost base films Under development
are comparable to dry- shipment separator products and
process films increasing the Company’s
market share
In order to bond the film Improving the
to the electrode ， helping competitiveness and sales
to improve the cycle life Mass production and volume of the Company’s
Self-capturing films Under development
of the battery and the shipment separator products and
stability of the electrode increasing the Company’s
structure market share
Improving the
Fourth-generation films
Reducing shutdown competitiveness and sales
with low shutdown Samples are available, and
temperature, increasing Mass production and volume of the Company’s
temperature, high the product is at
puncture strength and shipment separator products and
puncture strength and high promotion stage
improving film safety increasing the Company’s
porosity
market share
Expanding the application
scenarios of separators
Expanding the Company's
Basic development of ultra- and the Company's scope
business and increasing Pilot production has been Mass production and
small pore size special of business, and
the application scenarios completed shipment
filtration membranes strengthening the
of separators
Company’s overall
competitiveness
Expanding the application
scenarios of separators
Development of Expanding the Company's
Determining operational and the Company's scope
membranes for municipal business and increasing Operational model has
model and achieving mass of business, and
and industrial wastewater the application scenarios been determined
production and shipment strengthening the
treatment of separators
Company's overall
competitiveness
Comprehensively
Stable mass production improving product
Achieving mass Realizing mass production
has been, and both dry performance to reach the
production and shipment and shipment, continually
and thermal products are globally advanced level so
Development of and continually improving improving product
more competitive in the as to lay a solid
aluminum laminated films product performance to performance and entering
market, which have been foundation for entering
enter the supply chain of the supply chain of high-
supplied in bulk to a large high-end markets and
high-end customers end customers
number of customers. enhance the Company's
overall competitiveness
Complying with the
requirements of ecological
environment protection,
relevant regulations and
policies, fulfilling social
R&D of new-type Developing degradable Pilot production is Developing degradable responsibilities,
degradable film materials film materials underway film materials improving the market
competitiveness of the
Company's products and
improving the Company's
economic returns and
corporate image
Adapting to the
development concept of
Replacing petroleum-
"ecological and
based polymer materials
Going through trial mass environmental protection,
with bio-based polymer
Meeting market demand production and being in energy conservation and
R&D of bio-based materials to achieve 100%
with the aid of technical the stage of promoting the carbon reduction", and
polyethylene plastic caps natural degradation of
reserve product in downstream laying a foundation for the
packaging materials and
sectors Company's aseptic
achieve sustainable
packaging products to
development
enter the market of roof
package with cover.
Making conventional Making packaging
Expanding the market of packaging interesting. materials for liquid more
Scratch and sniff gable Going through trial mass
packaging materials for Customers can smell the innovative and attractive
top packaging production
liquid fragrance after scratching and enhancing the market
the designated area, competitiveness of the
23
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
improving the experience Company's aseptic
for end customers packaging products
The material has a good
barrier against light, water
vapor and oxygen, thus
Replacing traditional improving the sealing of
Multiple orders have been
High barrier oil packaging Expanding the market of packaging for edible oil the Company's aseptic
received, and the product
materials with Al-PE- edible oil, soy sauce and with molded pulp packaging products and
is being promoted in the
Paper complex structure other condiments packaging to reduce the laying a foundation for the
flavoring product market
use of plastics Company's aseptic
packaging products to
develop diversified
markets.
Information on the Company’s R&D personnel
2023 2022 Year-on-year change (%)
Number of R&D employees 507 512 -0.98%
R&D employees as a percentage of total employees 5.43% 6.87% -1.44%
Educational background structure of R&D personnel
Bachelor’s degree 403 408 -1.23%
Master’s degree 104 104 0.00%
Age structure of R&D personnel
Under 30 224 183 22.40%
Aged 30-40 218 252 -13.49%
Information on investment in R&D
2023 2022 Year-on-year change (%)
Amount of investment in R&D (RMB) 727,481,001.67 724,297,699.66 0.44%
Investment in R&D as a percentage of operating
6.04% 5.75% 0.29%
revenue
Capitalized investment in R&D (RMB) 0.00 0.00 0.00%
Capitalized investment in R&D as a percentage of total
0.00% 0.00% 0.00%
investment in R&D
Reasons for and impacts of significant changes in the composition of the Company’s R&D personnel
□Applicable Not applicable
Reasons for significant year-on-year changes in investment in R&D as a percentage of operating revenue
□Applicable Not applicable
Reasons and justification for significant changes in the capitalization rate of investment in R&D
□Applicable Not applicable
5. Cash flow
Unit: RMB
Item 2023 2022 Year-on-year increase or
decrease
Subtotal of cash inflows from operating activities 11,626,206,968.78 8,891,273,722.39 30.76%
Subtotal of cash outflows from operating activities 8,958,753,709.46 8,387,686,123.73 6.81%
Net cash flows from operating activities 2,667,453,259.32 503,587,598.66 429.69%
Subtotal of cash inflows from investment activities 174,676,679.85 72,299,752.44 141.60%
Subtotal of cash outflows from investment activities 8,164,800,691.58 5,757,926,436.30 41.80%
Net cash flows from investment activities -7,990,124,011.73 -5,685,626,683.86 --
Subtotal of cash inflows from financing activities 20,895,450,020.58 14,379,311,728.60 45.32%
Subtotal of cash outflows from financing activities 15,758,526,797.94 7,600,203,806.51 107.34%
Net cash flows from financing activities 5,136,923,222.64 6,779,107,922.09 -24.22%
Net increase in cash and cash equivalents -183,022,124.16 1,602,756,557.41 -111.42%
Main reasons for significant year-on-year changes in the relevant data
Applicable □Not applicable
(1) The significant increase in subtotal of cash inflows from operating activities and net cash flows from operating activities were mainly due to the
increase in sales proceeds received by the Company.
(2) The significant increase in subtotal of cash inflows from investment activities was mainly due to the recovery of time deposits upon maturity,
the significant increase in subtotal of cash outflows from investment activities and the significant decrease in net cash flows from investment
activities were mainly due to the increase in investment in new production lines.
(3) The significant increase in subtotal of cash inflows from financing activities was mainly due to the completion of the non-public issuance of A
shares in 2021 and the proceeds from investment projects; the significant increase in subtotal of cash outflows from financing activities was mainly
24
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
due to the repayment of borrowings.
Main reasons for the marked difference between net cash flow from operating activities during the Reporting Period and net profit for the year
□Applicable Not applicable
V. Analysis of Non-main Businesses
□Applicable Not applicable
VI. Analysis of Assets and Liabilities
1. Significant changes in the composition of assets
Unit: RMB
Percentag
End of 2023 Beginning of 2023 Reasons for significant changes
e change
As a As a
Amount percentage Amount percentage of
of total total assets
assets
Mainly due to the relative decrease
Monetary capital 3,835,530,538.70 8.13% 3,954,316,829.31 10.24% -2.11%
in bank deposits
Mainly due to the increase in sales
Accounts receivable 6,719,699,762.18 14.24% 6,559,717,117.36 16.98% -2.74%
proceeds
Contract assets 0.00% 0.00% 0.00%
Inventories 3,000,558,853.64 6.36% 2,463,490,238.80 6.38% -0.02%
Investment properties 7,865,069.42 0.02% 8,399,300.54 0.02% 0.00%
Long-term equity
investments 3,209,980.10 0.01% 5,017,642.31 0.01% 0.00%
14,306,873,399.8
Fixed assets 19,380,327,177.42 41.06% 37.04% 4.02%
8
Projects under Mainly due to the increase in
construction 6,207,408,467.99 13.15% 3,584,554,509.73 9.28% 3.87%
investment in new production lines
Right-of-use assets 2,387,711.07 0.01% 3,926,781.90 0.01% 0.00%
Short-term Mainly due to the repayment of
borrowings 7,290,694,906.27 15.45% 9,527,853,434.55 24.67% -9.22%
borrowings upon maturity
Contract liabilities 29,791,971.25 0.06% 24,596,154.15 0.06% 0.00%
Long-term borrowings 4,685,315,817.70 9.93% 4,179,264,746.86 10.82% -0.89%
Lease liabilities 182,663.88 0.00% 1,331,485.16 0.00% 0.00%
Overseas assets accounted for a high percentage of the Company’s total assets
□Applicable Not applicable
2. Assets and liabilities measured at fair value
Applicable □Not applicable
Unit: RMB
Profit and
loss from
Amount as at Accumulated Impairmen Amount of
the fair Amount of Amount as at
the beginning fair value t provided purchase
value sale during the Other the end of the
Item of the changes during the during the
changes Reporting changes Reporting
Reporting recognized Reporting Reporting
during the Period Period
Period through equity Period Period
Reporting
Period
Financial assets
2. Derivative
9,850,069.59 9,850,069.59
financial assets
4. Other 110,000,000.0
-21,000,000.00 89,000,000.00
investment in 0
25
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
equity
instruments
Sub-total of 119,850,069.5
-21,000,000.00 9,850,069.59 89,000,000.00
financial assets 9
692,286,629.0 408,354,641.6 692,286,629.0 408,354,641.6
Others
8 3 8 3
Including: Bank 692,286,629.0 408,354,641.6 692,286,629.0 408,354,641.6
acceptance bills 8 3 8 3
812,136,698.6 408,354,641.6 702,136,698.6 497,354,641.6
Total -21,000,000.00
7 3 7 3
Financial
94,394.79 94,394.79 0.00
liabilities
Other changes
Are there any significant changes in the measurement attributes of the Company’s major assets during the Reporting Period
□Yes No
3. Restriction of asset rights as of the end of the Reporting Period
Item Closing balance Closing book value Reasons for restriction
Bank draft margin, letter of credit margin, letter of guarantee
Monetary funds 1,045,522,070.90 1,045,522,070.90 margin, performance deposit, security deposits for lock
exchange, deposit regulated by banks
Bills receivables 248,473,890.50 248,473,890.50 Bank loans through pledge
Other current assets 251,828,755.71 251,828,755.71 Bank loans through pledge, bank acceptance bills
Other non-current
53,500,694.44 53,500,694.44 Bank loans through pledge
assets
Non-current assets
268,759,015.31 268,759,015.31 Bank loans through pledge, bank acceptance bills
within one year
Fixed assets 581,698,498.88 518,129,104.90 Bank loans through pledge
Construction in Bank loans through pledge
92,118,326.54 92,118,326.54
progress
Intangible assets 309,173,107.74 288,826,669.43 Bank loans through pledge
Total 2,851,074,360.02 2,767,158,527.73
In addition to the items listed in the above table, the Company's controlling subsidiary Shanghai Energy pledged its 100% equity interest in Suzhou
GreenPower to obtain bank loans, which resulted in Suzhou GreenPower's equity interest being restricted assets.
VII. Analysis of Investments
1. Summary
Applicable □Not applicable
Total investment amount during the Reporting Total investment amount during the same
Change (%)
Period (RMB) period of last year (RMB)
9,414,839,968.03 7,648,313,351.79 23.10%
2. Substantial equity investments obtained during the Reporting Period
□Applicable Not applicable
26
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
3. Substantial ongoing non-equity investments during the Reporting Period
Applicable □Not applicable
Unit: RMB
Reasons
for failing
Accumulated
Accumulated to make
Industries Amount of realized Disclosure
Whether it is actual investment planned
Project Investment related to the investment during Project Projected revenue as at date
an investment as of the end of Source of funds progress Index to disclosure (if any)
name mode investment the Reporting progress revenue the end of the
in fixed assets the Reporting and (if any)
project Period Reporting
Period generate
Period
projected
revenue
Please refer to the
Announcement on Capital
Wuxi ①self-owned and
Increase by Shanghai Energy to
Energy New self-raised funds;
Wuxi Energy and Investment in
Material Self- Lithium battery ②raise funds by 669,284,321.
Yes 37,968,802.36 2,405,871,799.95 98.66% N/A July 2, 2019 Wuxi Energy New Material
Industrial construction separator way of non- 20
Industrial Base Phase II -
Base Phase public offering in
Lithium Battery Separator Film
II 2020
(No.: 2019-076) disclosed on the
Cninfo website
Please refer to the
Announcement on A Controlled
①self-owned and Subsidiary’s Acquisition of
Jiangxi
Self- Lithium battery self-raised funds; 100.00 1,177,661,57 November 2, 100% Equity of Jiangxi Tonry
Tonry Yes 1,739,610,313.02 N/A
construction separator ②raise funds by % 2.45 2018 New Energy Technology
Phase I
convertible bonds Development Co., Ltd. (No.:
2018-141) disclosed on the
Cninfo website
Please refer to the
①self-owned and Announcement on A Controlled
Jiangxi self-raised funds; Subsidiary’s Acquisition of
Tonry Self- Lithium battery ②raise funds by 783,378,774. November 2, 100% Equity of Jiangxi Tonry
Yes 65,084,421.94 2,536,821,641.06 98.67% N/A
Phase I construction separator way of non- 73 2018 New Energy Technology
Expansion public offering in Development Co., Ltd. (No.:
2020 2018-141) disclosed on the
Cninfo website
Hungary Please refer to the
Lithium Self- Lithium battery self-owned and November Announcement on Construction
Yes 1,712,420,424.58 2,691,911,519.75 76.50% 0.00 N/A
Battery construction separator self-raised funds 11, 2020 of Wet-process Lithium Battery
Separator Separator Project in Hungary
27
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Reasons
for failing
Accumulated
Accumulated to make
Industries Amount of realized Disclosure
Whether it is actual investment planned
Project Investment related to the investment during Project Projected revenue as at date
an investment as of the end of Source of funds progress Index to disclosure (if any)
name mode investment the Reporting progress revenue the end of the
in fixed assets the Reporting and (if any)
project Period Reporting
Period generate
Period
projected
revenue
Project (No.: 2020-204) disclosed on the
Cninfo website
Chongqing
Energy
①self-owned and
High- Please refer to the
self-raised funds;
performance Announcement on Plan for Non-
Self- Lithium battery ②raise funds by 100.00 192,582,487. November
Lithium Yes 118,586,033.05 780,914,545.41 N/A public Offering of A Shares in
construction separator way of non- % 03 23, 2021
Battery 2021 (No.: 2021-188) disclosed
public offering in
Micropore on the Cninfo website
2021
Separator
(Phase I
Chongqing
Energy
①self-owned and
High- Please refer to the
self-raised funds;
performance Announcement on Plan for Non-
Self- Lithium battery ②raise funds by 145,334,579. November
Lithium Yes 996,071,433.63 1,664,917,596.46 85.00% N/A public Offering of A Shares in
construction separator way of non- 06 23, 2021
Battery 2021 (No.: 2021-188) disclosed
public offering in
Micropore on the Cninfo website
2021
Separator
(Phase II)
Chongqing
Energy Please refer to the
①self-owned and
High- Announcement on the Progress
self-raised funds;
performance of Chongqing Energy High-
Self- Lithium battery ②raise funds by 100.00 December 8,
Lithium Yes 2,738,730.35 45,227,719.18 0.00 N/A performance Lithium Battery
construction separator way of non- % 2021
Battery Micropore Separator Project
public offering in
Micropore (No.: 2021-203) disclosed on the
2021
Separator Cninfo website
(Phase III)
Jiangsu
①self-owned and
Energy EV Please refer to the
self-raised funds;
Lithium Announcement on Plan for Non-
Self- Lithium battery ②raise funds by 56,095,136.1 November
Battery Yes 2,374,453,347.86 2,620,238,706.47 60.00% N/A public Offering of A Shares in
construction separator way of non- 4 23, 2021
Separator 2021 (No.: 2021-188) disclosed
public offering in
Industrializa on the Cninfo website
2021
tion Project
28
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Reasons
for failing
Accumulated
Accumulated to make
Industries Amount of realized Disclosure
Whether it is actual investment planned
Project Investment related to the investment during Project Projected revenue as at date
an investment as of the end of Source of funds progress Index to disclosure (if any)
name mode investment the Reporting progress revenue the end of the
in fixed assets the Reporting and (if any)
project Period Reporting
Period generate
Period
projected
revenue
Jiangsu
Ruijie EV
①self-owned and
Lithium Please refer to the
self-raised funds;
Battery Aluminum Announcement on Plan for Non-
Self- ②raise funds by November
Aluminum Yes laminate 155,597,069.62 490,163,188.87 48.00% 0.00 N/A public Offering of A Shares in
construction way of non- 23, 2021
Laminated d film 2021 (No.: 2021-188) disclosed
public offering in
Film on the Cninfo website
2021
Industrializa
tion Project
Suzhou
GreenPower
Annual
Production
①self-owned and
of 200 Please refer to the
self-raised funds;
million Lithium battery Announcement on Plan for Non-
Self- ②raise funds by 274,599,931. November
Square Yes separator 139,777,126.21 591,333,628.81 95.00% N/A public Offering of A Shares in
construction way of non- 23 23, 2021
Meters of (Coating films) 2021 (No.: 2021-188) disclosed
public offering in
Lithium-ion on the Cninfo website
2021
Battery
Coating
Separators
Project
Yuxi Energy
lithium
battery
separator
Announcement on the progress
production
on Yuxi Municipal People’s
line
Government Signing the
construction Self- Lithium battery self-owned and March 30,
Yes 5,825,641.56 8,236,530.91 5.40% 0.00 N/A Strategic Cooperation
project with construction separator self-raised funds 2022
Framework Agreement
an annual
(Announcement No.: 2022-044)
production
disclosed on the Cninfo website
capacity of
1.6 billion
square
meters
29
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Reasons
for failing
Accumulated
Accumulated to make
Industries Amount of realized Disclosure
Whether it is actual investment planned
Project Investment related to the investment during Project Projected revenue as at date
an investment as of the end of Source of funds progress Index to disclosure (if any)
name mode investment the Reporting progress revenue the end of the
in fixed assets the Reporting and (if any)
project Period Reporting
Period generate
Period
projected
revenue
Announcement on Gaoan
Dry-process Municipal People’s Government
Lithium-ion in Jiangxi Province Signing the
Lithium battery -
Battery Self- self-owned and February 1, Contract for the Construction of
Yes separator (Dry- 574,171,113.17 903,960,750.87 50.00% 24,870,145.3 N/A
Separator construction self-raised funds 2021 Dry-process Lithium-ion Battery
process) 6
Films Separators Project
Project (Announcement No.: 2021-018)
disclosed on the Cninfo website
Hubei Announcement on the Plan to
Energy EV Set Up a Joint Venture with EVE
Lithium - to Construct a Wet-Processing
Self- Lithium battery self-owned and August 3,
Battery Yes 1,781,367,103.17 1,839,067,518.02 40.78% 10,398,197.0 N/A Lithium Battery Separator Film
construction separator self-raised funds 2021
Separator 4 Project (Announcement
Industrializa No.: 2021-128) disclosed on the
tion Project Cninfo website
3,263,668,45
Total -- -- -- 7,964,061,247.50 18,318,275,458.78 -- -- -- -- --
9.44
4. Financial asset investments
(1) Investments in securities
□Applicable □Not applicable
No investments in securities during the Reporting Period.
(2) Investments in derivatives
Applicable □Not applicable
30
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
1) Investments in derivatives for hedging during the Reporting Period
Applicable □Not applicable
Unit: RMB’0,000
Profit and loss
Accumulated Amount of Investment amount at the end of
Initial from changes in
Opening changes in fair purchase during Amount of sale during Closing the period as a percentage of the
Type of derivative investment investment fair value
amount value included in the Reporting the Reporting Period amount Company's net assets at the end
amount during the
equity Period of the Reporting Period
current period
Forward foreign exchange contract 27,247.85 27,247.85 0 0 0 27,247.85 0 0.00%
Total 27,247.85 27,247.85 0 0 0 27,247.85 0 0.00%
Accounting policies and specific
principles of accounting for hedging
Accounting is carried out in accordance with the relevant provisions of Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial
business during the Reporting
Instruments, Accounting Standards for Business Enterprises No. 37 - Presentation of Financial Instruments, Accounting Standards for Business Enterprises No. 39 –
Period, and details of whether there
Measurement of Fair Value, etc. There are no significant changes as compared with the previous Reporting Period.
are significant changes as compared
with the previous Reporting Period
Actual profit and loss during the
No
Reporting Period
With the increasing transparency of the RMB pricing mechanism and the acceleration of the market-oriented reform of the exchange rate, the volatility of exchange rate and
interest rate has been increasing, and the uncertainty of foreign exchange market has become increasingly prominent. With the development of the Company's global
business layout, the Company's export business revenue increase continuously, foreign currency business is involved in daily operation, and a certain amount of foreign
exchange assets and foreign exchange liabilities are held. In order to lock costs and prevent the risk of exchange rate fluctuations, it is necessary for the Company to carry
Hedging Effect out the foreign exchange derivatives trading business related to the daily business needs according to the specific situation, in order to reduce the risk of exchange rate or
interest rate fluctuations that the Company faces. The foreign exchange derivatives trading business carried out by the Company is closely related to the daily operation
needs, which can further improve the Company's ability to deal with the risk of foreign exchange fluctuations, avoid and prevent the risk of foreign exchange rate and
interest rate market fluctuations better, and enhance the Company's financial stability. The relevant hedging business carried out by the Company this year achieved the
expected results.
Capital source of derivative The Company's foreign exchange hedging transactions are mainly forward foreign exchange contracts, and the fair value of the contract is the price in the valuation notice of
investment each bank
Risk analysis and control measures The Company's foreign exchange derivatives trading business shall follow the principles of legality, prudence, safety and effectiveness, and shall not carry out speculative
of derivative during the Reporting and pure arbitrage trading. However, the foreign exchange derivatives trading operation still has the following risks, including but not limited to:
Period (including but not limited to 1. Market risks: the difference between the exchange rate and interest rate of the contract and the actual exchange rate and interest rate on the maturity date of foreign
market risks, liquidity risks, credit exchange derivatives trading will generate trading profits and losses. During the duration of foreign exchange derivatives, revaluation gains and losses will be generated in
risks, operational risks, legal risks, each accounting period. The cumulative value of revaluation gains and losses till the maturity date is equal to the trading gains and losses. 2. Liquidity risks: foreign
etc.) exchange derivatives are based on the Company's foreign exchange assets and liabilities and match with the actual foreign exchange receipts and payments to ensure that
31
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
there are sufficient funds for clearing at the time of delivery, so as to reduce the cash flow demand on the maturity date. 3. Performance risk: The counterparties of the
Company's foreign exchange derivatives transactions are banks with good credit and have established long-term business relations with the Company, so the performance
risk is low. 4. Operational risks: when conducting transactions, if the operators fail to conduct foreign exchange derivatives trading according to the prescribed procedures or
fail to fully understand the derivatives information, it will bring operational risks. 5. Legal risks caused by contract terms: if the terms of the transaction contract are not
clear, it may bring legal risks.
Risk control measures taken by the Company for foreign exchange derivatives transactions:
1. The Company has formulated the Foreign Exchange Derivatives Trading Business Management System, which clearly stipulates the operation principles, approval
authority, management and internal operation process, information isolation measures, internal risk reporting system, risk handling procedures, information disclosure and
other measures of the foreign exchange derivatives trading business to control the transaction risks. 2. The foreign exchange derivatives transactions carried out by the
Company are aimed at locking costs, avoiding and preventing exchange rate and interest rate risks, and any risk speculation is prohibited. 3. The Company will carefully
review the contract terms signed with banks to prevent legal risks. 4. The Finance Department of the Company will track the changes in the open market price or fair value of
foreign exchange derivatives continuously, timely assess the changes of the risk exposure of foreign exchange derivatives transactions, and regularly report to the
management of the Company, timely report any abnormalities found, and warn the management of risks and implement emergency measures. 5. The internal audit
department of the Company shall supervise and inspect the compliance of the decision-making, management and execution of foreign exchange derivatives transactions.
Changes in market price or product
fair value of invested derivatives
during the Reporting Period, the
analysis of the fair value of
N/A
derivatives should disclose the
specific methodology used and the
setting of relevant assumptions and
parameters
Litigations (if applicable) N/A
Disclosure date of the
announcement of the Board of
March 3, 2023
Directors on the approval of
derivative investments (if any)
Disclosure date of the
announcement of the shareholder
March 24, 2023
meeting on the approval of
derivative investments (if any)
The Company has issued a feasibility analysis report on the proposed foreign exchange derivative trading business. The main purpose of carrying out the foreign exchange
Special opinions of independent derivative trading business is to avoid foreign exchange risks caused by the fluctuation of RMB exchange rates, effectively control uncertainties in costs caused by foreign
directors on the Company's exchange risks, and meet the Company's operation and development needs. The Company has formulated the Foreign Exchange Derivatives Trading Business Management
derivative investments and risk Policy and relevant risk control measures, which will help us strengthen the risk management and control of foreign exchange derivatives trading. While carrying out the
control foreign exchange derivative trading business, the Company has performed the corresponding decision-making procedures and information disclosure obligations, complies
with the relevant provisions of the Self-Disciplinary Regulatory Guidelines for Companies Listed on the Shenzhen Stock Exchange No. 1 - Standardized Operation of
32
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Companies Listed on the Main Board, and does not harm the interests of the Company and all shareholders, especially minority shareholders. We approve the foreign
exchange derivative trading business of the Company.
The Company shall comply with the disclosure requirements for the chemical industry set forth in the Self-Disciplinary Regulatory Guidelines for Companies Listed on the Shenzhen Stock Exchange No. 3 – Industry
Information Disclosure
2) Investments in derivatives for speculation during the Reporting Period
□Applicable Not applicable
No investments in derivatives for speculation during the Reporting Period.
5. Use of funds raised
Applicable □Not applicable
(1) Overall use of funds raised
Applicable □Not applicable
Unit: RMB’0,000
Total
Total
amount
cumulative
of funds
Total amount of
raised Total
Total amount of funds raised Total
Net amount Cumulative with cumulative Use and Amount of funds raised that
Year of Way of raising amount of funds used with changes amount of
of funds amount of changes amount of funds whereabouts of have been idle for more than
raising funds funds funds during the of use as a unused
raised funds used of use raised with unused funds two years
raised Reporting percentage of funds
during changes of use
Period the total
the
amount of
Reportin
funds raised
g Period
Deposited to a
Initial public special bank
2016 78,376.68 74,776.70 1,347.23 64,188.02 0 10,588.68 14.16% 9,241.45 9,241.45
offering account for raised
funds
Public offering
of convertible
2020 160,000.00 158,612.26 0 160,000.00 0 0 0.00% 0 N/A 0
corporate bonds
in 2020
Non-public
2020 offering of 500,000 498,250.46 0 503,663.58 0 0 0.00% 0 N/A 0
shares in 2020
Non-public Deposited to a
2023 offering of 750,000.00 745,354.61 654,488.20 654,488.20 0 0 0.00% 90,866.41 special bank 0
shares in 2021 account for raised
33
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
funds
Explanations of the overall use of the funds raised
I. Initial Public Offering
With the approval of the CSRC in Zheng Jian Xu Ke [2016] No. 1886, the Company made its initial public offering of 33.48 million RMB-denominated ordinary shares. China Merchants Securities Co., Ltd., the main
underwriter, issued 33.48 million shares by combining offline enquiry and allotment to investors and online subscription based on market value to public investors. All of the shares issued are new shares, with no transfer
of old shares. Among them, 3.348 million shares were allotted offline, 30.1320 million shares were issued online at a price of RMB23.41 per share. After deducting RMB3,599.98 of newly increased external expenses
directly related to the issuance of equity securities, such as online issuance fees, prospectus printing fees, accountancy fees relating to filing the relevant documents, lawyer fees and valuation fees, the net amount of raised
funds was RMB747.767 million. The availability of the above raised funds was verified by Dahua CPAs (SGP) with the capital verification report titled “Da Hua Yan Zi [2016] No. 000897”. As of September 30, 2016,
the Company’s self-owned funds invested in the projects financed by funds raised reached RMB236.6591 million, which was audited by Dahua CPAs (SGP) with the issuance of the report titled “Da Hua He Zi No.
[2016] No. 004562”. In 2017, the total amount of raised funds used was RMB26,067,736.89. In 2018, the total amount of raised funds used was RMB36,288,006.85. In 2019, the total amount of raised funds used was
RMB24,728,775.11. From 2020 to 2022, the total amount of raised funds used was RMB0.00. During the Reporting Period, the total amount of raised funds used was RMB13,472,295.56. As of December 31, 2023, the
outstanding balance of funds raised was RMB104,651,892.51 (including the net interest income of the special bank account of RMB12,237,424.12 (after deducting handling charges). As of December 31, 2023, the actual
balance of funds raised was RMB23,459,448.07. In Q1 2024, RMB81.4594 million was refunded due to termination of some purchase contracts.
II. Public Offering of Convertible Corporate Bonds in 2020
Upon the approval of the CSRC with the Reply on Approving the Public Offering of Convertible Corporate Bonds of Yunnan Energy New Material Co., Ltd. (Zheng Jian Xu Ke [2019] No. 2701), the Company publicly
issued 16 million convertible corporate bonds on February 11, 2020, with a face value of RMB100 each bond and a total amount of RMB1,600,000,000. After deducting the underwriting and sponsorship fees (pre-tax) of
RMB9,433,962.26 and other offering expenses (pre-tax) of RMB4,443,396.23 from the total amount of proceeds from the public offering of convertible corporate bonds, the net amount of proceeds from the offering by
the Company was RMB1,586,122,641.51. The availability of funds raised this time was verified by Dahua CPAs (SGP) with the capital verification report titled “Da Hua Yan Zi [2020] No. 000047”. As verified by
Dahua CPAs (SGP), the Company has utilized the funds raised of RMB1,586,122,641.51 for the complete replacement of part of the self-collected funds that have been previously invested in the proceed financed
project. As of December 31, 2020, funds raised from convertible corporate bonds issued by the Company were all used to replace self-raised funds, the outstanding balance of the special account was RMB0.00, and the
Company had cancelled the special account.
III. Non-public Offering of Shares in 2020
Upon the approval of the CSRC with the Reply on Approving the Non-public Offering of Shares of Yunnan Energy New Material Co., Ltd. (Zheng Jian Xu Ke [2020] No. 1476), the Company non-publicly issued
69,444,444 RMB-denominated ordinary shares to 22 specific investors on August 17, 2020, with a face value of RMB 1.00 each share, at the offering price of RMB72.00 per share, and the total amount of the funds
raised from this offering was RMB4,999,999,968.00. After deducting the underwriting and sponsorship fees (pre-tax) of RMB14,150,943.40 and other offering expenses (pre-tax) of RMB3,344,470.11 from the total
amount of the funds raised from this offering, the net amount of funds raised from this offering by the Company was RMB4,982,504,554.49. The availability of funds raised by this offering was verified by Dahua CPAs
(SGP) with the capital verification report titled “Da Hua Yan Zi [2020] No. 000460”. As verified by Dahua CPAs (SGP), the Company has utilized the funds raised of RMB254,221,260.11 for the replacement of the self-
collected funds that have been previously invested in the proceeds financed project. The amount of raised funds used was RMB1,999,307,646.21 in 2020. The amount of raised funds used was RMB2,637,743,136.15 in
2021. The amount of raised funds used was RMB145,363,757.34 in 2022. As of December 31, 2022, the outstanding balance of the account of funds raised was RMB0.00, and the Company had cancelled the special
account of raised funds.
IV. Non-public Offering of Shares in 2021
Upon the approval of the CSRC with the Reply on Approving the Non-public Offering of Shares of Yunnan Energy New Material Co., Ltd. (Zheng Jian Xu Ke [2022] No. 1343), the Company non-publicly issued
85,421,412 RMB-denominated ordinary shares to specific investors on May 24, 2023, with a face value of RMB1.00 each share, at the offering price of RMB87.80 per share, and the total amount of the funds raised from
this offering was RMB7,499,999,973.60. After deducting the pre-tax offering expenses of RMB46,453,872.58, the actual amount of funds raised from this offering by the Company was RMB7,453,546,101.02. The
availability of funds raised by this offering was verified by Dahua CPAs (SGP) with the capital verification report titled “Da Hua Yan Zi [2023] No. 000250”. As verified by Dahua CPAs (SGP), the Company has utilized
the funds raised of RMB3,998,086,272.07 for the replacement of the part of self-collected funds that have been previously invested in the proceeds financed project. The amount of raised funds used during the Reporting
Period was RMB6,544,882,040.41. As of December 31, 2023, the outstanding balance of funds raised was RMB1,337,638,064.30 (including the net interest income of RMB37,423,499.21 from the special account of
raised funds after deducting handling fees).
(2) Projects in which the Company undertakes to invest the funds raised
34
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Applicable □Not applicable
Unit: RMB’0,000
Investme Whether
Whether the Cumulative nt Date on the
Total amount progress Benefits
project has been Total investment which the Whether the feasibility
Projects in which the Company of funds the Investment amount achieved
changed, investment amount as of the as of the project expected of the
undertakes to invest the funds raised and Company during the Reporting end of the during the
including changes amount after the end of the will be benefits are project has
the whereabouts of the over raised funds undertakes to Period Reporting
of some parts of adjustment (1) Reporting Period Reporting ready for achieved changed
invest Period
the project (2) Period (3) use significant
＝(2)/(1) ly
Projects in which the Company undertakes to invest
1. Reconstruction and expansion project
August
of color packaging boxes with annual No 28,414.7 28,414.7 28,414.7 100.00% 6,944.54 Yes No
15, 2019
production output of 3 billion pieces
2. Reconstruction and expansion project
of high-grade environmental-friendly
Yes 10,684.57 3,617.5 3,617.5 100.00% N/A Yes
specialty papers with annual production
output of 13,000 tons
3. R&D center construction project Yes 4,993.17 1,471.56 1,471.56 100.00% N/A No
4. Repayment of bank loans No 20,000 20,000 20,000 100.00% N/A No
5. Addition to current capital (IPO) No 10,684.26 10,684.26 10,684.26 100.00% N/A No
6. Lithium battery separator project No No No
(Phase I) with an annual production
58,612.26
output of 400 million square meters of 58,612.26 58,612.26
%
Jiangxi Tonry New Energy Technology
Development Co., Ltd.
7. Wuxi Energy New Material Industrial No Septembe No No
100,000 100,000 100,000 100.00% 23,436.83
Base r 30, 2020
8. Expansion of lithium battery No No No
separator project (Phase I) of Jiangxi July 31,
148,250.46 148,250.46 149,909.24 100.00% 34,050.47
Tonry New Energy Technology 2022
Development Co., Ltd.
9. Expansion of Wuxi Energy New No October No No
200,000 200,000 203,754.33 100.00% 25,655.2
Material Industrial Base Phase II 31, 2022
10. Addition to current capital (non- No No
150,000 150,000 150,000 100.00% N/A
public offering in 2020)
11. Microporous membrane project of No No No
July 31,
high performance Lithium-ion battery of 41,010 41,010 41,010 41,010 100.00% 9,765.71
2022
Chongqing Energy (phase I)
12. Microporous membrane project of No No No
December
high performance Lithium-ion battery of 140,630 140,630 140,630 140,630 100.00% 13,787.73
31, 2025
Chongqing Energy (phase II)
13. Suzhou GreenPower Project with an No Novembe No No
35,160 35,160 35,160 35,160 100.00% 1,585.66
annual output of 200 million square r 30, 2023
35
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
meters of lithium-ion battery coated
separator
14. Jiangsu Energy EV Lithium Battery No December No No
281,250 281,250 225,700.01 225,700.01 80.25% 5,894.28
Separator Industrialization Project 31, 2024
15. Jiangsu Ruijie EV Lithium Battery No No No
December
Aluminum Laminated Film 76,170 76,170 40,853.58 40,853.58 53.63%
31, 2025
Industrialization Project
16. Addition to current capital (non- No
171,134.61 171,134.61 171,134.61 171,134.61 100.00% N/A No
public offering in 2021)
Subtotal of the projects in which the
-- 1,476,994.03 1,466,405.35 654,488.20 1,322,339.79 -- -- 121,120.42 -- --
Company undertakes to invest
Whereabouts of the over raised funds
No 0
Subtotal of whereabouts of over raised
-- -- -- 0 -- --
funds
Total -- 1,476,994.03 1,466,405.35 654,488.20 1,322,339.79 -- -- 121,120.42 -- --
The estimated benefit is the estimated annual net profit when the project is ready for use and the capacity is fully released. As of December 31, 2023, under the “Lithium battery
According to the situation of each
separator project (Phase I) with an annual production output of 400 million square meters of Jiangxi Tonry New Energy Technology Development Co., Ltd.”, “Wuxi Energy
project, explain the reasons for not
New Material Industrial Base”, “Expansion of lithium battery separator project (Phase I) of Jiangxi Tonry New Energy Technology Development Co., Ltd.” and “Expansion of
achieving the planned progress and
Wuxi Energy New Material Industrial Base Phase II”, base film had release their capacities, but coating film did not release the capacities, and did not reach the estimated
estimated benefits (including "whether
benefits for the year. "Microporous membrane project of high performance Lithium-ion battery of Chongqing Energy (phase II)", "Jiangsu Energy EV Lithium Battery Separator
the estimated benefits have been
Industrialization Project" and "Jiangsu Ruijie EV Lithium Battery Aluminum Laminated Film Industrialization Project" have not been fully constructed into operation;
achieved" and the reasons for selecting
"microporous membrane project of high performance Lithium-ion battery of Chongqing Energy (phase I)" and "Suzhou GreenPower Project with an annual output of 200 million
"N/A")
square meters of lithium-ion battery coated separator" are in ramp-up stage.
I. Initial Public Offering
1. The “reconstruction and expansion project of high-grade environment-friendly special paper with an additional annual output of 13,000 tons” was planned by the Company
based on the market situation and the Company’s production capacity before listing. As time goes by, the market has changed dramatically. Since 2016, the procurement mode of
downstream tobacco manufacturers for special paper products has been adjusted from quantity allocation by cigarette manufacturers to the independent procurement mode
through centralized bidding or commercial negotiation by cigarette label printing enterprises. Cigarette-related enterprises can expand their bargaining range from region to the
entire country by means of tendering or commercial negotiation through public market inquiry and bargaining by themselves, breaking the original competitive landscape
featuring fixed share and region. As a result, special paper manufacturers took active competition strategies like price cuts to snap up orders, and the industry pattern changed. As
a result of the above industrial policy adjustments, the special paper industry has formed a new pattern featuring full market competition, with intensified market competition and
Significant changes in the feasibility of
a sharp decline in prices. If the project went on as scheduled, we may face risks that the utilization rate of raised funds may decline and the expected investment objective may
the projects
not be achieved. Therefore, the Company terminated the implementation of this project in 2019.
2. The “R&D center construction project” was launched to meet the Company’s demand for R&D in its main businesses before listing. With the completion of major asset
restructuring in 2018, the Company’s main businesses included lithium battery separator, which has high technological requirements. The manufacturing of lithium batteries has
a high requirement for the characteristics of separator materials, especially consistency, and the size and uniformity of distribution of separator micropores. Based on the
Company’s business development plan and market demand, in order to better implement its development strategy, the Company intends to integrate the technology centers
currently scattered in subordinate companies, so as to ensure that the Company’s R&D technology can further improve production efficiency, product quality and new product
development capacity. The above change was deliberated and approved by the 27th Meeting of the Third Board of Directors of the Company, the 22nd Meeting of the Third
Supervisory Committee and the 2018 Annual General Meeting.
Amount, use and status of over raised
N/A
funds
Applicable
Changes in the location to implement Occurred in the past
the proceeds financed projects Upon the deliberation and approval of the Proposal on Changing Some Proceeds Financed Projects at the 27th Meeting of the Third Board of Directors of the Company, it was
agreed to terminate the “reconstruction and expansion project of high-grade environment-friendly special paper with an additional annual output of 13,000 tons” and the “R&D
center construction project”, and invest the balance of the funds raised for these two projects, totaling RMB105.8868 million, and corresponding interest income, in the new
36
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
proceeds financed project of “Energy Technology Research Institute”. The Company will invest to establish a wholly-owned subsidiary (which has not been registered so far,
subject to the approval of the industry and commerce authorities) as the entity to implement the project of Energy Technology Research Institute, and will lease the experimental
building in the factory area of Shanghai Energy. The location to implement the project is changed to 155 Nanlu Road, Pudong New Area, Shanghai.
Adjustment to the implementation
method of the proceeds financed N/A
projects
Applicable
I. Initial Public Offering
Upon the deliberation and approval of the Proposal on Replacing Self-collected Funds Preliminarily Invested in Proceeds Financed Projects with Funds Raised at the 18th
Meeting of the Second Board of Directors of the Company, it was agreed to replace the self-collected funds of RMB236.6591 million that had been invested in proceeds financed
projects. RMB197.9357 million was preliminarily invested in the “the reconstruction and expansion project of color packaging boxes with an additional annual output of 3 billion
pieces”, RMB24.2138 million was preliminarily invested in the “reconstruction and expansion project of high-grade environment-friendly special papers with an additional
annual output of 13,000 tons”, and RMB14.5096 million was preliminarily invested in the “R&D center construction project”.
II. Public Offering of Convertible Corporate Bonds in 2020
At the 42nd Meeting of the Third Board of Directors of the Company, the Proposal on the Use of Proceeds from Convertible Corporate Bonds to Replace Self-collected Funds
Preliminarily Invested in Proceeds Financed Projects was deliberated and approved, and it was agreed that the Company used the funds raised from this offering to replace some
of the self-collected funds already invested in proceeds financed projects. As of March 16, 2020, the Company accumulatively invested self-collected funds of RMB1,697.9844
million in proceeds financed projects, and the net amount of funds raised from this offering of convertible corporate bonds was RMB1,586.1226 million, which was used fully to
replace the preliminarily invested self-collected funds. Specifically, RMB586.1226 million of self-collected funds invested in “Wuxi Energy New Material Industrial Base”, in
which RMB596.8886 million was initially invested, was replaced; RMB 1,000 million of self-collected funds invested in the “lithium battery separator project (Phase I) with an
annual output of 400 million square meters of Jiangxi Tonry New Energy Technology Development Co., Ltd.”, in which RMB1,101.0959 million was initially invested, was
replaced.
Preliminary investment in the proceeds
financed projects and replacement with III. Non-public Offering of Shares in 2020
the funds raised At the 11th Meeting of the Fourth Board of Directors and the 11th Meeting of the Fourth Supervisory Committee, the Proposal on Replacing Preliminarily Invested Self-
collected Funds in Proceeds Financed Projects with Proceeds from the Non-public Offering of A Shares in 2020 was deliberated and approved, and it was agreed to replace the
self-collected funds of RMB254.2213 million already invested in the projects with the funds raised. Specifically, RMB157.1693 million was preliminarily invested in the
“expansion project of lithium battery separator (Phase I) of Jiangxi Tonry New Energy Technology Development Co., Ltd.”, and RMB97.052 million was preliminarily invested
in the “expansion project of Wuxi Energy New Material Industrial Base Phase II”.
IV. Non-public Offering of Shares in 2021
At the sixth Meeting of the Fifth Board of Directors and the sixth Meeting of the Fifth Supervisory Committee, the Proposal on Replacing Preliminarily Invested Self-collected
Funds in Proceeds Financed Projects with Proceeds from the Non-public Offering of A Shares in 2021 was deliberated and approved, and it was agreed to replace part of self-
collected funds already invested in the proceeds financed projects with the funds raised. As of June 13, 2023, the amount preliminarily invested by the Company in the proceeds
financed projects with self-collected funds was RMB4,017,576,500.58, and the amount replaced with raised funds amounted to RMB3,998,086,272.07. Specifically,
preliminarily invested funds amounted to RMB411,491,379.33 for “Chongqing Energy High Performance Lithium-ion Battery Microporous Separator Project (Phase I)”, and
RMB410,100,000.00 of such funds were replaced. Preliminarily invested funds amounted to RMB1,409,367,607.63 for “Chongqing Energy High Performance Lithium-ion
Battery Microporous Separator Project (Phase II), and RMB1,406,300,000.00 of such funds were replaced. Preliminarily invested funds amounted to RMB1,421,550,504.48 for
“Jiangsu Energy EV Lithium Battery Separator Industrialization Project”, and RMB1,421,550,504.48 of such funds were replaced. Preliminarily invested funds amounted to
RMB408,535,767.59 for “Jiangsu Ruijie EV Lithium Battery Aluminum Laminated Film Industrialization Project”, and RMB408,535,767.59 of such funds were replaced.
Preliminarily invested funds amounted to RMB366,631,241.55 for “Suzhou GreenPower Lithium-ion Battery Coating Separators Project with an Annual Output of 200 Million
Square Meters”, and RMB351,600,000.00 of such funds were replaced.
Applicable
Use idle funds raised to temporarily I. Initial Public Offering
replenish working capital On February 24, 2020, at the 41st Meeting of the Third Board of Directors and the 36th Meeting of the Third Supervisory Committee, the Proposal on Using Some Idle Funds
Raised to Temporarily Supplement Working capital was deliberated and approved, and it was agreed to use idle funds raised of no more than RMB110 million to temporarily
supplement working capital within 12 months from the date of the approval of the above proposal. Both independent directors and sponsor expressed opinions of agreeing upon
37
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
the proposal. On August 26, 2020, the Company returned the aforementioned RMB110 million that was temporarily used to supplement working capital to a special account for
funds raised, and informed the sponsor CITIC Securities and sponsor representative of the return of the funds in a timely manner.
II. Non-public Offering of Shares in 2020
On September 7, 2020, at the 11th Meeting of the Fourth Board of Directors and the 11th Meeting of the Fourth Supervisory Committee, the Proposal on Using Some Idle Funds
Raised to Temporarily Supplement Working capital was deliberated and approved, and it was agreed to use idle funds raised from the non-public offering of shares in 2020 of no
more than RMB800 million to temporarily supplement working capital for production and operation activities related to the Company’s main business within 12 months from the
date on which the Sixth Extraordinary General Meeting of Shareholders of 2020 approved the proposal. Both independent directors and sponsor expressed opinions of agreeing
upon the proposal. As of June 1, 2021, the Company returned the idle raised funds of RMB800 million used to temporarily supplement working capital to the Company's special
account for raised funds, and timely informed the sponsor CITIC Securities and sponsor representative of the return of the funds.
Amount of and reasons for any balance
of the funds raised after the project N/A
implementation
Use and whereabouts of unused raised
Deposited to a special bank account for raised funds
funds
Problems and other situations in the
utilization and disclosure of the raised None
funds
(3) Project with changed use of funds raised
Applicable □Not applicable
Unit: RMB’0,000
Whether
the
Actual cumulative Investment feasibility
Total amount of intended Benefits Whether
investment progress as at of the
investment from the Actual investment Date on which the achieved the
amount as at the the end of the changed
Project after the change Project before the change funds raised in the amount during the project will be ready during the expected
end of the Reporting project has
project after the change Reporting Period for use Reporting benefits are
Reporting Period Period changed
(1) Period achieved
(2) (3)=(2)/(1) significantl
y after the
change
1. Reconstruction and
expansion project of high-
Project of Energy grade environment-friendly
Technology Research special paper with an 10,588.68 1,347.23 1,347.23 12.72% - - N/A Yes
Institute additional annual output of
13,000 tons; 2. R&D
center construction project
1. The “reconstruction and expansion project of high-grade environment-friendly special paper with an additional annual output
of 13,000 tons” was planned by the Company based on the market situation and the Company’s production capacity before listing.
As time goes by, the market has changed dramatically. Since 2016, the procurement mode of downstream tobacco manufacturers for
Reason for change, decision making procedure and information disclosure (by specific special paper products has been adjusted from quantity allocation by cigarette manufacturers to the independent procurement mode
project) through centralized bidding or commercial negotiation by cigarette label printing enterprises. Cigarette-related enterprises can
expand their bargaining range from region to the entire country by means of tendering or commercial negotiation through public
market inquiry and bargaining by themselves, breaking the original competitive landscape featuring fixed share and region. As a
result, special paper manufacturers took active competition strategies like price cuts to snap up orders, and the industry pattern
38
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
changed. As a result of the above industrial policy adjustments, the special paper industry has formed a new pattern featuring full
market competition, with intensified market competition and a sharp decline in prices. If the project went on as scheduled, we may
face risks that the utilization rate of raised funds will decline and the expected investment objective may not be achieved. Therefore,
the Company terminated the implementation of this project in 2019.
2. The “R&D center construction project” was launched to meet the Company’s demand for R&D in its main businesses before
listing. With the completion of major asset restructuring in 2018, the Company’s main businesses included lithium battery separator,
which has high technological requirements. The manufacturing of lithium batteries has a high requirement for the characteristics of
separator materials, especially consistency, and the size and the uniformity of distribution of separator micropores. Based on the
Company’s business development plan and market demand, in order to better implement its development strategy, the Company
intends to integrate the technology centers currently scattered in subordinate companies, so as to ensure that the Company’s R&D
technology can further improve production efficiency, product quality and new product development capacity. The above change
was deliberated and approved at the 27th Meeting of the Third Board of Directors of the Company, the 22nd Meeting of the Third
Supervisory Committee and the 2018 Annual General Meeting. For details, please refer to the Announcement on Changes in Some of
the Proceeds Financed Projects (Announcement No.: 2019-041) published by the Company on Cninfo.com.cn on April 26, 2019.
Status of and reason for failing to make planned progress or achieve expected returns
Not applicable
(by specific project)
Description of major changes in project feasibility after the change Not applicable
39
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
VIII. Sale of Significant Assets and Equity Interests
1. Sale of significant assets
□Applicable Not applicable
The Company did not sell any significant assets during the Reporting Period.
2. Sale of significant equity interests
□Applicable Not applicable
IX. Analysis of Major Companies in Which the Company Has a Stake or a Controlling
Stake
Applicable □Not applicable
Major subsidiaries and companies in which the Company has a stake with each contributing to over 10% of the Company’s net profit
Unit: RMB100 million
Company Company Main Registered Operating Operating
Total Assets Net Assets Net Profit
name Type Business Capital revenue Profit
Lithium
Shanghai
Subsidiary battery 3.89 434.19 123.19 103.78 26.07 23.07
Energy
separator
Acquisition and disposal of subsidiaries during the Reporting Period
Applicable □Not applicable
Way of acquisition or disposal of subsidiaries Impact on the Company’s overall production,
Company name
during the Reporting Period operation and earnings
Yunnan Jiechen Packaging Materials Co., Ltd. Establishment by investment No impact so far
Explanation on major companies in which the Company has a stake or a controlling stake
Shanghai Energy is a holding subsidiary of the Company. As at the end of the Reporting Period, the Company held a 95.22% stake in Shanghai
Energy, whose major product is lithium battery separator and major subsidiaries include Zhuhai Energy, Wuxi Energy, Jiangxi Tonry, Suzhou
GreenPower, Newmi Tech and Chongqing Energy. Since 2023, market competition intensified with the concentrated release of large-scale
production capacity of separator companies, Shanghai Energy achieved operating revenue of RMB10,378 million in 2023, representing a decrease
of 5.61% year on year, and a net profit attributable to the owner of the parent company of RMB2,317 million, representing a decrease of 40.18%
year on year.
X. Structured Bodies Controlled by the Company
□Applicable Not applicable
XI. Future Development Prospect of the Company
1. Corporate strategy
The Company will focus on the lithium battery separator sector, march towards the vision to become a “world-class polymer material research,
development and production enterprise” and bear in mind the philosophy of creating values for customers with quality, price and service. The
Company will continuously scale up the capacity, improve product quality, and strengthen R&D. The Company will enrich the product matrix,
seek cost reduction and benefit enhancement through lean management, build up technical innovation capacity to identify new profit growth drives.
The Company will actively expand domestic and overseas markets, improve the core market competitiveness, actively capture development
opportunities in the new energy sector, and dedicate itself to creating values for customers. The Company will attack the sterile package, BOPP
film and aluminum laminated film sectors to become the most competitive new material producer in China.
2. Operating plan for 2024
The global new energy sector has been thriving. As a leader in the wet-process lithium battery separator sector, the Company will persist in
advancing the construction for production bases both domestically and overseas according to our established plans, hastening the process of
globalization. The Company maintain a keen focus on cutting-edge technological developments, such as the solid state electrolyte coating
separators applicable to semi-solid-state batteries. With the completion of the Jiangsu Sanhe project, the Company's strategic layout in the
separator sector will be further refined. In addition, the Company further improved its core competitiveness by actively edging into the aluminum
laminated film business and enriching the product lines.
Looking ahead, the Company will continue to enhance our product innovation capabilities by bolstering our research and development efforts.
Given the intensifying market competition, the Company need to capitalize on our existing industry-leading scale and cost advantages, place
greater emphasis on the development of new products and technologies to drive profitability and innovation-led growth in the long run. In 2024,
40
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
the Company continue to actively promote overseas projects, ramp up efforts in overseas market development, accelerate our global layout,
optimize product portfolio using our core competitive advantages, and increase market share abroad. Our production base in Hungary has been
completed and is set to commence operations in 2024, enabling rapid response to the demand for lithium battery separators from European
customers and beyond.
Furthermore, in response to the fiercely competitive environment and the future need for global development, in addition to continuous
improvements in equipment, processes, and quality to enhance production efficiency and product quality, thereby achieving cost reduction and
efficiency enhancement, and consolidating our core competitive advantages, the Company have engaged a globally renowned consulting firm to
further enhance our operational management capabilities for future long-term development. Leveraging industrial big data, industrial artificial
intelligence, and intelligent control technologies, we aim to continuously empower the "smart manufacturing" of separators. The focus for the
upcoming year will primarily be on developing intelligent control systems for base separator thickness and AI vision inspection and classification
systems to achieve online adaptive control of separator thickness, further enhancing consistency. Moving forward, the Company will drive high-
quality development through new productive forces, deepen technological innovation, digitize separator "smart manufacturing," and propel our
industry towards high-end and intelligent development.
3. Risks the Company may face
(1) National regulatory risk relating to lithium battery separator business
In recent years, various countries have intensively introduced industry policies to support the development of new energy vehicle industry.
Benefiting from policy support, the production value of new energy vehicle industry rapidly increased, driving the rapid development of the
upstream lithium battery industry. If there are significant adverse changes in carbon emissions, renewable energy application and other relevant
industry policies in the future, the relevant policies may have a negative impact on the development of the whole industry chain of new energy
vehicle, thus having an adverse impact on the upstream lithium battery separator industry and the Company’s operation result.
Countermeasures: By actively investing in the R&D of new applications of film, the Company will explore its new commercial application
market. At the same time, the Company also invests resources to distribute new product projects to diversify business risks and reduce the impact
of policy fluctuations on the Company to a certain extent.
(2) Intensified market competition risk
The rapid growth of the new energy vehicle industry has driven the development of lithium battery separator in the upstream part, and the
lithium battery separator industry has attracted many domestic enterprises due to its higher gross margin, with a lot of funds invested in it,
increasing its capacity rapidly. Currently, the domestic competition in this segment is becoming increasingly fierce. The increasingly fierce
competition will have an adverse impact on the results of the Company if it can’t deeply understand the law of industrial development and make
constant efforts for technological innovation and operational management improvement to improve product quality and reduce production costs.
Countermeasures: The Company’s lithium-ion battery film business has formed industry leading advantages in production capacity, R&D
capacity, product quality, lean management, customer and market and other aspects. The Company will continue to reduce costs and increase
efficiency, improve the product quality and reduce the production costs through technological innovation, boost profitability through R&D
innovation, and develop diversified customer groups in domestic and overseas markets to reduce the impact of domestic and foreign market
fluctuations on the Company’s performance.
(3) Risk of price fluctuation of major raw materials
The major raw materials used by the Company are subjected to price fluctuation to some extent, especially polypropylene and polyethylene,
whose prices are affected by the strong fluctuations of the international crude oil price. The results of the Company may be adversely affected by
the gross profit margin which may be affected to some extent if the prices of major raw materials fluctuate sharply due to the macroeconomic
fluctuations, the demand and supply relation for enterprises in the upstream and downstream parts and other factors.
Countermeasures: The Company has established long-term and stable cooperative relations with major suppliers, established a strategic
purchase system as a whole, and improved the bargaining power and reduced the cost of raw materials by means of large-scale purchase. The
Company will also reduce the proportion of raw material cost in production cost through technological innovation, process equipment process
transformation, production efficiency improvement and loss reduction.
(4) Risk relating to construction in progress
Current construction in progress includes Chongqing Energy (phase II), Jiangsu Energy, Hubei Energy, Yuxi Energy, Jiangsu Ruijie and US
Energy and other production bases, which require a large amount of capital. If the Company fails to raise funds in time, complete and put into
operation on schedule, it will have a negative impact on the subsequent production and operation and future profits.
Countermeasures: The Company has raised RMB7.5 billion through non-public issuance of A shares to fund the construction of related
projects. Additionally, the Company made reasonable arrangements for future investment plans (including funds) by increasing cooperation with
financial institutions, and improving bank credit lines.
(5) Risk of technical loss and loss of core personnel
An enterprise engaging in lithium battery separator requires advanced technology and process, rich management experience and deep
understanding of the industry. To ensure the ability of constant innovation and the steady growth of business, the Company should have teams
consisting of steady high-quality employees in scientific research, management and sale. The Company constantly improves the mechanisms for
talent cultivation, incentive, promotion and restriction, but there is still the possibility of the outflow of core employees from the Company. In case
of leakage of the core technology or the departure of core employees, the production and operation of the Company may be adversely affected.
Countermeasures: The Company has implemented equity incentive to the core employees, so that the employees can share the value of the
growth of the enterprise, but also make the interests of the Company and the interests of employees deeply tied. The Company will continue to
increase the introduction and training of core technical personnel, further maintain the stability of core employees, continue to maintain the
company’s industry-leading technical level.
(6) Technological progress and product substitution risk
Lithium-ion battery is mainly used for mobile phones, computers, new energy vehicles, power station for energy storage and other industries.
After development for many years, lithium-ion batteries have been superior to traditional storage batteries such as nickel-cadmium batteries,
nickel-metal hydride batteries, lead-acid batteries in terms of volumetric specific energy, gravimetric specific energy, gravimetric specific power,
cycle life, charge/discharge efficiency, etc., becoming a new energy industry with priority support and key development from national
governments. Although the lithium-ion battery is the first choice for electronic products and pure electric vehicles, and it will take quite a long time
to commercialize other emerging batteries such as all-solid-state batteries which are immature technically, the market demands for lithium-ion
41
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
batteries will be affected when emerging batteries such as all-solid-state batteries break the technical bottleneck, achieve mass production and are
fully commercialized, and the lithium battery separator in the industry chain will also be affected adversely.
Countermeasures: After years of R&D investment and technology accumulation, the Company has strong research on new products and
prospective technology reserves. The R&D Department of the Company continues to pay attention to the market development trend, and organizes
a discussion group on film technology development, develops project development plans for R&D, and actively develops other new products and
technologies of functional film. In addition, the Company strengthens strategic cooperation with well-known lithium-ion battery manufacturers at
home and abroad, develops products together with customers in-depth cooperation, timely grasps the technical development trend and complies
with the market demand.
(7) Risk of exchange rate fluctuation
The export sales volume of the Company increases constantly as the Company expands its business scale and gradually strengthens the
development in the international market. If the RMB exchange rate and the foreign exchange rate in the countries where our products were sold
fluctuate sharply in the future, the results of the Company may be affected to some extent.
Countermeasures: The Company will minimize the exchange risk with such measures as closely watching the exchange rate, adjusting the
product prices in time based on the exchange rate to guarantee the product profit, strengthening cost control and conducting the foreign exchange
derivatives trading for the purpose of hedging.
(8) Risks arising from changes in the international business and trade environment
The international business and trade environment landscape is fraught with such as fluctuations ranging from shifts in the global economic
climate to policy adjustments. Nevertheless, the Company's globalization strategy remains paramount. However, amidst escalating international
competition and the backdrop of countries like the United States, major regions represented by Europe and America are progressively introducing
policies to support the development of domestic manufacturing industries. Failing to swiftly align with these policies and execute our globalization
agenda could potentially impede the Company's market penetration and overall performance.
Countermeasures: While paying close attention to the relevant policies of Europe and America, the Company will continuously pay attention
to the R&D efforts and technical improvement of products of various business systems, improve product quality and production efficiency,
constantly consolidate and strengthen its competitive advantages in technological R&D, capacity scale, product quality, cost efficiency and other
aspects, and reduce costs and increase efficiency on the premise of ensuring product quality. We will also continuously expand market
development in domestic and overseas regions and actively establish stable cooperative relations with global customers.
(9) Management risk after expansion of business scale
With the development of the Company’s business, the scale of the Company’s assets and business will be further expanded, which raises
higher requirements for the management level of the Company. The management risk arises if the capabilities of the Company to manage the
production, sales, quality control and risks can’t meet the requirements for scale expansion, and the systems for talent cultivation, organization
pattern and management are not further improved.
Countermeasures: The Company will continuously improve the management system, ensure the efficient operation of production, quality
control, sales, management and other business links, establish an effective incentive system, attract talents through the Company's broad
development platform and effective incentive systems, strengthen talent training and deliver talents for the Company's development through
targeted training and training measures for employees and managers at all levels.
XII. Reception of Visitors to the Company for Purposes of Research, Communication,
and Interview during the Reporting Period
Applicable □Not applicable
Major
Index to Main
Discussions and
Reception Date Reception Venue Reception Mode Type of Visitors Visitors Enquiry
Materials
Information
Provided
The Company's
presentation of
Investors
Online its annual 2022 Annual
participating in the
communication results, Results Briefing
March 3, 2023 Live streaming Others conference
on network production and disclosed at
through live
platform operation, Cninfo.com.cn
streaming
development and
ESG in 2022.
The impact of
the IRA Act on
the Company,
Investors
the relative
participating in the Record of
strengths of the
Online Company's 2023 Investor
Shanghai Energy Company over
communication first quarter results Relations
April 27, 2023 Conference Others its domestic
on network communication Activities
Room competitors, the
platform meeting via disclosed at
localization
network platforms Cninfo.com.cn
trend of
and telephone
separator
equipment,
among others
May 11, 2023 Shanghai Energy Online Others Investors The Company's Announcement on
42
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Conference communication participating in the 2022 annual Attending the
Room on network conference results, corporate 2022 Annual
platform through live governance, Online Investors
streaming development Collective
strategy, Reception Day
operating for Listed
conditions, Companies in
financing plans, Yunnan disclosed
equity at Cninfo.com.cn
incentives,
sustainable
development,
and other topics
of concerns of
investors
The follow-up
arrangements for
the private
placement, how
PIMCO,
to view the The Record of
Genharmony
Wuxi Energy technological Investor
Capital, Origin
New Material On-site Institutional revolution in Relations
May 17, 2023 Fund, Yunnan
Technology Co., investigation investors sodium-ion Activities on
Energy Investment
Ltd. batteries and disclosed at
and other institute
solid-state Cninfo.com.cn
investors
batteries, the
pricing method
for separators
and other issues.
BOCOM
Schroders, Origin
Global separator
Fund, China Asset
demand outlook The Record of
Management,
for the second Investor
Harvest Fund,
Telephone Telephone Institutional half of the year, Relations
August 24, 2023 UBS AG,
conference communication investors prices of the Activities on
Temasek, Fedelity
Company's disclosed at
Fund, Norges
separators and Cninfo.com.cn
Bank, Allianz
other issues
Global Investors,
among others
XIII. Implementation of the Action Plan for “Dual Improvements in Quality and Returns”
Whether the Company has disclosed the action plan for “Dual Improvements in Quality and Returns”.
□Yes No
43
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Section 4 Corporate Governance
I. Basic Information of Corporate Governance
The Company established and improved the modern enterprise system in strict accordance with the Company Law, the Securities Law, the Shenzhen
Stock Exchange Listing Rules, the Code of Corporate Governance for Listed Companies in China and other relevant laws and regulations, and constantly
improved the corporate governance structure, improved the internal control system and standardized the Company’s operation. During the Reporting
Period, the Company, in accordance with the Company Law, the Securities Law, the Management Measures for Independent Directors of Listed
Companies, the Rules Governing the Listing of Shares on the Shenzhen Stock Exchange, the Self-Disciplinary Regulatory Guidelines for Companies
Listed on the Shenzhen Stock Exchange No. 1 -- Standardized Operation of Companies Listed on the Main Board and other relevant laws, regulations and
regulatory documents, and in the light of the actual situation of the Company, made the relevant amendments to the Articles of Association, the Rules of
Procedure of the General Meeting of Shareholders, the Rules of Procedure of the Board of Directors, the Rules of Procedure of the Supervisory
Committee, System of Independent Directors, Annual Reporting System of Independent Directors, the Rules of Procedure of the Audit Committee, the
Rules of Procedure of the Remuneration and Appraisal Committee, the Rules of Procedure of the Strategy Committee, the Rules of Procedure of the
Nomination Committee, and other relevant regulations.
During the Reporting Period, the Company held 9 shareholders’ general meetings, 18 board meetings, 15 meetings of the Supervisory Committee. The
procedures for holding the meetings are legal and the resolutions are legal and effective.
Were there any significant differences between the Company’s actual governance status and laws, administrative regulations, and the regulations issued
by CSRC on listed company governance
□Yes No
There was no difference between the Company’s actual governance status and laws, administrative regulations, and the regulations issued by CSRC on
listed company governance.
II. Details of the Company’s Separation from the Controlling Shareholder and Actual
Controller with Respect to Corporate Assets, Personnel, Finance, Organization, Business, etc.
The Company is independent of its shareholders in terms of business, assets, personnel, institutions, financial affairs, etc., has an independent and
complete business system and market-oriented independent operation ability, and has a complete supply, production and sales system.
1. Assets integrity
The Company has independent and complete business assets that can be used for business activities. The Company has complete sites, facilities,
instruments and equipment, trademarks, patents, etc. required for production independent of shareholders and other related parties. The Company’s assets
are strictly separated from the shareholders and actual controller, and there is no case that the shareholders and actual controller encroach on the
Company’s assets.
2. Personnel independence
The General Manager, Deputy General Manager, Chief Financial Officer, Secretary of the Board and other senior managers of the Company are all full-
time working in the Company and receiving remuneration, and there is no case that they hold any post other than director or supervisor at the controlling
shareholder, actual controller and other enterprises under their control, or hold any position in other enterprises with the same or similar business with the
Company. The Company’s financial personnel are not doing part-time job in the controlling shareholders, actual controllers and other enterprises under
their control. The Company is completely independent in terms of social security and salary.
3. Finance independence
The Company has set up an independent financial department, and established an independent and complete financial accounting system according to the
current accounting standards and relevant laws and regulations, which can help make financial decisions independently. The Company has a standardized
financial accounting system and financial management system. The Company has set up an independent bank account and, as an independent taxpayer,
has gone through tax registration with the tax bureau of Yuxi High-tech Zone. The Company does not guarantee the debts of shareholders or other related
parties with the Company’s assets, interests or reputation. The Company has complete control over all assets, and there is no case that monetary funds or
other assets are occupied by shareholders and damage the Company’s interests.
4. Institutional independence
The Company has a production and operation place and organization independent of the controlling shareholder, and there is no mixed operation or joint
office with the controlling shareholder. There is no interference of the controlling shareholder and any other units or individuals in the Company’s
organizational structure. In accordance with the requirements of the Company Law, the Company has established and improved the organizational
structure system of the general meeting of shareholders, the Board of Directors, the Supervisory Committee, and the management, and is completely
independent of the affiliated enterprises in terms of institutional setting. The shareholder unit nominates directors to participate in the management of the
Company in accordance with the provisions of the Company Law and the Articles of Association, and does not directly interfere with the production and
operation activities of the Company.
5. Business independence
The Company has an independent production, supply and marketing system, and independently carries out various businesses. There is no case of relying
on or entrusting shareholders or other related parties to sell products, or relying on or entrusting shareholders or other related parties to purchase raw
materials. There is no horizontal competition with the controlling shareholder, actual controller and the enterprises under their control.
44
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
III. Horizontal Competition
□Applicable Not applicable
IV. Details about the Annual General Meeting and Extraordinary General Meeting of Shareholders Convened during the Reporting Period
1. Details about the shareholders’ general meeting during the Reporting Period
Meeting Meeting Type Investor Participation Date Convened Disclosure Date Meeting Resolution
Annual General Announcement on Resolutions of the Annual General
Annual General Meeting of
Meeting of 55.01% March 24, 2023 March 25, 2023 Meeting of Shareholders in 2022 (Announcement No.
Shareholders of 2022
Shareholders 2023-046) on www.cninfo.com.cn
Extraordinary Announcement on Resolutions of the First Extraordinary
First Extraordinary General
General Meeting of 53.22% May 8, 2023 May 9, 2023 General Meeting of Shareholders in 2023
Meeting of Shareholders in 2023
Shareholders (Announcement No.2023-072) on www.cninfo.com.cn
Extraordinary Announcement on Resolutions of the Second
Second Extraordinary General
General Meeting of 39.17% July 11, 2023 July 12, 2023 Extraordinary General Meeting of Shareholders in 2023
Meeting of Shareholders in 2023
Shareholders (Announcement No. 2023-119) on www.cninfo.com.cn
Extraordinary Announcement on Resolutions of the Third
Third Extraordinary General
General Meeting of 42.87% August 7, 2023 August 8, 2023 Extraordinary General Meeting of Shareholders in 2023
Meeting of Shareholders in 2023
Shareholders (Announcement No. 2023-136) on www.cninfo.com.cn
Extraordinary Announcement on Resolutions of the Fourth
Fourth Extraordinary General
General Meeting of 41.22% September 11, 2023 September 12, 2023 Extraordinary General Meeting of Shareholders in 2023
Meeting of Shareholders in 2023
Shareholders (Announcement No. 2023-161) on www.cninfo.com.cn
Extraordinary Announcement on Resolutions of the Fifth
Fifth Extraordinary General
General Meeting of 42.13% October 9, 2023 October 10, 2023 Extraordinary General Meeting of Shareholders in 2023
Meeting of Shareholders in 2023
Shareholders (Announcement No. 2023-185) on www.cninfo.com.cn
Extraordinary Announcement on Resolutions of the Sixth
Sixth Extraordinary General
General Meeting of 39.93% October 12, 2023 October 13, 2023 Extraordinary General Meeting of Shareholders in 2023
Meeting of Shareholders in 2023
Shareholders (Announcement No. 2023-186) on www.cninfo.com.cn
Extraordinary Announcement on Resolutions of the Seventh
Seventh Extraordinary General
General Meeting of 35.90% October 19, 2023 October 20, 2023 Extraordinary General Meeting of Shareholders in 2023
Meeting of Shareholders in 2023
Shareholders (Announcement No. 2023-190) on www.cninfo.com.cn
Extraordinary Announcement on Resolutions of the Eighth
Eighth Extraordinary General
General Meeting of 41.80% December 29, 2023 December 30, 2023 Extraordinary General Meeting of Shareholders in 2023
Meeting of Shareholders in 2023
Shareholders (Announcement No. 2023-231) on www.cninfo.com.cn
2. Extraordinary general meeting requested by the preferred shareholder with restituted voting rights
□Applicable Not applicable
V. Details on Directors, Supervisors, and Senior Management
45
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
1. Basic information
Quantity of Quantity of
Other
shares shares Quantity of
Shares held at the increased or Reason for share
increased in decreased in shares held at the
Name Gender Age Title Service status Start date End date beginning of the decreased increase/decrease
the current the current end of the period
period (share) changes
period period (share)
(share)
(share) (share)
Paul Xiaoming Shareholding
Male 66 Chairman Incumbent April 20, March 23, 126,192,257 1,246,718 127,438,975
Lee Increase Plan
2011 2026
Shareholding
Li Xiaohua Male 62 Director Incumbent April 20, March 23, 66,919,389 831,600 67,750,989
Increase Plan
2011 2026
April 20, July 18,
Yan Ma Female 65 Director Departure
2011 2023
April 8, 2020 July 18,
Alex Cheng Male 66 Director Departure
2023
August 7, March 23,
Zhai Jun Male 50 Director Incumbent
2023 2026
August 7, March 23,
Xiang Ming Male 61 Director Incumbent
2023 2026
Shareholding
Ma Weihua Male 57 Director Incumbent November March 23, 17,000 17,000
Increase Plan
22, 2021 2026
Shareholding
Feng Jie Male 60 Director Incumbent January 4, March 23, 82,000 82,000
Increase Plan
2017 2026
Independent
Lu Jiankai Male 46 Departure April 20, March 24,
Director
2017 2023
Tang Independent
Male 54 Departure April 8, 2020 March 24,
Changjiang Director
2023
Independent
Zheng Haiying Female 61 Departure April 8, 2020 March 24,
Director
2023
Independent
Shou Chunyan Female 53 Departure March 24, December 400 400
Director
2023 29, 2023
Independent
Li Zhe Male 37 Incumbent December March 23,
Director
29, 2023 2026
Independent
Pan Siming Male 47 Incumbent March 24, March 23,
Director
2023 2026
46
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Independent
Zhang Jing Female 63 Incumbent March 24, March 23,
Director
2023 2026
Shareholding
Zhang Tao Male 47 Supervisor Incumbent January 3, March 23, 10,000 10,000
Increase Plan
2019 2026
Chen Tao Male 46 Supervisor Departure April 20, March 24,
2011 2023
Shareholding
Li Bing Male 57 Supervisor Incumbent March 24, March 23, 3,600 7,400 11,000
Increase Plan
2023 2026
Kang Wenting Female 37 Supervisor Incumbent April 8, 2020 March 23,
2026
Board
Yu Xue Female 37 Incumbent November 4, March 23, 81,100 81,100
Secretary
2021 2026
Chief Financial
Li Jian Male 46 Incumbent September March 23,
Officer
30, 2020 2026
Total -- -- -- -- -- -- 193,196,346 2,195,118 0 0 195,391,464 --
Whether there was any departure of Directors and Supervisors and dismissal of senior management during the term of office during the Reporting Period
Yes □No
(1) On March 24, 2023, the renewal of the 5th Board of Directors of the Company was concluded, and the members of the 4th Board of Directors of the Company, Mr. Lu Jiankai (Independent Director), Mr. Tang
Changjiang (Independent Director) and Ms. Zheng Haiying (Independent Director), departed from the Company upon expiration of their term of office, and will no longer serve as the Company’s Independent
Directors and the relevant positions of the Specialized Committees of the Board of Directors following their departure from the Board of Directors nor hold any positions in the Company.
(2) On March 24, 2023, the renewal of the 5th Supervisory Committee of the Company was concluded, and Mr. Chen Tao (Supervisor), a member of the 4th Supervisory Committee of the Company, departed upon
expiration of his term of office, and will no longer hold the position of Supervisor of the Company, yet he still serves as the deputy general manager of the Company’s controlling subsidiary, Yunnan Hongchuang
Packaging Co., Ltd.
(3) On July 18, 2023, Ms. Yan Ma, a Director of the Company, applied for resignation as a Director of the Company due to personal reasons and will not hold any position in the Company upon resignation.
(4) On July 18, 2023, Mr. Alex Cheng, a Director of the Company, applied for resignation as a Director of the Company due to personal reasons, yet he still serves as a senior technical advisor in the Company upon
his resignation.
(5) On 29 December 2023, Ms. Shou Chunyan, an Independent Director of the Company, applied for resignation as an Independent Director of the Company and related positions in the Specialized Committees of the
Board of Directors due to personal reasons, and will no longer hold any position in the Company upon her resignation.
Changes in Directors, supervisors and senior management of the Company
Applicable □Not applicable
Name Position held Type Date Reason
She has applied for resignation as a Director of the Company due to personal reasons,
Yan Ma Director Departure July 18, 2023
and will not hold any position in the Company upon her resignation.
He has applied for resignation as a Director of the Company due to personal reasons,
Alex Cheng Director Departure July 18, 2023 but will hold the position of senior technical advisor in the Company upon his
resignation.
Zhai Jun Director Elected August 7, 2023 Newly-appointed
47
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Xiang Ming Director Elected August 7, 2023 Newly-appointed
Departure on expiration of
Lu Jiankai Independent Director March 24, 2023 Departure on expiration of the term of office of the 4th Board of Directors
term of office
Departure on expiration of
Tang Changjiang Independent Director March 24, 2023 Departure on expiration of the term of office of the 4th Board of Directors
term of office
Departure on expiration of
Zheng Haiying Independent Director March 24, 2023 Departure on expiration of the term of office of the 4th Board of Directors
term of office
She has applied for resignation from the position of Independent Director of the
Company and related positions in the Specialized Committees of the Board of
Shou Chunyan Independent Director Departure December 29, 2023
Directors due to personal reasons, and will no longer hold any position in the
Company upon her resignation.
Li Zhe Independent Director Elected December 29, 2023 Newly-appointed
Pan Siming Independent Director Elected March 24, 2023 Newly-appointed
Zhang Jing Independent Director Elected March 24, 2023 Newly-appointed
Departure on expiration of
Chen Tao Supervisor March 24, 2023 Departure on expiration of the term of office of the 4th Supervisory Committee
term of office
Li Bing Supervisor Elected March 24, 2023 Newly-appointed
48
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
2. Positions Held
Professional background, main working experience and main duties in the Company of current directors, supervisors, and senior executives of the
Company
(I) Members of the Board of Directors
1. Paul Xiaoming Lee, Chairman of the Company, male, born in 1958, American nationality with the right of residence in foreign country, and
master’s degree. Joined Kunming Plastic Research Institute of China in 1982, acted as the Vice President from 1984 to 1989, graduated from the
polymer material discipline at the University of Massachusetts of America in December 1992, served as the Manager of the Technical Department
of Inteplast Corporation in America from 1992 to 1995. Since April 1996, he has successively served as the Vice General Manager, General
Manager, Vice Chairman and Chairman of Hongta Plastic, Chairman and General Manager of Dexin Paper, and Chairman of Chengdu Hongta
Plastic (成都紅塑). Joined Innovative Color Printing as the Chairman in 2006. Now, serves as the Chairman of the Company.
2. Li Xiaohua, Vice Chairman of the Company, male, born in 1962, Chinese nationality with the right of residence in foreign country, and
master’s degree. Graduated from the polymer material discipline at the University of Massachusetts of America in February 1993, and worked at
World-Pak Corporation in the US from 1993 to 1996. Since April 1996, he has successively served as the Vice General Manager and Vice
Chairman of Hongta Plastic, the Vice Chairman of Dexin Paper, and the General Manager and Vice Chairman of Chengdu Hongta Plastic. Joined
Innovative Color Printing as the General Manager and Vice Chairman in 2006. Now, serves as the General Manager and Vice Chairman of the
Company.
3. Zhai Jun, Director of the Company, male, born in 1974, Chinese nationality, and master’s degree. He graduated from Wuhan University of
Technology majoring in Vehicle Engineering in June 2000 and served as project manager in State Development and Investment Corporation from
April 2000 to January 2006. Mr. Zhai worked for Valeo Automotive Air Conditioning Hubei Co., Ltd. as a director and deputy general manager
from January 2006 to March 2009; he served as a project manager of The State Development and Hi-tech Investment Corporation from March
2009 to July 2009; and he also served as a managing director of SDIC Investment Management Co., Ltd. from July 2009 to present. He is currently
a Director of the Company.
4. Xiang Ming, Director of the Company, male, born in 1963, Chinese nationality, and doctoral candidate. He graduated from the Institute of
Polymer Research of Chengdu University of Science and Technology in 1988, and served in the Institute of Polymer Research of Sichuan
University since 1988, and retired in April 2023. Mr. Xiang served as the Chairman of Chengdu Huicheng Technology Co., Ltd. since 2011. He is
currently a Director of the Company.
5. Ma Weihua, Director of the Company, male, born in 1967, Chinese nationality, and bachelor’s degree, engineer. From 1989 to 1997,
successively served as Deputy Section Chief of Equipment Section of Zhenyuan Gold Mine, Yunnan Province, and technician of Equipment
Section of Yuxi Hydropower Equipment Factory; from 1997 to 2016, successively served as the Director of Production Department, Vice General
Manager and Director of Hongta Plastic. He is currently the General Manager of Shanghai Energy.
6. Feng Jie, Director of the Company, male, born in 1964, Chinese nationality, and bachelor’s degree and medium industrial economist. Served
in Simao Industrial and Commercial Bank of China from 1981 to 1984; served as a statistician of the Comprehensive Management Section,
Director of the Computer Center and the Secretary of the Communist Youth League at Yunnan Optical Instrument Factory from 1989 to 1997;
served as a technician, statistical officer and Director of the General Manager’s Office at Hongta Plastic from 1997 to 2005; served as the Director
of Chengdu Office of Hongta Plastic from 2005 to 2009; since 2009, has successively served as the Director of the Sales Department, the Vice
General Manager and General Manager of Chengdu Hongta Plastic. He is now the Director of the Sales Department and the General Manager of
Chengdu Hongta Plastic, and a Director of the Company.
7. Li Zhe, Independent Director of the Company, male, born in 1987, Chinese nationality, and doctoral candidate. He is the deputy director of the
Finance Department, associate professor of the School of Accounting, and the tutor of doctoral candidate of Central University of Finance and
Economics. He has been an independent director of Leyard Optoelectronic Co., Ltd. from January 2023 to present. Mr. Li served an independent
director of Genertec Kunming Machine Tool Co., Ltd. from August 2023 to present. He is currently an Independent Director of the Company.
8. Pan Siming, an Independent Director of the Company, born in 1977, Chinese nationality, and bachelor’s degree. He served as financial analysis
of Huachen Automotive Group from July 2001 to December 2009. He served as financial manager of Zhejiang Longsheng Group Co., Ltd. from
December 2009 to August 2012. Mr. Pan was appointed as the director of post-loan management of the small and medium-sized department of
Minsheng Bank from August 2012 to April 2016, and has been appointed as the director of post-investment management of Yang Yue Shanghai
Investment Management Ltd. from April 2016 to the present. He is currently an Independent Director of the Company.
9. Zhang Jing, Independent Director of the Company, born in 1961, Chinese nationality, professor and doctoral tutor of Applied Physics in the
College of Science of Donghua University, executive vice president of the College of Science of Donghua University. She was a director of
Shanghai Energy from 2016 to 2018. She was a director of the Plasma Science and Technology Committee of the CSTAM from 2015 to 2020. Ms.
Zhang has been a director of Shanghai Sunshine Esailchem Technology Corp., Ltd. since 2018. Ms. Zhang an associate editor of the journal
Plasma Science and Technology since 2021. She is currently an Independent Director of the Company.
(II) Members of the Supervisory Committee
1. Zhang Tao, Chairman of the Supervisory Committee of the Company, male, born in 1977, Chinese nationality, and bachelor’s degree.
Worked as a financial analyst at the Financial Center of Beijing Marketing Company of Haci Co., Ltd. from July 2000 to January 2001; worked as
an accountant at the Finance Department of Yunnan Hongta Plastic Co., Ltd. from August 2001 to August 2006; and has served as the Manager of
the Finance Department of Yunnan Dexin Paper Co., Ltd. from September 2006 to March 2019. He has served as the supervisor of Yuxi Kunshasi
Plastic Masterbatch Co., Ltd. from October 2021 to the present. He has served as the Deputy Chief Financial Officer from April 2019 to the
present. Currently, he serves as Chairman of the Supervisory Committee of the Company.
2. Li Bing, Supervisor of the Company, male, born in 1967, Chinese nationality, and Junior college degree, assistant engineer. He served as a
technician in the process technology section of Yuxi Hydroelectric Equipment Factory from September 1988 to December 1995. He served as a
workshop supervisor and head of the process technology section of Yuxi Globe Colour Printing Carton Co., Ltd. from December 1995 to July
2004. He served as a sales manager of Yunnan Dexin Paper Co., Ltd. from October 2005 to February 2021. He served as a sales manager of
Yunnan Energy New Material Co., Ltd. and Yunnan Dexin Paper Co., Ltd. from March 2021 to June 2021. Mr. Li was appointed as the general
manager of Yunnan Dexin Paper Co., Ltd. from July 2021 to present. Now he is a Supervisor of the Company.
3. Kang Wenting, Supervisor of the Company, female, born in 1987, Chinese nationality, and bachelor’s degree. Served as the Personnel
Supervisor of Kunming Xinghe Spa Resort & Hotel from 2013 to 2014, and from 2015 to March 2019, has successively served as the Personnel
49
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Supervisor of the Human Resources Department of the Company. She serves as the manager of the Operation Support Department and
Administrative Department from October 2019 to the present. Now she is a Supervisor of the Company.
(III) Senior Management
1. Li Xiaohua, Vice Chairman and General Manager of the Company, male, born in 1962, Chinese nationality with the right of residence in
foreign country, and master’s degree. Graduated from the polymer material discipline at the University of Massachusetts in February 1993, and
worked at World-Pak Corporation in the US from 1993 to 1996. Since April 1996, has successively served as the Vice General Manager and Vice
Chairman of Hongta Plastic, the Vice Chairman of Dexin Paper, and the General Manager and Vice Chairman of Chengdu Hongta Plastic. Joined
Innovative Color Printing as the General Manager and Vice Chairman in 2006. Now, serves as the General Manager and Vice Chairman of the
Company.
2. Yu Xue, Vice General Manager of the Company, Secretary of the Board of Directors, female, born in 1987, Chinese nationality, and
master’s degree. Served as the Company’s Securities Affairs Representative from March 2013 to November 2021. Now, serves as the Chairman of
Hunan Semcorp, Vice General Manager and Secretary of the Board of Directors of the Company.
3. Li Jian, Chief Financial Officer of the Company, male, Han, born in 1978, Chinese nationality, and bachelor’s degree, Chinese Certified
Public Accountant and Chinese Certified Tax Agent. From 1997 to October 2016, has served as the General Budget Accountant at Liujiaqiao
Fiscal Office of the Finance Bureau of Chongren County, Jiangxi Province, the Financial Manager of Shunde Ouyadian Building Material Co.,
Ltd., the Project Manager of Shenzhen Pengcheng Accounting Firm, the Assistant to the Chief Financial Officer of Jiangsu Safety Steel Rope Co.,
Ltd. and the Chief Financial Officer of Suzhou ALTON Electric Industry Co., Ltd. Since October 2016, has served as the Chief Financial Officer
of Shanghai Energy New Material Technology Co., Ltd. Now, serves as the Chief Financial Officer of the Company.
Positions held at the shareholder’s entity
□Applicable Not applicable
Positions held at other entities
Applicable □Not applicable
Receiving
Positions in other remuneration and
Name Other Entity Names Start date End date
organizations allowance at other
entities
Paul Shanghai Ruiji New
Xiaoming Material Technology Co., Director No
Lee Ltd. January 20, 2020 March 3, 2023
Paul
Yuxi Kunshasi Plastic
Xiaoming Vice Chairman No
Masterbatch Co., Ltd.
Lee May 1, 1996 March 3, 2023
Shanghai Ruiji New
Li Xiaohua Material Technology Co., Chairman No
Ltd. January 20, 2020 April 25, 2024
Yuxi Kunshasi Plastic Director and General
Li Xiaohua No
Masterbatch Co., Ltd. Manager
May 1, 1996 April 25, 2024
Suzhou Jiesheng
Li Xiaohua Executive Director No
Technology Co., Ltd. October 29, 2021 April 25, 2024
Suzhou RS Technology Co.,
Li Xiaohua Chairman No
Ltd. February 24, 2022 April 25, 2024
Jiangsu Jiesheng Intelligent
Li Xiaohua Equipment Technology Co., Executive Director No
Ltd. November 26, 2021 April 25, 2024
Changshu Juxing Machinery Executive Director
Li Xiaohua No
Co., Ltd. and General Manager May 12, 2022 May 30, 2023
Leyard Optoelectronic Co.,
Li Zhe Independent Director Yes
Ltd. January 16, 2023 April 25, 2024
Genertec Kunming Machine
Li Zhe Independent Director Yes
Tool Co., Ltd. October 11, 2023 April 25, 2024
Yuxi Kunshasi Plastic
Zhang Tao Supervisor No
Masterbatch Co., Ltd. October 11, 2021 April 25, 2024
Chengdu Huicheng
Xiang Ming Chairman No
Technology Co., Ltd. July 6, 2011 April 25, 2024
Henan Kelong new energy
Zhai Jun Director No
Co., Ltd. December 13, 2016 April 25, 2024
Zhai Jun HXF SAW Co., Ltd. Director No
October 22, 2012 April 25, 2024
Shanghai Dianda
Zhai Jun Information Technology Director April 27, 2015 April 25, 2024 No
Co., Ltd.
Intelligent Vehicle
Innovation and April 25, 2024
Zhai Jun Director No
Development Platform
(Shanghai) Co., Ltd.
Jingci Material Science Co.,
Zhai Jun Director June 11, 2018 No
Ltd. April 25, 2024
Shanghai Sunshine
Zhang Jing Esailchem Technology Co., Director April 25, 2024 No
Ltd.
50
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Penalties to the current directors, supervisors and senior management of the Company and those leaving office during the Reporting Period by
securities regulatory agencies in the past three years
□Applicable Not applicable
3. Remuneration for Directors, Supervisors, and Senior Management
Decision-making procedures, determination basis and actual payment of remuneration for directors, supervisors, and senior management
1. Decision-making procedure for remunerations of directors, supervisors and senior management: The Remuneration & Evaluation
Committee of the Board of Directors of the Company studies and establishes the evaluation standard, remuneration policy and plan for the
directors, General Manager and other senior management members of the Company, the Board of Directors reviews the remunerations for the
senior management, the General Meeting of Shareholders reviews the remunerations of the directors and the supervisors, and the Human
Resources Department and the Finance Department of the Company assist the Remuneration & Evaluation Committee of the Board of Directors to
implement the remuneration plan for the directors and the senior management of the Company.
2. Basis for determining the remunerations of directors, supervisors and senior management: The remunerations for the directors and
supervisors are determined in line with the actual working status of the Company and in combination of the current market situation. The
remunerations of the senior management are determined in line with related provisions of the Company and in combination of the operating
objectives of the Company in 2023 and specific job responsibilities the senior management members of the Company take to complete the annual
operating objectives.
3. Actual payment of remunerations to the directors, supervisors and senior management: The remunerations of the Independent Directors are
paid to personal accounts based on the standard and schedule every quarter. The remunerations of other people are paid based on respective
evaluation result on a monthly basis or at the time specified by the remuneration payment policy.
Remuneration for Directors, supervisors, and senior management during the Reporting Period
Unit: RMB0’000
Whether
Total pre-tax
remuneration was
remunerations
Name Gender Age Tile Service status received from
received from the
related parties of
Company
the Company
Paul Xiaoming
Male 66 Chairman Incumbent 218.4 No
Lee
Li Xiaohua Male 62 Director Incumbent 187.2 No
Yan Ma Female 65 Director Departure 0 No
Alex Cheng Male 66 Director Departure 53 No
Zhai Jun Male 50 Director Incumbent 0 No
Xiang Ming Male 61 Director Incumbent 0 No
Ma Weihua Male 57 Director Incumbent 96.24 No
Feng Jie Male 60 Director Incumbent 32.68 No
Independent
Lu Jiankai Male 46 Departure 2.4 No
Director
Independent
Tang Changjiang Male 54 Departure 2.4 No
Director
Independent
Zheng Haiying Female 61 Departure 2.4 No
Director
Independent
Shou Chunyan Female 53 Departure 2.6 No
Director
Independent
Li Zhe Male 37 Incumbent 0 No
Director
Independent
Pan Siming Male 47 Incumbent 2.6 No
Director
Independent
Zhang Jing Female 63 Incumbent 2.6 No
Director
Zhang Tao Male 47 Supervisor Incumbent 27.25 No
Chen Tao Male 46 Supervisor Departure 6.27 No
Li Bing Male 57 Supervisor Incumbent 36.64 No
Kang Wenting Female 37 Supervisor Incumbent 12.3 No
Yu Xue Female 37 Board Secretary Incumbent 73.64 No
Chief Financial
Li Jian Male 46 Incumbent 97.91 No
Officer
Total - - - - 856.53 -
Other explanation
□Applicable Not applicable
VI. Performance of Directors during the Reporting Period
51
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
1. Meetings of the Board of Directors during the Reporting Period
Date
Meeting Disclosure Date Meeting Resolution
Convened
The meeting considered and adopted the Resolution on No Early Redemption of
The 54th meeting of "Energy Convertible Corporate Bonds", the Resolution on Anticipated Daily
January 30, January 31,
the 4th Board of Connected Transactions in 2023, the Resolution on the Establishment of a Special
2023 2023
Directors Account for Raised Funds and Authorization of Entering into a Supervisory
Agreement for Raised Funds, and the Resolution on Changes in Accounting Policies
The meeting considered and adopted the Resolution on the Work Report of the
Board of Directors for 2022, the Resolution on the Company's 2022 General
Manager Work Report, the Resolution on the Company's 2022 Annual Financial
Settlement Report, the Resolution on 2022 Profit Distribution Plan, the Resolution
on the Company's Internal Control Evaluation Report for 2022, the Resolution on
the Company's Self-check List for the Implementation of Internal Control Rules for
2022, the Resolution on the Company's Annual Report for 2022 and its Abstract, the
Resolution on the Company's 2022 Annual Environmental, Social and Governance
Report (ESG Report), the Resolution on Renewing the Employment of Dahua CPAs
(SGP) as the Company's Financial Auditor and Internal Control Auditor in 2023, the
Resolution on the Deposition and Use of Raised Funds of the Company in 2022, the
Resolution on Directors' Remuneration of the Company for 2022, the Resolution on
the Remuneration of the Senior Management the Company for 2022, the Resolution
The 55th meeting of
March 2, on Applying for the General Credit Limit in Banks in 2023, the Resolution on the
the 4th Board of March 3, 2023
2023 Amount of Guarantee Within the Scope of the Company's Consolidated Statements
Directors
in 2023, the Resolution on Anticipated Deposit, Loan and Guarantee Business in
Associated Banks in 2023, the Resolution on Using Some of the Idle Self-owned
Funds to Purchase Investment Quotas of Financial Products in Banks, the Resolution
on Providing Financial Assistance to Subsidiaries of the Holding Company and their
Subsidiaries, the Resolution on Developing Foreign Exchange Derivatives Trading
Business, the Resolution on the Conduct of Foreign Exchange Derivatives
Transactions in 2023, the Resolution on the Election of the Company's Board of
Directors and the Candidates for the Non-Independent Directors of the 5th Board of
Directors, the Resolution on the Election of the Company's Board of Directors and
the Nomination of the Candidates for the Independent Directors of the 5th Board of
Directors, the Resolution on the Establishment of Specialized Committees of the
Company's 5th Board of Directors and the Resolution on Convening the Company's
2022 Annual General Meeting of Shareholders
The meeting considered and adopted the Resolution on the Election of the
The 1st meeting of the
April 6, 2023 April 7, 2023 Company's Chairman and Vice Chairman and the Resolution on the Re-appointment
5th Board of Directors
of the Company's General Manager, Deputy General Manager and Board Secretary
The meeting considered and adopted the Resolution on Extending the Validity
Period of the Resolution of the General Meeting of Shareholders on the Company's
Non-public Offering of Shares, the Resolution on Requesting the General Meeting
The 2nd meeting of
April 21, of Shareholders to Extend the Validity Period of the Authorization for the Board of
the 5th Board of April 22, 2024
2023 Directors to Handle Matters Relating to the Company's Non-public Offering, and the
Directors
Resolution on the Convening of the First Extraordinary General Meeting of
Shareholders of the Company in 2023
The 3rd meeting of the April 26, The meeting considered and adopted the Resolution regarding the Company's First
April 27, 2023
5th Board of Directors 2023 Quarterly Report in 2023
The 4th meeting of the The meeting considered and adopted the Resolution on the Repurchase of the
May 4, 2023 May 5, 2023
5th Board of Directors Company's Shares
The 5th meeting of the The meeting considered and adopted the Resolution on Adjustment of the Scale of
May 14, 2023 May 15, 2023
5th Board of Directors Funds Raised from the Company's Non-public Offering of A Shares
The meeting considered and adopted the Resolution on Replacement of
Preliminarily Invested Self-collected Funds with the Proceeds from the Non-public
The 6th meeting of the Offering of A Shares in 2021, the Resolution on the Payment of Funds for Fund
June 13, 2023 June 14, 2023
5th Board of Directors Raising Projects Using Bank Acceptance and Replacement of the Same Amount
with Raised Funds, and the Resolution on the Use of Part of the Idle Fund Raised for
Cash Management
The meeting considered and adopted the Resolution on Adjustment of the Exercise
Price of Stock Options and Cancellation of Certain Stock Options under the 2022
Stock Option and Restricted Stock Incentive Plan, the Resolution on Compliance
with the Exercise Conditions during the First Exercise Period of the Company's 2022
Stock Options and Restricted Stock Incentive Plan, and the Resolution on
The 7th meeting of the Repurchase and Cancellation of Certain Restricted Shares under the 2022 Stock
June 25, 2023 June 26, 2023
5th Board of Directors Option and Restricted Stock Incentive Plan, the Resolution on Compliance with the
Conditions for Release of Restricted Shares during the First Release Period of
Restricted Shares under the Company's 2022 Stock Option and Restricted Share
Incentive Plan, the Resolution on Changing the Registered Capital and Amending
the Articles of Association and Registering the Changes in Industry and Commerce,
and the Resolution on Convening the Second Extraordinary General Meeting of
52
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Shareholders of the Company in 2023
The meeting considered and adopted the Resolution on the Addition of Candidates
for the Board of Directors, the Resolution on No Early Redemption of "Energy
The 8th meeting of the
July 21, 2023 July 22, 2023 Convertible Corporate Bonds", the Resolution on the Proposed Distribution of Profit
5th Board of Directors
in 2022, the Resolution on the Convening of the 3rd Extraordinary General Meeting
of Shareholders of the Company in 2023
The meeting considered and adopted the Resolution on Changing the Registered
The 9th meeting of the August 18, August 19,
Capital and Amending the Articles of Association and Registering the Changes in
5th Board of Directors 2023 2023
Industry and Commerce
The meeting considered and adopted the Resolution on the Company's Semi-annual
Report for 2023 and its Summary, the Resolution on the Deposit and Utilization of
The 10th meeting of
August 23, August 24, the Company's Fund Raised in the Semi-annual Period in 2023, the Resolution on
the 5th Board of
2023 2023 the Proposed Distribution of Interim Profit in 2023, and the Resolution on the
Directors
Convening of the 4th Extraordinary General Meeting of Shareholders in 2023
The meeting considered and adopted the Resolution on Changing the Registered
The 11th meeting of
September September 19, Capital and Amending the Articles of Association and Registering the Changes in
the 5th Board of
18, 2023 2023 Industry and Commerce, and the Resolution on the Convening of the 5th
Directors
Extraordinary General Meeting of Shareholders in 2023
The meeting considered and adopted the Resolution on Changing the Registered
The 12th meeting of
September September 22, Capital and Amending the Articles of Association and Registering the Changes in
the 5th Board of
21, 2023 2023 Industry and Commerce and the Resolution on the Convening of the 6th
Directors
Extraordinary General Meeting of Shareholders in 2023
The meeting considered and adopted the Resolution on the Purchase of Minority
The 13th meeting of Shareholders' Equity Interests in a Controlling Subsidiary and Connected
September September 29,
the 5th Board of Transaction, the Resolution on the Repurchase of the Company's Shares, and the
28, 2023 2023
Directors Resolution on the Convening of the 7th Extraordinary General Meeting of
Shareholders in 2023
The 14th meeting of The meeting considered and adopted the Resolution on the Termination of the
October 29, October 30,
the 5th Board of Purchase of the Minority Shareholders' Equity Interests in a Controlling Subsidiary
2023 2023
Directors and Connected Transaction
The 15th meeting of
October 30, October 31, The meeting considered and adopted the Resolution on the Company's Third
the 5th Board of
2023 2023 Quarterly Report in 2023
Directors
The meeting considered and adopted the Resolution on Amending the Articles of
Association of the Company and Certain Systems, the Resolution on Amending the
Articles of Association of the Company, the Resolution on Amending the Rules of
Procedure of the General Meeting of Shareholders, the Resolution on Amending the
Rules of Procedure of the Board of Directors, the Resolution on Amending the Rules
of Procedure of the Supervisory Committee, the Resolution on Amending the Rules
of Procedure of the Independent Directors, the Resolution on Amending the
The 16th meeting of
December 13, December 14, Working Rules for the Annual Report of the Independent Directors, the Resolution
the 5th Board of
2023 2023 on Amending the Rules of Procedure of the Audit Committee, the Resolution on
Directors
Amending the Rules of Procedure of the Remuneration and Appraisal Committee,
the Resolution on Amending the Rules of Procedure of the Strategy Committee, the
Resolution on Amending the Rules of Procedure of the Nomination Committee, the
Resolution on the By-election of Independent Directors, the Resolution on Adjusting
the Members of Certain Specialized Committees of the Board of Directors of the
Company, and the Resolution on Convening the 8th Extraordinary General Meeting
of Shareholders in 2023
2. Details of directors’ attendance at board meetings and shareholders’ general meetings
Details of directors’ attendance at board meetings and shareholders’ general meetings
Meetings Whether non-
Attendance by Attendance in
required to Attendance in Entrusted attendance in
way of Absence shareholders’
Name of director attend during person presence person for two
telecommunicat (times) general
the Reporting (times) (times) consecutive
ion (times) meeting
Period (times) times or not
Paul Xiaoming Lee 18 15 3 0 0 No 9
Li Xiaohua 18 18 0 0 0 No 9
Yan Ma 9 0 9 0 0 No 3
Alex Cheng 9 0 9 0 0 No 3
Zhai Jun 8 0 8 0 0 No 6
Xiang Ming 8 0 8 0 0 No 6
Ma Weihua 18 18 0 0 0 No 9
Feng Jie 18 0 18 0 0 No 9
Lu Jiankai 2 0 2 0 0 No 1
53
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Tang Changjiang 2 0 2 0 0 No 1
Zheng Haiying 2 0 2 0 0 No 1
Shou Chunyan 16 0 16 0 0 No 8
Li Zhe 0 0 0 0 0 No 0
Pan Siming 16 0 16 0 0 No 8
Zhang Jing 16 0 16 0 0 No 8
Explanations for non-attendance in person for two consecutive times
3. Details on directors’ objection to relevant matters
Whether Directors object to relevant matters of the Company
□Yes No
During the Reporting Period, no Directors objected to relevant matters of the Company.
4. Other details about the performance of directors
Whether advice to the Company from Directors adopted
Yes □No
Explanation on advice to the Company from Directors being adopted or not adopted
During the Reporting Period, directors of the Company were diligent, conscientious, honest and self-disciplined, and faithfully performed the
responsibilities as directors. The directors carefully listened to the report of the Company’s relevant principals on project construction,
development strategy, profit distribution plan, effectiveness of internal control, appointment of financial audit institutions, etc., and actively
expressed opinions on the Board of Directors. The independent directors issued independent, fair and objective opinions and prior
acknowledgement on issues of the Company during the Reporting year that need independent directors’ opinions, actively and effectively
performed the responsibilities of independent directors, improved the Company’s supervision mechanism, and safeguarded the legitimate rights
and interests of the Company and minority shareholders.
54
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
VII. Details on Specialized Committees under the Board of Directors during the Reporting Period
Other Duty Details on
Number of Date Important Opinions and
Committee Name Members Meeting Content Performance Objection to
Meetings Held Convened Suggestions Proposed
Information Matters (If any)
Strategy
Mr. PAUL XIAOMING The meeting considered the Resolution on
Committee of the
LEE, Mr. Li Xiaohua, Mr. 4 Extending the Validity Period of the Resolution of
5th Board of April 20, 2023 Unanimously adopted Nil Nil
Feng Jie, Ms. Shou the General Meeting of Shareholders on the
Directors
Chunyan, Mr. Pan Siming Company's Non-Public Offering of Shares
Strategy
Mr. PAUL XIAOMING
Committee of the Resolution on Adjustment of the Scale of Funds
LEE, Mr. Li Xiaohua, Mr. 4
5th Board of May 13, 2023 Raised from the Company's Non-public Offering of Unanimously adopted Nil Nil
Feng Jie, Ms. Shou
Directors A Shares
Chunyan, Mr. Pan Siming
Strategy
Mr. PAUL XIAOMING The meeting considered the Resolution on the
Committee of the
LEE, Mr. Li Xiaohua, Mr. 4 September 27, Purchase of Minority Shareholders' Equity Interests
5th Board of Unanimously adopted Nil Nil
Feng Jie, Ms. Shou 2023 in a Controlling Subsidiary and Connected
Directors
Chunyan, Mr. Pan Siming Transaction
Strategy
Mr. PAUL XIAOMING The meeting considered the Resolution on the
Committee of the
LEE, Mr. Li Xiaohua, Mr. 4 October 28, Termination of the Purchase of the Minority
5th Board of Unanimously adopted Nil Nil
Feng Jie, Ms. Shou 2023 Shareholders' Equity Interests in a Controlling
Directors
Chunyan, Mr. Pan Siming Subsidiary and Connected Transaction
Audit Committee
Lu Jiankai, Zheng Haiying, January 29, The meeting considered the Resolution on Changes
of the 4th Board 2 Unanimously adopted Nil Nil
Li Xiaohua 2023 of Accounting Policies
of Directors
The meeting considered the Resolution on the
Audit Committee Company's Audit Report for 2022 and the
Lu Jiankai, Zheng Haiying,
of the 4th Board 2 March 1, 2023 Resolution on Renewing the Employment of Dahua Unanimously adopted Nil Nil
Li Xiaohua
of Directors CPAs (SGP) as the Company's Financial Auditor
and Internal Control Auditor in 2023
Ms. Shou Chunyan, Mr.
Audit Committee
Li Xiaohua, Mr. Pan
of the 5th Board The meeting considered the Resolution on the
Siming 5 April 25, 2023 Unanimously adopted Nil Nil
of Directors Company's First Quarterly Report in 2023
Ms. Shou Chunyan, Mr.
Audit Committee
Li Xiaohua, Mr. Pan The meeting considered the Resolution on the
of the 5th Board August 22,
Siming 5 Company's Semi-annual Report for 2023 and its Unanimously adopted Nil Nil
of Directors 2023
Summary
Audit Committee Ms. Shou Chunyan, Mr. September 27, The meeting considered the Resolution on the
5 Unanimously adopted Nil Nil
of the 5th Board Li Xiaohua, Mr. Pan 2023 Purchase of Minority Shareholders' Equity Interests
55
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
of Directors Siming in a Controlling Subsidiary and Connected
Transaction
Audit Committee Ms. Shou Chunyan, Mr. Li The meeting considered the Resolution on the
of the 5th Board Xiaohua, Mr. Pan Siming October 28, Termination of the Purchase of the Minority
5 Unanimously adopted Nil Nil
of Directors 2023 Shareholders' Equity Interests in a Controlling
Subsidiary and Connected Transaction
Ms. Shou Chunyan, Mr.
Audit Committee
Li Xiaohua, Mr. Pan
of the 5th Board October 29, The meeting considered the Resolution on the
Siming 5 Unanimously adopted Nil Nil
of Directors 2023 Company's Third Quarterly Report in 2023
Remuneration and
The meeting considered the Resolution on
Appraisal Mr. PAUL XIAOMING
March 21, Directors' Remuneration for 2022 and the
Committee of the LEE, Ms. Zheng Haiying, 1 Unanimously adopted Nil Nil
2023 Resolution on the Remuneration of the Senior
4th Board of Mr. Tang Changjiang
Management the Company for 2022
Directors
The meeting considered the Resolution on
Compliance with the Exercise Conditions during
Remuneration and the First Exercise Period of the Company's 2022
Appraisal Mr. PAUL XIAOMING Stock Options and Restricted Stock Incentive Plan
Committee of the LEE, Ms. Shou Chunyan, 1 June 24, 2023 and the Resolution on Compliance with the Unanimously adopted Nil Nil
5th Board of Ms. Zhang Jing Conditions for Release of Restricted Shares during
Directors the First Release Period of Restricted Shares under
the Company's 2022 Stock Option and Restricted
Share Incentive Plan
The meeting considered the Resolution on the
Election of the Company's Board of Directors and
the Candidates for the Non-Independent Directors
Nomination
of the 5th Board of Directors, the Resolution on the
Committee of the Mr. Tang Changjiang, Mr.
1 March 1, 2023 Election of the Company's Board of Directors and Unanimously adopted Nil Nil
4th Board of Lu Jiankai, Mr. Feng Jie
the Candidates for the Independent Directors of the
Directors
5th Board of Directors, and the Resolution on the
Establishment of Specialized Committees of the
Company's 5th Board of Directors
Nomination The meeting considered the Resolution on the
Committee of the Mr. Pan Siming, Ms. Election of the Company's Chairman and Vice
5th Board of Zhang Jing, Mr. Feng Jie 3 April 5, 2023 Chairman and the Resolution on the Re- Unanimously adopted Nil Nil
Directors appointment of the Company's General Manager,
Deputy General Manager and Board Secretary
Nomination
Committee of the Mr. Pan Siming, Ms.
The meeting considered the Resolution on the
5th Board of Zhang Jing, Mr. Feng Jie 3 July 20, 2023 Unanimously adopted Nil Nil
Addition of Candidates for the Board of Directors
Directors
Nomination Mr. Pan Siming, Ms. 3 December 11, The meeting considered the Resolution on the By- Unanimously adopted Nil Nil
56
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Committee of the Zhang Jing, Mr. Feng Jie 2023 election of Independent Directors
5th Board of
Directors
57
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
VIII. Details on the Work of the Supervisory Committee
Whether there any risks in the Company according to the supervision of the Supervisory Committee during the Reporting Period
□Yes No
The Supervisory Committee raised no objection to matters under supervision during the Reporting Period.
IX. Employees of the Company
1. Number of employees, composition by profession, and educational level
Incumbent staff of parent company at the end of the Reporting Period
12
(person)
Incumbent staff of major subsidiary at the end of the Reporting Period
7,820
(person)
Total incumbent staff at the end of the Reporting Period (person) 9,333
Total staff receiving remunerations in current period (person) 13, 101
Number of retirees whose expenses shall be borne by the parent
0
company and major subsidiaries (person)
Composition by profession
Category of profession Number of profession (person)
Production staff 7,745
Sales people 103
Technician 507
Financial staff 75
Administrative staff 903
Total 9,333
Educational level
Category of educational level Number (person)
Doctor’s degree and above 23
Master’s degree 162
Bachelor’s degree 955
Junior college 2,035
Technical secondary school and below 6,158
Total 9,333
2. Remuneration policy
During the Reporting Period, the Company observed the principles of distribution based on labor, efficiency priority combining fairness and
sustainable development, and on this basis, the Company made detailed policies in respect of staff’s remuneration, fringe benefit, performance
evaluation and other aspects. The Company built a new salary architecture featuring a wide range and “hierarchical ladder”, and implemented the
two-level salary distribution mechanism. At the same time, the Company has linked the salary and bonus to the working time at the Company,
output, cost, fixed staff of every position, equipment maintenance and other factors, and established a reasonable evaluation mechanism. The
Company has taken multifaceted measures, including diversification of internal remuneration structure, to motivate employees and attract high-
quality human resources. These measures have helped the Company improve the overall performance, realized a sustainable development of the
Company and made the Company more competitive in the market. The Company has actively explored and continuously deepened the income
distribution system. In future, the Company will make a moderate adjustment to the remuneration system based on its performance, market
situation and industry trend.
3. Training plan
During the Reporting Period, the Company kept taking in excellent talents, actively strengthened internal personnel training, established a sound
training system and enhanced the professional development ability of employees. The Company has recorded a total of 7,295 training events,
including 7,171 internal training session and 124 external training sessions, and recorded a total of 129,800 class hours. These trainings have
benefited a total of 165,600 people. These trainings cover new employee training, job skill training, risk management training, quality and safety
management training, food safety training, product knowledge training, anti-fraud training, general management training, certification training,
safety training and reserve talent training.
4. Labor outsourcing
□Applicable Not applicable
X. Profit Distribution and Conversion of Capital Reserve into Share Capital
Formulation, execution or adjustments of profit distribution policy, especially cash dividend policy, during the Reporting Period
Applicable □Not applicable
(I) According to the Articles of Association, the Company’s profit distribution policy is as follows:
1. The Company’s profit distribution policy shall focus on the reasonable investment return to investors, take into account the sustainable
58
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
development of the Company, reflect the strong awareness of rewarding shareholders, and maintain continuity and stability.
2. Form of profit distribution, proportion of cash dividends: The Company pays dividends in cash or by shares in a positive manner. Where the
Company’s audited net profit is positive with no significant investment plan or significant cash expenditure in a year, the Company shall include
the cash distribution in its profit distribution scheme for that year. The annual cash dividend of the Company shall not be less than 20% of the
distributable profit realized in the current year (excluding the undistributed profit at the beginning of the year). Where available, the Company may
distribute interim cash dividends. If the Company’s revenue grows rapidly and the Board of Directors considers that the stock price of the
Company does not match the size of the Company’s share capital, it may make a Plan for dividend distribution by stock while satisfying the above
requirement for cash dividend distribution.
3. Interval for profit distribution: subject to the satisfaction of the cash dividend conditions stipulated in paragraph 4 below, the Company shall,
in principle, pay cash dividends once a year, and the Board of Directors of the Company may propose interim cash dividends based on the profit
status and capital demands of the Company. The Board of Directors of the Company shall, taking into account the characteristics of the industry in
which it operates, its development stage, its own business model, its profitability level, and any plan of its significant capital expenditure,
distinguish the following circumstances and propose a differentiated cash dividend policy in accordance with the procedures set forth in the
Articles of Association of the Company:
(1) If the Company is in a maturity stage and has no plan of significant expenditure, the proportion of cash dividends in the overall profit
distribution shall account for at least 80%;
(2) If the Company is in a maturity stage and has any plan of significant expenditure, the proportion of cash dividends in the overall profit
distribution shall account for at least 40%;
(3) If the Company is in a growth stage and has any plan of significant expenditure, the proportion of cash dividends in the overall profit
distribution shall account for at least 20%;
4. Conditions for distributing cash dividends
(1) The remaining distributable profit of the Company is positive after the profit achieved in the current year is used for making up for the losses
of previous years and making provision for surplus reserves.
(2) The auditor of the Company issues a standard unqualified audit report on the financial statements of the Company in the current year.
(3) The Company has no significant investment plans or significant cash expenditure.
Significant investment plan or significant cash expenditure means that the accumulative expenditure of the Company for the proposed external
investment, assets acquisition or equipment purchase within the next twelve months reaches or exceeds 30% of the Company’s latest audited net
assets and exceeds RMB300 million.
5. Conditions for distributing stock dividends: where the Company is well-run, with rapid growth of operating revenue and net profit, and the
Board of Directors believes that the Company is in the growth stage, the level of the Company’s net assets is high and the stock price does not
match the size of the share capital, it may propose a Plan for stock dividend distribution, subject to the consideration and approval at the general
meeting of shareholders of the Company. Stock dividend may be distributed separately or in conjunction with cash dividend.
(II) During the Reporting Period, the implementation of the equity distribution in 2022 and the 2023 semi-annual equity distribution by the
Company was in compliance with the relevant provisions of the Articles of Association of the Company, with due consideration given to the
reasonable demands from investors at large, while protecting the lawful rights and interests of small and medium-sized investors. On July 21, 2023,
the Company convened the 8th Meeting of the 5th Board of Directors to consider and approve the Resolution on the Proposed Distribution of
Profit in 2022, the Independent Directors expressed their concurring independent opinions on such resolution, which was implemented after being
considered and approved at the 3rd Extraordinary General Meeting of Shareholders in 2023 convened by the Company on August 7, 2023. For
details, please refer to the Announcement on the Resolution on the Proposed Distribution of Profit in 2022 (Announcement No. 2023-130) and the
Announcement on the Implementation of Equity Distribution for 2022 (Announcement No. 2023-141) published by the Company on
www.cninfo.com.cn. On August 23, 2023, the Company convened the 10th Meeting of the 5th Board of Directors to consider and approve the
Resolution on the Proposed Distribution of Interim Profit in 2023, the Independent Directors expressed their concurring independent opinions on
such resolution, which was implemented after being considered and approved at the 4th Extraordinary General Meeting of Shareholders in 2023
convened by the Company on September 11, 2023. For details, please refer to the Announcement on the Resolution on the Proposed Distribution of
Interim Profit in 2023 (Announcement No. 2023-150) and the Announcement on the Implementation of Semi- annual Equity Distribution for 2023
(Announcement No. 2023-166) published by the Company on www.cninfo.com.cn.
Special explanation on cash dividend distribution policy
Whether or not the policy is in compliance with the provisions of the Articles of
Association or requirements of the resolutions of the general meeting of shareholders of the Yes
Company:
Whether or not the standard and proportion of dividends are clear and defined: Yes
Whether or not the relevant decision-making process and mechanism are complete: Yes
Whether or not the Independent Directors fully perform their duties and play their roles: Yes
In case of not conducting cash dividend distribution, the Company shall disclose the
Not applicable
specific reasons and the next steps to be adopted to enhance investor return level:
Whether or not minority shareholders have the opportunity to voice their opinions and
Yes
demands, and whether or not their legitimate rights and interests are fully protected:
If the cash dividend policy is adjusted or amended, whether or not the conditions and
Yes
procedures are compliant and transparent:
The Company made a profit during the Reporting Period and the profit distributable to the shareholders of the parent Company was positive, but it
did not put forward a plan for cash dividend distribution to shareholders
□Applicable Not applicable
Profit distribution and conversion of capital reserve to share capital during the Reporting Period
Applicable □Not applicable
59
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Number of bonus shares per 10 shares (shares) 0
Dividend per 10 shares (RMB) (including tax) 15.51
Equity base for distribution proposal (shares) 967,343,387
Cash dividend amount (RMB) (including tax) 1,500,000,000.00
Amount of cash dividends in other means (e.g., share repurchase) (RMB) 549,976,686.75
Total cash dividends (including other means) (RMB) 2,049,976,686.75
Distributable profit (RMB) 1,667,202,765.19
Total cash dividends (including other means) as a percentage of total profit distribution 73.17%
Cash dividend for the period
In case of the Company entering into development stage with arrangement of significant capital expenditure, the minimum percentage of cash
dividend in the profit distribution for the period shall reach 20%
The breakdown of the proposed Profit Distribution or Conversion of Capital Reserve to Share Capital
Based on the 967,342,327 shares calculated by the total share capital as of April 11, 2024 deducting 10,412,256 shares in the designated securities
account for repurchase, cash dividend of RMB15.51 (inclusive of tax) per 10 shares, with a total cash dividend of RMB1,500,000,000.00, will be
paid to all shareholders without bonus shares. No capital reserve will be converted to share capital.
In accordance with the relevant provisions of the Guidelines on the Self-Regulation of Listed Companies of Shenzhen Stock Exchange No. 1 --
Share Repurchase, the amount of share repurchases implemented by the Company in 2023 amounting to RMB549,976,686.75 (excluding
commissions, transfer fees and other transaction costs) was deemed to be the amount of cash dividends.
If the total amount of the Company's share capital entitled to profit distribution changes during the period from April 11, 2024 to the
implementation of the distribution plan as a result of the listing of new shares, exercise of options under the share incentive, conversion of
convertible bonds, share repurchase, etc., the distribution ratio will be adjusted accordingly on the basis of no change in the total distribution.
XI. Implementation of any Equity Incentive Plan, Employee Stock Ownership Scheme or Other
Incentive Measures for Employees
Applicable □Not applicable
1. Equity Incentive
The Company held the 41st meeting of the 4th Board of Directors and the 2nd Extraordinary General Meeting of Shareholders of 2022 on January
24, 2022 and February 14, 2022, respectively, to approve the implementation of the 2022 Stock Option and Restricted Stock Incentive Plan of the
Company. On March 14, 2022, the Company completed the registration of granting of 1,585,437 options to 877 incentive objects. On May 23,
2022, the Company completed the registration of granting of 1,585,437 restricted shares to 826 incentive objects. The implementation of the 2022
Stock Option and Restricted Share Incentive Plan during the Reporting Period was as follows:
On June 25, 2023, the 7th meeting of the 5th Board of Directors and 7th meeting of the 5th Board of Supervisors considered and adopted the
Resolution on Adjustment of the Exercise Price of Stock Options under the 2022 Stock Option and Restricted Stock Incentive Plan and
Cancellation of Partial Stock Options, the Resolution on Compliance with the Exercise Conditions during the First Exercise Period of Stock
Options under the 2022 Stock Options and Restricted Stock Incentive Plan of the Company, the Resolution on the Repurchase and Cancellation of
Partial Restricted Stocks under the 2022 Stock Option and Restricted Stock Incentive Plan, the Resolution on the Compliance with the Conditions
for Release of Restricted Shares during the First Release Period of Restricted Shares under the 2022 Stock Option and Restricted Share Incentive
Plan of the Company; at which it agreed that the Company would release the 1,496,807 restricted shares held by 765 incentive objects; and agreed
that the 1, 461,960 stock options held by 794 incentive objects of the Company to enter into the first exercise period; agreed that the Company
should repurchase and cancel 88,630 restricted shares granted to 68 incentive objects who had not met the conditions for the release of restricted
shares; and agreed that the Company should cancel 123,477 stock options held by 90 incentive objects who had not met the conditions for the
exercise of stock options, which had been granted but not yet approved for the exercise of stock options. The independent directors of the
Company expressed concurring independent opinions on the relevant matters. For details, please refer to the Announcement on Adjustment of the
Exercise Price of Stock Options under the 2022 Stock Option and Restricted Stock Incentive Plan and Cancellation of Partial Stock Options
(Announcement No. 2023-102),the Announcement on the Compliance with the Exercise Conditions during the First Exercise Period of Stock
Options under the 2022 Stock Options and Restricted Stock Incentive Plan of the Company (Announcement No.: 2023-103), and the
Announcement on the Repurchase and Cancellation of Partial Restricted Stocks under the 2022 Stock Option and Restricted Stock Incentive Plan
(Announcement No.: No. 2023-104) and the Announcement on Compliance with the Conditions for Release of Restricted Shares during the First
Release Period of Restricted Shares under the 2022 Stock Option and Restricted Share Incentive Plan of the Company (Announcement No.: No.
2023-105) disclosed by the Company in the designated information disclosure media on June 26, 2023.
(2) On July 3, 2023, the Company completed the procedures for the cancellation of 123,477 stock options held by the aforesaid 90 incentive
objects who had not met the conditions for the exercise of stock options. For details, please refer to the Company's Announcement on the
Completion of the Cancellation of Partial Stock Options under the 2022 Stock Option and Restricted Stock Incentive Plan of the Company ''
(Announcement No. 2023-116) disclosed by the Company in the designated information disclosure media on July 4, 2022.
(3) On July 11, 2023, the aforesaid matters relating to the repurchase and cancellation of 88,630 restricted shares granted to 68 incentive objects
were considered and approved by the Second Extraordinary General Meeting of Shareholders of 2023 of the Company, and the relevant procedures
for the repurchase and cancellation of restricted shares were completed on July 19, 2023. For details, please refer to the Company’s Announcement
on the Completion of Repurchase and Cancellation of Partial Restricted Shares under the 2022 Share Option and Restricted Share Incentive Plan
(Announcement No. 2023-123) disclosed by the Company in the designated information disclosure media on July 20, 2022.
The Company did not implement any new share incentive plan during the Reporting Period.
60
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Equity incentives granted to the Company's Directors and senior management
Applicable □Not applicable
Unit: share
The The
The
The number of The The The The market The number of The grant
The exercise price number of
number of newly number of number of number of price at the number of newly price of The number
of the number of restricted
stock granted exercisable exercised stock end of the unlocked granted restricted of restricted
options exercised shares held
Name Post options stock options options options Reporting shares restricted shares shares held at
during the at the
held at the options during the during the held at the Period during the shares (RMB the end of the
Reporting Period beginning
beginning during the Reporting Reporting end of the (RMB per current during the per period
(RMB per share) of the
of the year Reporting Period Period period share) period Reporting share)
period
Period Period
Board
Yu Xue 40,000 0 16,000 0 40,000 70,825 10,000 0 0 60,825
Secretary
Total -- 40,000 0 16,000 0 -- 40,000 -- 70,825 10,000 0 -- 60,825
The 30,825 restricted shares held by Yu Xue as at the beginning of the period are executive locked-up shares, and the 36,825 executive locked-up shares are included in the restricted shares
Remarks (if any)
held by Yu Xue at the end of the period.
Evaluation mechanism and incentive of senior management
The Company has established a complete performance evaluation system, and the income of senior management is linked to the overall operating performance. During the Reporting Period, the Board of Directors of
the Company evaluated the work performance of senior management according to the annual operating performance of the Company, the job responsibilities of senior management and the completion of annual work
objectives, and prepared incentive compensation plans for senior management according to the evaluation results. Such plans were submitted for review in accordance with regulations. The Company encouraged
senior management with the equity incentive plan. The Company formulated implementation check-up management measures for all of the Company’s equity incentive plans. The Company's check-up indicators are
related to the Company's medium and long-term development strategies and annual business objectives. According to the relevant check-up methods, the Company conducted individual level performance assessment
on the incentive objects according to the key work performance, work ability, work attitude and other indicators, and finally determined the number of restricted shares or options that should be unlocked by the
incentive objects based on the Company level and individual level assessment results.
2. Implementation of Employee Stock Ownership Plan
□Applicable Not applicable
3. Other Employee Incentives
□Applicable Not applicable
XII. Internal Control System Construction and Implementation during the Reporting Period
1. Internal control construction and implementation
During the Reporting Period, the Company, in accordance with the Basic Norms for Enterprises’ Internal Control and related guidelines, updated and perfected its internal control system in due time, and established
an internal control system featuring scientific design, simplicity, applicability, and effective running. The Audit Committee of the Board of Directors and internal audit department jointly formed the Company’s risk
management and internal control organization system to supervise and evaluate the internal control management of the Company. Through the operation, analysis and evaluation of the internal control system, the
Company effectively prevented risks in operational management and promoted the realization of internal control objectives.
2. Details on material weakness in the Company’s internal control during the Reporting Period
□Yes No
61
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
62
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
XIII. Company’s Management and Control of Subsidiaries during the Reporting Period
According to the Company Law, Articles of Association and other relevant laws, regulations and rules, the Company will continue to manage and
supervise the standardized operation, information disclosure, financial capital, operation and other matters of its subsidiaries, and timely track the
financial status of its subsidiaries and other important matters, in order to ensure the legal compliance of operation and management, asset safety,
and the accuracy and completeness of the financial reports and related information, and further improve the operation and management and risk
management capabilities of subsidiaries.
XIV. Internal Control Assessment Report or Internal Control Audit Report
1. Assessment report on internal control
Disclosure date of the assessment report on
April 25, 2024
internal control
Disclosure index of the assessment report on 2023 Assessment Report on Internal Control disclosed on http://www.cninfo.com.cn/ on April
internal control 25, 2024
Ratio of total assets of the unit included in the
assessment scope to the total assets on the 100.00%
Company’s consolidated financial statements
Ratio of operating revenue of the unit
included in the assessment scope to the
100.00%
operating revenue on the Company’s
consolidated financial statements
Defect identification criteria
Type Financial report Non-financial report
General defects: There is little possibility that General defects: There is little possibility that
a failure to take any action will result in a failure to take any action will result in
potential misstatement, economic loss or potential misstatement, economic loss or
unachieved business objectives. Material unachieved business objectives. Material
defects: There is some possibility that a failure defects: There is some possibility that a failure
Qualitative criteria to take any action will result in potential to take any action will result in potential
misstatement, economic loss or unachieved misstatement, economic loss or unachieved
business objectives. Major defects: There is business objectives. Major defects: There is
the possibility that a failure to take any action the possibility that a failure to take any action
will result in potential misstatement, economic will result in potential misstatement, economic
loss or unachieved business objectives. loss or unachieved business objectives.
General defects: < 0.25% of Total Assets, < General defects: < 0.25% of Total Assets, <
0.5% of Operating revenue; material defects: 0.5% of Operating revenue; material defects:
≥ 0.25% of Total Assets and < 1% of Total ≥ 0.25% of Total Assets and <1% of Total
Quantitative criteria Assets, ≥ 0.5% of Operating revenue and < Assets, ≥ 0.5% of Operating revenue and <
1.5% of Operating revenue; major defects: ≥ 1.5% of Operating revenue; major defects: ≥
1% of Total Assets, ≥ 1.5% of Operating 1% of Total Assets, ≥ 1.5% of Operating
revenue. revenue.
Number of major defects in the financial
0
report
Number of major defects in the non-financial
0
report
Number of material defects in the financial
0
report
Number of material defects in the non-
0
financial report
2. Audit report on internal control
Applicable □Not applicable
Audit opinion in the audit report on internal control
According to the identification of major defects in the internal control of the Company’s financial report, there were no major defects in the
internal control of the financial report as of the base date of the internal control assessment report. The Board of Directors believed that the
Company maintained effective internal control over financial reporting in all major aspects in accordance with the requirements of the enterprise
internal control standard system and related regulations. According to the identification of major defects in the internal control of the Company’s
non-financial report, there were no major defects in the internal control of the non-financial report as of the base date of the internal control
assessment report. From the base date of the internal control assessment report to the issue date of the internal control assessment report, no factors
affecting the assessment conclusion of the effectiveness of internal control occurred.
Disclosure of the audit report on internal control Disclosed
Disclosure date of the full audit report on internal control April 25, 2024
The Authentication Report on Internal Control of Yunnan Energy New
Disclosure index of the audit report on internal control
Material Co., Ltd. (Da Hua Nei Zi No. [2024] 0011000067) disclosed
63
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
by the Company on http://www.cninfo.com.cn on April 25, 2024
Type of opinion in the audit report on internal control Standard unqualified opinion
Whether there was any major defect in the non-financial report No
Whether the accounting firm issue a qualified audit report on internal control or not
□Yes No
Whether the audit report on internal control issued by the accounting firm consistent with the self-assessment report from the Board of Directors or
not
Yes □No
XV. Rectification of Problems Found in Self-Inspection of the Special Operation on Improving Corporate
Governance of Listed Companies
Not applicable
Section 5 Environment and Social Responsibility
I. Major Environmental Protection Issues
Whether the listed company and its subsidiaries fell into major pollutant-discharge units published by the environmental protection authorities
Yes □No
Environmental protection related policies and industry standards
The Company strictly abides by the Environmental Protection Law of the People’s Republic of China, the Environmental Impact Assessment Law
of the People’s Republic of China, the Water Law of the People’s Republic of China, the Energy Conservation Law of the People’s Republic of
China, the Decision of the State Council on Strengthening Energy Conservation (Guo Fa [2006] No. 28) and other national and local laws and
regulations in its daily production and operation. The Group discharges waste gas, waste water and solid waste in accordance with the Integrated
Emission Standard of Air (DB31/933-2015), the Discharge Standard of Pollutants for Synthetic Resin Industry (GB31572-2015), the Discharge
Limits of Water Pollutants (DB44/26-2001) and the National Catalog of Hazardous Wastes (2021 Edition).
Environmental protection administrative permits
The Company and its subsidiaries have completed the Pollutant Discharge Permit and other relevant environmental protection qualification
procedures in accordance with the relevant laws and regulations.
64
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Industry emission standards and specific conditions of pollutant emissions involved in production and operation activities
Category of the Number Distribution
Name of Name of the Major Concentration Total
Major Pollutants Discharge of of Pollutant Discharge Standards Excess
Company or Pollutants and Specific /intensity of the Total Discharge Discharge
and Specific Method Discharg Discharge Implemented Discharge
Subsidiary Pollutants Discharge Approved
Pollutants e Outlets Outlets
Carrene 12 Plant area 19.7799mg/m 6.15392 49.6345 Nil
Nitrogen oxide 12 Plant area 18.7869mg/m Integrated Emission Standard of Air Pollutants 3.786 5.88 Nil
Wuxi
Sulfur dioxide Organized 12 Plant area 17.2782mg/m DB31033-2015 2.468 3.36 Nil
Energy Exhaust gas
Particulate matter emission 12 Plant area 24.5452mg/m 1.879 2.65672 Nil
Non-methane total Emission Standard of Pollutants for Synthetic
12 Plant area Not monitored / 0.224 Nil
hydrocarbon Resin Industry CB31572-2015
Integrated Emission Standard of Air Pollutants
Carrene 5 Plant area 5.4mg/m 0.30924 15.24208 Nil
DB32/4041-2021
Nitrogen oxide 7 Plant area 27mg/m 2.4408 10.2005 Nil
Organized Emission Standard of Air Pollutants for
Exhaust gas Sulfur dioxide 7 Plant area 3mg/m 1.90008 4.302 Nil
emission Boilers DB32/4385-2022
Particulate matter 7 Plant area 1mg/m 0.5796 3.207 Nil
Non-methane total Emission Standard of Pollutants for Synthetic
12 Plant area 2.14mg/m 0.1494472 8.861888 Nil
hydrocarbon Resin Industry GB31572-2015
DMAC waste liquid / / 258.5 1000 Nil
Suzhou Waste white clay / / 324.36 350 Nil
GreenPower Sludge / / 65.42 150 Nil
Waste slurry / / 40.22 100 Nil
Waste motor oil / Temporary / 0 0.5 Nil
Laboratory waste Handled by
/ storage of / Directory of National Hazardous Wastes (Version 0 0.5 Nil
Solid waste liquid qualified disposal
hazardous 2021)
Waste rag units / / 0 0.3 Nil
waste
Waste empty drums / / 0 0.5 Nil
Waste activated carbon / / 0 200 Nil
Waste activated
/ / 0 10 Nil
carbon fibers
Waste paraffin oil / / 0 50 Nil
Organized Emission Standard of Air Pollutants for
Exhaust gas Nitrogen oxide 20 Plant area 40.28mg/m 3.8662 4.9841 Nil
emission Boilers GB13271-2018
Shanghai
Organized Emission Standard of Air Pollutants for
Energy Exhaust gas Sulfur dioxide 20 Plant area 10mg/m 0.2064 0.2065 Nil
emission Boilers GB13271-2018
Exhaust gas Particulate matter Organized 20 Plant area 3.33mg/m Emission Standard of Air Pollutants for 0.0688 0.0765 Nil
65
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Category of the Number Distribution
Name of Name of the Major Concentration Total
Major Pollutants Discharge of of Pollutant Discharge Standards Excess
Company or Pollutants and Specific /intensity of the Total Discharge Discharge
and Specific Method Discharg Discharge Implemented Discharge
Subsidiary Pollutants Discharge Approved
Pollutants e Outlets Outlets
emission Boilers GB13271-2018
Non-methane total Organized Emission Standard of Pollutants for Synthetic
Exhaust gas 20 Plant area 10.67mg/m 3.528 4.1343 Nil
hydrocarbon emission Resin Industry GB31572-2015
Organized Emission Standard of Pollutants for Synthetic
Wastewater CODcr 1 Plant area 60mg/L 0.484 0.526 Nil
emission Resin Industry GB31572-2015
Ammonia nitrogen Organized Emission Standard of Pollutants for Synthetic
Wastewater 1 Plant area 8.0mg/L 0.0401 0.0416 Nil
(NH3-N) emission Resin Industry GB31572-2015
Organized Emission Standard of Pollutants for Synthetic
Wastewater Total nitrogen 1 Plant area 40mg/L 0.0635 0.07001 Nil
emission Resin Industry GB31572-2015
CODcr 1 Sewage station 74mg/l 0.13482 0.2552 Nil
Organized Discharge Limits of Water Pollutants DB44/26-
Wastewater BOD 1 Sewage station 23.2mg/l 0.04128 / Nil
emission 2001
Petroleum 1 Sewage station 0.59mg/l 0.000762 / Nil
Nitrogen oxide 5 Plant area 20.01mg/m Emission Standard of Air Pollutants for 4.825 35.998 Nil
Sulfur dioxide Organized 5 Plant area 0.4mg/m Boilers（DB44/765-2019） 0.264 1.96 Nil
Zhuhai Exhaust gas
Non-methane total emission Emission Standard of Pollutants for Synthetic
Energy, 14 Plant area 4.5mg/m 12.493 8.79 Nil
hydrocarbon Resin Industry (GB31572-2015)
Temporary
Transferred by
storage of Directory of National Hazardous Wastes (Version
Solid waste Solid waste qualified disposal / 595.632t/a 595.632 / Nil
hazardous 2021)
units
waste
Transferred by Temporary
Chongqing storage of
Solid waste Waste filter qualified disposal / hazardous / / 3 Nil
Energy
units waste
Waste white oil / / / 5162.1 Nil
Directory of National Hazardous Wastes (Version
Waste activated carbon / / / 80.34 Nil
2021)
Waste oil slick / / / 0.3 Nil
Sludge / / / 21 Nil
Waste motor oil / / / 4.5 Nil
Waste white clay / / / 1142.36 Nil
66
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Disposal of Pollutants
The Company strictly complies with the Law of the People’s Republic of China on the Prevention and Control of Atmospheric Pollution, the Law
of the People’s Republic of China on the Prevention and Control of Water Pollution, the Law of the People’s Republic of China on the Prevention
and Control of Environmental Pollution by Solid Waste, and other laws and regulations on the prevention and control of environmental pollution.
We have formulated the Compilation of Environmental and Hazardous Waste Management Policies, the Management Regulations of Solid Waste,
Waste Gas, Waste Water and Noise and other relevant policies. The Safety and Environmental Protection Department of each company conducts
internal supervision, management and feedback on the discharge of exhaust gas, wastewater and waste based on the standards set by local
environmental protection authorities. Meanwhile, we regularly appoint external inspection units and accept external inspections from time to time
to ensure that our emissions meet the relevant standards.
1. Exhaust Gas Emission Management
The Group strictly abides by the Law of the People's Republic of China on the Prevention and Control of Atmospheric Pollution, the Action Plan of
Yunnan Province on the Prevention and Control of Atmospheric Pollution and other national and local laws and regulations on exhaust gas
emission management, and adheres to standards on emissions. The exhaust gas generated by the Group mainly comes from workshop exhaust gas
and boiler exhaust gas, including VOCs (volatile organic compounds) emissions and nitrogen oxide emissions, among which VOCs mainly come
from workshop exhaust gas. The Group has formulated relevant exhaust gas management policies, including the Exhaust Gas Emission
Management Policy, the Exhaust Gas Absorption System Operating Procedures, etc., and strictly implements them. The Group continues to invest
in waste gas recovery and treatment devices to reduce emissions. It has set up treatment facilities such as plasma purifiers, oil smoke purification
devices and two-stage activated carbon adsorption devices in the workshops. Jiangxi Ruijie adopts regenerative thermal oxidizers (“RTO”) to
recover waste heat while treating waste gas. We require that the exhaust gas absorption facilities and exhaust gas treatment systems of each
workshop must operate normally, and we carry out regular repair and maintenance of related equipment. We have set up monitoring instruments in
the workshops, which will alert employees to evacuate once the preset concentration is exceeded. The VOCs exhaust gas online monitoring system
has also been put into operation in certain plants, and will become available in additional areas in the future, so that we will gradually achieve real-
time monitoring of emission concentration. In addition, each base of the Group has dedicated personnel who are responsible for safety and
environmental protection work and regularly conduct on-site supervision and inspection to check whether emissions, such as exhaust gas and
wastewater emissions, are compliant with the relevant standards and regulations. In accordance with the requirements of relevant national laws and
regulations, we have also engaged qualified third parties to conduct regular and ongoing monitoring of various indicators of exhaust emissions.
2. Wastewater Discharge Management
The Company strictly complies with the Law of the People’s Republic of China on the Prevention and Control of Water Pollution, the Work Plan
of Yunnan Province on the Prevention and Control of Water Pollution and other national and local laws and regulations on wastewater discharge
management, and adheres to standards on emissions. The Group has formulated the Wastewater Discharge Management Policy and strictly
implements them. Wastewater discharged by the Group includes production wastewater and domestic wastewater. Production wastewater is treated
by sewage treatment facilities, such as MBR separator, anaerobic pool and grid sedimentation pool, in compliance with the relevant regulations
based on the production practices in each region where we operate, and then reused or discharged into the municipal sewage pipe network. For
domestic sewage, the Company’s plants are all equipped with facilities to treat and regularly monitor domestic sewage. Take Shanghai Energy in
the new energy segment as an example. There is a sewage treatment station in Shanghai Energy, and the wastewater is discharged to the municipal
pipe network after primary precipitation, secondary precipitation, and filtration treatment. We conduct strict and effective internal monitoring on
the compliance of wastewater discharge: firstly, the relevant personnel manually carry out inspections on a daily basis; secondly, we engage a third
party to check and issue reports on a monthly basis; and thirdly, the Group conducts random inspections on a quarterly basis. In the packaging
segment, Chengdu Hongta Plastic has no production wastewater, and its domestic wastewater is discharged to four wastewater pre-treatment tanks
(septic tanks) via sewage pipe network before being discharged to the wastewater treatment plant in the local park via the said network.
Hongchuang Packaging has wastewater treatment equipment, and its domestic wastewater is directly used for watering greenery and plants in the
company after being treated and reaching the prescribed standard.
3. Waste management
67
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
The Company strictly abides by the Law of the People's Republic of China on the Prevention and Control of Solid Waste Pollution, the
Implementation Plan of Yunnan Province on Solid Waste Pollution Control and other national and local laws and regulations on waste
management, and adheres to emission and disposal standards. We have formulated relevant management policies such as the General Solid Waste
Management Policy, the Hazardous Waste Management Policy, the Hazardous Waste Pollution Prevention and Control Responsibility Policy, the
Hazardous Waste Transfer Policy, the Hazardous Waste Storage Facilities Management Policy, and the Solid Waste Management Rules, among
others, and strictly enforce them. During the production and research and development process, the Group generates certain types and a small
number of hazardous wastes and non-hazardous wastes. We classify and collect waste in accordance with regulations, store and classify waste in
separate areas. Among them, all hazardous wastes are handled by qualified third parties after they are taken away from the plants. We carefully
confirm their relevant qualifications when signing contracts with third-party processing agencies and regularly learn about their actual treatment
methods for the Group’s wastes. Hazardous wastes include waste activated carbon, waste ink solvents and waste engine oil as well as heat transfer
oil, laboratory wastes, biochemical pond sludge and other wastes. Waste activated carbon, waste ink solvents, waste engine oil, heat transfer oil
and laboratory wastes are usually stored in separate hazardous waste warehouses and disposed of two to three times a year. Among non-hazardous
wastes, paper and plastic bottles are recycled through the recycling bins set up in the Group, and domestic waste is handled by the sanitation
department.
The Company actively carries out technology innovation to reduce the emissions of hazardous wastes and other harmful wastes. We have
substituted alcohol-based inks for grease-based inks, and intend to further replace such grease-based inks with water-based inks wherever feasible
in the application scenarios. Each plant strictly follows the regulations on garbage sorting and disposal, separates food waste generated in the
canteens from other wastes and dumps such waste individually, and explains garbage sorting on the bulletin boards in the workplaces to help
employees have a clearer understanding of garbage sorting methods.
Contingency plans for environmental emergencies
In order to effectively respond to security risks arising from emergencies, each company has formulated comprehensive and special contingency
plans such as the Contingency Plan for Fire Accidents, the Contingency Plan for Environmental Emergencies, the Contingency Plan for
Production Safety Accidents, the Contingency Plan for Crane Accidents and Injuries, and the Special Contingency Plan for Natural Gas Leakage,
and regularly organizes drills for its employees, so as to ensure the effective deployment of its contingency plans.
Environmental self-monitoring plan
The Company and its subsidiaries have developed self-monitoring plans in accordance with the requirements of relevant laws and regulations,
installed automatic testing facilities in strict accordance with the plans, and regularly conduct or entrust qualified third parties to organize self-
monitoring of pollutants such as discharged exhaust gas, wastewater, and noise.
Investment in environmental governance and protection and payment of environmental protection tax
During the Reporting Period, the Company’s environmental protection expenditure amounted to RMB51,180,000, including investment in
environmental protection equipment and pollutant treatment facilities; and it paid RMB865,700 in environmental protection tax.
Measures taken to reduce carbon emissions during the Reporting Period and their effects
Applicable Not applicable
(I) Energy conservation and emission reduction:
Integrating requirements such as ISO14001 into the Company’s management system, we set up a top-down management and monitoring system
for energy conservation by formulating the Measures for Energy Management and Administrative, Measures for Energy Conversation and
Consumption Reduction for Group companies, so that energy conservation implementation and management is centralized in the Operations and
Maintenance Department (OMD). A 3-tier system centered on the OMD, business units (workshops) and teams (individual) are thus established to
take layered ownership of energy conservation management and each party is responsible for its respective role in the network of energy
conservation management.
The Operation and Maintenance Department is responsible for guiding, supervising, inspecting and assessing departments’ energy management;
setting goals and indicators for energy saving and consumption reduction for the coming year based on the energy consumption in the previous
year; establishing energy management targets and responsibility system to ensure target achievement and the compliance and effectiveness of the
energy management system; as well as penalizing and rectifying internal breach of the energy management system.
Apart from saving energy, reducing consumption, maintaining equipment and reporting exceptions, workshops and manufacturing teams are also
working together to organize and conduct energy management promotion, education and training, including focused training and general education
targeting energy saving and consumption reduction management and all other employees respectively to enhance the company’s energy
consumption and saving standard, and raise employees’ awareness of energy saving, so that they will participate out of their own initiative.
In the production process, the Group uses electric energy, natural gas and steam as the main energy sources, and sets specific targets for the
68
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
consumption of energy each year. Since the factory is order-based production, reducing energy consumption is mainly achieved through scientific
production scheduling, time optimization, improvement of equipment production efficiency, and improvement of yield rate. We have established
energy-saving concepts such as "saving electricity" and "saving gas" in our daily operations. The practices such as reducing standby energy
consumption of equipment, not using illegal electrical appliances, air conditioning temperature setting regulations, air circuit pressure checking,
and switching off lights when not in use are clarified through the system and reflected in the slogans of the operation site to achieve full staff
awareness and work implementation.
Case: Suzhou GreenPower carried out energy-saving transformation for process cooling water by using converters to reduce the power consumed
by water pumps, and carried out 2TD heat recovery transformation for 7 and 8 lines to reduce the power consumed by heating ovens. In addition,
Suzhou GreenPower took multiple measures for 5 and 6 lines, such as condensate recovery and recycling and utilization of high-temperature steam
condensate to boilers by using dimethylacetamide (DMAC), to reduce the consumption of natural gas and tap water. It also replaced the damaged
insulation cotton of all steam pipelines in the plant, to reduce heat loss and save natural gas. For lines 3-8, rectification feed security filters were
installed with recovery pipelines to reduce the loss of dichloromethane from replacement of filter bags.
(II) Carbon reduction measures:
The Group actively practices economy and implements green office, following the concept of green development and the requirements of green
and low carbon, and effectively reduces unreasonable consumption behaviors. We have formulated the Measures for Use of Air Conditioners in
Offices and other systems. We actively practice the concept of energy saving and consumption reduction, create a green and environmentally
friendly office model, and strive to be a loyal practitioner in the creation of a "resource-saving" society.
1. Reduce office paper consumption: The Group uses OA, ERP and other office systems to effectively reduce the use of paper and uses e-mail
instead of printing and photocopying. When using printers or photocopiers, we use recycled paper as much as possible and adopt double-sided
printing; we set up three types of paper recycling bins to collect used double-sided paper separately, such as copy paper, old envelopes, letterheads,
newspapers, wrapping paper, packaging boxes; we use newspapers as padding in packaging boxes; choose fax machines that can use plain paper
instead of fax machines that use thermal fax paper; The Administrative Department sets the print volume on printers based on each department's
work requirements, and worked with the IT Department to set black and white printing as default for each department.
2. Reduce energy consumption: The Group advocates carpooling to reduce vehicle gasoline consumption; we set computers to enter sleep mode if
the screen is not used for more than five minutes to save electricity; turn off the lights in the meeting room in time, and use natural lighting as
much as possible during the day; when purchasing new electrical appliances, while considering the price factor, we try to choose products with
high energy efficiency ratio; we control the air conditioner temperature settings in summer and winter to avoid the temperature being too low or
too high.
3. Reduce resource consumption: Each department formulates and submits annual and monthly plans to the Administration Department for review,
and place procurement orders as planned on a monthly basis. We replace disposable paper cups or plastic bottles with preferred reusable cups;
advocate the use of pens with replaceable cores, toner cartridges, rechargeable batteries, and other recyclable items; set up a simple recycling
system to recycle glass bottles, aluminum cans; reduce packaging and food waste by reducing the purchase pre-packaging products and reusing
shopping bags.
Meanwhile, we are also committed to creating low-carbon and environmental-friendly products, and implement the concept in the development,
design and production process of the product. Our development strategy aims to integrate green design, green technology & process, green
production, green management and green supply chain into the whole life cycle of products through technological innovation and system
optimization, on the basis of current function and quality of our products, while minimizing adverse impact on the environment and maximizing
the efficiency of resource use, with the ultimate goal to achieve higher economic, ecological and social benefits through improved coordination.
1. Regarding new energy products, the Institute of Recycling and Energy Saving under the Shanghai Energy Research Institute is mainly
responsible for the recycle, improvement and reuse of white oil, dichloromethane, DMAC [DMAC: dimethyl acetamide, is an organic solvent used
in the coating process.], acetone and clay used in manufacturing of lithium battery separators, as well as the research on the recovery and treatment
of wastewater and waste gas by designing effective plans and using advanced separation and recovery equipment to ensure the recovery rate of
white oil, dichloromethane, DMAC, acetone and white clay. In addition, we have also improved the recycling rate of wastewater and waste gas to
save energy, reduce consumption and contribute to the environmental friendliness of R&D and product design activities.
2. To improve the yield of BOPP film products, and reduce waste film, Hongta Plastics takes measures such as increasing the rewards for online
trim scrap recovery and for the team that recovers most trim scraps as an incentive to encourage employees to recover more trim scraps. The film -
making workshop strictly follows the Film Manufacturing Order and the requirements on the effective width of the parent roll in its manufacturing;
while the Technical and Quality Assurance Department strictly controls the sampling size according to the testing requirements when selecting
parent roll samples, oversampling is prohibited and cutting waste is minimized to reduce wastes in the manufacturing process.
3. In terms of packaging products, in response to the ecological civilization construction strategy implemented by the country and in line with the
development ideology of “embrace ecological environmental protection through energy saving and carbon reduction”, we continue to embrace
innovation in packaging materials. During the reporting period, Hongchuang Packaging used special technology and materials to replace traditional
69
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
oil packaging with paper-plastic packaging to reduce the use of plastic. In addition, Hongchuang Packaging also reformed the roof packaging
design to reduce the size of trash and improve user-friendliness to promote the green development of the industrial chain.
We believe the industry is leading to a greener future, and life cycle assessment assists companies to determine the strategies and direction of green
development. in 2023, we continued to conduct product life cycle environmental impact assessments. For example, Wuxi Energy performed life
cycle assessments on certain products in accordance with the requirements of ISO14040 and ISO14044 as the basis for the research on reducing
product carbon footprints.
Administrative penalties imposed on environmental issues during the Reporting Period
None
Other environmental information that should be publicly disclosed
Other environmental protection-related information
The Company shall comply with the disclosure requirements for the chemical industry set forth in the Self-Disciplinary Regulatory Guidelines for
Companies Listed on the Shenzhen Stock Exchange No. 3 – Industry Information Disclosure
Information about environmental accidents occurring in the listed company
II. Social Responsibility
For details, please refer to the Environmental, Social and Governance Report 2023 (ESG report)
disclosed by the Company at Cninfo.com.cn on April 25, 2024.
The Company shall comply with the disclosure requirements for the chemical industry set forth in the Self-
Disciplinary Regulatory Guidelines for Companies Listed on the Shenzhen Stock Exchange No. 3 – Industry
Information Disclosure
III. Information about Efforts to Consolidate and Extend the Achievements of Poverty Alleviation and
Rural Revitalization
No actions were carried out during the Reporting Period.
70
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Section 6 Significant Events
I. Performance of commitments
1. Commitments of the Company’s actual controller, shareholders, related parties and acquirer, as well as the Company and other commitment makers
performed during the Reporting Period or ongoing at the end of the Reporting Period
Applicable □ Not applicable
Commitment Type of Time of Term of Performance of
Commitment Details of commitment
made by commitment commitment commitment commitment
1. There are no false records, misleading statements or major omissions in the information disclosed and application
documents submitted by Energy Technology, and those making the commitments shall be jointly and severally liable for
the authenticity, accuracy and integrity of such documents 2. If the information provided or disclosed for this major
assets restructuring contains false records, misleading statements or major omissions, and is put on file by the judicial
organ for investigation or by the CSRC for investigation, before the conclusion of the investigation is made, those
making the commitments will not transfer the shares with interests in Energy Technology, and will submit the
The Company Commitment to application for suspending the transfer and share accounts to the Board of Directors of the Energy Technology within
Commitments and all directors, submit true, two trading days after receiving the notice of the investigation, and the Board of Directors shall apply for lockup to the
made during asset supervisors and accurate and stock exchange and the registration and clearing company on behalf of those making the commitments; if the Board of June 13, 2017 Long term Strictly performed
restructuring senior complete Directors fails to submit the lockup application within two trading days, it will authorize the Board of Directors to
management information directly submit the identity and account information of those making the commitments to the stock exchange and the
registration and clearing company after verification and apply for lockup; if the Board of Directors fails to submit the
identity and account information of those making the commitments to the stock exchange and the registration and
clearing company, those making the commitments will authorize the stock exchange and the registration and clearing
company to directly lock up the related shares. If the investigation found that there is any violation of laws or
regulations, those making the commitments promise to use voluntarily the shares locked up to compensate the related
investors.
1. The Company and its controlling shareholder and actual controller have not been investigated by judicial authorities
for suspected crimes or investigated by the CSRC for suspected violations of laws and regulations in recent 3 years; 2.
Commitments
Commitment on the Company and its controlling shareholders and actual controllers have not been publicly censured by the stock
made during asset The Company June 13, 2017 Long term Strictly performed
legal compliance exchange and have no other major acts of dishonesty in the past 12 months; 3. The Company and its incumbent
restructuring
directors and senior management have not been investigated by judicial authorities for suspected crimes or investigated
by the CSRC for suspected violations of laws and regulations.
1. I hereby commit neither to tunnel to other units or individuals without compensation or under unfair conditions, nor
Commitment on
Directors and to damage the Company’s interests in other ways. 2. I hereby commit to restrict my position-related consumption
Commitments dilution of current
senior activities. 3. I hereby commit not to use the Company’s assets for investment and consumption activities not related to
made during asset return and May 25, 2017 Long term Strictly performed
management of execution of my duties. 4. I hereby commit to link the remuneration system formulated by the Board of Directors or the
restructuring remedial
the Company Remuneration Committee or Assessment Committee of the Company with the execution of the return recovery
measures
measures. 5. I hereby commit to link the vesting conditions with the implementation of the return recovery measures if
71
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
the Company will implement any share incentive scheme in the future. 6. Since the date of this commitment up to
completion of this major asset restructuring, if the CSRC imposes other new regulatory requirements in relation to the
return recovery measures and its commitments and such commitments cannot meet such rules of the CSRC, I commit to
issue supplemental undertakings in accordance with the latest requirements of the CSRC.
The counterparty will timely provide Energy Technology with information related to restructuring, and guarantee the
Commitment to authenticity, accuracy and completeness of the information provided. In case of any false record, misleading statement
Commitments submit true, or major omission of the information provided, resulting in any loss to Energy Technology or investors, it shall be liable
made during asset Counterparty accurate and for compensation according to law. In case of any false record, misleading statement or major omission in the June 13, 2017 Long term Strictly performed
restructuring complete information provided or disclosed in this material assets restructuring, which is put on file by the judicial organ for
information investigation or by the CSRC for investigation, the counterparty will suspend the transfer of the shares with interests in
Energy Technology until the case investigation conclusion is clear.
1. Gao Xiang was the CFO of Shanghai Lvxin Packaging Materials Co., Ltd. (Shunhao). Due to Shunhao’s failure to
disclose related transactions with related natural persons according to law, in violation of the relevant provisions on
information disclosure in the Securities Law and the Administrative Measures for Information Disclosure of Listed
Companies, on July 27, 2016, Shanghai Securities Regulatory Bureau issued a warning to Shunhao and related parties,
including Gao Xiang, and imposed an administrative penalty of RMB30,000 on Gao Xiang; on January 5, 2017,
Shenzhen Stock Exchange made the Decision on Criticism to Shanghai Shunhao New Materials Technology Co., Ltd.
Commitments and Related Parties through Circulating Notices, and circulated notification of criticism to Shunhao and related parties,
Commitment on
made during asset Counterparty including Gao Xiang. In addition, other counterparties have not been subject to administrative or criminal penalties June 13, 2017 Long term Strictly performed
legal compliance
restructuring related to the securities market in the past five years, and have not involved in major civil litigation or arbitration related
to economic disputes. 2. Counterparties are eligible to purchase shares not publicly offered by Energy Technology, and
are not under any circumstances where they are not allowed to purchase shares not publicly offered by Energy
Technology as stipulated by laws, regulations, rules or normative documents. 3. Over the last five years, the
counterparties have not failed to repay a large amount of debts as scheduled, failed to fulfill its declaration, been subject
to administrative measures by the CSRC or disciplined by the stock exchange and there are no ongoing or threatened
administrative or judicial proceedings for investigation against my material violation of laws or regulations.
1. Shares of Shanghai Energy held by counterparties according to law. The counterparty has performed its contribution
obligation to Shanghai Energy in accordance with the law, and there is no false contribution, delayed contribution,
Commitments Commitment on withdrawal of capital and other acts in violation of its obligations and responsibilities as a shareholder, and there is no
made during asset Counterparty integrity of asset situation that may affect the legal survival of Shanghai Energy. 2. The equity of Shanghai Energy held by the June 13, 2017 Long term Strictly performed
restructuring ownership counterparty is actually legally owned. There is no ownership dispute, there is no trust, entrusted shareholding or
similar arrangement, and there is no pledge, freezing, sealing, property preservation or other rights restrictions on the
equity of Shanghai Energy held by the counterparty.
Commitments I/the enterprise and its main management do not leak any insider information of Energy Technology or leverage insider
Commitment on
made during asset Counterparty information to conduct insider trading. If the above commitments are violated, all losses caused to the listed company June 13, 2017 Long term Strictly performed
no insider trading
restructuring will be borne.
After the completion of the major asset restructuring, the enterprises that are controlled by those making the
commitments will avoid and reduce the related transactions with Energy Technology as far as possible. For those
related transactions that cannot be avoided or have reasonable reasons, the enterprises that are controlled by those
making the commitments will sign agreements with Energy Technology and perform legal procedures in accordance
Commitments Heyi Investment, Commitment to
with the principles of justice, fairness and compensation for equal value, and shall, in accordance with the provisions of
made during asset Paul Xiaoming regulate related June 13, 2017 Long term Strictly performed
relevant laws, regulations, other normative documents and the Articles of Association of Yunnan Energy New Material
restructuring Lee family transactions
Co., Ltd., perform relevant internal decision-making approval procedures in accordance with the law and timely
perform information disclosure obligations, guarantee not to trade with Energy Technology under unfair conditions
compared with the market, guarantee not to illegally transfer the funds and profits of Energy Technology by using
related party transactions, and do not use such transactions to engage in any behavior that damages the legitimate rights
72
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
and interests of Energy Technology and other shareholders. If a breach of the above commitment results in damage to
the interests of Energy Technology, those making the commitments will compensate the Energy Technology for the
losses caused by the above acts to Energy Technology.
1. At present, those making the commitments are not directly or indirectly engaged in the same or similar business with
the existing business of Energy Technology or Shanghai Energy through other operating entities directly or indirectly
controlled by it or in the name of natural person, and do not hold any position or act as any kind of consultant in any
operating entity with the main business same as or similar to that in Energy Technology or Shanghai Energy, or engage
in any other competition with Energy Technology or Shanghai Energy. 2. The commitment maker guarantees that after
the completion of this major asset restructuring, it will not carry out or operate the same or similar business with the
Commitments Heyi Investment, Commitment to
main business of Energy Technology or Shanghai Energy in its own way, directly or indirectly through other business
made during asset Paul Xiaoming avoid horizontal June 13, 2017 Long term Strictly performed
entities under its direct or indirect control; do not hold any position or act as any kind of consultant in any operating
restructuring Lee family competition
entity with the same or similar business with Energy Technology or Shanghai Energy; do not provide technical
services for existing customers of Energy Technology or Shanghai Energy in the name of other than Energy
Technology or Shanghai Energy; avoid any horizontal competition. 3. If any loss is caused to Energy Technology or
Shanghai Energy due to the commitment maker’s breach of the above commitments, the operating profit obtained shall
be owned by Energy Technology and all losses suffered by Energy Technology or Shanghai Energy shall be
compensated.
Before this major asset restructuring, Energy Technology has been completely separated from other enterprises
Commitment on
controlled by the commitment maker in terms of business, assets, institutions, personnel and finance. Energy
Commitments Heyi Investment, ensuring the
Technology’s business, assets, institutions, personnel and finance are independent. After the completion of this major
made during asset Paul Xiaoming independence of June 13, 2017 Long term Long term
asset restructuring, the commitment maker undertakes not to use the identity of the controlling shareholder or actual
restructuring Lee family the listed
controller of Energy Technology to affect the independence of Energy Technology, and to ensure the independence of
company
Energy Technology in business, assets, institutions, personnel and finance as far as possible.
There were administrative punishments in fire control and water affairs in Shanghai Energy. As of the date of this letter
of commitment, Shanghai Energy and its subsidiaries do not have any administrative penalty that has not been
implemented or rectified. In November 2015, Shanghai Pudong New Area Administration of Work Safety ordered
Commitment on Shanghai Energy to rectify the three dichloromethane storage tanks within a time limit. Shanghai Energy has completed
Commitments the existence of the rectification, but has not completed the safety acceptance after the rectification. If the relevant competent
Paul Xiaoming
made during asset previous departments in the local place where Shanghai Energy and its subsidiaries are located in have made administrative May 25, 2017 Long term Strictly performed
Lee family
restructuring administrative punishment to Shanghai Energy and its subsidiaries for fire control, water service or the three dichloromethane tanks at
penalty any time, the commitment maker promises to make cash compensation for all economic losses suffered by Shanghai
Energy or its subsidiaries within 30 days after the actual punishment or loss amount is determined, so as to ensure that it
will not have a material impact on the production, operation and financial situation of Shanghai Energy and its
subsidiaries. Joint and several liability shall be borne by those making the commitments.
Commitments Commitment on Although I hold the certificate of permanent residence right of the United States, I have not changed my nationality, I
made during asset Li Xiaohua capital source of am still a Chinese nationality; my own investment in Shanghai Energy is all China’s income, and does not involve the June 13, 2017 Long term Strictly performed
restructuring Shanghai Energy contribution of foreign exchange or foreign assets.
This enterprise is the employee stock ownership platform of Shanghai Energy, and the enterprise does not exist to raise
Commitment of
funds in a non-public way to qualified investors. There is no asset management by the fund manager or general partner,
the enterprise not
nor does it serve as the manager of any private equity fund. Therefore, the enterprise does not belong to the private
Commitments belonging to
investment fund or a private fund manager in the Interim Measures for the Supervision and Administration of Private
made during asset Zhuhai Hengjie private June 13, 2017 Long term Strictly performed
Investment Funds and the Measures for the Registration and Filing of Private Investment Fund Managers (for Trial
restructuring investment funds
Implementation), and does not need to follow the Interim Measures for the Supervision and Administration of Private
or a private fund
Investment Funds and the Measures for the Registration and Filing of Private Investment Fund Managers (for Trial
manager
Implementation) and other relevant laws and regulations to fulfill the registration and filing procedures.
Commitments Huachen Commitment of The Company is not established by raising funds from qualified investors in a non-public way, or doesn’t have the June 13, 2017 Long term Strictly performed
73
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
made during asset Investment the enterprise not assets managed by the fund manager or the general partner, or act as the manager of any private investment fund.
restructuring belonging to Therefore, the Company does not belong to the private investment funds or a private fund manager in the Interim
private Measures for the Supervision and Administration of Private Investment Funds and the Measures for the Registration
investment funds and Filing of Private Investment Fund Managers (for Trial Implementation), and does not need to follow the Interim
or a private fund Measures for the Supervision and Administration of Private Investment Funds and the Measures for the Registration
manager and Filing of Private Investment Fund Managers (for Trial Implementation) and other relevant laws and regulations to
fulfill the registration and filing procedures.
During the term of office of Shanghai Energy or within 2 years after the resignation of Shanghai Energy, it will not
directly or indirectly operate the same or similar business with Energy Technology or Shanghai Energy on its own or in
the name of others, nor will it hold any post or provide any service in entities with the same or similar business with Term of service Within the
Commitments
Paul Xiaoming Non-competition Energy Technology or Shanghai Energy; if they violate the aforesaid non-competition commitment, they shall pay a and within two performance
made during asset May 2, 2017
Lee, Li Xiaohua commitment penalty of RMB5 million to Energy Technology, and shall turn over all the operating profits, wages, remuneration and years after period, strictly
restructuring
other income earned by them due to the violation of the commitment to Energy Technology. If the aforesaid resignation performed
compensation still cannot make up for Energy Technology, Energy Technology has the right to request the breach party
to be liable for the loss suffered by Energy Technology.
Commitments During the term of office at Shanghai Energy, without the consent of Energy Technology, it is not allowed to work part- Within the
Paul Xiaoming Commitment performance
made during asset on no part-time time (except for directors and supervisors) in other companies, and the income violating the prohibition of concurrent May 2, 2017 Term of service
Lee, Li Xiaohua period, strictly
restructuring work operation shall be owned by Innovation Co., Ltd.
performed
Due to the death of Ms. Wang Yuhua, a member of Paul Xiaoming Lee’s family who is the shareholder and actual
controller of the Company, I, as one of the heirs, inherited 10,416,022 shares of the Company held by her according to
her will and the contribution of the Company’s controlling shareholder Heyi Investment of RMB17.955 million. After
succession, I directly and indirectly hold 54,655,167 shares of the Company through Heyi Investment, accounting for
11.53% of the total share capital of the Company. My directly holding shares is acquired by Ms. Wang Yuhua as one of
Commitment to
Commitments counterparties, through purchasing the equity of Shanghai Energy through issuing shares of the Company. Therefore,
ensure the October 25,
made during asset Jerry Yang Li with regard to the independence of listed companies involved in this restructuring, I hereby make the following Long term Strictly performed
independence of 2018
restructuring confirmation and commitment: before this restructuring, Shanghai Energy has been completely separated from other
listed companies
enterprises under my control in terms of business, assets, institutions, personnel and finance, and Shanghai Energy’s
business, assets, institutions, personnel and finance are independent. After the completion of this restructuring, I
promise not to use the identity of the actual controller of the listed company to affect the independence of the listed
company, and to ensure the independence of the listed company in business, assets, institutions, personnel and finance
as far as possible.
Due to the death of Ms. Wang Yuhua, a member of Paul Xiaoming Lee’s family who is the shareholder and actual
controller of the Company, I, as one of the heirs, inherited 10,416,022 shares of the Company held by her according to
her will and the contribution of the Company’s controlling shareholder Heyi Investment of RMB17.955 million. After
succession, I directly and indirectly hold 54,655,167 shares of the Company through Heyi Investment, accounting for
11.53% of the total share capital of the Company. My directly holding shares is acquired by Ms. Wang Yuhua as one of
counterparties, through purchasing the equity of Shanghai Energy through issuing shares of the Company. In order to
Commitments Commitment on
reduce and standardize the related transactions that may occur with the listed company, I hereby make the following October 25,
made during asset Jerry Yang Li regulating related Long term Strictly performed
commitments: after the completion of this restructuring, the enterprises under my control will avoid and reduce the 2018
restructuring transactions
related transactions with the listed company as much as possible. For the related transactions that cannot be avoided or
have reasonable reasons, the enterprises under my control will follow the principles of justice, fairness, equal value and
compensation with the listed company in accordance with the law sign the agreement, perform the legal procedures, and
in accordance with the provisions of relevant laws, regulations, other normative documents and the Articles of
Association of Yunnan Energy New Material Co., Ltd., perform the relevant internal decision-making approval
procedures in accordance with the law and timely perform the obligation of information disclosure, ensure that
74
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
transactions with listed companies will not be conducted in an unfair manner compared with the market, and that the
funds and profits of listed companies should not be transferred illegally by related transactions, nor will they engage in
any act that damages the legitimate rights and interests of listed companies and other shareholders. If there is any
violation of the above commitments, resulting in damages to the interests of the listed company, I will compensate the
listed company for the losses caused by the foregoing behavior to the listed Company.
Due to the death of Ms. Wang Yuhua, a member of Paul Xiaoming Lee’s family who is the shareholder and actual
controller of the Company, I, as one of the heirs, inherited 10,416,022 shares of the Company held by her according to
her will and the contribution of the Company’s controlling shareholder Heyi Investment of RMB17.955 million. After
succession, I directly and indirectly hold 54,655,167 shares of the Company through Heyi Investment, accounting for
11.53% of the total share capital of the Company. My directly holding shares is acquired by Ms. Wang Yuhua as one of
counterparties, through purchasing the equity of Shanghai Energy through issuing shares of the Company. Therefore, in
order to protect the legitimate rights and interests of the listed company and other shareholders and avoid horizontal
competition with the listed company, I hereby make the following solemn commitment: 1. At present, I have not
directly or indirectly engaged in the same or similar business with the existing business of the listed company or
Commitment on
Commitments Shanghai Energy through other business entities directly or indirectly controlled by me or in the name of natural
avoiding October 25,
made during asset Jerry Yang Li persons, have not held any position or acted as any kind of consultant in any business entity with the same or similar Long term Strictly performed
horizontal 2018
restructuring main business as the listed company or Shanghai Energy, or any other situation of horizontal competition with the listed
competition
company or Shanghai Energy. 2. I guarantee that after the completion of this transaction, I will not carry out or operate
the same or similar business with the main business of the listed company and Shanghai Energy through other business
entities directly or indirectly controlled by myself, directly or indirectly; I will not hold any position or serve as any
form of consultant in any business entity with the same or similar business with the listed company or Shanghai Energy;
do not provide technical services for listed companies or existing customers of Shanghai Energy in the name of listed
companies or other than Shanghai Energy; avoid any horizontal competition. 3. If any loss is caused to the listed
company or Shanghai Energy due to my violation of the above commitments, the operating profit obtained shall be
owned by the listed company and all losses suffered by the listed company or Shanghai Energy shall be
compensated.
(I). Company’s commitment: 1. there are no false records, misleading statements or major omissions in the prospectus
of the Company’s initial public offering. 2. If any competent authority finds that the initial prospectus issued by the
Company has false records, misleading statements or major omissions, which will make a significant and substantial
impact on judging whether it meets the requirements of the law, the Company will repurchase all the new shares of the
IPO in accordance with the law. 3. Within 10 trading days after the competent authority determines that the prospectus
of the Company has false records, misleading statements or major omissions that have a significant and substantial
The Company, impact on the judgment of whether the Company complies with the issuance conditions stipulated by the law, the Board
controlling of Directors of the Company shall formulate the share repurchase plan and submit it to the General Meeting of
Commitment on
shareholders and Shareholders for deliberation and approval, and after it is approved, reviewed or filed by the relevant competent
Commitments authenticity,
the actual department (if necessary), share repurchase measures will be started, and all new shares of the initial public offering
made at the time accuracy and September
controller, will be repurchased according to law; the repurchase price (in case of ex-right and ex-dividend due to cash dividend, Long term Performed
of IPO or completeness of 14, 2016
directors, share distribution, conversion to share capital and new share issuance, the right shall be restored in accordance with the
refinancing documents
supervisors and relevant provisions of Shenzhen Stock Exchange, the same below) shall be determined according to relevant laws and
related to IPO
senior regulations, and shall not be lower than the issuance price of the initial public offering shares. 4. If the prospectus of the
management Company’s initial public offering contains false records, misleading statements or major omissions, which causes
investors to suffer losses in securities trading, the Company will compensate investors for losses according to law. (II).
Commitment of the controlling shareholder and actual controller of the Company: 1. there are no false records,
misleading statements or major omissions in the prospectus of the Company’s initial public offering. 2. If any competent
authority determines that there are false records, misleading statements or major omissions in the prospectus of the
Company’s initial public offering, which have a significant and substantial impact on the judgment of whether it meets
the issuance conditions prescribed by law, Heyi Investment and the family will buy back the transferred original
75
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
restricted shares according to law; Heyi Investment and the family will formulate shares within 10 trading days after the
above matters are identified, the original restricted shares issued by the Company’s shareholders at the time of initial
public offering shall be repurchased in accordance with the law by means of centralized bidding transaction in
secondary market, bulk transaction, agreement transfer, tender offer, etc. The repurchase price is determined according
to the negotiated price or secondary market price, but not lower than the original transfer price and the price determined
according to relevant laws and regulations and regulatory rules. If Heyi Investment and the family buy back the original
restricted shares that have been transferred to trigger the tender offer conditions, Heyi Investment and the family will
perform the tender offer procedures in accordance with the law and perform the corresponding information disclosure
obligations. 3. If the prospectus of the Company’s initial public offering contains false records, misleading statements or
major omissions, which causes investors to suffer losses in securities trading, Heyi Investment and the family will
compensate investors for losses according to law. (III). Commitment of directors, supervisors and senior managers of
the Company: 1. the prospectus of the issuer’s initial public offering doesn’t contain false records, misleading
statements or major omissions, and I am jointly and severally liable for its authenticity, accuracy and completeness. 2. If
the prospectus of the issuer’s initial public offering contains false records, misleading statements or major omissions,
which causes investors to suffer losses in securities trading, I will compensate investors for losses according to law.
(I). Commitment of controlling shareholders and actual controllers’ shareholding intention and reduction intention: 1. as
the controlling shareholder and actual controller of the Company, Heyi Investment and the family hold the Company’s
shares in strict accordance with the provisions of laws, regulations, normative documents and regulatory requirements,
and abide by the share locking period; after the expiration of the locking period, the Company’s shares held by Heyi
Investment and the family’s reduction shall comply with the requirements of relevant laws, regulations, normative
documents and rules of the stock exchange; 2. Heyi Investment and the family shall not reduce the shares of the
Company directly held within three years after the Company’s listing; after the Company’s listing for three years, the
shares of the Company directly or indirectly held by Heyi Investment and the family transferred each year shall not
exceed 25% of the total shares of the Company directly or indirectly held by them. 3. Within two years after the
expiration of the equity lock-in period promised by Heyi Investment and the family, the shares of the Company shall be
reduced at a price not lower than the issue price of the Company’s initial public offering shares (in case of ex-right and
ex-dividend matters, the issue price shall be treated as ex-right and ex-dividend accordingly). Within two years after the
Controlling expiration of the lock-up period, the total number of shares held by Heyi Investment and the family shall not exceed
shareholder, 30% of the total shares held by Heyi Investment and the family directly or indirectly before the issuance. 4. Within two
About
Commitments actual controller, years after the expiration of the shareholding lock-in period of Heyi Investment and the family’s commitment, the price Within the
shareholding
made at the time and Shanghai of shares of the Company reduced by Heyi Investment and the family through the secondary market will be determined September Share holding performance
intention and
of IPO or Guohe, a according to the market price at that time on the premise of meeting the commitments made by Heyi Investment and the 14, 2016 period period, strictly
reduction
refinancing shareholder family, and the specific reduction plan will be formulated according to the market situation at that time. 5. Heyi performed
intention
holding more Investment and the family promise to make an announcement through the Company three trading days in advance when
than 5% shares carrying out the reduction, and complete the announcement within six months, and fulfill the obligation of information
disclosure accurately and completely in accordance with the rules of the stock exchange. (II). Shanghai Guohe’s
commitment to shareholding intention and reduction intention: 1. Within two years after the expiration of the
shareholding locking period promised by the Company, the Company intends to reduce its shareholding by means of,
including but not limited to, centralized competitive trading in the secondary market, block trading, agreement-based
transfer, etc. The reduction price will not be lower than the price of net assets per share, and the specific reduction price
will be determined according to the market price at the time of the reduction on the premise of meeting the
commitments made by the Company; the specific reduction plan will be based on the market conditions at that time.
The specific reduction plan will be formulated in accordance with the market conditions and the operating condition of
the Company. 2. The enterprise commits that it will make an announcement through the Company three days ahead of
schedule in the implementation of the reduction. At the same time, it will fulfill the obligation of information disclosure
accurately and completely in accordance with the rules of the stock exchange, except when it holds shares less than 5%
equity of the Company. 3. The enterprise will strictly fulfill the above commitments, and promise to abide by the
76
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
following binding measures: (1) if it fails to fulfill the above commitments, the Company’s cash dividends I should
receive will be withheld by the Company and owned by the Company; (2) if it fails to fulfill the above commitments, it
will bear relevant legal liabilities according to laws and regulations.
1. If the Company fails to take the specific measures as promised to stabilize the stock price, the Company undertakes
to accept the following binding measures: (1) the Company will publicly explain the specific reasons for not taking the
above measures in the General Meeting of Shareholders and the newspapers designated by the CSRC, and apologize to
the shareholders of the Company and the public investors; (2) If the investor suffers losses in the securities trading due
to the failure to fulfill the commitments, the Company will compensate the investor for the losses according to law after
being recognized by the CSRC, the stock exchange or the judicial organ; (3) The commitment of stock price stability is
the true meaning of the Company. The responsible parties voluntarily accept the supervision of the regulatory body,
self-discipline organization and the public. In case of the violation of the relevant commitments, the main body will
bear corresponding responsibilities according to law. 2. If the controlling shareholder and the actual controller have
delivered the notice of increase to the Company, but fail to fulfill the obligation of increasing the holdings, the Company
has the right to detain the equal amount of the cash dividends payable to the controlling shareholder and the actual
Commitments Commitment on controller until the controlling shareholder and the actual controller fulfill their obligation to increase. 3. If a company
made at the time remedial director or senior manager fails to fulfill his obligation to increase his or her holdings, the Company shall have the right September
The Company Long term Strictly performed
of IPO or measures for to detain salaries and cash dividends of directors and senior management until the directors and senior managers fulfill 14, 2016
refinancing breaking faith their obligations to increase their holdings. 4. If there are any false records, misleading statements or major omissions in
the prospectus of this public offering of shares, the Company will make a timely announcement, and the Company will
disclose in its regular report that the Company, its controlling shareholders, actual controllers, and its directors,
supervisors and senior management buy back shares due to information disclosure violations, performance of
commitments such as acquisition of shares and compensation for losses, as well as remediation and correction in case of
failure to perform commitments. 5. If the Company fails to perform, has failed to perform or fails to perform on
schedule due to objective reasons beyond the control of the Company, such as changes in relevant laws and regulations,
policies, natural disasters and other force majeure, the Company shall take the following measures: (1) Timely and fully
disclose the specific reasons for the Company’s failure, failure to fulfill its commitments or failure to fulfill its
commitments on schedule; (2) make supplementary or alternative commitments to the investors of the Company
(relevant commitments shall be subject to relevant approval procedures in accordance with laws, regulations and the
articles of association), so as to protect the rights and interests of investors as much as possible.
1. If the controlling shareholder and the actual controller have delivered the notice of increase to the Company, but
failed to fulfill the obligation of increasing the holdings, the Company has the right to detain the equal amount of the
cash dividends payable to the controlling shareholder and the actual controller until the controlling shareholder and the
actual controller fulfill their obligation to increase. 2. The controlling shareholder and the actual controller have signed
the commitment letter of false record, misleading statement or major omission in the prospectus of this public offering
of shares. The controlling shareholder and the actual controller take the profit distribution enjoyed by the controlling
shareholder and the actual controller in the Company’s profit distribution plan of the current year and the following
Commitments Commitment on years as the performance guarantee of the above commitment, and if the controlling shareholder and the actual
Controlling
made at the time remedial controller fails to fulfill the above-mentioned obligation of acquisition or compensation, the shares of the Company held September
shareholder, Long term Strictly performed
of IPO or measures for by the controlling shareholder and the actual controller shall not be transferred before fulfilling the above-mentioned 14, 2016
actual controller
refinancing breaking faith commitment. 3. The controlling shareholder and the actual controller have signed the promise of controlling
shareholder and actual controller’s shareholding intention and reduction intention. The controlling shareholder and the
actual controller will strictly carry out the above commitments and promise to abide by the following restraint
measures: (1) If the above commitments are not performed, the cash dividends to be obtained by the controlling
shareholder and the actual controller shall be withheld by the Company and owned by the Company; (2) if the above
commitments are not performed, the controlling shareholder and the actual controller shall extend the lock-in period for
six months after the lock-in period they promised; (3) The remuneration that the employees in the Company should
receive from the Company shall be withheld by the Company and owned by the Company; (4) if the above
77
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
commitments are not performed and the investors suffer losses in the securities trading, the controlling shareholder and
the actual controller will compensate the investors for the losses according to law. 4. If the Company fails to perform,
has failed to perform or fails to perform on schedule due to objective reasons beyond the control of the Company, such
as changes in relevant laws and regulations, policies, natural disasters and other force majeure, the Company shall take
the following measures: (1) Timely and fully disclose the specific reasons for the Company’s failure, failure to fulfill its
commitments or failure to fulfill its commitments on schedule; (2) make supplementary or alternative commitments to
the investors of the Company (relevant commitments shall be subject to relevant approval procedures in accordance
with laws, regulations and the articles of association), so as to protect the rights and interests of investors as much as
possible.
1. If any director or senior management of the Company fails to fulfill his obligation to increase the holdings, the
Company shall have the right to detain directors and senior management salaries and cash dividends until the directors
and senior managers fulfill their obligations to increase their holdings. 2. The directors, supervisors and senior
managers have made corresponding commitments on the information disclosure of IPO and listing. The directors,
supervisors and senior managers take the dividend of the Company in the current year and the following years obtained
Commitments Commitment on by holding the Company’s shares directly or indirectly and the salary received from the Company in the current year
Directors,
made at the time remedial and the following years as the performance guarantee of the above commitments. If the director, supervisor or senior September
supervisors and Long term Strictly performed
of IPO or measures for manager fails to perform, has failed to perform or fails to perform on schedule due to objective reasons beyond the 14, 2016
senior managers
refinancing breaking faith control of the director, supervisor or senior manager such as changes in relevant laws and regulations, policies, natural
disasters and other force majeure, the director, supervisor or senior manager shall take the following measures: (1)
Timely and fully disclose the specific reasons for the Company’s failure, failure to fulfill its commitments or failure to
fulfill its commitments on schedule; (2) make supplementary or alternative commitments to the investors of the
Company (relevant commitments shall be subject to relevant approval procedures in accordance with laws, regulations
and the articles of association), so as to protect the rights and interests of investors as much as possible.
1. The undertaker does not, and will not, directly or indirectly engage in any activity that constitutes horizontal
competition with the existing and future business of the Company and its holding subsidiaries, and is willing to assume
compensation liability for the economic losses caused to the Company due to violation of the above commitments. 2.
For other enterprises directly and indirectly controlled by the undertaker, the undertaker will adopt the representative
Effective during
office and personnel (including but not limited to directors, general managers, etc.) and the controlling position of the
the period in
undertaker in such enterprises, to ensure that such enterprises perform the same obligations as the undertaker under this
which the
Commitments Paul Xiaoming Commitment on letter of commitment, to ensure that such enterprises do not compete with the Company and its holding subsidiaries in
undertaker and
made at the time Lee family, Heyi avoiding the same industry, and the undertaker is willing to bear all compensation liabilities for the economic losses caused to November 10,
the companies Strictly performed
of IPO or Investment and horizontal the Company due to violation of the above commitments. 3. If the Company further expands its scope of business on 2012
he/she
refinancing Heli Investment competition the basis of its existing business, and the undertaker and the enterprise controlled by the undertaker have carried out
controlled have
production and operation on this, the undertaker promises to transfer the possible horizontal competition business or
relation with the
equity held by this enterprise, and agrees that the Company has the priority to acquire and operate under the same
Company
commercial conditions. 4. Except for the investment in the Company, the undertaker will not invest in or operate the
products (or similar products, or products with alternative function) developed, produced or operated by the Company
and its holding subsidiaries in any way in any place. 5. This commitment letter is effective during the period when the
undertaker and the company controlled by the undertaker are related parties of the Company.
1. The Company and its controlling shareholder and the actual controller make a commitment to the Company’s ability
The Company, The commitment
to fill in the return measures. It does not exceed the authority to interfere in the Company’s management activities and
controlling that the
Commitments does not occupy the Company’s interests. 2. Directors and senior managers make a commitment to fulfill the Company’s
shareholder and Company’s
made at the time return measures: (1) Promise not to transfer interests to other units or individuals free of charge or under unfair September
actual controller, compensation Long term Strictly performed
of IPO or conditions, and not to damage the interests of the Company in other ways; (2) Promise to restrict the post consumption 14, 2016
director and measures can be
refinancing behavior of directors and senior managers; (3) Promise not to use the Company’s assets to engage in investment and
senior effectively
consumption activities unrelated to the performance of its duties; (4) Commit that the remuneration system formulated
management performed
by the board of directors or remuneration committee is linked to the implementation of the Company’s measures to fill
78
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
the return; (5) Promised that the exercise conditions of the Company’s equity incentive to be announced are linked to
the implementation of the Company’s compensation measures.
The undertaker, close relative and the affiliated enterprise under control strictly restrict the funds of the Company and
its subsidiary companies in the operating capital transactions between the Company and its subsidiaries; the Company
Heyi Investment, and its subsidiaries shall not be required to pay wages, welfare, insurance, advertising and other expenses; the Company
a controlling and its subsidiary funds are not directly or indirectly provided to the undertaker, close relatives and controlled affiliated
Commitments shareholder, and Commitment on enterprises, including: 1. to lend funds to the undertaker, close relatives and controlled affiliated enterprises for use with
made at the time family members avoiding compensation or free of charge; 2. to provide entrusted loans without commercial substance to the undertaker, close September
Long term Strictly performed
of IPO or of Paul Xiaoming occupation of the relatives and controlled affiliated enterprises through banks or non-bank financial institutions; 3. Entrust the undertaker, 14, 2016
refinancing Lee, the actual Company’s funds close relatives and controlled affiliated enterprises to carry out investment activities without commercial substance; 4.
controllers of the To issue commercial acceptance bills without real transaction background for the undertaker, close relatives and
Company controlled affiliated enterprises; 5. Repay debts on behalf of the undertaker, close relatives and controlled affiliated
enterprises; 6. Provide funds to the undertaker, close relatives and controlled affiliated enterprises in other ways without
consideration for goods and services; 7. Other methods recognized by China Securities Regulatory Commission.
Due to the death of Ms. Wang Yuhua, a member of Paul Xiaoming Lee’s family who is the shareholder and actual
controller of the Company, I, as one of the heirs, inherited 10,416,022 shares of the Company held by her according to
her will and the contribution of the Company’s controlling shareholder Heyi Investment of RMB17.955 million. I
promise that I will strictly fulfill the commitments disclosed in the initial public offering and listing prospectus of the
controlling shareholder and actual controller. If the commitments of the controlling shareholder and actual controller
are not performed, cannot be performed or cannot be performed on schedule (except for objective reasons beyond the
control of controlling shareholders and actual controllers such as changes in relevant laws and regulations, policies,
natural disasters and another force majeure), I promise to strictly abide by the following measures: 1. If the controlling
shareholder or the actual controller has served the Company with the increase notice but failed to fulfill the increase
obligation, the Company has the right to withhold the cash dividends payable to the same amount until the controlling
shareholder or the actual controller fulfills the increase obligation; 2. The controlling shareholder and the actual
controller have signed the commitment letter of false record, misleading statement or major omission in the prospectus
of this public offering of shares. The controlling shareholder and the actual controller take the profit distribution
enjoyed by the controlling shareholder and the actual controller in the Company’s profit distribution plan of the current
year and the following years as the performance guarantee of the above commitment, and if the controlling shareholder
Commitments Commitment on
and the actual controller fails to perform the above-mentioned acquisition or compensation obligations, the shares of the
made at the time remedial October 25,
Jerry Yang Li Company held by the controlling shareholder and the actual controller shall not be transferred before the above- Long term Strictly performed
of IPO or measures for 2018
mentioned commitments are performed; 3. The controlling shareholder and the actual controller have signed the
refinancing breaking faith
commitment of the controlling shareholder and the actual controller’s shareholding intention and reduction intention.
The controlling shareholder and the actual controller will strictly perform the above commitments and promise to abide
by the following binding measures: (1) If the above commitments are not performed, the cash dividends to be obtained
by the controlling shareholder and the actual controller shall be withheld by the Company and owned by the Company;
(2) if the above commitments are not performed, the controlling shareholder and the actual controller shall extend the
lock-in period for half a year; (3) The remuneration that the employees in the Company should receive from the
Company shall be withheld by the Company and owned by the Company; (4) if the above commitments are not
performed and the investors suffer losses in the securities trading, the controlling shareholder and the actual controller
will compensate the investors for the losses according to law; 4. If the Company fails to perform, has failed to perform
or fails to perform on schedule due to objective reasons beyond the control of the Company, such as changes in relevant
laws and regulations, policies, natural disasters and other force majeure, the Company shall take the following measures:
(1) Timely and fully disclose the specific reasons for the Company’s failure, failure to fulfill its commitments or failure
to fulfill its commitments on schedule; (2) make supplementary or alternative commitments to the investors of the
Company (relevant commitments shall be subject to relevant approval procedures in accordance with laws, regulations
and the articles of association), so as to protect the rights and interests of investors as much as possible.
79
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
1. The undertaker does not, and will not, directly or indirectly engage in any activity that constitutes horizontal
competition with the existing and future business of the Company and its holding subsidiaries, and is willing to assume
compensation liability for the economic losses caused to the Company due to violation of the above commitments; 2.
For other enterprises directly and indirectly controlled by the undertaker, the undertaker will adopt the representative
office and personnel (including but not limited to directors, general managers, etc.) and the controlling position of the
undertaker in such enterprises, to ensure that such enterprises perform the same obligations as the undertaker under this
Commitment on
Commitments letter of commitment, to ensure that such enterprises do not compete with the Company and its holding subsidiaries in
avoiding capital
made at the time the same industry, and the undertaker is willing to bear all compensation liabilities for the economic losses caused to October 25,
Jerry Yang Li occupation of Long term Strictly performed
of IPO or the Company due to violation of the above commitments; 3. If the Company further expands its scope of business on 2018
Energy
refinancing the basis of its existing business, and the undertaker and the enterprise controlled by the undertaker have carried out
Technology
production and operation on this, the undertaker promises to transfer the possible horizontal competition business or
equity held by this enterprise, and agrees that the Company has the priority to acquire and operate under the same
commercial conditions; 4. Except for the investment in the Company, the undertaker will not invest in or operate the
products (or similar products, or products with alternative function) developed, produced or operated by the Company
and its holding subsidiaries in any way in any place; 5. This commitment letter is effective during the period when the
undertaker and the company controlled by the undertaker are related parties of the Company.
Due to the death of Ms. Wang Yuhua, a member of Paul Xiaoming Lee’s family who is the shareholder and actual
controller of the Company, I, as one of the heirs, inherited 10,416,022 shares of the Company held by her according to
her will and the contribution of RMB17.955 million by Heyi Investment, the Company’s controlling shareholder. With
respect to the Company’s shares indirectly held by me through Heyi Investment, my shareholding intention and
reduction intention are as follows: 1. as the actual controller of the Company, I hold the Company’s shares in strict
accordance with the provisions of laws, regulations, normative documents and regulatory requirements, and abide by
the share locking period; after the expiration of the locking period, I shall reduce my holding of the Company’s shares in
accordance with the requirements of relevant laws, regulations, normative documents and rules of the stock exchange; 2.
within three years after the listing of the Company, I will not reduce the shares of the Company I directly hold; upon
expiry of three years after the listing of the Company, I will transfer the shares of the Company I directly hold each year
not more than 25% of the total shares of the Company I directly hold; 3. within two years after the locking period I
Commitments committed, the Company’s shares will be reduced at a price not lower than the initial public offering price of the Within the
Commitment on
made at the time Company. If the Company’s shares are subject to ex-right and ex-dividend during the period, such as dividend October 25, performance
Jerry Yang Li reduction Holding period
of IPO or distribution, stock distribution, capital reserve converted to share capital, the issue price shall be ex-right and ex- 2018 period, strictly
intention
refinancing dividend accordingly; 4. After two years after the expiration of my commitment to hold shares, I will, through the performed
reduction of the price of the Company’s shares in the secondary market, meet the commitments made on the basis of the
market price, and the specific reduction plan will be drawn up according to the market situation at that time; 5. I
promise that I will announce the implementation of the reduction through the Company three trading days in advance,
and complete the announcement within six months. At the same time, I will fulfill the obligation of information
disclosure accurately and completely in accordance with the rules of the stock exchange; 6. I will strictly fulfill the
above commitments, and promise to abide by the following binding measures: (1) if I fail to fulfill the above
commitments, the Company’s cash dividends I should receive will be withheld by the Company and owned by the
Company; (2) the Company will own the profits I get from reducing the shares held in violation of the above
commitments; (3) The remuneration that the employees in the Company should receive from the Company shall be
withheld by the Company and owned by the Company; (4) if the above commitments are not performed and the
investors suffer losses in the securities trading, I will compensate the investors for the losses in accordance with the law.
Commitment on (1) Except for the capital occupation disclosed in writing to the relevant intermediary institutions, there is no other
Commitments
avoiding capital capital occupation that shall be disclosed but not disclosed in accordance with the laws and regulations and the relevant
made at the time October 25,
Jerry Yang Li occupation of provisions of the CSRC for the time being by the undertaker, close relatives, controlled affiliated enterprises and the Long term Strictly performed
of IPO or 2018
Energy Company and its subsidiaries; (2) The undertaker, close relatives and controlled affiliated enterprises will strictly limit
refinancing
Technology the occupation of funds of the Company and its subsidiaries in the operational capital transactions with the Company
80
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
and its subsidiaries; (3) The undertaker, close relatives and controlled affiliated enterprises shall not require the
Company and its subsidiaries to advance wages, welfare, insurance, advertising and other expenses, or require the
Company and its subsidiaries to bear costs and other expenses on behalf of them; (4) The undertaker, close relatives and
controlled affiliated enterprises do not seek to provide the funds of the Company and its subsidiaries directly or
indirectly to the undertaker, close relatives and controlled affiliated enterprises in the following ways, including: a. To
lend funds to the undertaker, close relatives and controlled affiliated enterprises for use with compensation or free of
charge; b. Provide entrusted loans without commercial substance to the undertaker, close relatives and controlled
affiliated enterprises through banks or non-bank financial institutions; c. Entrust the undertaker, close relatives and
controlled affiliated enterprises to carry out investment activities without commercial substance; d. To issue commercial
acceptance bills without real transaction background for the undertaker, close relatives and controlled affiliated
enterprises; e. Repay debts on behalf of the undertaker, close relatives and controlled affiliated enterprises; f. Provide
funds to the undertaker, close relatives and controlled affiliated enterprises in other ways without consideration for
goods and services; g. Other methods recognized by China Securities Regulatory Commission; (5) If the undertaker,
close relatives and controlled affiliated enterprises occupy the funds of the Company and its subsidiaries and require the
Company and its subsidiaries to provide guarantees in violation of laws and regulations, the Company’s board of
directors shall not transfer the shares of the Company held and controlled before all the occupied funds are returned and
all the illegal guarantees are released, and handle the procedures of share locking for the relevant parties. The board of
directors of the Company shall, within 5 trading days from the date of knowing the fact that the undertaker, close
relatives and controlled affiliated enterprises occupy the funds of the Company and its subsidiaries, and the Company
and its subsidiaries provide guarantees in violation of laws and regulations, handle the locking procedures for the
relevant parties.
Due to the death of Ms. Wang Yuhua, a member of Paul Xiaoming Lee’s family who is the shareholder and actual
controller of the Company, I, as one of the heirs, inherited 15,624,033 shares of the Company held by her according to
her will and the contribution of RMB9.045 million by Heyi Investment, the Company’s controlling shareholder. Before
inheritance, I have held 27,593,884 shares of the Company, of which 15,997,000 shares were held at the time of IPO
and listing of the Company, 11,596,884 shares of the Company acquired by the Company’s issuance of shares to
purchase shares of Shanghai Energy. After inheritance, I hold directly and hold 65,503,802 shares of the Company
indirectly through Heyi Investment, accounting for 13.82% of the total share capital of the Company. With respect to
locking period for the Company’s shares directly and indirectly held by me, I commit as follows: 1. as the actual
controller of the Company, I hold the Company’s shares in strict accordance with the provisions of laws, regulations,
normative documents and regulatory requirements, and abide by the share locking period; after the expiration of the
Commitments locking period, I shall reduce my holding of the Company’s shares in accordance with the requirements of relevant Within the
Commitment on laws, regulations, normative documents and rules of the stock exchange; 2. within three years after the listing of the
made at the time October 25, Share holding performance
Sherry Lee reduction Company, I will not reduce the shares of the Company I directly hold; upon expiry of three years after the listing of the
of IPO or 2018 period period, strictly
intention Company, I will transfer the shares of the Company I directly hold each year not more than 25% of the total shares of
refinancing performed
the Company I directly hold; 3. within two years after the locking period I committed, the Company’s shares will be
reduced at a price not lower than the initial public offering price of the Company. If the Company’s shares are subject to
ex-right and ex-dividend during the period, such as dividend distribution, stock distribution, capital reserve converted to
share capital, the issue price shall be ex-right and ex-dividend accordingly; 4. After two years after the expiration of my
commitment to hold shares, I will, through the reduction of the price of the Company’s shares in the secondary market,
meet the commitments made on the basis of the market price, and the specific reduction plan will be drawn up according
to the market situation at that time; 5. I promise that I will announce the implementation of the reduction through the
Company three trading days in advance, and complete the announcement within six months. At the same time, I will
fulfill the obligation of information disclosure accurately and completely in accordance with the rules of the stock
exchange; 6. I will strictly fulfill the above commitments, and promise to abide by the following binding measures: (1) if
I fail to fulfill the above commitments, the Company’s cash dividends I should receive will be withheld by the
81
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Company and owned by the Company; (2) the Company will own the profits I get from reducing the shares held in
violation of the above commitments; (3) The remuneration that the employees in the Company should receive from the
Company shall be withheld by the Company and owned by the Company; (4) if the above commitments are not
performed and the investors suffer losses in the securities trading, I will compensate the investors for the losses in
accordance with the law.
1. Neither to tunnel to other units or individuals without compensation or under unfair conditions, nor to damage the
Company’s interests in other ways; 2. to restrict my position-related consumption activities; 3. not to use the
Company’s assets for investment and consumption activities not related to execution of my duties; 4. to link the
remuneration system formulated by the Board of Directors or the Remuneration Committee or Assessment Committee
Commitment on
of the Company with the execution of the return recovery measures; 5. to link the vesting conditions with the
dilution on
implementation of the return recovery measures if the Company will implement any share incentive scheme in the
current returns as
future; 6. since the date of this commitment up to completion of this public offering of convertible corporate bonds, if
Commitments Directors and a result of the
the CSRC imposes other new regulatory requirements in relation to the return recovery measures and its commitments
made at the time senior public offering of
and such commitments cannot meet such rules of the CSRC, I commit to issue supplemental undertakings in accordance May 14, 2019 Long term Strictly performed
of IPO or management of convertible
with the latest requirements of the CSRC. In order to ensure the proper implementation of the return recovery measures,
refinancing the Company corporate bonds,
I commit to strictly perform the above commitments. If I breach or refuse to fulfill the above commitments, I will
and the return
perform obligations of interpretation and apology as required under the Guiding Opinions on Matters relating to the
recovery
Dilution on Current Returns as a result of Initial Public Offering, Refinancing and Major Asset Restructuring (CSRC
measures
Announcement No. [2015] 31), and agree that relevant regulatory or self-regulation measures shall be imposed or taken
in accordance with the relevant provisions and rules specified or published by CSRC and Shenzhen Stock Exchange; if
the Company or investors suffered losses as a result of my breach or refusal, I am willing to assume relevant liability
for compensation.
1. Not interfere with the operation and management activities of the Company beyond the authority, and not encroach
Commitment on on the interests of the Company; 2. since the date of this commitment up to completion of the convertible corporate
dilution on bonds, if the CSRC imposes other new regulatory requirements in relation to the return recovery measures and its
current returns as commitments and such commitments cannot meet such rules of the CSRC, I commit to issue supplemental undertakings
Commitments Company’s actual a result of the in accordance with the latest requirements of the CSRC. In order to ensure the proper implementation of the return
made at the time controller and public offering of recovery measures, I commit to strictly perform the above commitments. If I breach or refuse to fulfill the above
May 14, 2019 Long term Strictly performed
of IPO or controlling convertible commitments, I will perform obligations of interpretation and apology as required under the Guiding Opinions on
refinancing shareholder corporate bonds, Matters relating to the Dilution on Current Returns as a result of Initial Public Offering, Refinancing and Major Asset
and the return Restructuring (CSRC Announcement No. [2015] 31), and agree that relevant regulatory or self-regulation measures
recovery shall be imposed or taken in accordance with the relevant provisions and rules specified or published by CSRC and
measures Shenzhen Stock Exchange; if the Company or investors suffered losses as a result of my breach or refusal, I am willing
to assume relevant liability for compensation.
Commitment on
the authenticity,
accuracy and
Commitments completeness of
All directors of All directors of the Company commit that the report on this offering and the announcement on listing don’t contain
made at the time information September 3,
Energy false records, misleading statements or major omissions, and they will jointly and severally liable for its authenticity, Long term Strictly performed
of IPO or submitted in 2020
Technology accuracy and completeness.
refinancing connection with
the non-public
offering of A
shares in 2020
Controlling Commitment on 1. I promise not to interfere with the operation and management activities of the Company beyond the authority, and not
Commitments March 23,
shareholder and dilution on encroach on the interests of the Company; 2. I commit to properly implementation of the current return recovery Long term Strictly performed
made at the time 2020
actual controller current returns as measures formulated by the Company and fulfill any commitment I make in relation to the current return recovery
82
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
of IPO or a result of the measures, and assume the liability for compensation to the Company or investors according to law if I violate such
refinancing non-public commitments and as a result cause any loss to the Company or investors; 3. since the date of this commitment up to
offering of A completion of this non-public offering of shares by Energy Technology, if the CSRC imposes other new regulatory
shares in 2020, requirements in relation to the return recovery measures and its commitments and such commitments cannot meet such
and the return rules of the CSRC, I commit to issue supplemental undertakings in accordance with the latest requirements of the
recovery CSRC.
measures
Commitment on 1. I promise not to tunnel to other units or individuals without compensation or under unfair conditions, or to damage
dilution on the Company’s interests in other ways; 2. I commit to restrict my position-related consumption activities; 3. I commit to
current returns as not use the Company’s assets for investment and consumption activities not related to execution of my duties; 4. I
Commitments a result of the commit to link the remuneration system formulated by the Board of Directors or the Remuneration Committee or
Directors and
made at the time non-public Assessment Committee of the Company with the execution of the return recovery measures; 5. I commit to link the November 21,
senior Long term Strictly performed
of IPO or offering of A vesting conditions with the implementation of the return recovery measures if the Company will implement any share 2021
management
refinancing shares in 2021, incentive scheme in the future; 6. since the date of this commitment up to completion of this non-public offering of
and the return shares, if the CSRC imposes other new regulatory requirements in relation to the return recovery measures and its
recovery commitments and such commitments cannot meet such rules of the CSRC, I commit to issue supplemental undertakings
measures in accordance with the latest requirements of the CSRC.
Commitment on
dilution on I promise not to interfere with the operation and management activities of the Company beyond the authority, and not
current returns as encroach on the interests of the Company; I commit to properly implementation of the current return recovery measures
Commitments a result of the formulated by the Company and fulfill any commitment I make in relation to the current return recovery measures, and
Controlling
made at the time non-public assume the liability for compensation to the Company or investors according to law if I violate such commitments and November 21,
shareholders and Long term Strictly performed
of IPO or offering of A as a result cause any loss to the Company or investors; since the date of this commitment up to completion of this non- 2021
actual controller
refinancing shares in 2021, public offering of shares by the Company, if the CSRC imposes other new regulatory requirements in relation to the
and the return return recovery measures and its commitments and such commitments cannot meet such rules of the CSRC, I commit to
recovery issue supplemental undertakings in accordance with the latest requirements of the CSRC.
measures
The Company agreed not to transfer the shares under this subscription for within six months from the date of
Commitments 21 shareholders completion of the issuance of Energy Technology (i.e. the date on which the shares are listed under the issuance), and to
Commitment on June 20, 2023 -
made at the time of the non-public authorize the Board of Directors of Energy Technology to apply for lock-up procedure to the Shenzhen Branch of
the lock-up of June 20, 2023 December 19, Performed
of IPO or offering of shares China Securities Depository and Clearing Corporation Limited regarding the above shares, so as to ensure that the
shares 2023
refinancing in 2021 above shares held by the Company will not be transferred within six months from the date of completion of the
issuance.
The period
when the
Company’s
Commitment on 2022 Stock
Other Not to offer loans or any other form of financial aids to the incentive objects for them to obtain related stock options or January 24,
stock ownership The Company Option and Strictly performed
commitments restricted shares according to this incentive plan, including guaranteeing the loans. 2022
incentive scheme Restricted Stock
Incentive Plan
was
implemented
In case of any false record, misleading statement or major omission in the information disclosed by the Company,
Commitment on
Other resulting in incompliance with the arrangements for granting or exercising the interests, the incentive objects will, upon January 24,
stock ownership Incentive objects Long term Strictly performed
commitments acknowledgment of any false record, misleading statement or major omission existing in any related information 2022
incentive scheme
disclosure document, return all interests obtained from the equity incentive plan.
83
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
The Company pays dividends in cash or by shares in a positive manner. Where the Company’s audited net profit is
Other positive and no significant investment plan or significant cash expenditure in a year, the Company shall include the cash
commitments to Shareholder distribution in its profit distribution scheme for that year. The annual cash dividend of the Company shall not be less November 21, Within the
small and return plan for the than 20% of the distributable profit realized in the current year (excluding the undistributed profit at the beginning of November 21, 2021 - performance
The Company
medium next three years the year). Where available, the Company may distribute interim cash dividends. If the Company’s revenue grows 2021 November 21, period, strictly
shareholders of (2021-2023) rapidly and the Board of Directors considers that the stock price of the Company does not match the size of the 2024 performed
the Company Company’s share capital, it may make a plan for dividend distribution by stock while satisfying the requirement for
cash dividend distribution.
Undertaking not In view of his confidence in the future development prospects of the Company and his recognition of the long-term
to reduce their investment value, Mr. Paul Xiaoming Lee undertakes not to reduce his shareholding in the Company’ shares within six August 24,
Paul Xiaoming August 24,
shareholding in months from the date of this announcement on voluntary basis. During the above commitment period, any increase of 2023 - February Performed
Lee 2023
the Company’ shares due to reasons such as bonus shares, conversion of capital reserve to share capital and rights issue shall also 23, 2024
shares comply with the above commitment of not to diminish his shareholdings.
1. To comply with the relevant requirements of the CSRC and the Shenzhen Stock Exchange on changes in equity of Period for the
Commitment on
Paul Xiaoming listed companies and stock trading sensitive periods during the implementation of the share increase plan; 2. During the implementation
increase of shares June 27, 2023 Performed
Lee, Li Xiaohua period for the implementation of the share increase plan and the statutory period, not to reduce the shares in the of the share
Other in the Company
Company. increase plan
commitments
1. The directors, supervisors and senior management undertake to strictly comply with the relevant laws and regulations
on stock trading such as the CSRC and the Shenzhen Stock Exchange, and complete the share increase plan within the
Certain directors,
period for the implementation of the share increase plan; during the period for the implementation of the share increase Period for the Within the
supervisors, Commitment on
plan and the statutory period, not to reduce the shares in the Company; no insider trading or short-term trading, and no October 28, implementation performance
senior increase of shares
trading of the Company’s shares during the window period. 2. During period for the implementation of the share 2023 of the share period, strictly
management and in the Company
increase plan and the statutory period, core management, technical and business employees undertake to complete the increase plan performed
core employees
share increase plan, not to reduce the shares in the Company, and strictly comply with the relevant laws and regulations
on stock trading such as the CSRC and the Shenzhen Stock Exchange.
Whether the
commitment is
Yes
performed on
time
If the
commitments are
overdue and have
not been fulfilled,
the specific
Not applicable
reason for non-
fulfilment and
further work plan
shall be explained
in detail
84
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
2. Where any earnings forecast was made for any of the Company’s assets or projects and the
Reporting Period is still within the forecast period, the Company shall explain whether the performance
of the asset or project reaches the earnings forecast and the reason
□ Applicable Not applicable
II. Occupation of the Listed Company’s Capital by the Controlling Shareholder or Its
Related Parties for Non-Operating Purposes
□ Applicable Not applicable
In the Reporting Period, no controlling shareholder or its related party occupied capital of the listed company for non-operating purposes.
III. Illegal external guarantee
□ Applicable Not applicable
The Company didn’t provide any illegal external guarantee during the Reporting Period.
IV. Explanation of the Board of Directors Regarding the “Non-standard Audit Report”
Issued for the Latest Period
□ Applicable Not applicable
V. Explanation of the Board of Directors, the Supervisory Committee and Independent
Directors (If Any) Regarding the “Non-standard Audit Report” Issued by the Accounting
Firm for the Reporting Period
□ Applicable Not applicable
VI. Reason for Changes in Scope of the Consolidated Financial Statements as Compared to
the Financial Report for the Previous Fiscal Year
Applicable □ Not applicable
(I) On January 30, 2023, the Company held the 54th meeting of the 4th Board of Directors and the 47th meeting of the 4th Supervisory Committee
to consider and adopt the Resolution on the Changes of Accounting Policies. Since January 1, 2023, the Company has implemented the content on
the "Accounting Treatment of Deferred Income Tax Related to Assets and Liabilities Generated by a Single Transaction Not Applicable to Initial
Recognition Exemption" as set forth in the Accounting Standards for Business Enterprises No. 16 promulgated by the Ministry of Finance. Such
changes in accounting policies are reasonable as per the relevant regulations promulgated by the Ministry of Finance, which is in compliance with
relevant regulatory requirements and the actual situation of the Company, without significant impact on the Company's financial position,
operating results and cash flow. For details, please refer to the Announcement on Changes in Accounting Policies disclosed on designated
information disclosure media by the Company on January 31, 2023 (Announcement No. 2023-010).
(II) On April 10, 2024, the Company held the 22nd meeting of the 5th Board of Directors and the 18th meeting of the 5th Supervisory Committee
to consider and adopt the Resolution on the Changes of Accounting Policies. Since October 25, 2023, the Company has implemented the
Accounting Standards for Business Enterprises No. 17 "Accounting for Leaseback after Sale" promulgated by the Ministry of Finance in 2023.
Such changes in accounting policies are reasonable as per the relevant regulations promulgated by the Ministry of Finance, which is in compliance
with relevant regulatory requirements and the actual situation of the Company, without significant impact on the Company's financial position,
operating results and cash flow. For details, please refer to the Announcement on Changes in Accounting Policies disclosed on designated
information disclosure media by the Company on April 11, 2023 (Announcement No. 2024 -057).
VII. Reason for Changes in Scope of the Consolidated Financial Statements as
Compared to the Financial Report for the Previous Fiscal Year
Applicable □ Not applicable
In the Reporting Period, there were one company newly included in the scope of the consolidated statements: Yunnan Jiechen Packaging Materials
Co., Ltd., which was newly invested during the Reporting Period.
85
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
VIII. Engagement and Disengagement of CPAs Firm
CPA firm engaged at present
Name of the domestic CPA firm Dahua CPAs (SGP)
Remuneration of the domestic CPA firm (RMB0’000) 265
Consecutive years of audit services provided by the domestic auditor 11 years
Names of the certified public accountants from domestic accounting firm Kang Wenjun, Yao Rui
Consecutive years of audit services provided by the Certified Public Kang Wenjun and Yao Rui provide audit services for two years and
Accountants from domestic accounting firm three years respectively
Whether the CPAs firm was changed in the current period
□ Yes No
Engagement of any CPAs firm, financial advisor or sponsor for internal control and audit
Applicable □ Not applicable
The Company hired Dahua CPAs (SGP) as the auditing and accounting firm for internal control during the Reporting Period; the Company
engaged CITIC Securities Co., Ltd. as the sponsor for the non-public offering of A shares to raise funds.
IX. Possibility of Delisting after Disclosure of this Annual Report
□ Applicable Not applicable
X. Matters Related to Bankruptcy and Reorganization
□ Applicable Not applicable
The Company was not bankrupt and reorganized during the Reporting Period.
XI. Material Litigation and Arbitration
Applicable □ Not applicable
Whether Judgment
Basic information Amount Progress in Hearing result and
caused execution of Disclosure
on litigation involved litigation impact of litigation Disclosure Index
estimated litigation date
(arbitration) (RMB0’000) (arbitration) (arbitration)
liabilities (arbitration)
Zhuhai Energy sued
Hebei Gellec New Announcement on
Energy Science & Litigation Initiated
Withdrawn No impact on the
Technology Co. Ltd by Subsidiary of
in Company's profit for May 22,
(“Gellec”) for 3,000 No -- the Company
November the current and 2023
infringing the (Announcement
2023 subsequent periods
company's invention No.: 2023-079) on
patent No. the Cninfo website
ZL201810751698.9
Announcement on
Shanghai Energy
Litigation Initiated
sued Gellec for No impact on the
Withdrawn by Subsidiary of
infringing the Company's profit for May 22,
2,000 No in March -- the Company
company's utility the current and 2023
2024 (Announcement
model patent No. subsequent periods
No.: 2023-079) on
ZL201920914445.9
the Cninfo website
Shanghai Energy Announcement on
sued Gellec for No impact on the Litigation Initiated
Withdrawn
infringing the Company's profit for May 22, by Subsidiary of
2,000 No in March --
company's utility the current and 2023 the Company
2024
model patent No. subsequent periods (Announcement
ZL201921292978.4 No.: 2023-079) on
86
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
the Cninfo website
Announcement on
The final outcome of Litigation Matters
the judgement remains Involving
uncertain. It is not Subsidiary of the
Shanghai Energy possible to predict the Company (No.:
sued Gellec for impact on the 2023-138);, the
Commence
infringing the Company's profit for August 9, Corrigendum
10,500 No d on April --
company's invention the current or 2023 Announcement on
17, 2024
patent No. subsequent periods. The Litigation Initiated
ZL201380061102.8 final actual impact is by Subsidiary of
subject to the outcome the Company
of the court's final (Announcement
judgement No.: 2023-139) on
the Cninfo website.
Announcement on
Litigation Matters
The final outcome of
Involving
the judgement remains
Subsidiary of the
uncertain. It is not
Company
Shanghai Energy possible to predict the
(Announcement
sued Gellec for impact on the
Commence No.: 2023-138), the
infringing the Company's profit for August 9,
10,500 No d on April -- Corrigendum
company's invention the current or 2023
17, 2024 Announcement on
patent No. subsequent periods. The
Litigation Initiated
ZL201810710744.0 final actual impact is
by Subsidiary of
subject to the outcome
the Company
of the court's final
(Announcement
judgement
No.: 2023-139) on
the Cninfo website
It has not yet
commenced. The final
outcome of the
judgement remains Announcement on
Gellec sued uncertain. It is not Litigation Matters
Shanghai Energy possible to predict the Involving
and Zhuhai Energy Not yet impact on the December Subsidiary of the
5,000 No --
for infringing the commenced Company's profit for 18, 2023 Company
invention patent No. the current or (Announcement
ZL201810969215.2 subsequent periods. The No.: 2023-223) on
final actual impact is the Cninfo website
subject to the outcome
of the court's final
judgement
It has not yet
commenced. The final
outcome of the
judgement remains Announcement on
Gellec sued uncertain. It is not Litigation Matters
Shanghai Energy possible to predict the Involving
and Zhuhai Energy Not yet impact on the December Subsidiary of the
9,900 No --
for infringing the commenced Company's profit for 18, 2023 Company
invention patent No. the current or (Announcement
ZL201810859589.9 subsequent periods. The No.: 2023-223) on
final actual impact is the Cninfo website
subject to the outcome
of the court's final
judgement
The total sum involving other litigations incurred by the Company during the Reporting Period amounted to RMB4,195,000, including the
outstanding case amounting to RMB0 as at the end of the Reporting Period, which will not result in any estimated liabilities.
XII. Punishments and Rectifications
□ Applicable Not applicable
The Company made no punishment or rectification during the Reporting Period.
XIII The Company made no punishment or rectification during the Reporting Period.
Applicable □ Not applicable
During the Reporting Period, the Company and its controlling shareholder and the actual controller were in good standing, and there were no cases
of non-performance of court judgments in force or large debts due but unpaid.
87
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
XIV. Significant related transactions
1. Related transactions arising from routine operation
Applicable □ Not applicable
Wheth
Proportio
er the
n in the
Approve transac Obtainable
Related total
Pricing Related d tion market
Related Details of transactio amount Settlement
Type of related principle of the transac transactio exceed price for Disclosure
transaction Relation related n amount of mode for related Disclosure Index
transaction related tion n limit ed the the transact date
party transaction (RMB0’0 transactio transaction
transaction price (RMB0’0 approv ion of the
00) n of the
00) ed same type
same
limit or
type
not
Purchase raw
Agreed by both
materials from Purchase RNB18.53/ January 31,
parties based on -- 3,374.13 52.82% 5,500 No
related parties additives kg 2023
market price
Sell products Bank deposit or
and Agreed by both acceptance draft
A company Sell raw RNB9.46/k January 31,
commodities to parties based on -- 947.86 77.49% 2,500 No
Kunshasi invested in by materials g 2023
related parties market price
the Company
Lease to related Agreed by both
Lease January 31,
parties parties based on -- 2.40 1.33% 2.4 No Bank deposit --
workshop 2023
market price
A shareholder Agreed by both
Heyi Lease to related January 31,
of the Lease office parties based on -- 0.33 0.19% 0.33 No Bank deposit --
Investment parties 2023
Company market price For details, please refer to the
A shareholder Agreed by both Announcement on the Expected
Heli Lease to related January 31,
of the Lease office parties based on -- 0.24 0.14% 0.24 No Bank deposit -- Routine Related Transactions in
Investment parties 2023
Company market price 2023 (No.: 2023-008) disclosed on
Jiesheng the Cninfo website.
Purchase Purchase
Technology A company Agreed by both
equipment and equipment 30,715.2 32,497.0 Bank deposit or January 31,
Co., Ltd. invested in by parties based on -- 5.37% No --
spare parts from and spare 0 3 acceptance draft 2023
and its the Company market price
related parties parts
subsidiaries
Zhuhai A company Purchase Agreed by both
Purchase 12,765.8 Bank deposit or January 31,
Chenyu invested in by materials from parties based on -- 8.03% 28,350 No --
materials 9 acceptance draft 2023
New the Company related parties market price
88
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Material
Technology Sell packaging
Sell
Co., Ltd. materials and Bank deposit or January 31,
packaging -- 125.97 0.38% 150 No --
and its others to related acceptance draft 2023
materials
subsidiaries parties
Apply for loans
Market pricing,
(including
not higher than
applying for
the loan
general credit
benchmark
limits,
interest rate for 235,762. March 3,
acceptance bill, Loan -- 19.69% 521,000 No Not applicable --
the same period 75 2023
letter of credit,
or the market
letter of
interest rate
guarantee, etc.)
level under the
from related
The spouse of same conditions
banks
Industrial Ms. Zheng For details, please refer to the
Deposits with
and Haiying Market pricing, Announcement on the Expected
related banks
Commercial (Independent not higher than Deposit, Loan and Guarantee with
(including
Bank of Director) is a the deposit 12,587.4 March 3, Related Bank in 2023 (No.: 2023-
demand Deposit -- 2.70% 55,000 No Not applicable --
China Non-executive benchmark 8 2023 028) disclosed on the Cninfo
deposits, time
Limited Director of the interest rate for website.
deposits, call
ICBC the same period
deposits, etc.)
Mutual
guarantees
between
companies for
the purpose of Agreed by both
498,700. March 3,
the Company’s Guarantee parties based on -- 14.96% 521,000 No Not applicable --
00 2023
consolidated market price
financial
statements
through the
related banks
794,982. 1,133,50
Total -- -- -- -- -- -- -- --
25 2.97
Details of any sales return of a large amount No
Give the actual situation during the Reporting Period (if any) where The actual routine transaction amount between the Company and the related parties did not exceed the total amount of routine related transactions estimated by the
a forecast had been made for the total amounts of routine related Company by type.
transactions by type to occur in the current period
Reason for any significant difference between the transaction price
Not applicable
and the market reference price (if applicable)
89
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
2. Related-party transactions relevant to acquisition and sales of assets or equities
□ Applicable Not applicable
The Company didn’t acquire or sell assets or equities during the Reporting Period.
3. Related-party transactions in connection with joint external investments
□ Applicable Not applicable
The Company had no related-party transaction in connection with joint external investments during the Reporting Period.
4. Credits and liabilities with related parties
Applicable □ Not applicable
Whether there were any credits or liabilities with related parties for non-operating purposes
□Yes No
There were no credits or liabilities with related parties for non-operating purpose during the Reporting Period.
5. Dealing with related financial companies
□ Applicable Not applicable
There was no deposit, loan, credit granting or other financial business between the Company and the related financial companies and the related
parties.
6. Dealing between the financial companies controlled by the Company and the related parties
□ Applicable Not applicable
There was no deposit, loan, credit granting or other financial business between the financial companies controlled by the Company and the related
parties.
7. Other significant related party transactions
Applicable □Not applicable
On September 28, 2023, the 13th meeting of the 5th Board of Directors and the 10th meeting of the 5th Supervisory Committee of the Company
considered and approved the 'Proposal on the Acquisition of Minority Interest in a Controlled Subsidiary and Connected Transaction. The
Company proposed to use its own and self-financing funds to acquire 3.25% equity interest and 1.53% equity interest in Shanghai Energy New
Material Technology Co., Ltd. from Ms. Yan Ma and Mr. Alex Cheng. On October 13, 2023, the counterparties, Ms. Yan Ma and Mr. Alex Cheng,
voluntarily supplemented their performance undertakings. On October 19, 2023, the 7th extraordinary general meeting of the Company of 2023
considered and approved this connected transaction. On October 29, 2023, the Company held the 14th meeting of the 5th Board of Directors and
the 11th meeting of the 5th Supervisory Committee, at which it considered and approved the Proposal on Termination of the Acquisition of
Minority Interest in Holding Subsidiary and Connected Transaction. In view of the fact that the Company is currently focusing on accelerating the
overseas strategic layout in order to promptly grasp the development opportunities in overseas markets in the future, promote the co-operation with
overseas customers, and further strengthen overseas competitive advantages, the relevant development needs are more pressing. By taking into
consideration of a variety of factors, including the current market conditions, the Company and the counterparties have decided to terminate the
transaction after full communication and arms-length negotiation.
Relevant information regarding the interim announcement disclosure website for significant related party transactions
Disclosure date of the interim Name of the interim
Name of interim announcement
announcement announcement disclosure website
Proposal on the Acquisition of Minority Interest in a Controlled
September 29, 2023 The Cninfo website
Subsidiary and Connected Transaction
Proposal on the Acquisition of Minority Interest in a Controlled
October 13, 2023 The Cninfo website
Subsidiary and Connected Transaction (Revised)
Announcement on the Response to the Letter of Concern from Shenzhen
October 13, 2023 The Cninfo website
Stock Exchange
Announcement on the 7th Extraordinary General Meeting of the
October 20, 2023 The Cninfo website
Company of 2023
Proposal on Termination of the Acquisition of Minority Interest in
October 30, 2023 The Cninfo website
Holding Subsidiary and Connected Transaction (Updated)
XV.Significant contracts and their execution
1. Trusteeships, Contracts, and Leases
(1) Trusteeships
□ Applicable Not applicable
There was no trusteeship during the Reporting Period.
(2) Contracts
□ Applicable Not applicable
No such cases during the Reporting Period.
(3) Leases
□ Applicable Not applicable
No leases of the Company during the Reporting Period.
90
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
2. Significant guarantees
Applicable □Not applicable
Unit: RMB0’000
External guarantees provided by the Company and its subsidiaries (excluding those for subsidiaries)
Disclosure date of
Actual occurrence Actual guarantee Period of Performed or Guarantee for a
Guaranteed party the guarantee line Guarantee line Type of guarantee
date amount guarantee not related party or not
announcement
Guarantees provided by subsidiaries for subsidiaries
Disclosure date of
Actual occurrence Actual guarantee Period of Performed or Guarantee for a
Guaranteed party the guarantee line Guarantee line Type of guarantee
date amount guarantee not related party or not
announcement
Hongta Plastic March 4, 2023 4,400 May 18, 2022 1,969.22 Joint-liability guarantee 1 year No No
Hongta Plastic March 4, 2023 4,000 May 17, 2022 0 Joint-liability guarantee 5 years No No
Hongta Plastic March 4, 2023 7,800 November 10, 2020 0 Joint-liability guarantee 3 years No No
Hongta Plastic March 4, 2023 5,165 November 9, 2020 5,000 Joint-liability guarantee 3 years No No
Hongta Plastic March 4, 2023 8,000 March 18, 2021 4,100 Joint-liability guarantee 4 years No No
Hongta Plastic March 4, 2023 3,500 October 29, 2021 3,500 Joint-liability guarantee 3 years No No
Hongta Plastic March 4, 2023 10,000 November 29, 2021 136.67 Joint-liability guarantee 1 year No No
Hongta Plastic March 4, 2023 12,900 January 12, 2022 7,960.55 Joint-liability guarantee 3 years No No
Hongta Plastic March 4, 2023 6,000 May 5, 2022 6,000 Joint-liability guarantee 2 years No No
Hongta Plastic March 4, 2023 5,000 November 30, 2020 0 Joint-liability guarantee 1 year No No
Hongta Plastic March 4, 2023 5,000 October 24, 2022 2,000 Joint-liability guarantee 1 year No No
Dexin Paper March 4, 2023 800 March 30, 2021 0 Joint-liability guarantee 3 years No No
Dexin Paper March 4, 2023 1,000 January 12, 2022 1,000 Joint-liability guarantee 2 years No No
Dexin Paper March 4, 2023 1,000 June 7, 2022 1,000 Joint-liability guarantee 4 years No No
Dexin Paper March 4, 2023 2,000 October 24, 2022 0 Joint-liability guarantee 1 year No No
Dexin Paper March 4, 2023 2,000 November 13, 2019 0 Joint-liability guarantee 3 years No No
Hongchuang Packaging March 4, 2023 6,600 May 18, 2022 4,296.26 Joint-liability guarantee 1 year No No
Hongchuang Packaging March 4, 2023 5,000 January 12, 2022 0 Joint-liability guarantee 5 years No No
Hongchuang Packaging March 4, 2023 3,000 February 23, 2022 2,904.06 Joint-liability guarantee 3 years No No
Hongchuang Packaging March 4, 2023 5,600 March 1, 2022 0 Joint-liability guarantee 3 years No No
Hongchuang Packaging March 4, 2023 16,200 March 15, 2022 7,317.25 Joint-liability guarantee 3 years No No
Hongchuang Packaging March 4, 2023 4,000 March 21, 2022 0 Joint-liability guarantee 2 years No No
91
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Hongchuang Packaging March 4, 2023 12,000 May 1, 2022 417.21 Joint-liability guarantee 4 years No No
Hongchuang Packaging March 4, 2023 4,000 June 23, 2022 3,114.33 Joint-liability guarantee 1 year No No
Hongchuang Packaging March 4, 2023 11,000 July 8, 2022 3,813.25 Joint-liability guarantee 1 year No No
Hongchuang Packaging March 4, 2023 843.83 July 21, 2022 616.83 Joint-liability guarantee 1 year No No
Hongchuang Packaging, Shanghai Energy, September 30, 2022
March 4, 2023 39,224.9 30,000 Joint-liability guarantee 八 years No No
Wuxi Energy, Jiangsu Energy
Hongchuang Packaging March 4, 2023 10,000 October 21, 2022 0 Joint-liability guarantee 1 year No No
Hongchuang Packaging March 4, 2023 6,000 October 21, 2022 4,214.95 Joint-liability guarantee 3 years No No
Chengdu Hongta Plastic March 4, 2023 7,500 May 11, 2022 360 Joint-liability guarantee 1 year No No
Chengdu Hongta Plastic March 4, 2023 3,000 September 30, 2020 0 Joint-liability guarantee 1 year No No
Shanghai Energy March 4, 2023 85,600 October 23, 2020 63,600 Joint-liability guarantee 7 years No No
Shanghai Energy March 4, 2023 66,000 March 5, 2021 40,000 Joint-liability guarantee 5 years No No
Shanghai Energy March 4, 2023 11,000 March 16, 2021 0 Joint-liability guarantee Indefinite term No No
Shanghai Energy March 4, 2023 24,000 July 14, 2021 0 Joint-liability guarantee 3 years No No
Shanghai Energy March 4, 2023 90,000 September 15, 2021 81,800 Joint-liability guarantee 3 years No No
Shanghai Energy March 4, 2023 4,622.59 January 1, 2022 0 Joint-liability guarantee 5 years No No
Shanghai Energy March 4, 2023 45,000 February 7, 2022 20,000 Joint-liability guarantee 5 years No No
Shanghai Energy, Wuxi Energy March 4, 2023 10,000 February 14, 2022 0 Joint-liability guarantee 2 years No No
Shanghai Energy March 4, 2023 30,000 February 14, 2022 0 Joint-liability guarantee 5 years No No
Shanghai Energy, Zhuhai Energy March 4, 2023 34,382 February 15, 2022 0 Joint-liability guarantee 3 years No No
Shanghai Energy March 4, 2023 20,000 March 8, 2022 14,800 Joint-liability guarantee 1 year No No
Shanghai Energy March 4, 2023 20,000 March 21, 2022 20,000 Joint-liability guarantee 1 year No No
Shanghai Energy March 4, 2023 12,000 March 17, 2022 12,000 Joint-liability guarantee 1 year No No
Shanghai Energy March 4, 2023 80,000 November 30, 2021 25,000 Joint-liability guarantee 1 year No No
Shanghai Energy March 4, 2023 58,695.9 May 10, 2022 20,000 Joint-liability guarantee 2 years No No
Shanghai Energy March 4, 2023 50,000 June 5, 2022 42,750 Joint-liability guarantee 1 year No No
Shanghai Energy March 4, 2023 120,000 June 9, 2022 59,992.5 Joint-liability guarantee 15 years No No
Shanghai Energy March 4, 2023 87,500 April 18, 2022 30,000 Joint-liability guarantee 1 year No No
Shanghai Energy March 4, 2023 20,900 July 21, 2022 0 Joint-liability guarantee 2 years No No
Shanghai Energy March 4, 2023 16,500 June 10, 2022 15,000 Joint-liability guarantee 2 years No No
Shanghai Energy March 4, 2023 60,600 July 21, 2022 26,500 Joint-liability guarantee 1 year No No
Shanghai Energy March 4, 2023 19,600 September 2, 2022 400 Joint-liability guarantee 1 year No No
Shanghai Energy March 4, 2023 50,000 September 1, 2022 19,000 Joint-liability guarantee 4 years No No
Shanghai Energy March 4, 2023 5,000 September 21, 2022 5,000 Joint-liability guarantee 1 year No No
Shanghai Energy March 4, 2023 20,000 September 16, 2022 9,750 Joint-liability guarantee 1 year No No
Zhuhai Energy March 4, 2023 20,000 October 14, 2022 0 Joint-liability guarantee 5 years No No
Zhuhai Energy March 4, 2023 22,000 March 5, 2021 16,911.59 Joint-liability guarantee 2 years No No
92
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Zhuhai Energy March 4, 2023 30,000 October 27, 2022 0 Joint-liability guarantee 1 year No No
Zhuhai Energy March 4, 2023 27,000 December 28, 2022 0 Joint-liability guarantee 3 years No No
Zhuhai Energy March 4, 2023 10,000 December 11, 2019 5,580.15 Joint-liability guarantee 4 years No No
Zhuhai Energy March 4, 2023 3,200 November 30, 2021 3,000 Joint-liability guarantee 1 year No No
Zhuhai Energy March 4, 2023 30,000 May 21, 2021 1,394.2 Joint-liability guarantee 1 year No No
Zhuhai Energy March 4, 2023 20,000 May 18, 2021 1,773.12 Joint-liability guarantee 1 year No No
Zhuhai Energy March 4, 2023 20,000 June 24, 2021 4,800 Joint-liability guarantee 1 year No No
Zhuhai Energy March 4, 2023 30,000 September 1, 2021 30,000 Joint-liability guarantee 2 years No No
Zhuhai Energy March 4, 2023 15,000 September 1, 2021 10,000 Joint-liability guarantee 3 years No No
Wuxi Energy March 4, 2023 10,000 January 19, 2022 0 Joint-liability guarantee 3 years No No
Wuxi Energy March 4, 2023 10,000 February 7, 2022 6,800 Joint-liability guarantee 1 year No No
Wuxi Energy, Jiangxi Tonry, Suzhou March 30, 2022
GreenPower, Chongqing Energy, Jiangxi
Ruijie, Jiangsu Energy, Jiangsu Ruijie, March 4, 2023 70,000 0 Joint-liability guarantee 4 years No No
Jiangxi Enpo, Hubei Energy, Jiangsu Sanhe,
Yuxi Energy
Wuxi Energy, Jiangxi Tonry, Suzhou May 18, 2022
GreenPower, Chongqing Energy, Jiangxi
Ruijie, Jiangsu Energy, Jiangsu Ruijie,
March 4, 2023 300,000 9,268.49 Joint-liability guarantee 1 year No No
Jiangxi Enpo, Hubei Energy, Jiangsu Sanhe,
Yuxi Energy, Xiamen Energy, Newmi Tech,
Jiangxi Energy
Wuxi Energy, Jiangxi Tonry, Suzhou July 08, 2022
GreenPower, Chongqing Energy, Jiangxi
Ruijie, Jiangsu Energy, Jiangsu Ruijie, March 4, 2023 150,000 19 Joint-liability guarantee 3 years No No
Jiangxi Enpo, Hubei Energy, Yuxi Energy,
Xiamen Energy, Jiangxi Energy
Wuxi Energy, Jiangxi Tonry, Suzhou September 23, 2022
GreenPower, Chongqing Energy, Jiangxi
Ruijie, Jiangsu Energy, Jiangsu Ruijie, March 4, 2023 150,000 0 Joint-liability guarantee 3 years No No
Jiangxi Enpo, Hubei Energy, Jiangsu Sanhe,
Yuxi Energy, Xiamen Energy
Wuxi Energy March 4, 2023 7,000 September 7, 2022 6,954.59 Joint-liability guarantee 1 year No No
Wuxi Energy March 4, 2023 20,000 October 27, 2022 7,700 Joint-liability guarantee 1 year No No
Wuxi Energy March 4, 2023 15,000 May 1, 2021 0 Joint-liability guarantee 1 year No No
Jiangxi Tonry March 4, 2023 13,500 August 7, 2021 10,000 Joint-liability guarantee 3 years No No
Jiangxi Tonry March 4, 2023 10,000 January 5, 2022 10,000 Joint-liability guarantee 1 year No No
Jiangxi Tonry March 4, 2023 10,000 April 11, 2022 10,000 Joint-liability guarantee 1 year No No
Jiangxi Tonry March 4, 2023 10,000 June 10, 2021 10,000 Joint-liability guarantee 1 year No No
Jiangxi Tonry March 4, 2023 20,000 May 30, 2022 19,000 Joint-liability guarantee 1 year No No
93
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Jiangxi Tonry March 4, 2023 5,000 August 12, 2022 5,000 Joint-liability guarantee 1 year No No
Jiangxi Tonry March 4, 2023 10,000 October 8, 2022 10,000 Joint-liability guarantee 1 year No No
Suzhou GreenPower March 4, 2023 10,400 November 1, 2022 0 Joint-liability guarantee 5 years No No
Suzhou GreenPower March 4, 2023 10,000 January 22, 2021 0 Joint-liability guarantee 5 years No No
Suzhou GreenPower March 4, 2023 10,000 October 17, 2022 6,058.95 Joint-liability guarantee 1 year No No
Chongqing Energy March 4, 2023 30,000 October 28, 2022 0 Joint-liability guarantee 1 year No No
Jiangxi Ruijie March 4, 2023 40,000 September 17, 2021 30,000 Joint-liability guarantee 7 years No No
SEMCORPHUNGARYKFT. March 4, 2023 100,000 July 1, 2020 4,341.25 Joint-liability guarantee 5 years No No
SEMCORPHUNGARYKFT. March 4, 2023 45,000 November 30, 2021 0 Joint-liability guarantee 4 years No No
Jiangsu Energy March 4, 2023 20,000 April 8, 2021 5,000 Joint-liability guarantee 1 year No No
Hubei Energy March 4, 2023 49,500 March 9, 2022 36,694.19 Joint-liability guarantee 5 years No No
Hubei Energy March 4, 2023 165,000 May 30, 2022 90,955.68 Joint-liability guarantee 9 years No No
Yuxi Energy March 4, 2023 50,000 October 8, 2022 41,075.44 Joint-liability guarantee 3 years No No
Yuxi Energy March 4, 2023 100,000 November 01, 2021 9,441.25 Joint-liability guarantee 3 years No No
Yuxi Energy March 4, 2023 80,000 May 6, 2022 0 Joint-liability guarantee 9 years No No
Shanghai Energy Trading Co., Ltd. March 4, 2023 1,000 May 5, 2022 1,000 Joint-liability guarantee 1 year No No
Hongchuang Packaging (Anhui) Co., Ltd. March 4, 2023 21,000 July 14, 2021 0 Joint-liability guarantee 1 year No No
Jiangxi Tonry March 4, 2023 50,000 December 27, 2021 0 Joint-liability guarantee 1 year No No
Jiangxi Tonry March 4, 2023 180,000 April 13, 2022 0 Joint-liability guarantee 3 years No No
Jiangxi Enpo March 4, 2023 180,000 May 17, 2022 0 Joint-liability guarantee 3 years No No
Jiangxi Tonry March 4, 2023 150,000 November 24, 2022 0 Joint-liability guarantee 5 years No No
Zhuhai Energy March 4, 2023 75,000 June 10, 2021 28,000 Joint-liability guarantee 6 years No No
Zhuhai Energy March 4, 2023 20,000 August 14, 2017 0 Joint-liability guarantee 2 years No No
Wuxi Energy March 4, 2023 116,000 August 1, 2019 45,449.29 Joint-liability guarantee 9 years No No
Jiangxi Tonry March 4, 2023 150,000 May 8, 2020 0 Joint-liability guarantee 5 years No No
Suzhou GreenPower March 4, 2023 55,000 June 9, 2022 22,972.03 Joint-liability guarantee 5 years No No
Chongqing Energy March 4, 2023 160,000 December 1, 2020 88,099.87 Joint-liability guarantee 6 years No No
Total actual amount
of guarantees in
Total line of guarantees granted to subsidiaries during the
5,738,300 favour of subsidiaries 1,345,041.37
Reporting Period (B1)
during the Reporting
Period (B2)
Total actual amount
of guarantees in
Total line of guarantees granted to subsidiaries as at the end of the favour of subsidiaries
5,738,300 1,182,602.16
Reporting Period (B3) as at the end of the
Reporting Period
(B4)
94
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Guarantees provided by subsidiaries for subsidiaries
Disclosure date of
Actual occurrence Actual guarantee Period of Performed or Guarantee for a
Guaranteed party the guarantee line Guarantee line Type of guarantee
date amount guarantee not related party or not
announcement
Jiangsu Energy March 4, 2023 160,000 June 30, 2022 40,909.74 Joint-liability guarantee 3 years No No
Jiangsu Ruijie March 4, 2023 43,500 June 30, 2022 16,964.27 Joint-liability guarantee 3 years No No
Total line of
guarantees granted to
Total line of guarantees granted to subsidiaries during the
subsidiaries during
Reporting Period (C1) 203,500 62,747.36
the Reporting Period
(C2)
Total actual amount
of guarantees in
Total line of guarantees granted to subsidiaries as at the end of the favour of subsidiaries
203,500 57,874.02
Reporting Period (C3) as at the end of the
Reporting Period
(C4)
Total guarantee amount provided by the Company (sum of the aforesaid three categories)
Total actual amount
Total line of guarantees granted during the Reporting Period of guarantees during
5,941,800 1,407,788.73
(A1+B1+C1) the Reporting Period
(A2+B2+C2)
Total line of guarantees granted as at the end of the Reporting Total actual amount
Period of guarantees as at the
5,941,800 1,240,476.18
end of the Reporting
(A3+B3+C3)
Period (A4+B4+C4)
Actual total guarantees (A4+B4+C4) in proportion to net asset of the Company 46.07%
Including:
Balance of guarantees given for shareholders, actual controllers and their related parties (D) 0
Balance of debt guarantees direct or indirectly given for guarantee parties with gearing ratio of over 70% (E) 1,957,625.39
Amount of total guarantees in excess of 50% of net assets (F) 4,591,754.01
Total of the above three guarantee amounts (D+E+F) 4,591,754.01
For unexpired guarantees, descriptions about the guarantee liabilities or possible joint and several liabilities of
Nil
repayment occurred during the Reporting Period (if any)
External guarantees in breach of procedural requirements (if any) Nil
95
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
3. Entrusted cash assets management
(1) Entrusted wealth management
Applicable □ Not applicable
Overview of entrusted wealth management during the Reporting Period
Unit: RMB0’000
Impairment of
Source of capital Amount of the
Overdue amount not overdue wealth
Type under the entrusted Entrusted wealth Undue amount
recovered management not
wealth management management
recovered
Bank wealth Self-owned fund
management 85,192.75 72,192.75 0 0
products
Total 85,192.75 72,192.75 0 0
Particulars of high-risk entrusted wealth management with significant single amount or low security and low liquidity
□ Applicable Not applicable
Whether there is the case where the principal cannot be recovered at maturity or other case where impairment may occur
□ Applicable Not applicable
(2) Entrusted loans
□ Applicable Not applicable
There was no entrusted loan of the Company during the Reporting Period.
4. Other major contracts
□Applicable Not applicable
96
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
XVI. Explanation for Other Significant Events
Applicable □ Not applicable
1.From January 3, 2023 to January 30, 2023, the Company's stock triggered the redemption clause of "Energy Convertible Bonds". The 54th
meeting of the 4th session of the Board of Directors of the Company resolved not to exercise the early redemption right of "Energy Convertible
Bonds" during the period from January 31, 2023 to June 30, 2023. From July 3, 2023 to July 21, 2023, the Company's stock triggered the
redemption clause of "Energy Convertible Bonds". The 8th meeting of the 5th Board of Directors of the Company resolved not to exercise the
early redemption right of "Energy Convertible Bonds" during the period from July 22, 2023 to December 31, 2023. For details, please refer to the
Announcement on No Early Redemption of "Energy Convertible Bonds" (Announcement Nos: 2023-007 and 2023-129) published by the
Company in the designated information disclosure media on January 31, 2023 and July 22, 2023, respectively.
2. The Company completed the general election of the Board of Directors and the Supervisory Committee on March 24, 2023. Following the
election at the 2022 Annual General Meeting held on March 24, 2023 and the Employees’ Representatives Conference held on February 24, 2023,
the members of the 5th Board of Directors of the Company are Mr. Paul Xiaoming Lee, Mr. Li Xiaohua, Ms. Yan Ma, Mr. Alex Cheng, Mr. Ma
Weihua, Mr. Feng Jie, Ms. Shou Chunyan, Mr. Pan Siming and Ms. Zhang Jing; and the members of the 5th Supervisory Committee of the
Company are Mr. Zhang Tao, Mr. Li Bing and Ms. Kang Wenting. On April 6, 2023, the first meeting of the 5th Board of Directors and the first
meeting of the 5th Supervisory Committee of the Company elected the chairman and vice-chairman of the 5th Board of Directors and the chairman
of the 5th Supervisory Committee of the Company, and renewed the appointment of the general manager, the deputy general manager and the
secretary of the Board of the Company. For details, please refer to the Announcement on the Resolutions of the 2022 Annual General Meeting
(Announcement No.: 2023-046) and the Announcement on the Completion of the General Election of the Board of Directors and the Supervisory
Committee and the Re-appointment of Senior Management (Announcement No.: 2023-050), which were disclosed by the Company on the Cninfo
website on March 25, 2023 and April 7, 2023, respectively.
3. During the Reporting Period, the Company implemented a total of two share repurchase plans of the Company for the execution of equity
incentive or employee stock ownership s cheme, with its own funds. From May 4, 2023 to May 9, 2023, the Company repurchased a total of
1,469,800 shares through the designated account for repurchase by way of centralized bidding transactions, with the total amount paid for
repurchase amounting to RMB149,973,873.79 (excluding transaction costs). Please refer to the Announcement on the Completion of Share
Repurchase and Changes in Shares (Announcement No.: 2023-074) published by the Company in the designated information disclosure media on
May 10, 2023 for details. From September 28, 2023 to December 25, 2023, the Company repurchased a total of 7,238,804 shares by way of
centralized bidding transactions through the designated account for repurchase, and the total amount paid for the repurchase was
RMB400,002,812.96 (excluding transaction costs), please refer to the 'Announcement on the Completion of Share Repurchase and Changes in
Shares (Announcement No.: 2023-229) published by the Company in the designated information disclosure media on December 26, 2023 for
details.
4.Based on the recognition of the long-term development of the Company, Mr. Paul Xiaoming Lee (chairman) and Mr. Li Xiaohua (vice chairman
and general manager), actual controllers of the Company, increased their shareholdings in the Company by a total of 2,078,318 shares by means of
centralized bidding transactions through the trading system of the Shenzhen Stock Exchange from June 27, 2023 to July 17, 2023, with an increase
in the amount of RMB194 million, of which Mr. Paul Xiaoming Lee increased his shareholdings by 1,246,718 shares, with an increase amount of
RMB116 million; Mr. Li Xiaohua increased his shareholdings by 831,600 shares, with an increase amount of RMB78 million. The relevant share
increase plan was completed. For details, please refer to the Announcement on the Plan of Controlling Shareholders and Actual Controllers to
Increase Their Shareholdings in the Company (Announcement No.: 2023-112) and Announcement on the Completion of the Plan of Controlling
Shareholders and Actual Controllers to Increase Their Shareholding in the Company (Announcement No.: 2023-122), which were published by the
Company in the designated disclosure of information media on June 26, 2023 and July 18, 2023, respectively. In addition, Mr. Paul Xiaoming Lee
voluntarily undertook not to reduce his shareholdings in the Company within 6 months from August 24, 2023. For details, please refer to the
Announcement on the Undertaking of the Controlling Shareholders of the Company Not to Reduce Their Shareholdings in the Company
(Announcement No.: 2023-153) published by the Company in the designated disclosure of information media on August 24, 2023. Currently, the
undertaking has been fulfilled now.
5.Based on the confidence in the Company's future development and recognition of its long-term investment value, some of the Company's
directors, supervisors, senior management and core management, technical and business personnel intend to increase their shareholdings in the
Company within 6 months from October 28, 2023, with an aggregate amount of not less than RMB200 million (inclusive) and not more than
RMB400 million (inclusive). For details, please refer to the Announcement on the Plans for Increase in Shareholdings in the Company by Some of
Directors, Supervisors, Senior Management and Core Personnel (Announcement No.: 2023-192) published by the Company in the designated
information disclosure media on October 30, 2023. As of the end of the Reporting Period, the above persons have increased their equity interest by
144,300 shares, with a total increase of RMB8.8802 million. This share increase plan is being implemented. The Company will continue to pay
attention to the implementation of the share increase plan, manage the increased shares in the Company, supervise such persons of purchase and
sale of the Company's shares in strict accordance with the relevant provisions, timely fulfill the information disclosure obligations.
6.On November 22, 2022, the Company published the 'Announcement on Material Matters (Announcement No.: 2022-146) in the designated
information disclosure media. On January 30, 2023, April 11, 2023 and August 26, 2023, the Company published the 'Announcement on Update of
Material Matters' (Announcement Nos: 2023-004,2023-053 and 2023-155) in the designated information disclosure media. The relevant authorities
lifted the compulsory measures imposed on Mr. Li Xiaohua and Mr. Paul Xiaoming Lee. Mr. Paul Xiaoming Lee received the Written Decision of
Recalling a Case issued by the public security authority. At present, both Mr. Li Xiaohua and Mr. Paul Xiaoming Lee are performing their duties
normally in the Company with diligence and are actively participating in the operation and management of the Company.
XVII. Significant Events of the Company and Its Subsidiaries
Applicable □ Not applicable
1.During the Reporting Period, Shanghai Energy established good cooperation with a number of important customers. Shanghai Energy
entered into a 2023 Guaranteed Supply Agreement with CATL, pursuant to which Shanghai Energy supplied lithium-ion battery wet-process
97
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
separator to CATL (including CATL and its affiliates) based on the agreed quantities; Shanghai Energy entered into a Capacity Locking
Agreement with a well-known global large-scale lithium battery producer for supplying no less than 960 million square meters of lithium battery
separator materials to that producer from its Hungarian plant in the period of 2025-2033, subject to the purchase order; Shanghai Energy received a
supplier nomination letter from a global battery company confirming that Shanghai Energy had become its lithium battery separator supplier for
supplying separator film products for its lithium batteries of mainstream auto models at its production bases in Europe, Asia, etc. from 2023 to
2031, subject to the purchase order. For details, please refer to the Announcement on the Signing of Guaranteed Supply Agreement by the
Company's Controlled Subsidiary Shanghai Energy (Announcement No.: 2023-016), the Announcement on the Signing of Capacity Locking
Agreement by Controlled Subsidiary Shanghai Energy New Material Technology Co., Ltd. (Announcement No.: 2023-158) and the
Announcement on the Receipt of Supplier Nomination Letter (Announcement No.: 2023-164), which were disclosed by the Company in the
designated information disclosure media on February 14, 2023, August 30, 2023 and September 13, 2023, respectively.
2. On April 12, 2023, Hongchuang Packaging and Jiangsu Jintan Economic Development Zone entered into the Investment Agreement of
Hongchuang Aseptic Packaging Production Base Project, deciding to terminate the former Investment Cooperation Agreement for “Energy Liquid
Packaging Project” signed by both parties on December 20, 2021; on the same day, Hongchuang Packaging entered into the Investment Agreement
of Hongchuang Aseptic Packaging Production Base Project with the Management Committee of Ma'anshan Economic and Technological
Development Zone, pursuant to which the wholly-owned project company of Hongchuang Packaging located within the area under the jurisdiction
of the Management Committee of Ma'anshan Economic and Technological Development Zone invested in the construction of Hongchuang Aseptic
Packaging Production Base Project. The project company completed the filing of the project and the filing of the change in the industrial and
commercial registration for the relocation, and obtained the Business License re-issued by the Ma'anshan Administration for Market Regulation.
For details, please refer to the Announcement on the Progress of the Signing of Investment and Cooperation Agreement on Energy Liquid
Packaging Project between Hongchuang Packaging and the Management Committee of Jiangsu Jintan Economic Development Zone
(Announcement No.: 2023-055) and the Announcement on the Completion by a Subsidiary of Filing of Changes in the Industrial and Commercial
Registration (Announcement No.: 2023-057), which were disclosed by the Company in the designated information disclosure media on April 14
and April 17, 2023, respectively.
3. The Company intends to set up the Shanghai management headquarters for new energy, Energy Research Institute and overseas operation
headquarters in Jinqiao Development Zone, with an estimated total project investment of no more than RMB1,720 million. On May 22, 2023,
Shanghai Energy and Shanghai Jinqiao (Group) Co., Ltd. entered into a Framework Agreement, pursuant to which Jinqiao Group would transfer
the exclusive parts of Building B, C and D at the Jinqiao 1851 project by way of pre-sale. The total tentative pre-sale price was RMB1,714.5
million. The Company would pay the total tentative pre-sale price as agreed in the agreement in batches. For details, please refer to the
Announcement on the Progress of the Investment in the Construction of the Group's Headquarters Office Building, Research and Development
Center and Overseas Operation Headquarters (Announcement No.: 2023-080), which was disclosed by the Company in the designated information
disclosure media on May 23, 2023.
Section 7 Share Changes and Shareholder Details
I. Changes in Shares
1. Changes in shares
Unit: shares
Before the change Increase or decrease (＋,－) After the change
Convers ion
Number of New shares Bonus Number of
Proportion of reserve Others Subtotal Proportion
shares issued issuance shares
into share
I. Shares subject to
150,367,377 16.85% -2,949,509 -2,949,509 147,417,868 15.08%
restrictions on sale
1. Shares held by state 0 0.00% 0 0.00%
2. Shares held by state-
0 0.00% 0 0.00%
owned legal persons
3. Shares held by other
55,714,351 6.24% -3,881,014 -3,881,014 51,833,337 5.30%
domestic investors
Including: Shares held
by domestic legal 0 0.00% 0 0.00%
persons
Shares held by domestic
55,714,351 6.24% -3,881,014 -3,881,014 51,833,337 5.30%
natural persons
4. Shares held by
94,653,026 10.61% 931,505 931,505 95,584,531 9.78%
overseas investors
Including: Shares held
by overseas legal 0 0.00% 0 0.00%
persons
98
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Shares held by overseas
94,653,026 10.61% 931,505 931,505 95,584,531 9.77%
natural persons
II. Shares not subject to
742,044,313 83.15% 85,421,412 2,870,968 88,292,380 830,336,693 84.92%
restrictions on Sale
1. Renminbi
denominated common 742,044,313 83.15% 85,421,412 2,870,968 88,292,380 830,336,693 84.92%
shares
2.Domestically-listed
0 0.00% 0 0.00%
foreign shares
3. Foreign shares listed
0 0.00% 0 0.00%
overseas
4. Others 0 0.00% 0 0.00%
III. Total shares 892,411,690 100.00% 85,421,412 -78,541 85,342,871 977,754,561 100.00%
Reason for changes in shares
Applicable □Not applicable
1. Conversion of convertible corporate bonds into shares
Under the approval granted by the CSRC under the Reply on Approving the Public Offering of Convertible Corporate Bonds by Yunnan Energy
New Material Co., Ltd. (Zheng Jian Xu Ke [2019] No. 2701), the Company made a public offering of 16 million convertible corporate bonds
(bonds abbreviation: Energy Convertible Bond, bonds code: 128095) on February 11, 2020 and started trading at Shenzhen Stock Exchange on
February 28, 2020. The conversion period of “Energy Convertible Bonds” started on August 17, 2020. During the Reporting Period, a total of
10,089 shares were converted from the bonds, and by the end of the Reporting Period, a total of 17,629,685 shares were converted from the bonds.
2. 2022 Stock Option and Restricted Stock Incentive Plan
On June 25, 2023, the 7th meeting of the 5th Board of Directors considered and adopted the Resolution on Repurchase and Cancellation of Certain
Restricted Shares under the 2022 Stock Option and Restricted Stock Incentive Plan and the Resolution on the Restricted Shares under the 2022
Stock Option and Restricted Stock Incentive Plan of the Company Meeting the Unlocking Conditions in the First Unlocking Period. On July 11,
2023, the Company held the Second Extraordinary General Meeting of Shareholders of 2023, at which it considered and approved the Resolution
on the Repurchase and Cancellation of Certain Restricted Shares under the 2022 Stock Option and Restricted Stock Incentive Plan. On July 19,
2023, the Company completed the repurchase and cancellation of 88,630 restricted shares under the 2022 Stock Option and Restricted Stock
Incentive Plan. On July 3, 2023, 598,537 shares, which met the unlocking conditions during the first unlocking period of the 2022 Stock Option
and Restricted Stock Incentive Plan, were listed for trading.
3. Listing for trading of non-publicly issued shares
Upon the approval of the CSRC with the Reply on Approving the Non-public Offering of Shares of Yunnan Energy New Material Co., Ltd. (Zheng
Jian Xu Ke [2022] No. 1343), the Company made a non-public offering of 85,421,412 RMB-denominated ordinary shares on June 8, 2023, which
were listed for trading on the SZSE on June 20, 2023. On December 20, 2022, 85,421,412 shares that were non-publicly offered by the Company
were released from sale restriction and listed for trading. After the listing, the nature of the aforesaid shares was changed from restricted shares to
unrestricted shares.
4.Reasons for other changes
The shares held by the directors and senior managers of the Company have been locked in accordance with the Listing Rules of Shenzhen Stock
Exchange, Self-Disciplinary Regulatory Guidelines for Companies Listed on the Shenzhen Stock Exchange No. 1 -- Standardized Operation of
Companies Listed on the Main Board, the Several Provisions Regarding Share Reduction by Shareholders, Directors, Supervisors and Senior
Executives of Listed Companies, the Implementation Rules of Shenzhen Stock Exchange Regarding Share Reduction by Shareholders, Directors,
Supervisors and Senior Executives of Listed Companies and other related provisions.
Approval of changes in shares
Applicable □Not applicable
1. Convertible corporate bonds
Under the approval granted by China Securities Regulatory Commission under the Reply on Approving the Public Offering of Convertible
Corporate Bonds by Yunnan Energy New Material Co., Ltd. (CSRC License No. [2019] 2701), the Company made a public offering of 16 million
convertible corporate bonds (bonds abbreviation: Energy Convertible Bond, bonds code: 128095) on February 11, 2020 and started trading at
Shenzhen Stock Exchange on February 28, 2020. The conversion period of “Energy Convertible Bonds” started on August 17, 2020.
2. 2022 Stock Option and Restricted Stock Incentive Plan
In order to further improve the Company's long-term incentive mechanism and fully mobilize the enthusiasm of core employees, on March 17,
2021, the Company held the 24th meeting of the fourth Board of Directors to consider and adopt the Resolution on Repurchasing the Company's
Shares, agreeing that the Company would use its own funds to repurchase the Company's public shares through centralized bidding trade. The
repurchased shares were used to implement equity incentive or employee shareholding plans. On January 24, 2022 and February 14, 2022, the
Company held the 41st meeting of the fourth Board of Directors and the Second Extraordinary General Meeting of Shareholders of 2022 to
consider and adopt the Resolution on the Company's 2022 Stock Option and Restricted Stock Incentive Plan (Draft) and its Summary as well as
other relevant motions. On June 25, 2023 and July 11, 2023, the Company held the 7th meeting of the fifth Board of Directors and the second
99
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
extraordinary general meeting of 2023, respectively, at which it considered and approved the Resolution on the Repurchase and Cancellation of
Certain Restricted Shares under the 2022 Stock Option and Restricted Stock Incentive Plan of the Company. On July 19, 2023, the Company
completed the repurchase and cancellation of 88,630 partial restricted shares under the 2022 Stock Option and Restricted Stock Incentive Plan. On
June 25, 2026, the Company held the 7th meeting of the fifth Board of Directors, at which it considered and approved the Resolution on the
Restricted Shares under the 2022 Stock Option and Restricted Stock Incentive Plan of the Company Meeting the Unlocking Conditions in the First
Unlocking Period, approving that a total of 598,537 shares that were held by 765 incentive objects under the 2022 Stock Option and Restricted
Stock and met the unlocking conditions were released from sales restriction.
3. Listing for trading of non-publicly issued shares in 2021
Upon the approval of the CSRC with the Reply on Approving the Non-public Offering of Shares of Yunnan Energy New Material Co., Ltd. (Zheng
Jian Xu Ke [2022] No. 1343), the Company made a non-public offering of 85,421,412 RMB-denominated ordinary shares (A shares) to 21 specific
investors. The registration procedures of new shares were completed at the CSDC Shenzhen Branch on June 8, 2023 and listed on the SZSE on
June 20, 2023, with a locking period of 6 months from the date of listing. The locking period for the abovementioned non-publicly issued RMB-
denominated ordinary shares had expired. The aforesaid restricted shares were released from restriction and listed for trading on December 20,
2023 after the Company applied to the Shenzhen Stock Exchange and the CSDC Shenzhen Branch for the release of sales restriction.
Transfer of share ownership
Applicable □Not applicable
1. Unlocking of restricted shares for the first unlocking period under the 2022 Stock Option and Restricted Stock Incentive Plan
The Company completed the unlocking procedures of restricted shares at the CSDC Shenzhen Branch. The date of listing for trading of the
unlocked restricted shares was July 3, 2023. 598,537 restricted shares were unlocked with 765 incentive objects meeting the unlocking conditions.
2. Listing of non-publicly issued shares in 2021
The Company completed the pre-registration at the CSDC Shenzhen Branch on June 8, 2023 and obtained the Confirmation of Acceptance on
Application for Share Registration (Service No. 101000012459), and the CSDC Shenzhen Branch accepted the materials of the non-public issue of
new shares with the relevant shares transferred on June 1, 2023. The number of new shares in the non-public offering was 85,421,412 shares. On
December 20, 2023, the non-publicly issued shares in 2021 were released from sales restriction.
3. Conversion of convertible corporate bonds into shares
A total of 10,089 shares were converted from “Energy Convertible Bonds” during the Reporting Period, and a total of 17,629,685 shares were
converted as of the end of the Reporting Period.
4. Repurchase and cancellation of restricted shares under the 2022 Stock Option and Restricted Stock Incentive Plan
The Company completed the repurchase of 88,630 restricted shares which were granted but not released from restriction under the 2022 Stock
Option and Restricted Stock Incentive Plan, based on the sum of the repurchase price plus the interest on deposits with the bank for the same
period. The repurchase and cancellation of certain restricted shares by the Company was verified by Dahua CPAs (SGP), which issued the Capital
Verification Report (Da Hua Yan Zi [2023] No. 000386. On July 17, 2023, the aforesaid repurchase and cancellation was reviewed and confirmed
by CSDC Shenzhen Branch and the process was completed.
Effects of changes in shares on the basic EPS, diluted EPS, net assets per share attributable to ordinary shareholders of the Company, and other
financial indicators for the prior year and the last Reporting Period
Applicable □Not applicable
①During the Reporting Period, the conversion of 10,089 shares from the “Energy Convertible Bonds” had small impact on the basic earnings per
share and the diluted earnings per share and the net assets;
②The number of restricted shares granted but not yet unlocked that were repurchased and cancelled by the Company under the stock incentive
plan was small, therefore the impact on basic earnings per share was small;
③ During the Reporting Period, the Company made a non-public offering of 85,421,412 shares, affecting basic earnings per share by RMB-
0.16/share, diluted earnings per share by RMB-0.26/share, and net assets per share of the Company by approximately RMB5.53/share.
Other contents that the Company considers are necessary, or are required by the securities regulatory authorities, to disclose
□Applicable Not applicable
2. Changes in restricted shares
Applicable □Not applicable
Unit: Shares
Number of Increase of Number of Number of
Name of restricted shares restricted restricted shares restricted Reason for
Date of unlocking
shareholder at the beginning shares in the unlocked in the shares at the restriction
of period current period current period end of period
Locked-up shares A director can unlock 25%
Paul Xiaoming
94,644,193 935,038 95,579,231 held by senior of the total shares he or she
Lee
executives holds every year
Locked-up shares A director can unlock 25%
Li Xiaohua 52,378,417 623,700 2,188,875 50,813,242 held by senior of the total shares he or she
executives holds every year
Ma Weihua 0 12,750 12,750 Locked-up shares A director can unlock 25%
100
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
held by senior of the total shares he or she
executives holds every year
Locked-up shares A director can unlock 25%
Feng Jie 0 61,500 61,500 held by senior of the total shares he or she
executives holds every year
①A secretary of the Board
①Locked-up can unlock 25% of the total
shares held by shares he or she holds every
senior executives year; ②the restricted shares
②the restricted under the 2022 Stock
shares under the Option and Restricted Stock
Yu Xue 70,825 10,000 60,825
2022 Stock Incentive Plan of the
Option and Company will be exercised
Restricted Stock and released in three
Incentive Plan of installments 12 months
the Company after the completion of the
grant registration
Locked-up shares A supervisor can unlock
Zhang Tao 0 7,500 7,500 held by senior 25% of the total shares he
executives or she holds every year
Locked-up shares A supervisor can unlock
Li Bing 0 8,250 8,250 held by senior 25% of the total shares he
executives or she holds every year
He resigned from the
position of the Board
Secretary in November
2021, and during the term
recognized when he held
the position and within six
Locked-up shares months after the expiration
Xiong Wei 202,500 202,500 0 held by senior of the term, he shall not
executives transfer the Company’s
shares he holds within half
a year after resignation, and
the shares transferred every
year shall be not more than
25% of the total shares of
the Company he holds
He resigned from the
position of the Chief
Financial Officer in
September 2020, and
during the term determined
when he held the position
and within six months after
Locked-up shares
the expiration of the term,
Pang Qizhi 248,250 248,250 0 held by senior
he shall not transfer the
executives
Company’s shares he holds
within half a year after
resignation, and the shares
transferred every year shall
be no more than 25% of the
total shares of the Company
he holds
He resigned from the
position of the director in
November 2021, and during
the term determined when
he held the position and
within six months after the
Locked-up shares expiration of the term, he
Xu Ming 1,277,755 1,277,755 0 held by senior shall not transfer the
executives Company’s shares he holds
within half a year after
signation, and the shares
transferred every year shall
be not more than 25% of
the total shares of the
Company he holds
101
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
①Out of the 825 incentive
objects of restricted shares
granted under the 2022
Stock Option and Restricted
Stock Incentive Plan of the
Company, 60 incentive
objects resigned due to
personal reasons, 1
incentive object no in the
line of duty, and 7
personnel failed to meet the
standards of the first
performance appraisal. The
Company has repurchased
Total number of
Restricted shares and cancelled an aggregate
other incentive
1,545,437 671,167 874,270 for equity of 88,630 restricted shares
objects (764
incentive held by the above 68
persons)
personnel that were granted
but not yet unlocked; ②
During the Reporting
Period, the unlocking
conditions for the first
unlocking period of the
2022 Stock Option and
Restricted Share Incentive
Plan of the Company were
fulfilled, and the Company
released 582,537 restricted
shares held by 764
incentive objects from sales
restriction
Shareholders of
non-public Restricted shares
offering of A 0 85,421,412 85,421,412 0 after initial December 20, 2023
shares in 2021 offering
(21)
Total 150,367,377 87,070,150 90,019,959 147,417,568 -- --
II. Issuance and Listing of Securities
1.Issuance of securities (excluding preferred shares) during the Reporting Period
Applicable □Not applicable
Names of
Issue price Number of Date of
shares and Number Listing Disclosure
Issue date (or interest approved termination Disclosure index
derivative of issues Date date
rate) listings of trading
securities
Shares
Announcement on the
Energy
Listing of Non-
Technology
publicly issued A
( A shares 85,421,41 June 20, June 19,
June 8, 2023 87.8 85,421,412 Shares
non-publicly 2 2023 2023
(Announcement No.:
offered in
2023-095) disclosed
2021)
on the Cninfo website
Description of securities issued during the Reporting Period (excluding preferred shares)
The Company's non-public offering of A shares in 2021 is as follows:
Upon the approval of the CSRC with the Reply on Approving the Non-public Offering of Shares of Yunnan Energy New Material Co., Ltd. (Zheng
Jian Xu Ke [2022] No. 1343), the Company made a non-public offering of 85,421,412 RMB-denominated ordinary shares (A shares) to 21 specific
investors, at the offering price of RMB87.80 per share. The registration of new shares was completed at the Shenzhen branch of the CCSB on June
8, 2023, and listed on the SZSE on June 20, 2023 with a restricted period of 6 months from the date of listing. The abovementioned 85,421,412
shares were released from sales restrictions and listed for trading on December 20, 2023. For details, please refer to Holding Announcement on the
Listing of Non-publicly Issued Restricted Shares (Announcement No.: 2023-224) disclosed by the Company in the designated information
disclosure media on December 19, 2023.
102
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
2. Statement on changes in total shares and shareholder structure of the Company, and changes in assets and liabilities of
the Company
Applicable □Not applicable
At the beginning of period, the Company recorded a total share capital of 892,411,690 shares and a gearing ratio of 51.18%. During the Reporting
Period, the Company made a non-public offering of 85,421,412 RMB-denominated ordinary shares (A shares); the “Energy Convertible Bonds”
were converted into 10,089 shares. The Company repurchased and cancelled 88,630 restricted shares under the 2022 Stock Option and Restricted
Stock Incentive Plan that have not met the unlocking conditions. As of the end of the Reporting Period, the Company recorded a total share capital
of 977,754,561 shares and a gearing ratio of 39.23%.
3. Existing shares held by internal employees of the Company
□Applicable Not applicable
III. Details of Shareholders and Actual Controllers
1. Number of shareholders and their shareholdings
Unit: shares
Total
Total
preferred
ordinary
shareholders
shareholders
resuming Total preferred shareholders
Total ordinary at the end of
voting right resuming voting right at the end
shareholders at the the previous
98,774 at the end of 0 of the previous month before 0
end of the month
the annual report disclosure date (if
Reporting Period before
Reporting any) (see Note 8)
annual report
Period (if
disclosure
any) (see
date
Note 8)
Shareholders holding more than 5% of shares or shareholdings of the top 10 shareholders (excluding shares lent through securities lending and refinancing)
Number of Increase or Pledged, tagged or frozen
shares held decrease of
Number of Number of
Name of Nature of Shareholding at the end of shares
restricted unrestricted Number of
shareholder shareholder ratio the during the Status of shares
shares held shares held shares
Reporting Reporting
Period Period
Paul Xiaomi Overseas
13.03% 127,438,975 1246718 95,579,231 31,859,744 Frozen 25,000,000
ng Lee natural person
Yuxi Heyi Domestic non-
Investment Co., state-owned 12.22% 119,449,535 0 0 119,449,535 Frozen 77,720,000
Ltd. legal person
Overseas
Sherry Lee 7.29% 71,298,709 0 0 71,298,709 N/A 0
natural person
Domestic
Li Xiaohua 6.93% 67,750,989 831600 50,813,242 16,937,747 Frozen 37,880,000
natural person
Hong Kong
Securities Overseas legal
5.21% 50,931,586 -29524408 0 50,931,586 N/A 0
Clearing person
Company Limited
Overseas
Jerry Yang Li 1.51% 14,735,754 0 0 14,735,754 N/A 0
natural person
China Merchants
Bank Co., Ltd.－
Quanguo Xuyuan
Other 1.48% 14,428,748 10500398 0 14,428,748 N/A 0
three-year mixed
securities
investment fund
Kunming
Domestic non-
Huachen
state-owned 1.43% 13,983,913 -4442700 0 13,983,913 N/A 0
Investment Co.,
legal person
Ltd.
Domestic
Zhang Yong 1.42% 13,917,907 -2005000 0 13,917,907 Frozen 9,922,907
natural person
Shanghai Domestic non-
Hengzou state-owned 1.19% 11,645,173 0 0 11,645,173 N/A 0
Enterprise legal person
103
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Management
Office (Limited
Partnership)
Strategic investors or general legal The Company issued 85,421,412 A shares to specific investors in 2021, of which Origin Asset Management Co.,
persons who have become top 10 Ltd. subscribed 3,416,856 shares in cash, which were locked up for a period of 6 months, and were released from
shareholders due to new share restriction and listed for trading on December 20, 2023. The shareholdings of China Merchants Bank Co., Ltd -
allotment (if any) (see Note 3) Quanguo Xuyuan three-year mixed securities investment fund are shown in the table above.
Paul Xiaoming Lee, Sherry Lee, Li Xiaohua and Jerry Yang Li are all the family members of the Company’s actual
Statement on related party
controller Paul Xiaoming Lee and represent the persons acting in concert with Heyi Investment under his control.
relationship or concerted action
Shanghai Hengzou Enterprise Management Office (Limited Partnership) is the employee stock ownership platform.
between above-mentioned
The other shareholders are not known as to whether they have the related party relationships between them or
shareholders
constitute the persons acting in concert.
Mr. Paul Xiaoming Lee and Ms. Sherry Lee signed the Power of Attorney for Shareholding on January 14, 2020, by
Explanation of delegation/acceptance
which Ms. Sherry Lee fully delegated the shareholders’ rights, such as rights to question, proposal and vote, in
of voting right and waiver of voting
connection with 73,470,459 shares she held in the Company, to her father Mr. Paul Xiaoming Lee, for a period of
right involving the above shareholders
three years from the date of the Power of Attorney.
Special explanation on the existence
of designated repurchase account
N/A
among the top 10 shareholders (if
any) (see Note 10)
Top 10 shareholders holding unrestricted shares
Type of shares
Name of shareholder Number of unrestricted shares held at the end of the Reporting Period Number of
Type of shares
shares
Renminbi
Yuxi Heyi Investment Co., Ltd. 119,449,535 denominated 119,449,535
common shares
Renminbi
Sherry Lee 71,298,709 denominated 71,298,709
common shares
Renminbi
Hong Kong Securities Clearing
50,931,586 denominated 50,931,586
Company Limited
common shares
Renminbi
Jerry Yang Li 14,735,754 denominated 14,735,754
common shares
China Merchants Bank Co., Ltd.－ Renminbi
Quanguo Xuyuan three-year mixed 14,428,748 denominated 14,428,748
securities investment fund common shares
Renminbi
Kunming Huachen Investment Co.,
13,983,913 denominated 13,983,913
Ltd.
common shares
Renminbi
Zhang Yong 13,917,907 denominated 13,917,907
common shares
Shanghai Hengzou Enterprise Renminbi
Management Office (Limited 11,645,173 denominated 11,645,173
Partnership) common shares
The designated account for repurchase Renminbi
of Yunnan Energy New Material Co., 8,708,604 denominated 8,708,604
Ltd. common shares
Orient Securities Company Limited－ Renminbi
Zhonggeng Value Vanguard Stock 7,497,837 denominated 7,497,837
Securities Investment Fund common shares
Statement on related party
Paul Xiaoming Lee, Sherry Lee, Li Xiaohua and Jerry Yang Li are all the family members of the Company’s actual
relationships or concerted action
controller Paul Xiaoming Lee and represent the persons acting in concert with Heyi Investment under his control.
between top 10 shareholders with
Shanghai Hengzou Enterprise Management Office (Limited Partnership) is the employee stock ownership platform
unrestricted shares and between top
of the Company. It is not known whether the other shareholders have related party relationships between them or
10 shareholders with unrestricted
constitute the persons acting in concert.
shares and top 10 shareholders
Statement on top 10 ordinary
shareholders’ participation in
Nil
securities margin trading business (if
any) (see Note 4)
Shares lent through securities lending and refinancing by top ten shareholders
104
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
□Applicable Not applicable
Change in the top ten shareholders from the previous period
□Applicable Not applicable
Did any of the top 10 ordinary shareholders or top 10 ordinary shareholders with unrestricted shares of the Company conduct any transactions on
agreed repurchase during the Reporting Period
□Yes No
Top 10 ordinary shareholders and top 10 ordinary shareholders without sales restriction didn’t conduct transactions on agreed repurchase during
the Reporting Period.
2. Details about the controlling shareholder
Nature of controlling shareholder: The nature of the controlling entity is unclear
Type of controlling shareholder: Natural person
Acquisition of right of residence in other
Controlling shareholder’s name Nationality
countries or regions
Paul Xiaoming Lee American Yes
Yan Ma American Yes
Sherry Lee American Yes
Li Xiaohua China Yes
Yanyang Hui American Yes
Jerry Yang Li American Yes
Paul Xiaoming Lee serves as the Chairman of the Company. Li Xiaohua serves as the Vice
Major Occupation and Position Chairman and General Manager of the Company. Yan Ma, Yanyang Hui, Sherry Lee and Jerry
Yang Li take no positions at the Company.
Equities in other domestic and overseas listed
companies under control and with None
participation during the Reporting Period
Change of controlling shareholder during the Reporting Period
□Applicable Not applicable
The controlling shareholder of the Company has not changed during the Reporting Period.
3. Details about the actual controller and persons acting in concert
Nature of actual controller: Domestic natural person; overseas natural person
Type of actual controller: Natural person
Acquisition of right of residence
Name of actual controller Relationship with actual controller Nationality
in other countries or regions
Act in concert (including agreement,
Paul Xiaoming Lee American Yes
kinship and common control)
Act in concert (including agreement,
Yan Ma American Yes
kinship and common control)
Act in concert (including agreement,
Li Xiaohua American Yes
kinship and common control)
Act in concert (including agreement,
Sherry Lee Chinese Yes
kinship and common control)
Act in concert (including agreement,
Yanyang Hui American Yes
kinship and common control)
Act in concert (including agreement,
Jerry Yang Li American Yes
kinship and common control)
Act in concert (including agreement,
Heyi Investment Chinese No
kinship and common control)
Paul Xiaoming Lee serves as the Chairman of the Company. Li Xiaohua serves as the Vice Chairman and
Major Occupation and Position General Manager of the Company. Yan Ma, Yanyang Hui, Sherry Lee and Jerry Yang Li take no positions at
the Company.
Control over domestic and
overseas listed companies over None
past 10 years
Change of actual controller during the Reporting Period
□Applicable Not applicable
The actual controller of the Company has not changed during the Reporting Period.
105
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
A block diagram of the property rights and control relationship between the Company and the actual controller
106
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
The actual controller controls the Company through trust or other asset management methods
□Applicable Not applicable
4.The accumulated number of pledged shares of the Company’s controlling shareholder or the largest
shareholder of the Company and its persons acting in concert account for 80% of the Company’s shares held
□Applicable Not applicable
5. Other corporate shareholders holding more than 10% of the shares
Applicable □Not applicable
Legal Date of
Name of legal Registere
Representative/Princi Incorporati Major operating activities or management activities
person shareholder d Capital
pal of Organization on
Conduct venture capital activities with free capital; make project
November RMB30
Heyi Investment Li Xiaohua investment and manage investment project; investment management,
10, 2010 million
investment consulting and social and economic consultation.
6. Details about restrictions on reduction of shareholdings of controlling shareholders, actual controllers,
restructuring parties, and other entities making commitments
□Applicable Not applicable
IV. Information on implementation of share repurchase during the Reporting Period
Progress in implementation of share repurchase
Applicable □Not applicable
Number of Ratio of shares
shares Amount intended Number of repurchased to
Percentage of Intended
Scheme Repurchase shares the underlying
intended to be the general to be repurchased repurchase
disclosure date repurchased purpose repurchased shares under the
capital (RMB0’000) period
(shares) stock incentive
(shares) plan (if any)
Not less than Used for
RMB100 million May 4, implementation
714,200 shares
0.08% to (inclusive) and not 2023 to of the stock
May 6, 2023 to 1,071,400 1,469,800 16.88%
0.12% more than November incentive or
shares
RMB150 million 3, 2023 employee stock
(inclusive) ownership plan
Not less than Used for
2,970,300 RMB300 million September implementation
September 29, shares to 0.30% to (inclusive) and not 28, 2023 of the stock
7,238,804 83.12%
2023 4,950,500 0.51% more than to March incentive or
shares RMB500 million 27, 2024 employee stock
(inclusive) ownership plan
Progress of centralized bidding for reduction of shares repurchased
□Applicable Not applicable
107
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Section 8 Details about Preferred Shares
□Applicable Not applicable
During the Reporting Period, there were no preferred shares in the Company.
108
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Section 9 Details about bonds
Applicable □Not applicable
I. Corporate bonds
□Applicable Not applicable
During the Reporting Period, there were no corporate bonds of the Company.
II. Debentures
□Applicable Not applicable
During the Reporting Period, there were no debentures of the Company.
III. Debt financing instruments of non-financial enterprises
□Applicable Not applicable
During the Reporting Period, there were no non-financial enterprise debt financing tool of the Company.
IV. Convertible corporate bonds
Applicable □Not applicable
1. All Previous Adjustments to the Conversion Price
Upon the approval of the file "Zheng Jian Xu Ke [2019] No. 2701" promulgated by China Securities Regulatory Commission, the Company
publicly issued 16 million convertible bonds on February 11, 2020, with face value of RMB100 each, total issue amount of RMB1.6 billion, and a
term of 6 years. With the approval of the file "Shen Zheng Shang [2020] No. 109" of Shenzhen Stock Exchange, the Company's convertible bonds
of RMB1.6 billion would be listed and traded in Shenzhen Stock Exchange from February 28, 2020. The bond is referred to as "Energy
Convertible Bond" and the bond code is "128095". The initial conversion price of "Energy Convertible Bond" is RMB64.61/share.
In May 2020, the Company implemented the annual profit distribution plan for 2019: Based on the total share capital of the Company, namely
805,370,770 shares, distribute RMB1.25 in cash (inclusive of tax) for every 10 shares to all shareholders, distribute a total cash dividend of
RMB100,671,346.25 (inclusive of tax), distribute no dividend shares, convert no surplus reserve into share capital, and set the ex-dividend date as
May 21, 2020. Pursuant to related articles concerning the adjustment of the conversion price for the convertible corporate bonds, the Company has
made corresponding adjustment to the conversion price of “Energy Convertible Bonds” from RMB64.61/share before the adjustment to
RMB64.49/share after adjustment, and the conversion price after adjustment took effect on May 21, 2020.
In September 2020, under the approval granted by China Securities Regulatory Commission under the Approval of Private Share Offering by
Yunnan Energy New Material Co., Ltd. (Zheng Jian Xu Ke [2020] No. 1476), the Company made a private offering of 69,444,444 shares (A
shares) to 22 specific investors. These shares started trading at an issuing price of RMB72.00/share at Shenzhen Stock Exchange on September 4,
2020. Pursuant to related articles concerning the adjustment of the conversion price for the convertible corporate bonds, the Company has made
corresponding adjustment to the conversion price of “Energy Convertible Bonds” from RMB64.49/share before the adjustment to RMB65.09/share
after adjustment, and the conversion price after adjustment took effect on September 4, 2020.
In September 2020, the Company repurchased and canceled a total of 23,120 restricted shares held by 4 incentive objects with a personal
assessment rating of “good” when the 2017 Restricted Stock Incentive Plan was unlocked for the third time. The repurchase price was RMB8.426
per share. The cancellation for repurchase was completed on September 28, 2020. Due to the small number of shares canceled in this repurchase,
the conversion price of “Energy Convertible Bonds” remained unchanged at RMB65.09 per share after calculating in accordance with the relevant
terms regarding the adjustment to the conversion price of convertible corporate bonds.
In April 2021, the Company implemented the annual profit distribution plan for 2020: Based on the total share capital of the Company, namely
888,160,636 shares, distribute RMB1.696948 in cash (inclusive of tax) for every 10 shares to all shareholders, distribute a total cash dividend of
RMB150,716,245.67 (inclusive of tax), distribute no dividend shares, convert no surplus reserve into share capital, and set the ex-dividend date as
April 30, 2021. Pursuant to related articles concerning the adjustment of the conversion price for the convertible corporate bonds, the Company has
made a corresponding adjustment to the conversion price of “Energy Convertible Bonds” from RMB65.09/share to RMB64.92/share, and the
conversion price after adjustment took effect on April 30, 2021.
In May 2022, the Company implemented the 2021 annual profit distribution plan: based upon the 890,823,196 shares equal to 892,408,633 shares
of the Company's total capital on the share registration date (i.e. May 13, 2022) minus 1,585,437 shares in the special securities account for
repurchase, RMB3.030904 (including tax) in cash will be paid to all shareholders for every 10 shares without bonus shares. No capital reserve shall
be converted as capital increase. In accordance with relevant provisions on the adjustment to the conversion price of convertible corporate bonds,
the conversion price of "Energy Convertible Bond" was adjusted from RMB64.92 per share to RMB64.62 per share, and the adjusted conversion
price would take effect from May 16, 2022.
Upon the approval of the China Securities Regulatory Commission with the Reply on Approving the Non-public Offering of Shares of Yunnan
Energy New Material Co., Ltd. (Zheng Jian Xu Ke [2022] No. 1343), the Company made a non-public offering of 85,421,412 RMB-denominated
ordinary shares (A shares) to 21 specific investors, which were listed for trading on the Shenzhen Stock Exchange on June 20, 2023. Pursuant to
related articles concerning the adjustment of the conversion price for the convertible bonds, the Company has made corresponding adjustment to
the conversion price of “Energy Convertible Bonds”. Starting from June 20, 2023, the price of “Energy Convertible Bonds” has been adjusted to
RMB66.64/share.
On June 25, 2023, the 7th meeting of the 5th Board of Directors and the 7th meeting of the 5th Board of Supervisors of the Company considered
and approved the Resolution on the Repurchase and Cancellation of Partial Restricted Shares under the 2022 Stock Option and Restricted Stock
Incentive Plan". As 60 incentive objects of restricted shares under the 2022 Stock Option and Restricted Stock Incentive Plan resigned due to
personal reasons, one incentive object died other than as a result of the performance of his duties, four incentive objects received a personal
109
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
performance appraisal rating of B, two incentive objects received a personal performance appraisal rating of C, and one incentive object received a
personal performance appraisal rating of D, the Company repurchased and cancelled a total of 88,630 restricted shares granted to the above 68
incentive objects but not yet unlocked at a repurchase price of RMB64.18 per share (excluding interest on bank deposits for the same period). As
the proportion of shares repurchased and cancelled is relatively small compared to the total share capital of the Company, after the completion of
the repurchase and cancellation, the conversion price of “Energy Convertible Bonds”, upon calculation, remains unchanged at RMB66.64 per share.
In August 2023, the Company implemented the 2022 annual profit distribution plan: Based on the 976,282,205 shares calculated by the total share
capital of 977,752,005 shares deducting 1,469,800 shares from the designated securities account for repurchase, a total of RMB173,778,232.00,
representing RMB1.78 (including tax) per 10 shares, will be paid to all shareholders without bonus shares. No capital reserve will be converted to
share capital. Pursuant to related articles concerning the adjustment of the conversion price for the convertible corporate bonds, corresponding
adjustment was made to the conversion price of “Energy Convertible Bonds” from RMB66.64/share before the adjustment to RMB66.46/share
after adjustment, with the conversion price after adjustment being effective on August 21, 2023.
In September 2023, the Company implemented the 2023 interim profit distribution plan: Based on the 976,283,180 shares calculated by the total
share capital of 977,752,980 shares deducting 1,469,800 shares from the designated securities account for repurchase, a total of
RMB200,137,953.50, representing RMB2.05 (including tax) per 10 shares, will be paid to all shareholders without bonus shares. No capital
reserve will be converted to share capital. Pursuant to related articles concerning the adjustment of the conversion price for the convertible
corporate bonds, corresponding adjustment was made to the conversion price of “Energy Convertible Bonds” from RMB66.46/share before the
adjustment to RMB66.26/share after adjustment, with the conversion price after adjustment being effective on September 21, 2023.
2. Cumulative Share Conversion
Applicable □Not applicable
Ratio of
Ratio of the number
Total amount of
Cumulative of shares converted Amount
Abbreviation volume of Total Cumulative shares not
Start and end number of to the total issued of shares
for bond amount of conversion yet
date of share shares shares of the not yet
convertible issuance issuance amount converted to
conversion converted Company before converted
bond (number of (RMB) (RMB) the total
(shares) the start of the (RMB)
bonds) amount of
conversion
issuance
August 17,
Energy
2020 to 1,600,000,0 1,146,901,90 453,098,1
Convertible 16,000,000 17,629,685 2.19% 28.32%
February 11, 00.00 0.00 00.00
Bonds
2026
3. Top Ten Holders of Convertible Bonds
Number of
Amount of
convertible bonds Percentage of
convertible bonds
Nature of holder of held at the end of the convertible bonds
No. Name of holder of convertible bonds held at the end of the
convertible bonds Reporting Period held at the end of the
Reporting Period
(number of Reporting Period
(RMB)
convertible bonds)
Agricultural Bank of China Limited -
1 Penghua convertible bond securities Other 358,518 35,851,800.00 7.91%
investment fund
China Construction Bank Limited -
2 Huashang credit enhanced bond Other 321,220 32,122,000.00 7.09%
securities investment fund
Dajia Asset Management - China
CITIC Bank - Dajia Asset
3 Management Houkun No. 40 Other 240,611 24,066,100.00 5.31%
collective assets management
products
Efund sustaining mixed pension
4 products－Industrial and Commercial Other 200,150 20,015,000.00 4.42%
Bank of China Limited
5 Efund Anying return fixed income Other 200,060 20,006,000.00 4.42%
pension products － Industrial and
110
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Commercial Bank of China Limited
Dajia Asset Management－Minsheng
Banking － Dajia Asset Management
6 －sustaining selection No. 3 (Tranche Other 137,050 13,705,000.00 3.02%
5) collective assets management
products
Efund Yixin mixed pension products
7 Other 132,710 13,271,000.00 2.93%
－Bank of China Limited
Industrial and Commercial Bank of
China Limited － Huashang Fengli
8 Other 121,190 12,119,000.00 2.67%
enhanced fixed-term open bond
securities investment fund
Dajia Asset Management－Minsheng
Banking － Dajia Asset Management
9 Other 104,330 10,433,000.00 2.30%
－ value selection No. 1 collective
assets management products
PICC Pension sustaining Hengxin
10 fixed income pension products － Other 100,173 10,017,300.00 2.21%
China Everbright Bank Co., Ltd.
4. Significant Changes in the Guarantor’s Profitability, Asset Status, and Credit Status
□Applicable Not applicable
5. The Company’s Liabilities and Credit Changes at the End of the Reporting Period, and Cash
Arrangements for Debt Repayment in Future Years
(1) The Company’s liabilities: relevant indicators such as the asset-liability ratio, interest coverage multiple, and loan repayment rate at the end of
the Reporting Period, and year-on-year changes are detailed in the “VIII. Major Accounting data and financial indicators of the Company in the
recent two years as at the end of the Reporting Period”.
(2) Changes in the Company’s credit standing: According to the Follow-up Rating Report on Public Offering of Convertible Corporate Bonds by
Yunnan Energy New Material Co., Ltd. (No. Follow-up Rating on Corporate Bonds by Shanghai Brilliance (2020) 100053, Follow-up Rating on
Corporate Bonds by Shanghai Brilliance (2021)100043, Follow-up Rating on Corporate Bonds by Shanghai Brilliance (2022)100280), Follow-up
Rating on Corporate Bonds by Shanghai Brilliance (2023)100005)) issued by the credit rating agency - Shanghai Brilliance Credit Rating &
Investors Service Co, Ltd., the credit rating of the Company on the whole was AA, the credit rating of “Energy Convertible Bonds” was AA, and
the said bonds were affirmed with a “stable” outlook. The above-mentioned follow-up rating results have not changed compared with the previous
rating results. For details about the above-mentioned follow-up rating reports, refer to http://www.cninfo.com.cn/.
(3) Cash arrangements for debt repayment in future years: The Company’s credit status is good, the asset-liability structure is reasonable, and banks
and other financial institutions grant sufficient comprehensive credit to the Company. The Company can quickly and effectively obtain financing
support from financial institutions. The Company has stable operations and good performance, and can obtain stable operating cash flow through
endogenous growth. At the same time, the Company actively promotes the implementation of fundraising projects through convertible corporate
bonds to further enhance its profitability. If the Company meets the put provision and redemption clauses and repayment of principal and interest
when due as disclosed in the prospectus of convertible corporate bonds, the Company can pay the bondholders’ principal and interest with its own
funds and financing.
V. Losses in the scope of consolidated statements during the Reporting Period exceeding 10% of the net
assets as at the end of the prior year
□Applicable Not applicable
VI. Overdue repayment of interest-bearing debt other than bonds as at the end of the Reporting Period
□Applicable Not applicable
VII. Violation of rules and regulations during the Reporting Period
□Yes No
111
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
VIII. Major Accounting data and financial indicators of the Company in the recent two years as at the
end of the Reporting Period
Unit: RMB’0,000
Item At the end of the Reporting Period At the end of the prior year Increase or decrease at the end of the
current Reporting Period compared
with the end of prior year
Current Ratio 1.413000 1.103800 28.01%
Asset-Liability Ratio 39.23% 51.18% -11.95%
Quick ratio 1.019200 0.875700 16.39%
The Reporting Period The corresponding period of prior Increase or decrease of the
year Reporting Period compared with the
corresponding period of prior year
Net profit after deduction of non-
246,125.79 383,979.21 -35.90%
recurring gains and losses
Debt-to-EBITDA ratio 26.38% 30.99% -4.61%
Interest coverage ratio 7.880000 15.260000 -48.36%
Cash interest coverage ratio 7.990000 4.210000 89.79%
EBITDA interest coverage ratio 11.310000 18.500000 -38.86%
Loan repayment rate 100.00% 100.00% 0.00%
Interest coverage rate 100.00% 100.00% 0.00%
112
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Section 10 Financial Report
I. Audit Report
Type of audit opinion Standard unqualified opinion
Signature date of audit report April 24, 2024
Audit organization name Dahua CPAs (SGP)
Audit report No. Da Hua Shen Zi No. [2024] 0011001946
Name of Certified Public Accountant Kang Wenjun, Yao Rui
Body of the audit report
To all shareholders of Yunnan Energy New Material Co., Ltd.:
I. Audit Opinions
We have audited the financial statements of Yunnan Energy New Material Co., Ltd. (“Energy Technology”), including the consolidated and the
parent company’s balance sheets as of December 31, 2023, the consolidated and parent company’s income statement, the consolidated and the
parent company’s cash flow statement, the consolidated and the parent company’s statement of changes in equity for 2023, and the relevant notes
to financial statements.
In our opinion, the enclosed financial statements were prepared in accordance with the Accounting Standards for Business Enterprises in all
material aspects and fairly reflected the Energy Technology’s consolidated and the parent company’s financial positions as of December 31, 2023
as well as the consolidated and the parent company’s operation results and cash flow for 2023.
II. Basis for Audit Opinions
We carried out the audit work according to the Auditing Standards for Chinese CPA. Our responsibilities under the Standards are further described
under the section titled “responsibilities of CPA for auditing financial statements” in this audit report. We are independent from Energy
Technology and have fulfilled the obligations in terms of professional ethics according to Code of Professional Conduct for Chinese CPAs. We
believe that the evidences we obtained are adequate and proper, and lay a solid foundation for the audit opinion.
III. Key Audit Matters
Key audit matters are those that we believe are of most significance in the audit of the financial statements of the current period based on
professional judgment. These matters are addressed in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
We have determined that the following matters are key audit matters to be communicated in the audit report.
1. Revenue recognition
2. Provision for bad debts of accounts receivable
(I) Revenue recognition matters
1. Description of matters
Please refer to Note IV-(33) and Note VI-44 of the consolidated financial statements for the accounting policies and book amount information of
the revenue recognition of Energy Technology in this year.
The operating revenue of Energy Technology in 2023 amounted to RMB12,042,229,800, which was the main source of its profit and affected its
key performance indicators. In addition, according to the industry practice, after signing the sales order with customer, Energy Technology
arranges production based on customer’s requirements, delivers it to customers pursuant to the agreed delivery method, obtains the customer’s
evidence on the transfer of the ownership of goods, and then recognizes the sales revenue. Since the time of revenue recognition is later than the
product delivery, and the delivery time and delivery document recognition are all dependent on the customer, there may be significant risk of
misstatement if the sales revenue is fully included in the appropriate accounting period. Therefore, we recognize revenue as a key audit matter.
2. Audit Response
Our key audit procedures for revenue recognition include:
(1) Understand and evaluate the design of internal control of revenue recognition by the management, and test the effectiveness of key control
implementation;
(2) Obtain a major business contract, identify terms and conditions related to the transfer of commodity ownership, and assess whether the income
recognition policy of Energy Technology is in line with the relevant provisions of the enterprise accounting standards;
(3) Perform analytical review procedures on revenue and gross profit based on the product types and customer conditions of Energy Technology,
and determine the reasonableness of the changes in sales revenue and gross profit margin;
(4) Understand the background and basic information of the main customers, identify whether they are related parties, and confirm the accounts
receivable balance and sales amount of the main customers by confirmation letters;
(5) Select samples from the sales revenue ledger, check the relevant documents such as contracts (orders), invoices, delivery documents, pay
attention to the delivery time, and check the revenue recognition time point;
(6) Check the sales revenue recognized before and after the balance sheet date with supporting documents of sales revenue recognition, and
implement the cut-off test and subsequent inspection procedures for revenue recognition;
(7) Assess whether the management’s disclosure of income statement is appropriate. According to the audit procedures and the evidence we have
obtained, we believe that the income of Energy Technology is real and recorded correctly during the accounting period.
(II) Provision for bad debts of accounts receivable
1. Description of matters
Please refer to Note IV-(12) and Note VI-4 of the consolidated financial statements for the accounting policies and book value amount of accounts
113
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
receivables of Energy Technology in this year.
On December 31, 2023, the original book value of accounts receivable of Energy Technology was RMB6,865,281,600, the bad debt provision was
RMB1,455,818 and the net value was RMB67,196,998, accounting for 14.24% of the total assets at the end of the period.
Based on the financial situation of the counterparty, the management evaluates the guarantee obtained to the accounts receivable, the aging of the
accounts receivable, the credit rating and historical repayment record of the counterparty, and with reference to the historical credit loss experience,
combined with the current situation and the forecast of the future economic situation, the management considers to accrue bad debt for the
accounts receivable according to the expected credit loss in the whole duration. As the determination of the amount of bad debt provision requires
the management to use significant accounting estimates and judgments, and accounts receivable is important to the financial statements, therefore,
we regard the bad debt provision of accounts receivable as a key audit matter.
2. Audit response
(1) Understand and evaluate the management’s key internal control over the daily management and provision for accounts receivable, and carry out
the corresponding walk-through test;
(2) For accounts receivable with significant single amount and credit impairment occurred after initial recognition, the bases for the management’s
assessment of the expected future available cash flow shall be reviewed to analyze whether it is reasonable;
(3) For the accounts receivable of bad debt provision withdrawn by the management according to the combination of credit risk characteristics,
combined with the credit risk characteristics and aging analysis, evaluate the rationality of the withdrawal of bad debt provision by the
management;
(4) Evaluated the adequacy of the management’s provision for bad debt in combination with the check of payment collection after the period;
(5) Assess whether the management’s disclosure of accounts receivable financial statements is appropriate. Based on the audit procedures we have
implemented and the evidence we have obtained, we believe that the accounting estimates of the bad debt provision of accounts receivable made
by Energy Technology are fully reasonable.
IV. Other Information
Energy Technology’s management is responsible for the other information. The other information comprises all of the information included in the
financial report other than the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that
fact. We have nothing to report in this regard.
V. Responsibilities of Management and Those Charged with Governance for Financial Statements
Energy Technology’s management is responsible for the preparation of the financial statements that give a fair view in accordance with CAS, and
for designing, implementing and maintaining such internal control as the management determines is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing the Energy Technology’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management either intends to
liquidate Energy Technology or to cease operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing Energy Technology’s financial reporting process.
VI. Responsibilities of CPA for Auditing Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether
due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with CAS will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with CAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
1. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting 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 override of internal control.
2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.
3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the
management.
4. Conclude on the appropriateness of the management’s use of the going concern basis of accounting. Based on the audit evidence obtained,
conclude on whether a material uncertainty exists related to events or conditions that may cast significant doubt on Energy Technology’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required by CAS to draw users’ attention in our auditor’s
report to the related disclosures 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 Energy Technology to cease
to continue as a going concern.
5. Evaluate the overall presentation, structure and content of the financial statements, and whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
6. Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within Energy
Technology to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the Company
audit and remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant
audit findings, including any noteworthy deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence,
and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable,
114
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the
financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, 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 interest benefits of
such communication.
II. Financial Statements
The unit of notes to financial statements is: RMB
1. Consolidated balance sheet
Prepared by: Yunnan Energy New Material Co., Ltd.
December 31, 2023
Unit: RMB
Item December 31, 2023 January 1, 2023
Current assets:
Monetary funds 3,835,530,538.70 3,954,316,829.31
Settlement reserves
Loans to banks and other financial institutions
Held-for-trading financial assets 9,850,069.59
Derivative financial assets
Notes receivable 760,968,387.25 637,755,156.47
Accounts receivable 6,719,699,762.18 6,559,717,117.36
Receivable financing 408,354,641.63 692,286,629.08
Prepayments 175,605,702.96 220,239,470.09
Premiums receivable
Reinsurance premium receivable
Reinsurance contract provision receivable
Other receivables 26,568,094.26 20,596,472.81
Including: Interest receivable
Dividends receivable
Financial assets held under resale agreements
Inventories 3,000,558,853.64 2,463,490,238.80
Contractual assets
Held-for-sales assets
Non-current assets due within one year 618,295,576.83 87,029,166.67
Other current assets 746,345,684.12 321,998,218.33
Total current assets 16,291,927,241.57 14,967,279,368.51
Non-current assets:
Loans and advances to customers
Debt investment
Other debt investment
Long-term receivables
Long-term equity investments 3,209,980.10 5,017,642.31
Investments in other equity instruments 89,000,000.00 111,000,000.00
Other non-current financial assets
Investment properties 7,865,069.42 8,399,300.54
Fixed assets 19,380,327,177.42 14,306,873,399.88
Construction in progress 6,207,408,467.99 3,584,554,509.73
Productive biological assets
Oil and gas assets
Right-of-use assets 2,387,711.07 3,926,781.90
Intangible assets 1,119,341,214.09 1,054,043,010.42
Development expenditures
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Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Goodwill 520,230,679.65 520,230,679.65
Long-term unamortized expenses 524,481.50 1,317,972.74
Deferred income tax assets 432,868,864.70 315,538,499.73
Other non-current assets 3,145,825,748.18 3,744,550,327.16
Total non-current assets 30,908,989,394.12 23,655,452,124.06
Total assets 47,200,916,635.69 38,622,731,492.57
Current liabilities:
Short-term borrowings 7,290,694,906.27 9,527,853,434.55
Borrowings from the central bank
Placements from banks and other financial institutions
Held-for-trading financial liabilities 94,394.79
Derivative financial liabilities
Notes payable 802,933,704.02 609,315,699.02
Accounts payable 1,608,309,616.46 1,720,586,992.11
Advances from customers
Contractual liabilities 29,791,971.25 24,596,154.15
Financial assets sold under repurchase agreements
Customer bank deposits and due to banks and other
financial institutions
Customer brokerage deposits
Securities underwriting brokerage deposits
Employee benefits payable 87,688,714.29 54,164,141.80
Taxes payable 180,293,856.11 279,461,730.79
Other payables 244,698,302.33 209,680,232.86
Including: Interest payable
Dividends payable 95,117,453.54 9,778,239.09
Fees and commissions payable
Reinsurance amounts payable
Hold-for-sale liabilities
Non-current liabilities due within one year 1,095,554,519.11 858,495,954.79
Other current liabilities 189,792,221.12 275,222,986.34
Total current liabilities 11,529,757,810.96 13,559,471,721.20
Non-current liabilities:
Insurance contract reserves
Long-term borrowings 4,685,315,817.70 4,179,264,746.86
Bonds payable 435,900,486.76 425,795,937.76
Including: preferred shares
Perpetual bonds
Lease liabilities 182,663.88 1,331,485.16
Long-term payables
Long-term payroll payable
Estimated liabilities
Deferred income 994,974,995.96 823,467,109.47
Deferred income tax liabilities 308,332,028.16 236,759,482.43
Other non-current liabilities 564,217,694.55 542,217,694.55
Total non-current liabilities 6,988,923,687.01 6,208,836,456.23
Total liabilities 18,518,681,497.97 19,768,308,177.43
Owners’ equity:
Share capital 977,754,217.00 892,411,690.00
Other equity instruments 50,242,778.32 50,317,083.84
Including: preferred shares
Perpetual bonds
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Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Capital reserve 15,070,954,107.76 7,685,332,598.80
Less: treasury stock 607,261,671.95 101,753,346.66
Other comprehensive income 89,911,398.03 7,774,250.92
Special reserve
Surplus reserve 399,014,802.99 191,644,843.59
General risk provision
Undistributed profits 10,945,879,862.09 9,000,475,751.88
Total owners’ equity attributable to parent company 26,926,495,494.24 17,726,202,872.37
Minority interests 1,755,739,643.48 1,128,220,442.77
Total owners’ equity 28,682,235,137.72 18,854,423,315.14
Total liabilities and owners’ equity 47,200,916,635.69 38,622,731,492.57
Legal representative: Paul Xiaoming Lee Legal representative: Li Jian Financial Manager: Deng Jinhuan
2. Balance sheet of the parent company
Unit: RMB
Item December 31, 2023 January 1, 2023
Current assets:
Monetary funds 1,382,521,361.78 264,731,171.00
Held-for-trading financial assets
Derivative financial assets
Notes receivable 300,000.00 700,000.00
Accounts receivable 14,842,141.47 33,130,270.37
Receivable financing 500,000.00
Prepayments 315,497.60 1,340,081.33
Other receivables 14,132,822,217.29 6,831,112,472.90
Including: Interest receivable
Dividends receivable 2,011,040,000.00 211,040,000.00
Inventories 3,831,510.64 9,356,812.38
Contractual assets
Held-for-sales assets
Non-current assets due within one year
Other current assets
Total current assets 15,534,632,728.78 7,140,870,807.98
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term equity investments 4,959,728,962.52 4,750,066,580.90
Investments in other equity instruments 89,000,000.00 111,000,000.00
Other non-current financial assets
Investment properties
Fixed assets 18,234,472.92 61,119,717.03
Construction in progress 1,595,104.80 1,219,946.39
Productive biological assets
Oil and gas assets
Right-of-use assets
Intangible assets 37,069,860.82 38,206,008.22
Development expenditures
Goodwill
Long-term unamortized expenses
Deferred income tax assets 5,349,914.01 110,400.07
Other non-current assets 15,000.00 259,030.00
Total non-current assets 5,110,993,315.07 4,961,981,682.61
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Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Total assets 20,645,626,043.85 12,102,852,490.59
Current liabilities:
Short-term borrowings 59,543,098.59 194,346,485.13
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 20,301,025.31 7,831,403.74
Advances from customers
Contractual liabilities
Employee benefits payable 84,981.79 328.46
Taxes payable 35,169,433.18 60,535,712.47
Other payables 519,178,786.86 374,372,490.35
Including: Interest payable
Dividends payable
Hold-for-sale liabilities
Non-current liabilities due within one year 6,070,366.96 120,063,422.78
Other current liabilities 300,000.00 500,000.00
Total current liabilities 640,647,692.69 757,649,842.93
Non-current liabilities:
Long-term borrowings
Bonds payable 435,900,486.76 425,795,937.76
Including: preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term payroll payable
Estimated liabilities
Deferred income
Deferred income tax liabilities 250,000.00
Other non-current liabilities
Total non-current liabilities 435,900,486.76 426,045,937.76
Total liabilities 1,076,548,179.45 1,183,695,780.69
Owners’ equity:
Share capital 977,754,217.00 892,411,690.00
Other equity instruments 50,242,778.32 50,317,083.84
Including: preferred shares
Perpetual bonds
Capital reserve 17,125,627,483.84 9,738,751,318.24
Less: treasury stock 607,261,671.95 101,753,346.66
Other comprehensive income -15,750,000.00 750,000.00
Special reserve
Surplus reserve 371,262,292.00 163,892,332.60
Undistributed profits 1,667,202,765.19 174,787,631.88
Total owners’ equity 19,569,077,864.40 10,919,156,709.90
Total liabilities and owners’ equity 20,645,626,043.85 12,102,852,490.59
3. Consolidated income statement
Unit: RMB
Item 2023 2022
I. Total operating revenue 12,042,229,789.30 12,590,925,529.68
Including: Operating revenue 12,042,229,789.30 12,590,925,529.68
Interest income
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Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Earned premium
Fee and commission incomes
II. Total operating cost 9,048,863,438.70 7,959,405,882.79
Including: operating cost 7,535,223,456.34 6,568,148,382.65
Interest expense
Fee and commissions expenses
Cash surrender amount
Net payments for insurance claims
Net provision for insurance liability contract
reserves
Policy dividend expenses
Reinsurance expenses
Taxes and surcharges 74,765,080.44 57,680,955.03
Selling expenses 89,338,734.45 74,455,043.47
Administrative expenses 383,415,488.72 323,291,931.01
R&D expenses 727,481,001.67 724,297,699.66
Financial expenses 238,639,677.08 211,531,870.97
Including: Interest expense 376,997,402.81 287,498,131.60
Interest income 84,200,436.11 26,258,474.95
Add: Other income 209,120,211.75 156,434,027.51
Investment income (loss is indicated with “-”) 16,784,148.14 22,731,466.27
Including: Income from investment in associates
1,351,086.12 1,471,658.10
and joint ventures
Derecognized financial assets measured
-21,537,307.12 -18,658,871.90
by amortized cost
Exchange gain (loss is indicated with “-”)
Net exposure hedging income (loss is indicated with “-
”)
Income from changes in fair value (loss is indicated
9,755,674.80
with “-”)
Credit impairment losses (loss is indicated with “-”) -3,872,510.61 -8,324,053.71
Asset impairment losses (loss is indicated with “-”) -186,376,180.23 -42,921,534.91
Income from disposal of assets (loss is indicated with
204,866.12 223,345.22
“-”)
III. Operating profit (loss is indicated with “-”) 3,029,226,885.77 4,769,418,572.07
Add: Non-operating revenue 2,516,231.14 1,962,503.26
Less: Non-operating expenses 5,400,590.27 6,236,954.06
IV. Total profit (total loss is indicated with “-”) 3,026,342,526.64 4,765,144,121.27
Less: Income tax expense 376,128,124.08 553,009,563.88
V. Net profit (net loss is indicated with “-”) 2,650,214,402.56 4,212,134,557.39
(I) Classified according to operating continuity
1. Net profit from continuing operations (net loss is
2,650,214,402.56 4,212,134,557.39
indicated with “-”)
2. Net profit from discontinuing operations (net loss is
indicated with “-”)
(II) Classified according to attribution of the ownership
1. Net profit attributable to shareholders of the parent
2,526,688,570.92 4,000,461,964.37
company
2. Profit or loss of minority interest 123,525,831.64 211,672,593.02
VI. Other comprehensive income, net of tax 87,088,686.32 12,061,121.08
Other comprehensive income attributable to owners of
82,137,147.11 11,520,449.49
parent company, net of tax
(I) Other comprehensive income that cannot be
-16,500,000.00 750,000.00
reclassified to profit or loss
1. Changes arising from re-measurement of the defined
benefit plan
2. Other comprehensive income that cannot be
reclassified into profit or loss under the equity method
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Yunnan Energy New Material Co., Ltd. 2023 Annual Report
3. Changes in fair value of other equity instrument
-16,500,000.00 750,000.00
investments
4. Changes in fair value of the enterprise’s credit risk
5. Others
(II) Other comprehensive income that will be reclassified
98,637,147.11 10,770,449.49
subsequently to profit or loss
1. Other comprehensive income that can be reclassified
into profit or loss under the equity method
2. Changes in fair value of other debt investments
3. Amount of the financial asset reclassified into other
comprehensive income
4. Provision for credit impairment of other debt
investment
5. Cash flow hedging reserve
6. Exchange differences from translation of statements
98,637,147.11 11,527,018.37
denominated in foreign currencies
7. Others
Other comprehensive income attributable to minority
4,951,539.21 540,671.59
interests, net of tax
VII. Total comprehensive income 2,737,303,088.88 4,224,195,678.47
Total comprehensive income attributable to owners of
2,608,825,718.03 4,011,982,413.86
parent company
Total comprehensive income attributable to minority
128,477,370.85 212,213,264.61
interests
VIII. Earnings per share:
(I) Basic earnings per share 2.68 4.48
(II) Diluted earnings per share 2.58 4.46
If a business combination occurs under common control in the current period, the net profit realized by the merged party before the combination
was: RMB0.00, and the net profit realized by the merged party in the previous period was: RMB0.00.
Legal representative: Paul Xiaoming Lee Legal representative: Li Jian Financial Manager: Deng Jinhuan
4. Income statement of parent company
Unit: RMB
Item 2023 2022
I. Operating revenue 63,116,038.61 150,233,416.05
Less: Operating cost 49,925,691.72 85,513,828.29
Taxes and surcharges 4,034,635.44 5,613,303.27
Selling expenses 576,692.02 666,580.27
Administrative expenses 23,590,872.61 17,079,899.57
R&D expenses 2,671,152.31 7,274,587.70
Financial expenses -316,352,130.41 -203,997,298.76
Including: Interest expense 33,567,175.48 35,182,103.58
Interest income 350,004,443.73 239,246,217.64
Add: Other income 611,188.63 2,595,991.42
Investment income (loss is indicated with “-”) 1,850,000,000.00
Including: Income from investment in associates and
joint ventures
Derecognized financial assets measured by
amortized cost (loss is indicated with “-”)
Net exposure hedging income (loss is indicated with “-
”)
Income from changes in fair value (loss is indicated
with “-”)
Credit impairment losses (loss is indicated with “-”) -160,407.34 -50,423.38
Asset impairment losses (loss is indicated with “-”) -135,155.16 -141,430.14
Income from disposal of assets (loss is indicated with
596.59 26,910.57
“-”)
II. Operating profit (loss is indicated with “-”) 2,148,985,347.64 240,513,564.18
Add: Non-operating revenue 22,748.59 454,747.63
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Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Less: Non-operating expenses 105,542.48 10,000.00
III. Total profit (total loss is indicated with “-”) 2,148,902,553.75 240,958,311.81
Less: Income tax expense 75,202,959.73 58,439,098.55
IV. Net profit (net loss is indicated with “-”) 2,073,699,594.02 182,519,213.26
(I) Net profit from continuing operations (net loss is
2,073,699,594.02 182,519,213.26
indicated with “-”)
(II) Net profit from discontinuing operations (net loss is
indicated with “-”)
V. Other comprehensive income, net of tax -16,500,000.00 750,000.00
(I) Other comprehensive income that cannot be
-16,500,000.00 750,000.00
reclassified to profit or loss
1. Changes arising from re-measurement of the defined
benefit plan
2. Other comprehensive income that cannot be
reclassified into profit or loss under the equity method
3. Changes in fair value of other equity instrument
-16,500,000.00 750,000.00
investments
4. Changes in fair value of the enterprise’s credit risk
5. Others
(II) Other comprehensive income that will be reclassified
subsequently to profit or loss
1. Other comprehensive income that can be reclassified
into profit or loss under the equity method
2. Changes in fair value of other debt investments
3. Amount of the financial asset reclassified into other
comprehensive income
4. Provision for credit impairment of other debt
investment
5. Cash flow hedging reserve
6. Exchange differences from translation of statements
denominated in foreign currencies
7. Others
VI. Total comprehensive income 2,057,199,594.02 183,269,213.26
VII. Earnings per share:
(I) Basic earnings per share
(II) Diluted earnings per share
5. Consolidated cash flow statement
Unit: RMB
Item 2023 2022
I. Cash flows from operating activities:
Cash received from the sale of goods or rendering of
10,446,360,770.22 8,308,323,229.28
services
Net increase in deposits from customers and placements
from corporations in the same industry
Net increase in borrowings from the central bank
Net increase in placements from other financial institutions
Cash received for receiving premium of original insurance
contract
Net cash received from reinsurance business
Net increase in deposits of the insured and investment
Cash received from interests, fees and commissions
Net increase in placements from banks and other financial
institutions
Net increase in repurchasing
Net cash received from acting sale of securities
Receipts of tax refunds 721,095,698.04 280,936,013.05
Other cash receipts related to operating activities 458,750,500.52 302,014,480.06
Subtotal of cash inflows from operating activities 11,626,206,968.78 8,891,273,722.39
Cash payments for goods purchased and services received 6,189,875,575.33 6,268,851,123.90
Net increase in loans and advances
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Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Net increase in deposits in the Central Bank and other
financial institutions
Cash paid for claim settlements on original insurance
contract
Net increase in placements to banks and other financial
institutions
Cash paid for interests, fees and commissions
Cash paid for policy dividends
Cash paid to and on behalf of employees 1,161,970,056.10 883,089,073.20
Payments of all types of taxes 1,069,293,242.57 900,675,889.00
Other cash payments relating to operating activities 537,614,835.46 335,070,037.63
Subtotal of cash outflows due to operating activities 8,958,753,709.46 8,387,686,123.73
Net cash flows from operating activities 2,667,453,259.32 503,587,598.66
II. Cash flows from investment activities:
Cash received from disposal of investments 132,832,319.38 55,000,000.00
Cash received from procuring investment income 14,079,456.62 12,217,774.71
Net amount of cash received from disposal of fixed assets,
27,764,903.85 5,081,977.73
intangible assets and other long-term assets
Net cash received from disposals of subsidiaries and other
business units
Other cash received relating to investment activities
Subtotal of cash inflows from investment activities 174,676,679.85 72,299,752.44
Cash paid for acquisition of fixed assets, intangible assets
7,823,808,926.29 5,257,761,880.77
and other long-term assets
Cash paid for acquisition of investments 300,000,000.00 350,000,000.00
Net increase in pledge loans
Net cash payments for acquisitions of subsidiaries and other
business units
Other cash paid relating to investment activities 40,991,765.29 150,164,555.53
Subtotal of cash outflows due to investment activities 8,164,800,691.58 5,757,926,436.30
Net cash flows from investment activities -7,990,124,011.73 -5,685,626,683.86
III. Cash flows from financing activities:
Cash received from absorbing investment 8,036,235,783.60 372,446,946.93
Including: Cash received from subsidiaries’ absorbing
582,691,751.93 270,693,600.27
minority shareholder investment
Cash received from borrowings 12,859,214,236.98 14,006,864,781.67
Other cash received relating to financing activities
Subtotal of cash inflows from financing activities 20,895,450,020.58 14,379,311,728.60
Cash paid for debt repayment 13,704,612,776.52 6,748,216,372.27
Cash paid for distributing dividends and profits or paying
719,029,212.87 595,877,608.26
interests
Including: Dividends and profits paid to minority
shareholders by subsidiaries
Cash payments relating to other financing activities 1,334,884,808.55 256,109,825.98
Subtotal of cash outflows from financing activities 15,758,526,797.94 7,600,203,806.51
Net cash flows from financing activities 5,136,923,222.64 6,779,107,922.09
IV. Effect of changes in exchange rate on cash and cash
2,725,405.61 5,687,720.52
equivalents
V. Net increase in cash and cash equivalents -183,022,124.16 1,602,756,557.41
Add: Opening balance of cash and cash equivalents 2,972,056,126.01 1,369,299,568.60
VI. Closing balance of cash and cash equivalents 2,789,034,001.85 2,972,056,126.01
6. Cash flow statement of parent company
Unit: RMB
Item 2023 2022
I. Cash flows from operating activities:
Cash received from the sale of goods or rendering of
71,880,593.33 145,968,617.09
services
Receipts of tax refunds 96,584.46 8,852,166.05
Other cash receipts related to operating activities 53,858,322.26 12,817,429.72
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Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Subtotal of cash inflows from operating activities 125,835,500.05 167,638,212.86
Cash payments for goods purchased and services received 32,907,746.19 20,871,988.83
Cash paid to and on behalf of employees 16,383,482.17 24,270,586.06
Payments of all types of taxes 135,972,576.99 44,796,093.76
Other cash 29,098,017.34 21,244,359.26
activities
Subtotal of cash outflows due to operating activities 214,361,822.69 111,183,027.91
Net cash flows from operating activities -88,526,322.64 56,455,184.95
II. Cash flows from investment activities:
Cash received from disposal of investments 30,000,000.00
Cash received from procuring investment income 50,000,000.00 164,200.00
Net amount of cash received from disposal of fixed assets,
39,908,191.62
intangible assets and other long-term assets
Net cash received from disposals of subsidiaries and other
business units
Other cash activities 758,017,645.64 589,627,793.34
Subtotal activities 847,925,837.26 619,791,993.34
Cash paid for acquisition of fixed assets, intangible assets
214,338.12 2,527,820.95
and other long-term assets
Cash paid for acquisition of investments 186,000,000.00
Net cash payments for acquisitions of subsidiaries and other
business units
Other cash paid relating to investment activities 5,997,573,198.61 530,126,014.26
Subtotal of cash outflows due to investment activities 6,183,787,536.73 532,653,835.21
Net cash flows from investment activities -5,335,861,699.47 87,138,158.13
III. Cash flows from financing activities:
Cash received from absorbing investment 7,453,546,101.02 101,753,346.66
Cash received from borrowings 59,500,000.00 218,200,000.00
Other cash activities 469,700,000.00 200,800,000.00
Subtotal of cash inflows from financing activities 7,982,746,101.02 520,753,346.66
Cash paid for debt repayment 290,190,000.00 219,010,000.00
Cash paid for distributing dividends and profits or paying
383,380,310.88 278,706,732.17
interests
Cash payments relating to other financing activities 764,644,041.58 131,740,024.60
Subtotal of cash outflows from financing activities 1,438,214,352.46 629,456,756.77
Net cash flows from financing activities 6,544,531,748.56 -108,703,410.11
IV. Effect of changes in exchange rate on cash and cash
equivalents
V. Net increase in cash and cash equivalents 1,120,143,726.45 34,889,932.97
Add: Opening balance of cash and cash equivalents 261,730,980.89 226,841,047.92
VI. Closing balance of cash and cash equivalents 1,381,874,707.34 261,730,980.89
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Yunnan Energy New Material Co., Ltd. 2023 Annual Report
7. Consolidated statement of changes in owners’ equity
Amount of current period
Unit: RMB
2023
Owner’s equity attributable to parent company Minority Total owners’
interests equity
Item Other equity instruments Capital Less: Other Special Surplus General Undistrib Other Subtotal
Share reserve treasury comprehens reserve reserve risk uted
Perpetu
capital Preferred stock ive income provision profits
al Other
stock
bonds
I. Closing balance of the 892,411,6 50,317, 7,685,33 101,753, 7,774,250.9 191,644, 9,000,47 17,726,202, 1,128,220,4 18,854,423,3
previous year 90.00 083.84 2,598.80 346.66 2 843.59 5,751.88 872.37 42.77 15.14
Add: Effects of changes
in accounting policies
Effects of
correction of prior year errors
Others
II. Opening balance of the 892,411,6 50,317, 7,685,33 101,753, 7,774,250.9 191,644, 9,000,47 17,726,202, 1,128,220,4 18,854,423,3
current year 90.00 083.84 2,598.80 346.66 2 843.59 5,751.88 872.37 42.77 15.14
III. Increase/decrease for the -
85,342,52 7,385,62 505,508, 82,137,147. 207,369, 1,945,40 9,200,292,6 627,519,20 9,827,811,82
period (decrease is indicated 74,305.
7.00 1,508.96 325.29 11 959.40 4,110.21 21.87 0.71 2.58
with “-”) 52
(I) Total comprehensive 82,137,147. 2,526,68 2,608,825,7 128,477,37 2,737,303,08
income 11 8,570.92 18.03 0.85 8.88
(II) Contribution and -
85,342,52 7,385,62 505,508, 6,965,381,4 584,381,04 7,549,762,44
withdrawal of capital by 74,305.
7.00 1,508.96 325.29 05.15 4.31 9.46
owners 52
1. Common shares invested 85,421,41 7,368,25 7,453,673,6 582,564,15 8,036,237,85
by owner 2.00 2,287.14 99.14 3.80 2.94
2. Capital invested by other -
732,247.
equity instrument holders 10,089.00 74,305. 668,030.64 668,030.64
16
52
3. Amount of share payment - -
- 16,636,9 505,508, 1,816,890.5
credited to owner’s equity 488,960,32 487,143,434.
88,974.00 74.66 325.29 1
4.63 12
4. Other
(III) Profit distribution 207,369, - - - -
959.40 581,284, 373,914,50 85,339,214. 459,253,715.
124
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
460.71 1.31 45 76
1. Withdrawal of surplus -
207,369,
reserve 207,369,
959.40
959.40
2. Provision for general risk
- - - -
3. Distribution to owners (or
373,914, 373,914,50 85,339,214. 459,253,715.
shareholders)
501.31 1.31 45 76
4. Other
(IV) Internal carry-forward
of owners’ equity
1. Conversion of capital
reserve into capital (or
shares)
2. Conversion of surplus
reserve into capital (or
shares)
3. Making good of loss with
surplus reserve
4. Carry-forward of changes
in the defined benefit plan for
retained earnings
5. Carry-forward of other
comprehensive income for
retained earnings
6. Other
(V) Special reserve
1. Amount withdrawn in the
period
2. Amount utilized in the
period
(VI). Other
15,070,9 10,945,8
IV. Closing balance for the 977,754,2 50,242, 607,261, 89,911,398. 399,014, 26,926,495, 1,755,739,6 28,682,235,1
54,107.7 79,862.0
period 17.00 778.32 671.95 03 802.99 494.24 43.48 37.72
6 9
Amount of previous period
Unit: RMB
Item 2022
125
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Total
Minority owner
Owner’s equity attributable to parent company
interests s’
equity
Other equity instruments Capital Less: Other Special Surplus General Undistrib Other Subtotal
Share reserve treasury compre reserve reserve risk uted
Preferred Perpetual Other
capital stock hensive provision profits
stock bonds
income
-
I. Closing balance of the 892,406 50,352,3 7,635,639 204,444, 173,392, 5,288,26 13,831,866, 705,424, 14,537,291,7
3,746,1
previous year ,822.00 23.80 ,929.52 302.78 922.26 5,431.08 927.31 784.78 12.09
98.57
Add: Effects of changes
in accounting policies
Effects of
correction of prior year
errors
Other
II. Opening balance of the -
892,406 50,352,3 7,635,639 204,444, 173,392, 5,288,26 13,831,866, 705,424, 14,537,291,7
current year 3,746,1
,822.00 23.80 ,929.52 302.78 922.26 5,431.08 927.31 784.78 12.09
98.57
III. Increase/decrease for the - -
4,868.0 49,692,66 11,520, 18,251,9 3,712,21 3,894,335,9 422,795, 4,317,131,60
period (decrease is indicated 35,239.9 102,690,
0 9.28 449.49 21.33 0,320.80 45.06 657.99 3.05
with “-”) 6 956.12
(I) Total comprehensive 11,520, 4,000,46 4,011,982,4 212,213, 4,224,195,67
income 449.49 1,964.37 13.86 264.61 8.47
(II) Contribution and - -
4,868.0 49,692,66 152,353,25 210,582, 362,935,646.
withdrawal of capital by 35,239.9 102,690,
0 9.28 3.44 393.38 82
owners 6 956.12
1. Common shares invested - -
253,057, 217,595,281.
by owner 35,462,19 35,462,199.
480.66 32
9.34 34
2. Capital invested by other -
4,868.0 343,945.8
equity instrument holders 35,239.9 313,573.92 313,573.92
0 8
6
3. Amount of share payment -
84,810,92 187,501,87 7,117,54 194,619,428.
credited to owner’s equity 102,690,
2.74 8.86 9.88 74
956.12
- -
4. Other 0.00 49,592,6 49,592,637.1
37.16 6
(III) Profit distribution - - -
18,251,9
288,251, 269,999,72 0.00 269,999,722.
21.33
643.57 2.24 24
1. Withdrawal of surplus 18,251,9 -
0.00 0.00 0.00
reserve 21.33 18,251,9
126
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
21.33
2. Provision for general risk - - -
269,999, 269,999,72 0.00 269,999,722.
722.24 2.24 24
3. Distribution to owners (or
shareholders)
4. Other
(IV) Internal carry-forward
of owners’ equity
1. Conversion of capital
reserve into capital (or
shares)
2. Conversion of surplus
reserve into capital (or
shares)
3. Making good of loss with
surplus reserve
4. Carry-forward of changes
in the defined benefit plan
for retained earnings
5. Carry-forward of other
comprehensive income for
retained earnings
6. Other
(V) Special reserve
1. Amount withdrawn in the
period
2. Amount utilized in the
period
(VI) Other
IV. Closing balance for the 892,411 50,317,0 7,685,332 101,753, 7,774,2 191,644, 9,000,47 17,726,202, 1,128,22 18,854,423,3
period ,690.00 83.84 ,598.80 346.66 50.92 843.59 5,751.88 872.37 0,442.77 15.14
8. Statement of changes in owners’ equity of parent company
Amount of current period
Unit: RMB
2023
Other equity instruments Capital Less: treasury Other Special Surplus Undistrib Other Total
Item Share reserve stock comprehens reserve reserve uted owners’
capital Preferred Perpetual Other
ive income profits equity
stock bonds
127
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
892,411,69 50,317,083. 9,738,751,31 163,892 174,787, 10,919,156,
I. Closing balance of the previous year 101,753,346.66 750,000.00
0.00 84 8.24 ,332.60 631.88 709.90
Add: Effects of changes in accounting
policies
Effects of correction of prior year
errors
Other
II. Opening balance of the current year 892,411,69 50,317,083. 9,738,751,31 163,892 174,787, 10,919,156,
101,753,346.66 750,000.00
0.00 84 8.24 ,332.60 631.88 709.90
III. Increase/decrease for the period (decrease -
85,342,527. 7,386,876,16 207,369 1,492,41 8,649,921,1
is indicated with “-”) -74,305.52 505,508,325.29 16,500,000.
00 5.60 ,959.40 5,133.31 54.50
00
(I) Total comprehensive income -
2,073,69 2,057,199,5
16,500,000.
9,594.02 94.02
00
(II) Contribution and withdrawal of capital by 85,342,527. 7,386,876,16 6,966,636,0
-74,305.52 505,508,325.29
owners 00 5.60 61.79
1. Common shares invested by owner 85,421,412. 7,368,124,68 7,453,546,1
00 9.02 01.02
2. Capital invested by other equity instrument
10,089.00 -74,305.52 732,247.16 668,030.64
holders
3. Amount of share payment credited to -
18,019,229.4
owner’s equity -88,974.00 505,508,325.29 487,578,06
2
9.87
4. Other
(III) Profit distribution - -
207,369
581,284, 373,914,50
,959.40
460.71 1.31
1. Withdrawal of surplus reserve -
207,369
207,369,
,959.40
959.40
2. Distribution to owners (or shareholders) -
373,914,
501.31
3. Other
(IV) Internal carry-forward of owners’ equity
1. Conversion of capital reserve into capital (or
shares)
2. Conversion of surplus reserve into capital
(or shares)
3. Making good of loss with surplus reserve
4. Carry-forward of changes in the defined
benefit plan for retained earnings
128
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
5. Carry-forward of other comprehensive
income for retained earnings
6. Other
(V) Special reserve
1. Amount withdrawn in the period
2. Amount utilized in the period
(VI) Other
-
977,754,21 50,242,778. 17,125,627,4 371,262 1,667,20 19,569,077,
IV. Closing balance for the period 607,261,671.95 15,750,000.
7.00 32 83.84 ,292.00 2,765.19 864.40
00
Amount of previous period
Unit: RMB
2022
Other equity instruments Capital Less: Other Special Surplus Undistribut Other Total
Item reserve treasury comprehe reserve reserve ed profits owners’
Share capital Preferred Perpetual Other
stock nsive equity
stock bonds
income
892,406,822 50,352,3 9,749,414, 204,444, 145,640, 280,520,0 10,913,88
I. Closing balance of the previous year
.00 23.80 509.20 302.78 411.27 62.19 9,825.68
Add: Effects of changes in accounting
policies
Effects of correction of prior year
errors
Other
II. Opening balance of the current year 892,406,822 50,352,3 9,749,414, 204,444, 145,640, 280,520,0 10,913,88
.00 23.80 509.20 302.78 411.27 62.19 9,825.68
III. Increase/decrease for the period (decrease is - - - -
indicated with “-”) 750,000. 18,251,9 5,266,884.
4,868.00 35,239.9 10,663,19 102,690, 105,732,4
00 21.33 22
6 0.96 956.12 30.31
(I) Total comprehensive income 750,000. 182,519,2 183,269,2
00 13.26 13.26
(II) Contribution and withdrawal of capital by owners - - -
91,997,39
4,868.00 35,239.9 10,663,19 102,690,
3.20
6 0.96 956.12
1. Common shares invested by owner - -
102,690,9 102,690,9
56.12 56.12
2. Capital invested by other equity instrument holders -
343,945.8 313,573.9
4,868.00 35,239.9
8 2
6
129
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
3. Amount of share payment credited to owner’s -
91,683,81 194,374,7
equity 102,690,
9.28 75.40
956.12
4. Other
(III) Profit distribution - -
18,251,9
288,251,6 269,999,7
21.33
43.57 22.24
1. Withdrawal of surplus reserve -
18,251,9
18,251,92
21.33
1.33
2. Distribution to owners (or shareholders) - -
269,999,7 269,999,7
22.24 22.24
3. Other
(IV) Internal carry-forward of owners’ equity
1. Conversion of capital reserve into capital (or
shares)
2. Conversion of surplus reserve into capital (or
shares)
3. Making good of loss with surplus reserve
4. Carry-forward of changes in the defined
benefit plan for retained earnings
5. Carry-forward of other comprehensive
income for retained earnings
6. Other
(V) Special reserve
1. Amount withdrawn in the period
2. Amount utilized in the period
(VI) Other
892,411,690 50,317,0 9,738,751, 101,753, 750,000. 163,892, 174,787,6 10,919,15
IV. Closing balance for the period
.00 83.84 318.24 346.66 00 332.60 31.88 6,709.90
130
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
III. Corporate Information
(i) Company registration address, organization form and headquarters address
Yunnan Energy New Material Co., Ltd. (hereinafter referred to as the “Company” or “our Company”) was formerly Yunnan Yuxi Innovation
Color Printing Co., Ltd. with the approval of Department of Commerce of Yunnan Province document YSZ [2011] No.50, the shareholders of the
Company signed the sponsor agreement on March 28, 2011, unanimously agreed to change the Company as a whole into a company limited by
share, and obtained the business license of enterprise legal person No.530400400000009 issued by Yunnan Provincial Administration for Industry
and Commerce, which is now changed to the unified social credit code 91530000727317703K, with the registered address and headquarters
address of No.125, Fuxian Road, High-tech Zone, Yuxi City, Yunnan Province. The Company’s legal representative is PAUL XIAOMING LEE.
In accordance with the resolution of the first extraordinary general meeting of shareholders in 2014 held in March 2014 and the revised articles of
association of the Company, and the Approval of Initial Public Offering of Shares of Yunnan Innovative New Materials Co., Ltd. (Zheng Jian Xu
Ke [2016] No. 1886) issued by China Securities Regulatory Commission, the Company issued RMB-denominated ordinary shares (A shares) of
33,480,000 to the public. It was priced and issued to the public investors on September 6, 2016, with a par value of RMB1.00 per share, a
subscription price of RMB23.41 per share, and a total of RMB783,766,800.00 raised funds. After deducting the issuance related expenses of
RMB35,999,800.00, the actual net amount of raised funds is RMB747,767,000.00 yuan, which is included share capital of RMB33,480,000.00 and
capital reserve-share capital premium of RMB714,287,000.00. All the above contributions have been paid in place and have been verified by
Dahua CPAs (SGP) issuing the capital verification report (Da Hua Yan Zi [2016] No. 000897).
According to the Notice on the Listing of RMB-denominated Ordinary Shares of Yunnan Innovative New Materials Co., Ltd. (SZS No. (2016) 618)
issued by Shenzhen Stock Exchange, the shares of the Company were listed on Shenzhen Stock Exchange on September 14, 2016.
According to the fourth meeting of the third board of directors held on June 1, 2017, which deliberated and passed the Resolution on Granting
Restricted Shares to Incentive Object of 2017 Restricted Stock Incentive Plan of the Company, the Company issued 2.57 million RMB-
denominated ordinary shares (issue price: RMB28.65/share) to 84 employees qualified for participants of equity incentive plan, among them: the
amount of share capital is RMB2,570,000.00, and capital reserve-share capital premium is RMB71,060,500.00. All the above capital contributions
have been subscribed in place and have been verified by Dahua CPAs (SGP) issuing the capital verification report (Da Hua Yan Zi [2017] No.
000338).
Whereas the Company has completed capital reserve converted to share capital, according to the resolution of the second extraordinary general
meeting of shareholders in 2018 held on May 10, 2018 and the revised articles of association, the registered capital of the Company has increased
from RMB136,450,000.00 to RMB272,900,000.00.
In accordance with the resolution of the fourteenth meeting of the third board of directors held by the Company on July 20, 2018 and the revised
articles of association, and approved by China Securities Regulatory Commission (hereinafter referred to as “CSRC”) Zheng Jian Xu Ke [2018] No.
671 and Ministry of Commerce of the People’s Republic of China (hereinafter referred to as “Ministry of Commerce”) Shang Zi Chan Han [2018]
No. 225, the Company issued 201,023,712 A-shares in private to Paul Xiaoming Lee, Li Xiaohua, Wang Yuhua, Kunming Huachen Investment
Co., Ltd., Sherry Lee, Future Industry Investment Fund (Limited Partnership), Shanghai Hengzou Enterprise Management Firm (Limited
Partnership), Huang Shuhua, Zhang Tao, Gao Xiang, He Baohua, Huang Yuchen, Hu Jiadong, Wang Chizhou, Jiang Xinmin, Zhang Fang, Zhang
Fan, Zheng Mei, Liu Wei, Du Jun and Cao Ben, with a par value of RMB1.00 per share and a subscription price of RMB24.87 per share. After the
issuance of the shares, the shareholders’ equity assets of RMB4,999,459,975.00 were actually received, and the registered capital of
RMB201,023,712.00 was actually paid, and the mode of contribution was equity capital contribution. The newly increased share capital is
RMB201,023,712.00, the newly increased capital reserve (share capital premium) is RMB4,798,436,263.00, and the registered capital after the
change is RMB473,923,712.00, which has been verified by Dahua CPAs (SGP) with the capital verification report (Da Hua Yan Zi [2018] No.
000430).
According to the resolution of the fourth extraordinary general meeting of shareholders of 2018 held by the Company on September 3, 2018 and
the revised articles of association of the Company, the Company canceled the repurchase of part of incentive shares, repurchased the shares
subscribed by seven natural persons in the form of monetary capital, totaling RMB799,335.00, including: reducing share capital by RMB55,800.00,
reducing capital reserve-share capital premium by RMB743,535.00. It has been verified by the capital verification report (Da Hua Yan Zi [2018]
No. No. 000514) issued by Dahua CPAs (SGP).
According to the resolution of the 19th meeting of the third board of directors held by the Company on September 28, 2018 and the revised articles
of association, the Company changed its name from Yunnan Innovative New Material Co., Ltd. to Yunnan Energy New Material Co., Ltd.
Whereas the Company has completed the conversion of capital reserve to share capital, according to the resolution of the sixth extraordinary
general meeting of shareholders in 2019 held on July 29, 2019 and the revised articles of association, the registered capital of the Company has
increased from RMB473,867,912.00 to RMB805,575,450.00.
According to the resolution of the sixth extraordinary general meeting of shareholders of 2019 held by the Company on July 29, 2019, the
resolution of the seventh extraordinary general meeting of shareholders of 2019 held on August 15, 2019 and the amended articles of association,
the Company canceled the repurchase of part of incentive shares, repurchased the shares subscribed by 17 natural persons in monetary funds, with
a total amount of RMB1,151,665.68, including: reduction of share capital by RMB136,680.00, reducing capital reserve-share capital premium by
RMB1,014,985.68. In addition, according to the resolution of the seventh extraordinary general meeting of shareholders in 2019 held on August 15,
2019 and the revised articles of association, the Company canceled the share buyback of the resigned incentive objects, and repurchased the shares
subscribed by one natural person in the form of monetary capital, with a total amount of RMB601,580.59, including a decrease of share capital of
RMB68,000.00 and a decrease of capital reserve-share capital premium of RMB533,580.59. It has been verified by the capital verification report
(Da Hua Yan Zi [2019] No. 000324) issued by Dahua CPAs (SGP).
According to the resolutions of the 43rd meeting of the third board of directors held on March 23, 2020, the resolutions of the 2020 first
extraordinary general meeting of shareholders held on April 9, 2020, and the resolutions of the third meeting of fourth board of directors held on
June 12, 2020 and the Approval of the Non-public Issuance of Shares by Yunnan Energy New Material Co., Ltd.” (Zheng Jian Xu Ke [2020] No.
1476) issued by China Securities Regulatory Commission, the Company’s non-public issuance shall not exceed 241,611,231 RMB-denominated
ordinary shares. The Company non-publicly issued 69,444,444 RMB-denominated ordinary shares (A shares) to specific investors on August 17,
2020, with a par value of RMB1.00 per share, and a subscription price of RMB72.00 per share. A total of RMB4,999,999,968.00 was raised.
131
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Excluding the cost of RMB17,495,413.51 related to the issuance, the Company’s actual net funds raised were RMB4,982,504,554.49, of which
RMB69,444,444.00 was included in the share capital and RMB4,913,060,110.49 was included in the capital reserve-share capital premium. All the
above capital contributions have been subscribed in place and have been verified by Dahua CPAs (SGP) issuing the capital verification report (Da
Hua Yan Zi [2020] No. 000460).
Approved by the Reply on Approval of Yunnan Energy New Material Co., Ltd. to Issue Convertible Corporate Bonds Publicly (Zheng Jian Xu Ke
[2019] No. 2701) issued by China Securities Regulatory Commission, the Company publicly issued 16 million convertible corporate bonds on
February 11, 2020. The conversion period of convertible corporate bonds shall start from the first trading day six months after the end of the
issuance to the maturity date of the convertible corporate bonds, that is, from August 17, 2020 to February 11, 2026. As of December 31, 2023, a
total of 17,629,685.00 shares of convertible corporate bonds were converted cumulatively into shares.
According to the resolution of the fourth extraordinary general meeting of shareholders of 2020 held by the Company on July 30, 2020 and the
revised articles of association of the Company, the Company canceled the repurchase of part of incentive shares, repurchased the shares subscribed
by four natural persons in the form of monetary capital, totaling RMB194,809.12, including: reducing share capital by RMB23,120.00, reducing
capital reserve-share capital premium by RMB171,689.12. It has been verified by the capital verification report (Da Hua Yan Zi [2020] No.
000561) issued by Dahua CPAs (SGP).
According to the provisions of the Resolution on the Company's 2022 Stock Option and Restricted Stock Incentive Plan (Draft) and Its Abstract,
the Resolution on the Formulation of the Company's 2022 Stock Option and Restricted Stock Incentive Plan Implementation Assessment
Management Measures, and the Resolution on Requesting the General Meeting of Shareholders to Authorize the Board of Directors to Handle
Matters Related to Equity Incentive, which were reviewed and approved at the 2nd Extraordinary General Meeting of 2022 held by Energy
Technology on February 14, 2022, the Company granted a total of 1,585,437.00 restricted shares to 826 natural persons including Yu Xue at a
grant price of RMB 64.18 per share. The capital contribution of RMB 101,753,346.66 has been paid in full amount, which has been verified by Da
Hua Certified Public Accountants (Special General Partnership) through the capital verification report (Da Hua Yan Zi [2022] No. 00L00001). The
source of the restricted stock incentive plan in the current period is the common stocks repurchased by Energy Technology from the secondary
market. After the implementation of this restricted stock incentive plan, the total share capital of Energy Technology remains unchanged.
According to the resolutions of the 38th meeting of the fourth board of directors held on November 21, 2021, the resolutions of the 2022 first
extraordinary general meeting of shareholders held on January 17, 2022, the resolutions of the second meeting of fifth board of directors held on
April 21, 2023, the resolutions of the 2023 first extraordinary general meeting of shareholders held on May 8, 2023, and the resolutions of the fifth
meeting of fifth board of directors held on May 14, 2023, and the Approval of the Non-public Issuance of Shares by Yunnan Energy New Material
Co., Ltd. (Zheng Jian Xu Ke [2022] No. 1343) issued by China Securities Regulatory Commission approving that the Company’s non-public
issuance shall not exceed 267,721,996 RMB-denominated ordinary shares. The Company non-publicly issued 85,421,412 RMB-denominated
ordinary shares (A shares) to specific investors on June 1, 2023, with a par value of RMB1.00 per share, and a subscription price of RMB87.8 per
share. A total of RMB7,499,999,973.60 was raised. Excluding the cost of RMB46,453,872.58 (excluding value-added tax) related to the issuance,
the Company’s actual net funds raised were RMB7,453,546,101.02, of which RMB85,421,412.00 was included in the share capital and
RMB7,368,124,689.02 was included in the capital reserve-share capital premium. All the above capital contributions have been subscribed in place
and have been verified by Dahua CPAs (SGP) issuing the capital verification report (Da Hua Yan Zi [2023] No. 000250).
According to the resolution of the second extraordinary general meeting of shareholders of 2023 held by the Company on July 11, 2023 and the
revised articles of association of the Company, the Company canceled the repurchase of part of incentive shares, repurchased the shares subscribed
by 68 natural persons in the form of monetary capital, totaling RMB5,710,003.24. It has been verified by Dahua CPAs (SGP) issuing the capital
verification report (Da Hua Yan Zi [2023] No. 000386). In addition, one incentive object died other than as a result of the performance of his
duties, the Company repurchased and cancelled a total of 344.00 restricted shares granted to such object but not yet unlocked a total of
RMB22,122.96 for the repurchase and interest. The above transactions reducing share capital by RMB88,974.00, reducing capital reserve-share
capital premium by RMB5,643,152.20.
After years of distribution of bonus shares, allotment of new shares, conversion of share capital and issuance of new shares, as of December 31,
2023, the Company has issued a total number of 977,754,217.00 shares, with a registered capital of RMB977,754,217.00.
(ii) Business nature and main business activities of the Company
The scope of business of the Company mainly includes: Packaging and decoration and other printing products printing; commodity trademark
printing (including tobacco and drug trademarks), trademark design; packaging box production, processing and sales; color printing; paper
products (excluding paper making), plastic products and other supporting products production, processing and sales; production, processing and
sales of printing raw materials and auxiliary materials; production, processing, sale of laminated film and modified plastics; production, processing
and sale of laser transfer paper, gold and silver card paper, liquid packaging paper, electrified aluminum, high-grade packaging paper; production,
processing and marketing of anti-counterfeiting labels, anti-counterfeiting materials; packaging machinery, packaging machinery spare parts
design, manufacture, processing and marketing; production, processing and sale of new energy materials and corresponding new technologies and
new products development; import and export of goods (except those with national restrictions and prohibition). (the above projects do not involve
special management measures for foreign investment access) (approvals from competent authorities shall be obtained for the operation of the
activities requiring approval in accordance with the laws)
The Company is a rubber and plastic products industry, and the main products can be divided into three categories: (1) film products, mainly
including lithium-ion separator, BOPP film and special paper. Lithium-ion separator products include base film and coating film, and BOPP film
products include smoke film and flat film; (2) packaging and printing products, mainly including cigarette label and aseptic packaging; (3) paper
products packaging mainly includes special paper products, holographic anti-counterfeiting electrified aluminum, transfer film and other products.
Special paper products include laser transfer anti-counterfeiting paper, direct plating paper and coated paper.
(iii) Scope of the Consolidated Financial Statements
There are 37 subsidiaries included in the consolidation scope in this period. For details, please refer to “Note VIII. Interests in Other Entities”.
132
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Compared with the last period, one new entity was included in and no entity was removed from the consolidated financial statements this period.
Please refer to “VII. Change of consolidation scope” for details of the subject in the scope of consolidated financial statements.
(iv) Authorization of financial statements for issue
These financial statements were authorized for issue by the Company’s Board of Directors on April 24, 2024.
IV. Basis for Preparation of Financial Statements
1. Basis for preparation
The preparation of financial statements of the Company is based on the actual transactions and events in accordance with the Accounting Standards
for Business Enterprises - Basic Standards published by the Ministry of Finance and specific corporate accounting standards, application
guidelines for corporate accounting standards, corporate accounting standards interpretations and other relevant regulations (hereinafter
collectively referred to as “corporate accounting standards”) for confirmation and measurement, combining the provisions of “Regulations on the
Information Disclosure and Compilation of Companies Offering Securities to the Public No. 15 - General Provisions on Financial Reports”
(revised in 2023) published by CSRC.
2. Going concern basis
The Company has evaluated the ability to continue as a going concern for 12 months from the end of the Reporting Period and has not identified
any issues or circumstances that result in significant doubts about its ability to continue as a going concern. Therefore, the financial statements
have been prepared on a going concern basis.
V. Significant Accounting Policies and Accounting Estimates
Reminders on specific accounting policies and accounting estimates:
1. Statement of compliance with the accounting standards for business enterprises
The financial statements are in compliance with the requirements of accounting standards for business enterprises, and truly and completely reflect
the financial status, operating results, cash flow and other relevant information of the Company during the Reporting Period.
2. Accounting period
The Company’s accounting year starts on January 1 and ends on December 31.
3. Operating cycle
Operating cycle refers to the period from the purchase of assets for processing to the realization of cash or cash equivalents. The Company takes 12
months as an operating cycle and uses it as the standard for dividing the liquidity of assets and liabilities.
4. Functional currency
The Company’s functional currency is Renminbi (RMB).
Overseas subsidiaries take the currency in the main economic environment in which they operate as the recording currency and are converted into
RMB during the preparation of financial statements.
5. Methods for determination and basis for selection of the materiality criteria
Applicable □Not applicable
Items Materiality Criteria
Significant receivables for allowance for bad debts provided on
≥RMB1 million
individual basis
Significant receivables written off ≥RMB1 million
Significant other receivables written off ≥RMB1 million
Significant construction in progress Top 10 engineering projects in book value of construction in progress
Significant payables ageing over 1 year ≥RMB5 million
Significant other payables ageing over 1 year or overdue ≥RMB5 million
Significant other gains ≥RMB5 million
The Company has identified subsidiaries with total assets/total
Significant non-wholly owned subsidiaries income/total profit exceeding 10% of the total assets/total income/total
profit of the Group as significant non-wholly owned subsidiaries
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6. Accounting treatments for business combination under common control and not under common
control
(1) When the terms, conditions and economic influence of transactions in the process of a step-by-step combination
conform to one or more of the following, accounting for multiple transactions is treated as a package transaction.
1) These transactions are made simultaneously or with consideration of influence on each other;
2) These transactions can only achieve a complete business outcome when treated as a whole;
3) The occurrence of a transaction depends on the occurrence of at least one of the other transactions;
4) A transaction is uneconomical when treated alone, but is economical when considered together with other transactions.
(2) Business combination under common control
The assets and liabilities acquired by the Company in business combinations are measured in accordance with the book value of assets and
liabilities of the combined party in the ultimate controller’s consolidated financial statements on the date of combination (including the goodwill of
the ultimate controlling party resulting from the acquisition of the combined party). The difference between the book value of net assets acquired in
the combination and the book value of the consideration paid for the combination (or the total par value of shares issued) is used to adjust the
capital stock premium in the capital reserve, and when the capital stock premium in the capital reserve is insufficient for offset, it is used to adjust
the retained earnings.
If there is a contingent consideration and it is necessary to confirm the estimated liabilities or assets, the difference between the estimated amount
of liabilities or assets and the settlement amount of subsequent contingent consideration is used to adjust the capital reserve (capital premium or
premium on capital stock), and when the capital reserve is insufficient, it is used to adjust the retained earnings.
For a business combination that is ultimately realized through multiple transactions, if it is a package transaction, each transaction is treated as a
transaction that acquires control; if it is not a package transaction, on the date of acquisition of control, the difference between the initial cost of
long-term equity investment and the book value of long-term equity investment before the combination plus the book value of the new paid
consideration on the date of combination is used to adjust the capital reserve; and when the capital reserve is insufficient for offset, it is used to
adjust the retained earnings. For equity investments held prior to the date of combination, no accounting treatment is carried out for other
comprehensive income recognized by equity accounting or financial instrument confirmation and measurement standards, and up to the disposal of
the investment, the accounting treatment shall be based on the same basis as the direct disposal of the assets or liabilities of the invested entity;
other changes in owner’s equity other than net profit or loss, other comprehensive income or profit distribution of net assets of the invested
company recognized by equity method are not subject to accounting, and will be transferred to the current profit and loss until the disposal of the
investment.
(3) Business combination not under the common control
Purchase date refers to the date when the Company actually obtains the control right over the acquire, that is, the date when the control right over
the net assets or production and operation decision is transferred to the Company. When the following conditions are met at the same time, the
Company generally considers that the transfer of control right has been realized:
1) The business combination contract or agreement has been approved by the internal authority of the Company.
2) The business combination matters that need to be considered and approved by the relevant competent departments of the state have been
approved.
3) Necessary procedures for transfer of property rights have been completed.
4) The Company has paid most of the combination price, and has the ability and plan to pay the remaining amount.
5) In fact, the Company has controlled the financial and operational policies of the acquiree, enjoyed corresponding benefits and assumed
corresponding risks.
The assets paid and liabilities incurred or assumed of the Company as a consideration for the business combination are measured at fair value on
the date of purchase, and the difference between the fair value and the book value is recognized in profit or loss.
The difference between the higher combination cost and lower fair value of identifiable net assets of the acquiree gained in the combination is
recognized as goodwill by the Company. In case the combination cost is less than the fair value of the share of the attributable net identifiable
assets of the acquiree, a review of the measurement of the fair values of the identifiable assets, liabilities and contingent liabilities of the acquiree
and the combination cost is conducted. If the review indicates that the fair value of the combination cost is indeed less than the fair value of the
share of the attributable net identifiable assets of the acquiree, the difference is included in current profit or loss.
For the case where a business combination involving enterprises not under common control is finally realized through multiple transactions step by
step, if it is a package transaction, each transaction is treated as a transaction for acquiring control; if it is not a package transaction, if the equity
investment held before the date of combination is accounted for by equity method, the book value of equity investment of the acquiree held before
the date of acquisition plus the new investment cost on the date of acquisition is recognized as the initial cost of the investment; the other
comprehensive income confirmed by equity method before the date of acquisition is accounted for, when the investment is disposed, on the same
basis as those the invested party adopted directly to dispose the relevant assets or liabilities. If the equity investment held before the date of
combination is accounted for by financial instrument recognition and measurement criteria, the fair value of equity investment on the date of
combination plus the new investment cost is taken as the initial investment cost on the date of combination. The difference between the fair value
and the book value of the original equity interest, and the accumulated fair value changes originally included in other comprehensive income
should be transferred to investment income in the current period of combination date.
(4) Related expenses incurred for business combination
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The agency fees paid for audits, legal services, assessments and other related expenses incurred in the business combination are recognized in
profit or loss in the period in which they are incurred. The transaction costs for the issuance of equity securities for the business combination that
may be directly attributed to equity transactions can be deducted from equity.
7. Criteria for judgement of control and methods for preparation of the consolidated financial statements
(1) Criteria for judgement of control
Control refers to the investor has the power over the investee, enjoys variable returns by participating in the relevant activities of
the investee, and has the ability to use the power over the investee to influence the amount of returns.
The Company makes judgments on whether or not it controls the investee after considering all relevant facts and circumstances. Once changes in
relevant facts and circumstances lead to changes in the relevant elements involved in the definition of control, the Company will re-evaluate them.
The relevant facts and circumstances mainly include:
1) the purpose of establishment of the investee.
2) the relevant activities of the investee and how to make decisions about the relevant activities.
3) whether the investor has the right to direct the relevant activities of the investee.
4) whether the investor is entitled to variable returns from its involvement with the investee.
5) whether the investor has the ability to use its power over the investee to affect the amount of its returns.
6) the relationship between the investor and other parties.
(2) The scope of consolidation
The scope of consolidation of the Company’s consolidated financial statements is determined on the basis of control, and all
subsidiaries (including separate entities controlled by the Company) are included in the consolidated financial statements.
(3) Procedures for consolidation
The Company prepares consolidated financial statements based on the financial statements of itself and its subsidiaries and other
relevant information. While preparing consolidated financial statements, the Company treats the entire enterprise group as an
accounting entity, and in accordance with the requirements for confirmation, measurement and presentation of relevant enterprise
accounting standards, and based on unified accounting policies, reflects the overall financial status, operating results and cash flow
of the enterprise group.
The accounting policies and accounting periods adopted by all subsidiaries included in the consolidated financial statements are
consistent with the Company. If the accounting policies or accounting periods adopted by the subsidiaries are inconsistent with the
Company, necessary adjustments will be made in accordance with the Company’s accounting policies and accounting periods
when preparing consolidated financial statements.
The impact of internal transactions between the Company and its subsidiaries, and internal transactions between subsidiaries, on
the consolidated balance sheet, consolidated income statement, consolidated cash flow statement and consolidated statement of
changes in shareholders’ equity is offset in the preparation of consolidated financial statements. If the determination of the same
transaction is different from the perspective of the consolidated financial statements of the enterprise group and with the Company
or subsidiaries as the accounting entity, the transaction shall be adjusted from the perspective of the enterprise group.
Subsidiary owners’ equity, current net profit and loss, and current comprehensive income of the minority shareholders are
separately presented under the owner’s equity item in the consolidated balance sheet, the net profit item in the consolidated income
statement, and the total comprehensive income item. If the current losses shared by the minority shareholders of a subsidiary
exceed the share enjoyed by the minority shareholder in the initial owner’s equity of the subsidiary, the excess is deducted from
the minority interests.
For subsidiaries acquired from a business combination involving enterprises under common control, the individual financial
statements of the subsidiaries shall be adjusted based on the book value of their assets and liabilities (including the goodwill
arising from the ultimate controller’s acquisition of the subsidiary) in the ultimate controller’s financial statements.
For subsidiaries acquired from a business combination involving enterprises not under common control, the financial statements of
the subsidiaries are adjusted based on the fair value of the identifiable net assets at the acquisition date.
(1) Increase in subsidiary or business
During the Reporting Period, if a subsidiary or business is added due to a business combination under common control, the
opening amount of the consolidated balance sheet shall be adjusted; the income, expenses and profits of the subsidiary or business
combination from the beginning of the current period to the end of the Reporting Period shall be included in the consolidated
income statement; the cash flow from the beginning of the current period to the end of the Reporting Period of the subsidiary or
business combination is included in the consolidated cash flow statement, and the relevant items in the comparative statement are
adjusted at the same time, as if the consolidated reporting entity has been in existence since the ultimate controller begins the
control.
If the investee under the common control can be controlled due to additional investment or other reasons, the parties involved in
the combination shall be deemed to have made adjustments in their current state when the ultimate controlling party begins the
control. For the equity investment held by the merging entity prior to obtaining control over the merged entity, the relevant profit
and loss, other comprehensive income and other changes to net assets recognized in the period from the date of acquiring the
original equity or the date when the merging entity and merged entity are under common control, whichever is later, to the date of
combination, shall be covered by writing down the opening retained earnings or current profit and loss of the comparison period.
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During the Reporting Period, if a subsidiary or business is added due to a business combination involving enterprises under non-
common control, the opening balance of the consolidated balance sheet is not adjusted; the income, expenses and profits of the
subsidiary and business from the date of acquisition to the end of the Reporting Period are included in the consolidated income
statement; the cash flows of the subsidiary and business from the date of acquisition to the end of the Reporting Period are
included in the consolidated cash flow statement.
If the investee under the common control can be controlled due to additional investment or other reasons, the equity interest held
in the acquiree prior to the date of acquisition is re-measured according to its fair value at the date of acquisition. The difference
between the fair value and the book value is recognized as investment income for the current period. If the equity held in the
acquiree held before the acquisition date involves other comprehensive income under the equity method and other changes in
owner’s equity other than net profit and loss, other comprehensive income and profit distribution, related other comprehensive
income, and other changes in owner’s equity are converted into the investment income of the current period on the acquisition date,
except for other comprehensive gains arising from the re-measurement of net liabilities of the defined benefit plan made by the
invested party or changes in net assets.
(2) Disposal of subsidiary or business
1) General treatment method
During the Reporting Period, if the Company disposes of a subsidiary or business, the income, expenses and profits of the
subsidiary or business from the beginning of the period to the disposal date are included in the consolidated income statement; the
cash flows of the subsidiary or business from the beginning of the Reporting Period to the disposal date are included in the
consolidated cash flow statement.
When the Company loses control over the invested party due to disposal of part of the equity investment or other reasons, the
remaining equity investment after disposal will be re-measured according to its fair value by the Company on the date of loss of
control. The difference of the sum of the consideration obtained from the disposal of the equity and the fair value of the remaining
equity, less the sum of the share of net assets and goodwill of the original subsidiary that should be enjoyed in accordance with the
original share-holding ratio since the date of acquisition or combination, is accounted for the investment income in the current
period of loss of control. Other comprehensive income related to the equity investment of the original subsidiary or other changes
in owner’s equity other than net profit and loss, other comprehensive income and profit distribution, will be converted into current
investment income when control is lost, except for other comprehensive gains arising from the re-measurement of net liabilities of
the defined benefit plan made by the invested party or changes in net assets.
2) Disposal of subsidiaries in steps
If the equity investment in a subsidiary is disposed of in steps through multiple transactions until the loss of control, the terms,
conditions, and economic impact of the disposal of the equity investment in the subsidiary meet one or more of the following
conditions, it usually indicates that multiple transactions shall be accounted as a package deal:
A. These transactions are made simultaneously or with consideration of influence on each other;
B. These transactions can only achieve a complete business outcome when treated as a whole;
C. The occurrence of a transaction depends on the occurrence of at least one of the other transactions;
D. A transaction is uneconomical when treated alone, but is economical when considered together with other transactions.
If all transactions from disposal of equity investment in subsidiaries to loss of control belong to a package deal, each transaction
shall be treated as a transaction for disposal of equity investment in subsidiaries and loss of control. The difference between each
disposal price and the share of the subsidiary’s net assets corresponding to the disposal investment before the loss of the control is
recognized as other comprehensive income in the consolidated financial statements, which is transferred into the current profit and
loss when the control is lost.
If the disposal of the equity investment in the subsidiary until the loss of control is not a package deal, before the loss of control,
the accounting treatment shall be carried out in accordance with the relevant policies for partial disposal of the equity investment
of the subsidiary without loss of control; when the control is lost, the accounting treatment shall be carried out in accordance with
the general treatment method for the disposal of the subsidiary.
(3) Acquisition of minority’ equity in subsidiary
The difference between the additional long-term equity investment arising from the acquisition of minority equity and the net
assets of the subsidiary, which is calculated according to the new holding proportion since the date of acquisition (or the date of
combination) shall be covered by adjusting the equity premium in capital reserve of the consolidated balance sheet; if the equity
premium in capital reserve is not sufficient for write-off, retained earnings shall be adjusted.
(4) Partial disposal of the equity investment of the subsidiary without loss of control
If the parent company disposes of part of its long-term equity investment in the subsidiary without losing its control, the difference
between the disposal price and the net assets of the subsidiary corresponding to the equity investment disposed of since the date of
acquisition or the date of combination shall be covered by adjusting the equity premium in capital reserve of the consolidated
balance sheet; if the equity premium in capital reserve is not sufficient for write-off, retained earnings shall be adjusted.
8. Classification of joint venture arrangements and accounting treatment method for joint operations
(1) Classification of joint arrangements
The Company divides joint venture arrangements into joint operations and joint ventures based on factors such as the structure, legal form, and
terms in the joint venture arrangement and other relevant facts and circumstances.
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Joint venture arrangements that are not reached through separate entities are classified as joint operations; joint arrangements reached through
separate entities are usually classified as joint ventures; there is conclusive evidence that joint arrangements that meet any of the following
conditions and comply with relevant laws and regulations are classified as joint operations:
1) The legal form of the joint arrangement indicates that the joint venture party has the rights and obligations of the related assets and liabilities
in the arrangement.
2) According to contractual terms of the joint arrangement, the joint venture party has the rights and obligations of the related assets and
liabilities in the arrangement
3) Other relevant facts and circumstances indicate that the joint venture party has the rights and obligations of the related assets and liabilities
in the arrangement. For example, the joint venture party enjoys almost all the output related to the joint venture arrangement, and the settlement of
the liabilities in the arrangement continues to rely on the support from the joint venture party.
(2) Accounting treatment for joint operations
The Company recognizes the following items related to the share of interests in joint operations and makes accounting treatment
according to the relevant ASBE:
1) Recognizes the assets held separately, and the assets held jointly according to its proportion;
2) Recognizes the liabilities assumed separately, and the liabilities assumed jointly according to its proportion;
3) Recognizes the income from the sales of its share in the outputs of joint operation;
4) Recognizes the income from the sales of the outputs of joint operation according to is proportion;
5) Recognizes the expenses incurred separately, and recognize the expenses incurred jointly according to its proportion.
If the Company invests or sells assets, etc. to a joint operation (except that if the asset constitutes a business), before the asset, etc.,
is sold by the joint operation to a third party, only the profit and loss arising from the transaction attributable to other participants
in the joint operation is recognized. In the event of asset impairment losses complying with the Accounting Standards for Business
Enterprises No. 8 - Asset Impairment and other provisions of assets invested or sold, the Company shall recognize the loss in full.
If the Company purchases assets, etc. from a joint operation (except that if the asset constitutes a business), before the asset, etc., is
sold to a third party, only the profit and loss arising from the transaction attributable to other participants in the joint operation is
recognized. In the event of asset impairment losses complying with the Accounting Standards for Business Enterprises No. 8 -
Asset Impairment and other provisions of assets purchased, the Company shall recognize the loss based on the share it holds.
The Company does not have joint control over the joint operation. If the Company enjoys the joint operation-related assets and
assumes the joint operation-related liabilities, the accounting treatment shall still be carried out in accordance with the above
principles; otherwise, the accounting treatment shall be carried out in accordance with the relevant corporate accounting standards.
9. Determination standards for cash and cash equivalents
In the preparation of the cash flow statement, the Company’s cash on hand and deposits that can be readily used for payment are
recognized as cash. The investment that has the four conditions of short maturity (generally due within three months from the date
of purchase), strong liquidity, easy conversion into cash of a known amount, and low risk of value changes will be determined as
cash equivalents.
10. Foreign currency business and foreign currency statement translation
(1) Foreign currency business
In the initial confirmation of foreign currency transactions, the spot exchange rate on the date of occurrence of the transaction shall
be used as the conversion rate to convert into RMB for accounting.
At the balance sheet date, foreign currency monetary items are translated at the spot exchange rate on the balance sheet date, and
the resulting exchange differences are included in the current profit and loss, except for the exchange differences arising from
foreign currency special borrowings related to the acquisition and construction of assets eligible for capitalization, which are
treated in accordance with the principle of capitalization of borrowing costs. The foreign currency non-monetary items measured
at historical cost are still translated at the spot exchange rate on the date of transaction without changing the amount of recording
currency.
Foreign currency non-monetary items measured at fair value shall be translated at the spot exchange rate on the date of
determination of fair value. The difference between the translated amount of recording currency and the original amount of
recording currency shall be treated as fair value changes (including changes in exchange rate), and included in the current profit
and loss or recognized as other comprehensive income.
(2) Translation of foreign currency financial statements
The assets and liabilities items in the balance sheet shall be treated at the spot exchange rate on the balance sheet date. Except for
the “undistributed profit” items, other owner’s equity items shall be translated at the spot exchange rate at the time of occurrence.
The income and expense items in the income statement shall be translated at the current average exchange rate. The exchange
differences on translation of foreign currency financial statements generated in accordance with the above translation shall be
included in other comprehensive income.
When disposing of an overseas operation, the difference in translation of the foreign currency financial statements related to the
overseas operation listed in other comprehensive income items in the balance sheet shall be transferred from other comprehensive
income items to the profits and losses of the current period for disposal. When the proportion of overseas business interests held is
reduced due to the disposal of part of equity investment or other reasons but the right of control over overseas business is not lost,
the difference of translation of foreign currency statements related to the disposal part of overseas business will be attributed to
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minority shareholders’ rights and interests and will not be transferred to current profit and loss. When disposing of part of the
equity of an overseas operation that is an associate or a joint venture, the difference on translation of the foreign currency
statement related to the overseas operation shall be transferred to the disposal of the current profit and loss according to the
proportion of the disposal of the overseas operation.
11. Financial instruments
When the Company becomes a party to a financial instrument, it recognizes a financial asset or liability.
The effective interest method refers to the method of calculating the amortized cost of financial assets or liabilities and allocating
interest income or interest expense into each accounting period.
The effective interest rate refers to the interest rate used to discount the estimated future cash flow of a financial asset or financial
liability during its expected duration to the book balance of the financial asset or the amortized cost of the financial liability. When
determining the effective interest rate, the expected cash flow is estimated on the basis of considering all contract terms of
financial assets or liabilities (such as prepayment, extension, call options or other similar options), but the expected credit loss is
not considered.
The amortized cost of a financial asset or financial liability is the accumulated amortization amount formed by deducting the
repaid principal from the initial recognition amount of the financial asset or financial liability, adding or subtracting the difference
between the initial recognition amount and the maturity amount by using the effective interest method, and then deducting the
accumulated accrued loss reserve (only applicable to financial assets).
(1) Classification, recognition and measurement of financial assets
According to the business model of the financial assets under management and the contractual cash flow characteristics of the
financial assets, the Company divides the financial assets into the following three categories:
1) Financial assets measured at amortized cost.
2) Financial assets measured at fair value and whose changes are included in other comprehensive income.
3) Financial assets measured at fair value through profit and loss.
Financial assets are measured at fair value when initially recognized, but if the accounts or notes receivable arising from the sale of
goods or the provision of services do not contain significant financing components or do not consider financing components for no
more than one year, the initial measurement shall be made at the transaction price.
For financial assets measured at fair value through profit and loss, transaction expenses are directly recognized in the current profit
and loss. For other financial assets, transaction expenses are included in the initial recognition amount.
Subsequent measurement of financial assets depends on their classification. All related financial assets affected will be reclassified
when and only when the Company changes its business model of managing financial assets.
A. Financial assets classified as measured at amortized cost
The contract terms of a financial asset stipulate that the cash flow generated on a specific date is only the payment of the principal
and the interest on the amount of outstanding principal, and the business model for managing the financial asset is to collect the
contractual cash flow, then the Company classifies the financial asset as measured at amortized cost. Financial assets of the
Company that are classified as measured at amortized cost include monetary funds, some notes receivable and accounts receivable
measured at amortized cost, other receivables, etc.
The Company recognizes interest income from such financial assets with the effective interest method, and carries out subsequent
measurement at amortized cost. Gains or losses arising from impairment or derecognition or modification are included in the
current profit and loss. The Company calculates and determines the interest income based on the book balance of financial assets
multiplied by the effective interest rate except for the following circumstances:
a. For purchased or originated credit-impaired financial assets, the Company calculates and determines their interest income at the
amortized cost of the financial asset and the credit-adjusted effective interest rate since the initial recognition.
b. For financial assets that have not been credit-impaired at the time of being purchased or originated but become credit-impaired
in the subsequent period, the Company calculates and determines their interest income at the amortized cost and the effective
interest rate of the financial assets in the subsequent period. If the financial instrument is no longer credit-impaired due to the
improvement of its credit risk in the subsequent period, the Company calculates and determines the interest income by multiplying
the effective interest rate by the book balance of the financial asset.
B. Financial assets classified as measured at fair value and whose changes are included in other comprehensive income
The contract terms of a financial asset stipulate that the cash flow generated on a specific date is only the payment of the principal
and the interest on the amount of outstanding principal, and the business model for managing the financial asset is both to collect
contractual cash flows and for its sale, then the Company classifies the financial asset as measured at fair value and whose changes
are included in other comprehensive income.
The Company recognizes interest income from such financial assets with the effective interest method. Except that the interest
income, impairment loss and exchange difference are recognized as the current profit and loss, other changes in fair value are
included in other comprehensive income. When the financial asset is derecognized, the accumulated gains or losses previously
included in other comprehensive income are transferred out and included in the current profit and loss.
Notes and accounts receivable measured at fair value with changes included in other comprehensive income are reported as
receivables financing, and such other financial assets are reported as other creditors’ investments. Among them, other creditors’
investments maturing within one year from the balance sheet date are reported as non-current assets maturing within one year, and
other creditors’ investments maturing within one year are reported as other current assets.
C. Financial assets designated as measured at fair value and whose changes are included in other comprehensive income
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At the time of initial recognition, the Company may irrevocably designate non-trading equity instrument investments as financial
assets measured at fair value and whose changes are included in other comprehensive income on the basis of individual financial
assets.
Changes in the fair value of such financial assets are included in other comprehensive income without provision for impairment.
When the financial asset is derecognized, the accumulated gains or losses previously included in other comprehensive income are
transferred out and included in the retained earnings. During the investment period when the Company holds the equity instrument,
the dividend income is recognized and included in the current profit and loss when the Company’s right to receive dividends has
been established, the economic benefits related to dividends are likely to flow into the Company, and the amount of dividends can
be measured reliably. The Company reported such financial assets under other equity instrument investment items.
An investment in equity instruments is a financial asset measured at fair value through profit and loss when it is obtained mainly
for recent sale, or is part of the identifiable portfolio of financial assets centrally managed, and objective evidence exists for a
short-term profit model in the near future when initially recognized, or is a derivative (except derivatives defined as financial
guarantee contracts and designated as effective hedging instruments).
D. Financial assets classified as measured at fair value through profit and loss
If failing to be classified as measured at amortized cost or at fair value and whose changes are included in other comprehensive
income, or not designated as measured at fair value and whose changes are included in other comprehensive income, financial
assets are all classified as measured at fair value through profit and loss.
The Company carries out subsequent measurement of such financial assets at fair value, and includes gains or losses arising from
changes in fair value as well as dividends and interest income associated with such financial assets into current profit and loss.
The Company reports such financial assets as trading financial assets and other non-current financial assets according to their
liquidity.
E. Financial assets designated as measured at fair value through profit and loss
At the time of initial recognition, the Company may irrevocably designate financial assets as measured at fair value through profit
and loss on the basis of individual financial assets in order to eliminate or significantly reduce accounting mismatches.
If the mixed contract contains one or more embedded derivative instruments and its main contract is not any financial asset as
above, the Company may designate the whole of the mixed contract as a financial instrument measured at fair value through profit
and loss. Except under the following circumstances:
a. Embedded derivatives do not significantly change the cash flow of mixed contracts.
b. When determining for the first time whether similar mixed contracts need to be split, it is almost clear that embedded
derivatives contained in them should not be split without analysis. If the prepayment right embedded in a loan allows the holder to
prepay the loan at an amount close to the amortized cost, the prepayment right does not need to be split.
The Company carries out subsequent measurement of such financial assets at fair value, and includes gains or losses arising from
changes in fair value as well as dividends and interest income associated with such financial assets into current profit and loss.
The Company reports such financial assets as trading financial assets and other non-current financial assets according to their
liquidity.
(2) Classification, recognition and measurement of financial liabilities
The Company classifies a financial instrument or its components into financial liabilities or equity instruments upon initial
recognition according to the contract terms of and the economic essence reflected by the financial instrument issued, rather than
only in legal form, in combination with the definitions of financial liabilities and equity instruments. Financial liabilities are
classified at initial recognition as measured at fair value and whose changes are included in current profit and loss, or other
financial liabilities, or derivatives designated as effective hedging instruments.
Financial liabilities are measured at fair value upon initial recognition. For financial liabilities measured at fair value and whose
changes are included in current profit and loss, relevant transaction expenses are directly included in current profit and loss. For
other categories of financial liabilities, relevant transaction expenses are included in the initial recognition amount.
Subsequent measurement of financial liabilities depends on their classification:
1) Financial liabilities measured at fair value through profit and loss
Such financial liabilities include trading financial liabilities (including derivatives falling under financial liabilities) and financial
liabilities designated as measured at fair value and whose changes are included in current profit and loss upon initial recognition.
The financial liability is a trading financial liability if it is mainly undertaken for recent sale or repurchase, or is part of the
identifiable portfolio of financial instruments centrally managed, and there is objective evidence that the enterprise has recently
employed a short-term profit model, or is a derivative instrument, except derivatives designated as effective hedging instruments
and derivatives conforming to financial guarantee contracts. Trading financial liabilities (including derivatives belonging to
financial liabilities) shall be subsequently measured according to fair value. Except in relation to hedge accounting, all changes in
fair value shall be recorded into current profit and loss.
The Company irrevocably designates financial liabilities as measured at fair value and whose changes are included in current
profit and loss at the time of initial recognition in order to provide more relevant accounting information if:
A. Such financial liabilities can eliminate or significantly reduce accounting mismatches.
B. The financial liability portfolio or the portfolio of financial assets and liabilities is managed and evaluated for performance on
the basis of fair value according to the enterprise risk management or investment strategy stated in the official written documents,
and is reported to key management personnel within the enterprise on this basis.
The Company subsequently measures such financial liabilities at fair value. Except changes in fair value that are brought about by
changes in the Company’s own credit risk are included in other comprehensive income, other changes in fair value are included in
current profit and loss. Unless including such changes in other comprehensive income will cause or expand accounting mismatch
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in profit or loss, the Company will include all changes in fair value (including the amount affected by changes in its own credit
risk) in current profit and loss.
2) Other financial liabilities
The Company classifies financial liabilities except for the following items as measured at amortized cost. Such financial liabilities
are recognized by the effective interest method and subsequently measured at amortized cost. Gains or losses arising from
derecognition or amortization are included in the current profit and loss:
A. Financial liabilities measured at fair value through profit and loss.
B. Financial liabilities resulting from the transfer of financial assets that do not meet the conditions for derecognition or continue
to be involved in the transferred financial assets.
C. Financial guarantee contracts that do not fall under the first two categories of this article, and loan commitments that do not fall
under category 1) of this article and lend at a below-market interest rate.
Financial guarantee contracts refer to contracts that require the issuer to pay a specific amount to the contract holder who has
suffered losses when a specific debtor fails to pay the debt in accordance with the original or modified terms of the debt instrument.
Financial guarantee contracts that are not financial liabilities designated as measured at fair value and whose changes are included
in current profit and loss are measured after initial recognition according to the loss reserve amount and of the initial recognition
amount, less the accumulated amortization amount during the guarantee period, whichever is higher.
(3) Derecognition of financial assets and liabilities
1) Financial assets are derecognized, i.e. written off from its account and balance sheet if:
A. The contractual right to receive cash flow from the financial asset is terminated.
B. The financial asset has been transferred, which meets the requirements for derecognition of financial assets.
2) Conditions for derecognition of financial liabilities
If the current obligation of a financial liability (or part thereof) has been discharged, such financial liability (or part thereof) is
derecognized.
The existing financial liability is derecognized with a new one recognized, and the difference between the carrying amount and the
consideration paid (including transferred non-cash assets or assumed liabilities) is included in the current profit and loss, if an
agreement is signed between the Company and the lender to replace the existing financial liability by assuming a new one, and the
contract terms of these two financial liabilities are substantially different, or the contract terms of the existing financial liability (or
part thereof) are substantially modified.
If the Company repurchases part of a financial liability, the carrying amount of the financial liability shall be distributed according
to the proportion of the fair value of the continuing recognition portion and the derecognition portion to the overall fair value on
the repurchase date. The difference between the carrying amount allocated to the derecognized portion and the consideration paid
(including transferred non-cash assets or liabilities assumed) shall be included in the current profit and loss.
(4) Recognition basis and measurement method of financial asset transfer
When a financial asset is transferred, the Company evaluates the risks and rewards retained of the financial asset ownership:
1) If almost all the risks and rewards of the financial asset ownership are transferred, such financial asset shall be derecognized,
and the rights and obligations generated or retained in the transfer shall be separately recognized as assets or liabilities.
2) If almost all the risks and rewards of the financial asset ownership are retained, such financial asset shall continue to be
recognized.
3) In circumstances when the Company neither transfers nor retains almost all the risks and rewards of the financial asset
ownership (i.e. circumstances other than 1) and 2) of this article), according to whether it retains control over such financial asset:
A. The financial asset shall be derecognized, and the rights and obligations generated or retained in the transfer shall be separately
recognized as assets or liabilities if such control is not retained.
B. The relevant financial asset shall continue to be recognized to the extent that it continues to be involved in the transferred
financial asset, and the relevant liabilities shall be recognized accordingly if such control is retained. The extent that it continues to
be involved in the transferred financial asset refers to the extent the Company bears the risks or rewards on changes in the value of
the transferred financial asset.
When judging whether the transfer of financial assets meets the above conditions for derecognition of financial assets, the
principle of substance over form shall be adopted. The Company divides the transfer of financial assets into overall transfer and
partial transfer.
1) If the overall transfer of financial assets meets the conditions for derecognition, the difference between the following two
amounts shall be included in the current profit and loss:
A. The carrying amount of the transferred financial asset on the date of derecognition.
B. The sum of the consideration received for the transfer of financial assets and the amount of the corresponding derecognized
portion of the accumulated changes in fair value originally included in other comprehensive income directly (the financial assets
involved in the transfer are financial assets measured at fair value and whose changes are included in other comprehensive
income).
2) If the financial asset is partially transferred and the transferred part meets the conditions for derecognition, the carrying
amount of the financial asset before transfer shall be allocated between the derecognition portion and the continuing recognition
portion (in this case, the retained service asset shall be regarded as the continuing recognition part of the financial asset) according
to the respective relative fair values on the transfer date, and the difference between the following two amounts shall be included
in the current profit and loss:
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A. The carrying amount of the derecognized portion on the derecognition date.
B. The sum of the consideration received for the derecognized portion and the amount of the corresponding derecognized portion
of the accumulated changes in fair value originally included in other comprehensive income (the financial assets involved in the
transfer are financial assets measured at fair value and whose changes are included in other comprehensive income). If the transfer
of a financial asset does not meet the conditions for derecognition, the financial asset shall continue to be recognized and the
consideration received shall be recognized as a financial liability.
(5) Determination of fair value of financial assets and liabilities
The fair value of a financial asset or liability with an active market shall be determined by the quoted price in the active market,
unless the financial asset has a sell-off period for the asset itself. For the financial assets restricted for the assets themselves, the
compensation amount demanded by market participants due to the risk of not being able to sell the financial assets on the open
market within the specified period shall be deducted from the quoted price in the active market. Quoted prices in the active market
includes those for related assets or liabilities that can be easily and regularly obtained from exchanges, dealers, brokers, industry
groups, pricing or regulatory agencies, and can represent actual and recurring market transactions on the basis of fair trade.
The fair value of financial assets initially acquired or derived or financial liabilities assumed shall be determined on the basis of
market transaction price.
The fair value of financial assets or liabilities without an active market shall be determined by valuation techniques. At the time of
valuation, the Company adopts valuation techniques that are applicable under the current circumstances and are supported by
sufficient available data and other information, selects input values consistent with the characteristics of relevant assets or
liabilities considered by market participants in the transactions thereof, and gives priority to the use of relevant observable input
values whenever possible. If the relevant observable input value cannot be obtained or be feasibly obtained, the unobservable input
value shall be used.
(6) Impairment of financial instruments
Based on the expected credit loss, the Company conducts impairment accounting of financial assets classified as measured at
amortized cost and financial assets classified as measured at fair value and whose changes are included in other comprehensive
income and recognizes loss reserves.
Expected credit loss refers to the weighted average of the credit losses of financial instruments weighted by the risk of default.
Credit loss refers to the difference between all contractual cash flows discounted at the original effective interest rate and
receivable according to the contract and all cash flows expected to be collected of the Company, i.e. the present value of all cash
shortfalls. Among them, credit-impaired purchased or originated financial assets of the Company shall be discounted at the credit-
adjusted effective interest rate of such financial assets.
For contractual assets, notes receivable and receivables arising from transactions regulated by the income criteria, the Company
measures the loss reserve according to the amount equivalent to the expected credit loss during the entire duration.
For credit-impaired purchased or originated financial assets, only the accumulated changes in the expected credit losses during the
entire duration since the initial recognition are recognized as loss reserves on the balance sheet date. On each balance sheet date,
the amount of change in the expected credit loss during the entire duration is included in the current gains and losses as
impairment losses or gains. Even if the expected credit loss during the entire duration on the balance sheet date is less than that
reflected in the estimated cash flow upon initial recognition, the favorable change in the expected credit loss is recognized as
impairment gains.
In addition to other financial assets adopting the above simplified measurement method and other than the credit-impaired
purchased or originated ones, the Company evaluates whether the credit risk of relevant financial instruments has increased
significantly since the initial recognition, measures its loss reserves and recognizes the expected credit loss and its changes
respectively according to the following circumstances on each balance sheet date:
1) If the credit risk of the financial instrument has not increased significantly since its initial recognition and is in the first stage,
its loss reserve shall be measured according to an amount equivalent to its expected credit loss in the next 12 months, and the
interest income shall be calculated at the book balance and the effective interest rate.
2) If the credit risk of the financial instrument has increased significantly since the initial recognition but no credit impairment
has occurred, it is in the second stage, then its loss reserve shall be measured according to an amount equivalent to its expected
credit loss throughout its life, and the interest income shall be calculated at the book balance and the effective interest rate.
3) If the financial instrument is credit-impaired since its initial recognition, it is in the third stage, and the Company shall
measure its loss reserve according to an amount equivalent to its expected credit loss throughout its life, and calculate the interest
income at the amortized cost and the effective interest rate.
The increase or reversed amount of the credit loss reserve for financial instruments shall be included in the current profit and loss
as impairment losses or gains. Except for financial assets classified as measured at fair value and whose changes are included in
other comprehensive income, the credit loss reserve will offset the carrying amount of the financial assets. For financial assets
classified as measured at fair value and whose changes are included in other comprehensive income, the Company recognizes its
credit loss reserve in other comprehensive income without reducing its carrying amount presented in the balance sheet.
In the previous accounting period, the Company has measured the loss reserve, the amount of which is equivalent to the expected
credit loss of the financial instrument throughout its life. However, on the balance sheet date of the current period, the financial
instrument no longer conforms to the situation of significant increase in credit risk since initial confirmation; on the balance sheet
date of the current period, the Company has measured the loss reserve of the financial instrument, the amount of which is
equivalent to the expected credit loss in the next 12 months, and the reversed amount of the loss reserve thus formed is included in
the current profit and loss as impairment profit.
A. Significant increase of credit risk
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In order to determine whether the credit risk of financial instruments has increased significantly since the initial recognition, the
Company uses the available reasonable and based forward-looking information and compares the risk of default of financial
instruments on the balance sheet date with the risk of default on the initial confirmation date. When the Company applies
provisions on depreciation of financial instruments to financial guarantee contracts, the initial recognition date shall be regarded as
the date when the Company becomes a party to make irrevocable commitments. For the assessment of whether the credit risk has
increased significantly, the Company will consider the following factors
a. Whether the actual or expected operating results of the debtor have changed significantly;
b. Whether the regulatory, economic or technological environment of the debtor has undergone significant adverse changes;
c. Whether the following items have changed significantly: the value of collateral as debt mortgage, or the guarantee provided by a
third party, or the quality of credit enhancement; these changes will reduce the debtor’s economic motivation to repay the loan
within the time limit stipulated in the contract or impact the probability of default;
d. Whether the debtor’s expected performance and repayment behavior have changed significantly;
e. Whether the Company’s credit management methods for financial instruments have changed, etc.
If, on the balance sheet date, the credit risk of the financial instrument is judged to be low by the Company, the Company assumes
that the credit risk of the financial instrument has not increased significantly since the initial recognition. The financial instrument
will be deemed to have lower credit risk under the following circumstances: the default risk of the financial instrument is lower;
the borrower has a strong ability to fulfill its contractual cash flow obligations in a short time; furthermore, even if there are
adverse changes in the economic situation and operating environment for a long period of time, it may not necessarily reduce the
borrower’s ability to fulfill its contractual cash flow obligations.
B. Financial assets with credit impairment
If one or more events have adverse effects on the expected future cash flow of a financial asset, the financial asset will become a
financial asset that has suffered credit impairment. The following observable information can be regarded as evidence of credit
impairment of financial assets:
a. The issuer or debtor is in serious financial difficulties;
b. The debtor breaches the contract, such as default or overdue payment of interest or principal, etc.;
c. The creditor gives concessions to the debtor due to economic or contractual considerations related to the debtor’s financial
difficulties; the concessions will not be made under any other circumstances;
d. There is a great possibility of bankruptcy or other financial restructuring of the debtor;
e. The financial difficulties of the issuer or debtor cause the disappearance of the active market for the financial asset;
f. The purchase or origin of a financial asset at a substantial discount that reflects the fact that a credit loss has occurred.
Credit impairment of financial assets may not be caused by separately identifiable events, but may be caused by the combined
effect of multiple events.
C. Determination of expected credit loss
The Company’s assessment of the expected credit losses of financial instruments is based on single items and combinations.
During the evaluation, the Company will take into account reasonable and reliable information about past events, current situation
and future economic situation forecast. The Company divides financial instruments into different combinations on the basis of
common credit risk characteristics. Common credit risk characteristics adopted by the Company include: type of financial
instrument, credit risk rating, aging portfolio, overdue aging portfolio, contract settlement period, debtor's industry, etc. To
understand the individual evaluation criteria and combined credit risk characteristics of relevant financial instruments, please refer
to the accounting policies of relevant financial instruments for details.
The Company adopts the following methods to determine the expected credit losses of relevant financial instruments:
a. In terms of financial assets, credit loss is equivalent to the present value of the difference between the contract cash flow that the
Company shall receive and the expected cash flow.
b. In terms of lease receivables, credit loss is equivalent to the present value of the difference between the contract cash flow that
the Company shall receive and the expected cash flow.
c. In terms of the financial guarantee contract, credit loss is equal to the expected amount of payment made by the Company to the
holder of the contract for credit loss incurred, less the present value of the difference between the amount expected to be collected
from the holder of the contract, the debtor or any other party.
d. If, on the balance sheet date, a financial asset has suffered credit impairment, but one does not purchase or originate a financial
asset that has suffered credit impairment, the credit loss is equivalent to the difference between the book balance of the financial
asset and the present value of the estimated future cash flow discounted at the original actual interest rate.
Factors reflected in the Company’s method of measuring the expected credit losses for financial instruments include: unbiased
probability weighted average amount determined by evaluating a series of possible results; time value of money; reasonable and
reliable information about past events, current situation and future economic situation forecast that can be obtained on the balance
sheet date without unnecessary extra costs or efforts.
4) Write-off of financial assets
If the Company cannot reasonably expect the contract cash flow of the financial asset to be fully or partially recovered, the book
balance of the financial asset will be written off directly. This write-off constitutes the derecognition of relevant financial assets.
(7) Offset of financial assets and financial liabilities
In the balance sheet, financial assets and financial liabilities are shown separately without offsetting each other. However, if the following
conditions are met at the same time, the net amount after offset will be listed in the balance sheet:
1) The Company has the legal right, which is currently enforceable, to offset the confirmed amount;
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2) The Company plans to settle on a net basis, or realize the financial assets and settle the financial liabilities at the same time.
12. Notes receivable
For the determination method and accounting treatment method of the Company for the expected credit losses on notes receivable, please
refer to “11-(6) Impairment of financial instruments” in this section.
The Company separately determines credit losses for notes receivables that have sufficient evidence to assess expected credit losses at a
reasonable cost at the level of a single instrument.
When sufficient evidence of expected credit loss cannot be evaluated at a reasonable cost at the level of single instrument, the Company will
refer to the experience of historical credit loss, combine the current situation and judgment on future economic situation, divide bills receivable
into several combinations according to the characteristics of credit risk, and calculate expected credit loss on the basis of combinations. The basis
for determining the portfolio is as follows:
Item Basis for determining Method
portfolio
Bank acceptance bill Type of bill Refer to the experience of historical credit loss, combine the current situation and
portfolio judgment on future economic situation to measure the expected credit loss
Commercial Type of bill Refer to the experience historical credit loss, combine the current situation and
acceptance bill judgement on future economic situation, and prepare a comparison table of aging and
portfolio expected credit loss rate according to the expected credit loss in the whole duration, on
which the expected credit loss is calculated.
13. Accounts receivable
For the determination method and accounting treatment method of the Company for the expected credit losses on accounts receivable, please
refer to “11-(6) Impairment of financial instruments” in this section.
For accounts receivable with significant single amount and credit impairment occurring after initial recognition, the Company separately
determines its credit losses.
If sufficient evidence of expected credit loss cannot be assessed at reasonable cost at the level of single instrument, the Company will divide
the accounts receivable into several portfolios according to the credit risk characteristics, and calculate the expected credit loss on the basis of the
portfolio (with reference to the experience of historical credit loss, and in combination with the current situation with the judgment of future
economic situation). The basis for determining the portfolio is as follows:
Item Basis for determining portfolio Method
Aging portfolio Accounts receivable with similar Referring to historical credit loss experience, combined with the current situation
credit risk characteristics by aging and the forecast of future economic situation, according to the expected credit loss
during the entire duration, a comparative table of age and expected credit loss rate is
developed, based on which the expected credit loss is calculated.
14. Receivables financing
Bills receivable and accounts receivable classified as measured at fair value through other comprehensive income, whose maturity is within
one year (including one year) from the initial recognition date, are presented as receivables financing; those with a maturity of more than one year
from the initial recognition date are presented as other debt investments. Please refer to Note 11 for relevant accounting policies.
For the determination method and accounting treatment method of the Company’s expected credit loss on receivables financing, please refer
to “11-(6) Impairment of financial instruments” in this section.
The Company separately determines credit losses for receivables financing which sufficient evidence of expected credit loss can be assessed
at a reasonable cost at the level of a single instrument.
If sufficient evidence of expected credit loss cannot be assessed at reasonable cost at the level of single instrument, the Company will divide
the receivables into several portfolios according to the credit risk characteristics, and calculate the expected credit loss on the basis of the portfolios
(with reference to the experience of historical credit loss, and in combination with the current situation with the judgment of future economic
situation). The basis for determining the portfolio is as follows:
Item Basis for determining portfolio Accrual method
Aging portfolio Accounts receivable with similar Referring to historical credit loss experience, combined with the current situation and
credit risk characteristics by aging the forecast of future economic situation, according to the expected credit loss during
the entire duration, a comparative table of age and expected credit loss rate is
developed, based on which the expected credit loss is calculated
15. Other receivables
For the determination method and accounting treatment method of the Company’s expected credit loss on other receivables,
please refer to “11-(6) Impairment of financial instruments” in this section.
The Company separately determines credit losses for other receivables that which sufficient evidence of expected credit loss
can be assessed at the level of a single instrument.
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If sufficient evidence of expected credit loss cannot be assessed at reasonable cost at the level of single instrument, the
Company will divide the other receivables into several portfolios according to the credit risk characteristics, and calculate the
expected credit loss on the basis of the portfolios (with reference to the experience of historical credit loss, and in combination
with the current situation with the judgment of future economic situation). The basis for determining the portfolio is as follows:
Item Basis for determining portfolio Method
Aging portfolio Other receivables with similar With reference to historical credit loss experience, combined with current
credit risk characteristics by conditions and forecasts of future economic conditions, the expected credit loss is
aging calculated through the default risk exposure and the credit loss rate in the next 12
months or the entire duration
16. Contractual assets
17. Inventories
(1) Classification of inventories, valuation method for issuance, inventory system and amortization method of low-value
consumables and packages
1) Classification of inventories
Inventories refer to the finished products or commodities held for sale by the Company in the course of its daily activities, the products
being in the process of production, and the materials and supplies consumed in the process of production or provision of labor services, etc. The
Company classifies inventories into raw materials, turnover materials, work-in-process products, self-made semi-finished products, finished
products (inventory goods), issued goods, etc.
2) Valuation method for issuance of inventories
When the inventories are acquired, it is initially measured at cost, including purchase cost, processing cost and other costs. When the
inventories are delivered, it shall be valued by the first-in, first-out method and weighted average method at the end of the month.
3) Inventory system
A perpetual inventory system is adopted.
4) Amortization method of low-value consumables and packages
A. Low-value consumables are amortized by the one-off writing-off method.
B. Packages are amortized by the one-off writing-off method.
C. Other turnover materials are amortized by the one-off writing-off method.
(2) recognition audit and provision method for provision for inventory impairment
Provision for inventory impairment is recognized or adjusted at the lower of costs and the net realizable value after
conducting a thorough check of inventories at the end of the year. For inventories of goods directly used for sale, such as finished
goods, merchandise inventories and materials for sale, in the normal production and operation process, the net realizable value is
determined by the amount of the estimated selling price of the inventory less the estimated sales cost and relevant taxes and fees;
for material inventories that need to be processed, in the normal production and operation process, the net realizable value is
determined by the amount of the estimated selling price of finished products produced less the estimated cost to be occurred at the
time of completion, the estimated selling expenses and related taxes; for inventories held for the execution of sales contracts or
labor contracts, the net realizable value is calculated on the basis of the contract price, and if the quantity of inventories held is
more than the quantity specified in sales contracts, the net realizable value of excess inventories is calculated based on the general
sales price.
At the end of the year, inventory valuation allowance is accrued according to individual inventory items; but for a large
number of inventories with lower unit prices, inventory valuation allowance is accrued according to inventory category; for
inventories related to the product series produced and sold in the same region with the same or similar end use or purpose, and that
is difficult to be measured separately from other items, inventory valuation allowance is accrued combined with other items.
If the influencing factors of the write-down of inventory value have disappeared, the amount written-down is recovered and
reversed to the amount of inventory valuation allowance already accrued, and the amount reversed is included in the current profit
and loss.
18. Held-for-sales assets
19. Debt investment
20. Other debt investment
21. Long-term receivables
22. Long-term equity investment
(1) Recognition of initial investment cost
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1) For the long-term equity investment formed by the business combination, the specific accounting policies are detailed in “(6). Accounting
treatments for business combination under common control and not under common control” in this section.
2) Long-term equity investment acquired by other means
For long-term equity investment acquired by cash payment, the actual acquisition price is recognized as initial investment cost. The initial
investment cost includes expenses, taxes and other necessary expenses directly related to the acquisition of the long-term equity investment.
For a long-term equity investment obtained by issuing equity securities, the initial investment cost shall be the fair value of the equity
securities issued. Transaction costs incurred in the issuance or acquisition of one’s own equity instruments those can be directly attributable to the
equity transaction shall be deducted from the equity.
Provided that the non-monetary asset exchange contains commercial substance and the fair value of the assets received or assets surrendered
can be reliably measured, the initial investment cost of the long-term equity investment received with non-monetary assets is determined based on
the fair value of the assets surrendered, except that there is conclusive evidence indicates that the fair value of assets received is more reliable. For
non-monetary asset exchange that do not satisfy the above condition, the book value of assets surrendered and related taxes and fees payable are
recognized as the initial investment cost of the long-term equity investment.
The initial investment cost of a long-term equity investment acquired by debt restructuring is determined on the basis of fair value.
(2) Subsequent measurement and recognition of related profit and loss
1) Cost method
The Company can use the cost method to calculate the long-term equity investment controlled by the invested entity, price it according to
the initial investment cost, and increase or recoup the cost of investment on adjusting a long-term equity investment.
Except for the declared but undistributed cash dividends or profits included in the actual payment or consideration when the investment is
obtained, the Company shall recognize the cash dividends or profits declared to be distributed by the invested entity as current investment income.
2) Equity method
The Company adopts equity method for accounting of long-term equity investments in associates and joint ventures. For the equity
investment in associates in which part of it is held indirectly through venture capital institutions, mutual funds, trust companies or similar entities
including investment-linked insurance funds, it shall be measured at fair value and its changes shall be recorded into profits and losses.
For the balance that the initial investment cost of long-term equity investments is bigger than the fair value shares of invested units’
distinguished net assets which shall be enjoyed by the Company, the Company will not adjust the initial investment cost of long-term equity
investments; for the balance that the initial investment cost is smaller than the fair value shares of invested units’ distinguished net assets which
shall be enjoyed by the Company, it shall be included in the current profit and loss.
After the Company obtains long-term equity investment, it shall recognize investment income and other comprehensive income respectively
according to its share of the net profit or loss realized by the invested entity and other comprehensive income, and adjust the book value of long-
term equity investment at the same time. In addition, the part to be enjoyed shall be calculated according to the profit or cash dividend declared by
the invested entity to be distributed, and the book value of long-term equity investment shall be reduced accordingly. For other changes in owners’
equity other than net profit and loss, other comprehensive income and profit distribution of the invested entity, the book value of long-term equity
investment shall be adjusted and recorded into owners’ equity.
When confirming the shares of invested units’ net gain or loss to be enjoyed, the Company will adjust and confirm the invested units’ net
profit based on the fair value of the invested units’ distinguishable assets when investments are obtained. For the gain or loss on the non-realized
internal transactions between the Company and associates, joint ventures, the part attributing to the Company will be calculated as per the
proportion to be enjoyed, will be written down, and on this basis, the investment profit and loss will be confirmed.
The Company recognizes that the loss suffered by the invested unit should be dealt with in the following order: first, reduce the book value
of long-term equity investments. Secondly, if the book value of long-term equity investments is not sufficient to offset, the book value of other
long-term equity that substantially constitute the net investment in the invested entity shall be used to continue to recognize the investment loss and
offset the book value of long-term receivables. Finally, after the above treatment, according to the investment contract or agreement, the enterprise
still assumes the additional obligations, and it will confirm the provisions according to the expected obligations and shall be included in the current
investment losses.
If the investee makes profits in the future, the Company shall, after deducting the unrecognized loss share, deal with it in the reverse order,
write down the book balance of the confirmed provisions, recover other long-term equity that substantially constitute the net investment to the
investee and the book value of long-term equity investments, and resume the recognition of investment income.
(3) Transformation of accounting method of long-term equity investments
1) Transfer of fair value measurement to equity method
The equity investment originally held by the Company that does not have control, joint control or significant influence on the
investee and is subject to accounting treatment according to the recognition and measurement standards of financial instruments
can exert significant influence on the investee or implement joint control but does not constitute control due to additional
investment and other reasons, the sum of the fair value of the originally held equity investment plus the newly increased
investment cost determined in accordance with the Accounting Standards for Business Enterprises No. 22 - Recognition and
Measurement of Financial Instruments shall be regarded as the initial investment cost calculated according to the equity method.
The initial investment cost calculated by the equity method is less than the difference between the fair value of the
identifiable net assets of the investee on the additional investment date calculated and determined according to the new
shareholding ratio after the additional investment, the book value of long-term equity investments is adjusted and included in the
non-operating revenue of the current period.
2) Transfer of fair value measurement or equity method to cost method
The equity investment originally held by the Company that does not have control, joint control or significant impact on the
investee and is subject to accounting treatment in accordance with the recognition and measurement standards of financial
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instruments, or the long-term equity originally held by the Company in associates and joint ventures: If the investee under different
control can be controlled due to additional investment and other reasons, when preparing individual financial statements, the book
value of equity investment originally held plus new investment cost shall be taken as the initial investment cost calculated by cost
method instead.
The other comprehensive income, which is recognized as equity investment held before the purchase date, is accounted for
by the equity method. When disposing the investment, it adopts the same basis as the relevant assets or liabilities directly disposed
of by the invested entity for accounting treatment.
If the equity investment held before the acquisition date is accounted for in accordance with the relevant provisions of the
Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments, the changes in
the accumulated fair value originally included in other comprehensive income are transferred to the current profit and loss when
the cost method is used for accounting.
3) Transfer of equity method to fair value measurement
If the Company loses joint control or significant impact on the invested entity due to disposal of part of equity investment,
the remaining equity after disposal shall be accounted according to Accounting Standards for Business Enterprises No. 22 -
Recognition and Measurement of Financial Instruments, and the difference between the fair value and book value on the date of
loss of joint control or significant impact shall be included in the current profit and loss.
The other comprehensive income of the original equity investment recognized due to the use of equity method shall be
accounted on the same basis as the invested unit’s direct disposal of relevant assets or liabilities when the equity method is
terminated.
4) Transfer of cost method to equity method
If the Company loses the control over the investee due to the disposal of part of the equity investment and other reasons,
when preparing individual financial statements, if the residual equity after disposal can exercise joint control or exert significant
influence on the investee, the equity method shall be used for accounting instead, and the residual equity shall be deemed to be
adjusted by the equity method when it is obtained.
5) Transfer of cost method to fair value measurement
If the Company loses control over the investee due to the disposal of part of equity investment and other reasons, when
preparing individual financial statements, if the residual equity after disposal cannot exercise joint control or exert significant
influence on the investee, the accounting treatment shall be carried out in accordance with the relevant provisions of the
Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments. The difference
between the fair value and the book value on the date of loss of control is included in the current profit and loss.
(4) Disposal of Long-Term Equity Investments
For the disposal of long-term equity investments, the difference between the book value and the actually obtained price shall
be included in the current profit and loss. Long-term equity investments accounted by the equity method shall be disposed on the
same basis as the investee’s direct disposal of relevant assets or liabilities, and the part originally included in other comprehensive
income shall be accounted according to the corresponding proportion.
If the terms, conditions and economic impact of the disposal of various transactions of equity investment in subsidiaries meet
one or more of the following conditions, multiple transactions shall be accounted as a package deal:
1) These transactions are made simultaneously or with consideration of influence on each other;
2) These transactions can only achieve a complete business outcome when treated as a whole;
3) The occurrence of a transaction depends on the occurrence of at least one of the other transactions;
4) A transaction is uneconomical when treated alone, but is economical when considered together with other.
If the control over the original subsidiary company is lost due to the disposal of part of equity investment or other reasons,
and it does not belong to a package deal, the relevant accounting treatment shall be made by distinguishing individual financial
statements and consolidated financial statements:
1) In individual financial statements, for the equity disposed, the difference between the book value and the actually
obtained price is included in the current profit and loss. If the residual equity after disposal can exercise joint control or exert
significant influence on the investee, it shall be accounted by equity method, and the residual equity shall be deemed as adjusted
by equity method when it is acquired; If the residual equity after disposal cannot exercise joint control or exert significant
influence on the investee, it shall be accounted in accordance with the relevant provisions of the Accounting Standards for
Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments, and the difference between the fair value
and book value on the date of loss of control shall be included in the current profit and loss.
2) In the consolidated financial statements, for the difference between the disposal price and the corresponding share of
net assets of the subsidiary calculated continuously from the purchase date or the combination date for each transaction before the
loss of control over the subsidiary, the capital reserve (share capital premium) shall be adjusted. If the capital reserve is insufficient
to offset, the retained earnings shall be adjusted; if the control right over the subsidiary is lost, the remaining equity shall be
remeasured according to its fair value on the date of losing the control right. The difference between the sum of the consideration
obtained from the disposal of equity and the fair value of the remaining equity minus the share of the net assets of the original
subsidiary calculated continuously from the purchase date calculated according to the original shareholding ratio shall be included
in the investment income of the current period when the control right is lost, and goodwill shall be offset at the same time. Other
comprehensive income related to the equity investment of the original subsidiary will be converted into the current investment
income when the control right is lost.
If all transactions from disposal of equity investment in subsidiaries to loss of control belong to a package deal, each
transaction shall be treated as a transaction for disposal of equity investment in subsidiaries and loss of control, and relevant
accounting treatment shall be conducted according to individual financial statements and consolidated financial statements:
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1) In individual financial statements, the difference between each disposal price and the long-term equity investment book
value corresponding to the disposed equity before the loss of control right is recognized as other comprehensive income, which is
transferred to the loss and profit of the current period when the control right is lost.
2) In the consolidated financial statements, the difference between each disposal price and the share of the subsidiary’s
net assets corresponding to the disposal investment before the loss of the control right is recognized as other comprehensive
income, which is transferred into the current profit and loss when the control right is lost.
(5) Judgment for joint control and significant impact
If the Company controls an arrangement collectively with other participants in accordance with relevant agreements, and the
activity decision-making that has a significant impact on the return of the arrangement needs to exist after the consensus of the
participants sharing the control right, it is deemed that the Company and other participants jointly control an arrangement, which is
a joint venture arrangement.
When the joint venture arrangement is reached by a single body, the individual entity shall be judged as a joint venture and
the equity method shall be used for accounting when the Company has the right to enjoy the net assets of the individual entity
according to the relevant agreement. If it is judged that the Company does not have the right to the net assets of the individual
subject according to the relevant agreement, the individual subject shall be regarded as the joint operation, the Company shall
recognize the items related to the share of interests of the joint operation, and carry out accounting treatment in accordance with
the provisions of the relevant accounting standards for business enterprises.
Significant influence means that the investor has the right to participate in the decision-making of the financial and
operational policies of the investee, but cannot control or jointly control the formulation of these policies with other parties. The
Company judges to have a significant impact on the investee through one or more of the following circumstances and
comprehensive consideration of all facts and circumstances: 1) having a representative on the board of directors or similar
authority of the investee; 2) participate in the financial and operational policy-making process of the investee; 3) there are
significant transactions with the investee; 4) dispatch management personnel to the investee; and 5) provide key technical data to
the investee.
23. Investment properties
Measuring mode of investment properties
Measured at cost
Depreciation or amortization method
The Company adopts the cost model for subsequent measurement of investment property. Depreciation or amortization is accrued on
buildings and land use rights according to the estimated service life and net residual value rate. The estimated service life, net residual value rate
and annual depreciation (amortization) rate of investment properties are listed as follows:
Type The estimated service life (Year) The estimated net residual Annual depreciation
value rate (%) (amortization) rate (%)
Land use rights Service life of land use rights 1/Service life*100
Property and plant 20 5-10 4.50-4.75
See 30 "Impairment of long-term assets" for methods of testing and providing for impairment of investment properties.
24. Fixed assets
(1) Recognition criteria
Fixed assets mean tangible assets held for the purpose of producing goods, rendering of services, leases or operation management, whose
service life is more than one fiscal year. Fixed assets satisfying the following conditions are recognized:
1) The economic benefits associated with the fixed assets are likely to flow into the enterprise;
2) The cost of the fixed asset can be measured in a reliable way.
(2) Depreciation method
Type Depreciation method Depreciation life (year) Rate of residual value (%) Annual depreciation rate
(%)
Property and plant Straight-line method 20 5-10 4.50-4.75
Machinery and equipment Straight-line method 6-13 5-10 6.92-15.83
Transportation equipment Straight-line method 5 5-10 18.00-19.00
Electronic equipment Straight-line method 5 5-10 18.00-19.00
Office equipment Straight-line method 5 5-10 18.00-19.00
Other equipment Straight-line method 5 5-10 18.00-19.00
The Company shall comply with the disclosure requirements in the chemical industry set forth in the Self-Disciplinary
Regulatory Guidelines for Companies Listed on the Shenzhen Stock Exchange No. 3 – Industry Information Disclosure.
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25. Construction in progress
The Company shall comply with the disclosure requirements in the chemical industry set forth in the Self- Disciplinary
Regulatory Guidelines for Companies Listed on the Shenzhen Stock Exchange No. 3 – Industry Information Disclosure.
Construction in progress built by the Company is valued at the actual cost, which consists of the necessary expenses incurred
before the construction of the asset is reaches the expected usable status, including engineering materials costs, labor costs, related
taxes and fees, borrowing costs that should be capitalized and indirect costs that should be apportioned.
For the construction in progress project, all expenses incurred before the construction of the asset reaches the expected
serviceable state shall be taken as the entry value of fixed assets. If the construction in progress has reached the expected
serviceable condition, but the final accounts of completion have not yet been handled, from the date of reaching the expected
serviceable condition, it shall be transferred to fixed assets according to the estimated value according to the project budget, cost or
actual cost of the project, and the depreciation of fixed assets shall be accrued according to the Company’s fixed assets
depreciation policy. The original estimated value shall be adjusted according to the actual cost after the completion of final
accounts, but the amount of depreciation that has been accrued shall not be adjusted.
See "(30) Impairment of long-term assets" in this section for methods of testing and providing for impairment of construction
in progress.
26. Borrowing costs
(1) Recognition principles of capitalization of borrowing costs
Borrowing costs incurred by the Company that are directly attributable to the acquisition, construction or production of qualifying assets,
shall be capitalized and included in the cost of relevant assets. Other borrowing costs shall be recognized as expenses according to the amount
incurred and included in the profits or losses in the current period.
Assets eligible for capitalization refer to fixed assets, investment properties, inventory and other assets that are expected to be usable or
salable after a considerable period of purchase and construction or production activities.
Capitalization shall commence when:
1) Expenditures are being incurred, which comprise disbursements incurred in the form of payments of cash, transfer of non-monetary
assets or assumption of interest-bearing debts;
2) Borrowing costs are being incurred, and;
3) Purchase, construction or manufacturing activities that are necessary to prepare the assets for their intended use or sale are in progress.
(2) Capitalization period for borrowing costs
Capitalization period refers to the period from commencement of capitalization of borrowing costs to its cessation; period of
suspension for capitalization is excluded.
Capitalization of borrowing costs shall cease when the qualifying asset under acquisition, construction or production gets
ready for intended use or sale.
Where part of the project of acquisition, construction or production of qualifying assets has been completed respectively and
can be put into use individually, capitalization of borrowing costs of that part should cease.
Where each part of assets purchased, constructed or manufactured has been completed separately but can be used or sold
only after all parts have been completed, capitalization of borrowing costs shall cease at the completion of all parts of the said
assets.
(3) Period of suspension for capitalization
Capitalization of borrowing costs shall be suspended during periods in which purchase, construction or manufacturing of
assets eligible for capitalization is interrupted abnormally, and the interruption is for a continuous period of more than 3 months; if
the interruption is the necessary procedure to prepare the assets purchased, constructed or manufactured assets eligible for
capitalization for their intended use or sale, the borrowing costs shall continue to be capitalized. Borrowing costs incurred during
the interruption shall be recognized in current profit or loss, and shall continue to be capitalized when purchase, construction or
manufacturing of the relevant assets resumes.
(4) Measurement of capitalized amounts of borrowing costs
Interest charges on special borrowings (excluding interest income on unused borrowings deposited in the bank, or
investment income on temporary investment) and their ancillary expenses shall be capitalized before the assets purchased,
constructed or produced that meet the capitalization conditions are ready for intended use or sale.
The amount of capitalized interest on general borrowings is calculated by the weighted average of the excess portion of the
accumulative asset expenditures over the special borrowings multiplied by the capitalization rate of general borrowings. The
capitalization rate is determined based on the weighted average interest rate of general borrowings.
Where there are discounts or premiums on borrowings, the amounts of interest for each accounting period shall be adjusted
taking account of amortizable discount or premium amounts for the period by effective interest method.
27. Right-of-use assets
The Company initially measures the right-of-use assets on the basis of the cost, which includes:
(1) The amount of initial measurement of lease liabilities;
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(2) For the lease payment paid on or before the beginning of the lease term, if there is lease incentive plan, the relevant amount of
lease incentive enjoyed shall be deducted;
(3) The initial direct costs incurred by the company;
(4) The costs expected to be incurred by the Company to dismantle or remove the leased assets, restore the site where the leased
assets are located or restore the leased assets to the state agreed in the lease terms (excluding the costs incurred for the production of
inventories).
After the beginning date of the lease term, the Company adopts the cost model for subsequent measurement of the right-of-use assets.
If it can be reasonably determined that the ownership of the leased asset is obtained at the expiration of the lease term, the Company shall
accrue depreciation within the remaining service life of the leased asset. If it is impossible to reasonably determine that the ownership of the leased
asset can be obtained at the expiration of the lease term, the Company shall accrue depreciation within the shorter term between the lease term and
the remaining service life of the leased asset. For the right-of-use assets with impairment provision, the depreciation shall be accrued on the basis
of the book value after deducting the impairment provision in the future with reference to the above principles.
In accordance with the relevant provisions of Accounting Standards for Business Enterprises No. 8 - Asset Impairment, the Company
determines whether the right-of-use assets have been impaired and accounts for the identified impairment losses. Please refer to “24. Impairment of
long-term assets” in the section for details.
28. Biological assets
29. Oil and gas assets
30. Intangible assets
(1) The service life and its determination basis, estimated situation, amortization method or review
procedures
The Company determines the useful life of intangible assets on acquisition, which are classified as intangible assets with limited useful life
and indefinite useful life.
1) Intangible assets with limited useful lives
For the intangible assets with limited service life, they are amortized by the straight-line method within the period of bringing economic
benefits to the enterprise. The estimated life and basis of intangible assets with limited service life are as follows:
Item Expected service life Basis for estimates
Software 10 years Expected service life
Land use rights 50 years Certificate of land using right
Patent rights 10 years Benefit period
Non-proprietary technology 10 years Benefit period
The service life of the intangible assets with limited service life and its amortization method shall be reviewed at the end of each period.
Adjustments will be made if necessary.
2) Intangible assets with uncertain useful lives
Intangible assets with unforeseeable economic benefits to the Company are deemed to be intangible assets with an indefinite useful life.
Intangibles assets with uncertain useful lives are reviewed for remaining useful lives at each period end. If there is evidence to suggest that
the period in which the intangible asset will bring economic benefits to the enterprise is foreseeable, the Company will estimate its useful life and
amortize it according to the amortization policy for intangible assets with limited useful life. See "30. Impairment of long-term assets" in this
section for methods of testing and providing for impairment of intangibles assets.
(2) Sweep scope for R&D expenses and relevant accounting treatments
1) Criteria for classification of research phase and development phase of internal R&D projects of the Company
Research phase: the phase in which original and planned investigation and research are carried out with purpose of gaining and understanding
new scientific or technical knowledge.
Development phase: before commercial production and utilization, the phase in which the research achievement or other knowledge is
applied to a particular project or design in order to produce new or substantially improved materials, devices, products, etc.
The expenditure of internal R&D projects incurred during research phase is recognized in profit or loss when incurred.
2) Expenditures arising from development phase on internal R&D projects must be capitalized if the Company can satisfy all of the
following criteria:
A. There is technical feasibility of completing the intangible assets (so that they will be available for use or sale);
B. There is an intention to complete and use or sell the assets;
C. how the intangible asset will generate economic benefits including there is evidence that the products produced using the intangible asset
has a market or the intangible asset itself has a market; if the intangible asset is for internal use, there is evidence that there exists usage for the
intangible asset;
D. There are adequate technical, financial and other resources to complete the development and the ability to use or sell the intangible assets;
E. The expenditure attributable to the development phase of intangible assets can be reliably measured.
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If the expenditure at the development phase does not meet the above condition, it shall be charged to current profits or losses when occurring.
If it is not possible to distinguish between research phase expenditures and development phase expenditures, all research and development
expenditures incurred are recognized in the current profits and losses. The cost of intangible assets resulting from internal development activities
includes only the total amount of expenditure incurred from the point at which the capitalization condition is met until the intangible asset reaches
its intended use. No adjustment is made to the expenditure that has been expensed to profit or loss before the capitalization condition is met for the
same intangible asset in the development process.
31. Impairment of long-term assets
At each balance sheet date, the Company inspects whether there are signs of possible impairment of long-term equity
investments, investment properties measured using the cost method, fixed assets, construction in progress and intangible assets
with definite useful lives. If there is any sign of impairment of a long-term asset, the recoverable amount shall be estimated on the
basis of a single asset; if it is difficult to estimate the recoverable amount of a single asset, the recoverable amount of the asset
group to which the asset belongs shall be determined.
The recoverable amount of an asset is estimated based on the higher of the net amount of its fair value less disposal expenses
and the present value of the expected future cash flow of the asset.
If the measurement results of the recoverable amount show that the recoverable amount of the long-term asset is lower than
its book value, the book value of the long-term asset shall be written down to the recoverable amount, and the written-down
amount shall be recognized as the impairment loss of the asset, which shall be recorded into the current profit and loss, and the
corresponding asset impairment provision shall be drawn at the same time. Once the impairment loss of assets is recognized, it
shall not be reversed in the future accounting period.
After the asset impairment loss is recognized, the depreciation or amortization expenses of the impaired asset shall be
adjusted accordingly in the future period, so that the adjusted asset book value (deducting the estimated net residual value) will be
systematically apportioned over the remaining service life of the asset.
For goodwill and intangible assets with uncertain service life due to business combination, no matter whether there is any
sign of impairment or not, impairment test shall be carried out every year.
In the impairment test of goodwill, the book value of goodwill would be apportioned to asset group or portfolio of asset
group expected to benefit from the synergy effect of a business combination. When carrying out an impairment test on the relevant
asset group or portfolio of asset group containing goodwill, if there is a sign of impairment on the asset group or portfolio of asset
group related to the goodwill, the Company first calculates the recoverable amount after testing the asset group or portfolio of
asset group which does not contain the goodwill for impairment, and then compares it with the related book value to recognize the
corresponding impairment loss. Next, the Company conducts an impairment test on the asset group or portfolio of asset group
which contains the goodwill and compares the book value of the related asset group or portfolio of asset group (book value
includes the share of goodwill) with the recoverable amount. If the recoverable amount of the related asset group or portfolio of
asset group is lower than the book value, the Company will recognize the impairment loss of goodwill.
32. Long-term deferred expenses
(1) Amortization method
Long-term deferred expenses refer to expenses that have already been spent by the Company, but shall be apportioned in the
current period and the future periods and the benefit period is over 1 year. Long-term prepaid expenses are amortized using the
straight-line method over the period of projected earnings.
(2) Amortization period
Type Amortization period Notes
Technical services fee Agreed in the contract
Renovation fee 3-5 years
Power Grid access fee 10 years
Software system implementation fee 5 years
Repair and maintenance fee 2-3 years
33. Contractual liabilities
The Company recognizes as a contractual liability the portion of its obligation to transfer commodities to a customer for
which the customer consideration has been received or is receivable.
34. Employee compensation
(1) Accounting treatment of short-term employee compensation
During the accounting period when employees provide services, the Company recognizes the short-term benefits payable as
a liability and includes the same in the relevant asset costs and expenses on the basis of the beneficiaries of the services provided
by employees.
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(2) Accounting treatment for post-employment benefits
The post-employment benefit plans of the Company are classified as defined contribution plans and defined benefit plans.
The defined contribution plan for post-employment benefits is mainly to participate in the social basic endowment insurance,
unemployment insurance, etc., organized and implemented by local labor and social security institutions. During the accounting
period when employees provide services to the Company, the amount of deposit payable calculated according to the defined
deposit plan shall be recognized as liabilities and included in the current profit and loss or related asset costs. After making regular
payments for the aforementioned amounts in accordance with national standards and pension plans, the Company will no longer
have any additional payment obligations.
(3) Accounting treatment for termination benefits
Termination benefits refer to the compensation paid to an employee when the Company terminates the labor relationship with an employee
before the labor contract expires, or offers compensation for encouraging the employee to accept the redundancies voluntarily. The liabilities
arising from the termination of labor relations with the employee are determined, and also included in the current profit and loss, at the time when
the Company cannot unilaterally withdraw the termination of the labor relationship plan or redundancies proposal, or the time when the cost
associated with restructuring involving payment of termination benefits is confirmed, whichever is earlier.
The Company provides early retirement benefits to employees who accept internal retirement arrangements. Early retirement welfare refers
to the wages paid to the employees who fail to reach the retirement age stipulated by the state and voluntarily quit their jobs with the approval of
the Company’s management and the social insurance premiums paid for them. The Company shall pay the internal retirement benefits to the early
retired employees from the commencement date of the internal retirement arrangement to the date when the employees reach the normal retirement
age. For the early retirement welfare, the Company shall carry out accounting treatment according to the termination benefits. When the relevant
recognition conditions of the termination benefits are met, the wages and social insurance premiums to be paid to the early retired employees from
the date when the employees stop providing services to the normal retirement date shall be recognized as liabilities and included in the current
profit and loss on a lump-sum basis. The difference caused by the change of actuarial assumption and the adjustment of welfare standard of early
retirement welfare shall be included in the current profit and loss when it occurs.
(4) Accounting treatment method for other long-term employee benefits
35. Estimated Liabilities
(1) Recognition criteria of estimated liabilities
When an obligation related to a contingency is a current obligation undertaken by the company, and the fulfillment of such
obligation is likely to result in an outflow of economic benefits, and the amount of such obligation can be reliably measured, it is
recognized as an estimated liability.
(2) Measurement of estimated liabilities
The estimated liabilities of the Company are initially measured on the basis of the best estimate of the expenditure required
to perform the relevant current obligations.
When determining the best estimate, the Company considers factors such as risks, uncertainties and time value of money
related to contingent events. Where the time value of money has a significant impact, the best estimate is determined by
discounting the relevant future cash outflows.
The best estimates are handled as follows:
In case that there is a continuous range (or interval) of required expenditures, within which the possibility of occurrence of
various results is the same, the best estimate is determined by the average of the middle value of the range, that is, the average of
the upper and lower limits.
In case that there is no continuous range (or interval) of required expenditures, or there is a continuous range but the
possibility of various results in the range is different, if the contingency involves a single item, the best estimate should be
determined based on the most probable amount; if a contingency involves multiple items, the best estimate is determined based on
various possible outcomes and associated probabilities.
If all or part of the expenses required by the Company to settle the provisions are expected to be compensated by a third
party, the compensation amount is separately recognized as an asset when it is basically confirmed to be received, and the
recognized compensation amount should not exceed the book value of estimated liabilities.
36. Lease liability
The Company initially measures the lease liability according to the present value of the lease payments that have not been
paid on the beginning of the lease period. When calculating the present value of the lease payment, the Company uses the interest
rate implicit in the lease as the discount rate; if the interest rate implicit in the lease cannot be determined, the Company’s
incremental borrowing rate is used as the discount rate. Lease payments include:
(1) The fixed payment amount and the actual fixed payment amount after deducting the leasing incentive related amount;
(2) Variable lease payments depending on index or ratio;
(3) When the Company reasonably determines that the option will be exercised, the lease payment includes the exercise
price of the purchase option;
(4) When the lease term reflects that the Company will exercise the option to terminate the lease, the lease payment includes
the amount to be paid for the exercise of the option to terminate the lease;
(5) The expected payment due to the residual value of the guarantee provided by the Company.
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The Company calculates the interest expense of the lease liability in each period of the lease term at a fixed discount rate,
and include it in the current profit and loss or related asset costs.
Variable lease payments that are not included in the measurement of lease liabilities should be included in current profit or
loss or related asset costs when they actually occur.
37. Share-based payments
(1) Categories of share-based payments
The share-based payment of the Company is divided into equity-settled share-based payment and cash-settled share-based
payment.
(2) Determination method of fair value of equity instruments
For the granted equity instruments such as options with active market, their fair value shall be determined according to the
quoted price in the active market. For the granted equity instruments without active market, the option pricing model is used to
determine their fair value. The following factors are considered in the option pricing model: (1) the exercise price of the option; (2)
the validity period of the option; (3) the current price of the target share; (4) the expected volatility of the share price; (5) the
expected dividend of the share; (6) the risk-free interest rate.
When determining the fair value of the equity instrument on the grant date, the impact of market conditions and non-vesting
conditions specified in the share-based payment agreement shall be considered. If there are non-vesting conditions for share-based
payment, as long as the employees or other parties meet all non-market conditions (such as service term, etc.) in all of the vesting
conditions, the corresponding cost of the services received shall be recognized.
(3) Basis for determining the best estimate of exercisable equity instruments
At each balance sheet date in the vesting period, the Company would make best estimate in accordance with the newly
acquired information such as changes in the number of employees with exercisable rights, and amend the number of estimated
exercisable equity instruments. On the exercise date, the ultimate estimated number of exercisable equity instruments coincides
with the actual number.
(4) Accounting treatment
1) Accounting treatment for equity-settled and cash-settled share-based payment
The equity-settled share-based payment shall be measured at the fair value of the equity instrument granted to the employee.
If the right is exercisable immediately after the grant, the relevant cost or expense shall be recorded in accordance with the fair
value of the equity instrument on the grant date, and the capital reserve shall be increased accordingly. If the right is not
exercisable until the service within the waiting period is completed or the performance conditions are met, on each balance sheet
date within the waiting period, the services acquired in the current period shall be included into relevant costs or expenses and
capital reserves based on the best estimate of the number of the equity instruments of the exercisable rights and based on the fair
value on the grant date of the equity instruments. No adjustments shall be made after the vesting date for the related costs or
expenses recognized and total owners’ equity.
The cash-settled share-based payment is measured at the fair value of the liabilities borne by the Company and calculated
based on shares or other equity instruments. Where the right is feasible immediately after the grant, the fair value of the liabilities
borne by the Company shall be included into the relevant costs or expenses s at the fair value of the liabilities assumed by the
Company on the grant date, and the liabilities shall be increased accordingly. Where the share-based payment is not exercisable
until the service in the vesting period is completed or specified performance conditions are met, then at each balance sheet date
within the vesting period, the service obtained in the current period shall be included in cost or expenses and in liabilities at the fair
value of the Company’s liabilities based on the best estimates of the quantity of exercisable equity instruments made by the
Company. At each balance sheet date and settlement date before relevant liabilities are settled, the fair value of the liabilities is
remeasured and the changes are recognized in profit or loss.
2) Accounting treatment for modification of terms and conditions of share-based payment
For the unfavorable modifications, the Company will continue to account for the services received as if the changes have
never occurred.
For favorable modifications, the Company will handle them in accordance with the following regulations: If the
modifications increase the fair value of the equity instruments granted, the enterprise should recognize the increase in services
received in accordance with the increase in the fair value of the equity instruments. If the modification occurs within the waiting
period, when recognizing the fair value of services received between the date of the modification and the exercisable date after the
modification, both the service amount determined based on the fair value of the original equity instrument on the grant date over
the remaining original waiting period and the increase in the fair value of the equity instrument shall be included. If the
modification occurs after the exercise date, the increase in fair value of the equity instrument shall be recognized immediately. If
the equity-settled share-based payment agreement requires employees to complete an extended period of service before obtaining
the modified equity instrument, the enterprise should recognize the increase of the fair value of the equity instrument throughout
the waiting period.
If the modification increases the number of equity instruments granted, the fair value of the increased equity instruments is
recognized as an increase in services received. If the modification occurs during the waiting period, when recognizing the fair
value of services received from the date of the modification to the exercisable date of the increased equity instruments, both the
service amount determined based on the fair value of the original equity instruments on the grant date during the remaining
original waiting period and the increase in the fair value of the equity instruments shall be included.
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If the enterprise modifies the exercise conditions in favor the employees, such as shortening the waiting period, changing or
canceling the performance conditions (rather than market conditions), the enterprise should consider the revised exercise
conditions when dealing with the exercise conditions.
3) Accounting treatment for share-based payment cancelations
If the granted equity instrument is cancelled in the waiting period, the Company will treat the cancellation of the granted
equity instrument as accelerated exercise, and the amount to be recognized in the remaining waiting period will be included in the
current profit and loss immediately, and capital reserve will be recognized at the same time. If the employee or other parties can
choose to meet the non-vesting conditions but fail to meet them within the waiting period, the Company will treat them as the
cancellation of the granted equity instrument.
38. Preferred stock, perpetual bonds and other financial instruments
39. Revenue
Disclosure of accounting policies for recognition and measurement of revenue by business type
The timing of revenue recognition of the Company for major products respectively are as follows: (1) For BOPP cigarette
films, cigarette labels, aseptic packaging products, when the products are delivered to the locations designated by the customers,
and the delivery is completed and the evidence of transfer of control of the goods is obtained from the customers. (2) For BOPP
flat films and lithium battery separators, when the delivery has been completed according to the method agreed by the customers,
and the evidence of transfer of control of goods is obtained from the customers or the carriers designated by the customers. (3) For
special paper products, the products are delivered to the locations designated by the customers, the delivery is completed and the
evidence of conforming requirements from customers is obtained.
The Company has fulfilled its obligations under the contract, that is, when the customer acquires control of the relevant
goods or services, the revenue is recognized according to the transaction price apportioned to the performance obligations.
Performance obligation refers to the commitment of the Company in the contract to assign commodities or services that can be
clearly distinguished to the customer. Obtaining the control right of the related commodity means to be able to dominate the use of
the commodity and obtain almost all the economic benefits from it.
The Company shall evaluate the contract on the commencement date of the contract, identify the individual performance
obligations contained in the contract, and determine whether each individual performance obligation shall be performed within a
certain period of time or at a certain point in time. If one of the following conditions is satisfied, the performance obligation shall
be performed within a certain period of time, and the Company shall recognize the income within a certain period of time
according to the performance progress of the Company: (1) the client shall obtain and consume the economic benefits brought by
the performance of the Company as the Company performs the contract; (2) the customer is able to control the goods under
construction during the performance of the Company; and (3) the products produced by the Company during the performance of
the contract are of irreplaceable use, and the Company is entitled to collect payment for the part of the contract which has been
completed so far during the whole term of the contract. Otherwise, the Company recognizes revenue at the time point when the
customer acquires control of the relevant goods or services.
For the performance obligations performed during a certain period of time, the Company will use the output/input method to
determine the appropriate performance schedule based on the nature of the goods and services. The output method determines the
performance schedule according to the value to the customer of the goods that have been transferred to the customer (the input
method determines the performance schedule according to the Company’s input to fulfill the performance obligation). If the
performance schedule cannot be reasonably determined and the Company is expected to be compensated for the costs already
incurred, the revenue shall be recognized in accordance with the amount of costs already incurred until the performance progress
can be reasonably determined.
Differences in recognition and measurement methods of revenue due to different business models for similar businesses
The Company shall comply with the disclosure requirements in the chemical industry set forth in the Self-Disciplinary
Regulatory Guidelines for Companies Listed on the Shenzhen Stock Exchange No. 3 – Industry Information Disclosure.
(1) Contracts with sales return clauses
For sales with sales return clauses, when the customer obtains the control right of the relevant goods, the revenue is
recognized according to the amount of consideration expected to be entitled to receive due to the transfer of goods to the customer
(i.e., excluding the amount expected to be refunded due to sales return), and the liabilities are recognized according to the amount
expected to be refunded due to sales return. At the same time, the balance of the book value at the time of transfer of the goods
expected to be returned after deducting the expected cost of recovering the goods (including the impairment of the value of the
returned goods) shall be accounted for an asset. According to the book value of the transferred goods at the time of transfer, deduct
the net carrying cost of the above-mentioned asset costs.
(2) Contracts with quality assurance clauses
For sales with quality assurance clauses, if the quality assurance provides a separate service to the customer other than
ensuring that the goods or services sold meet the established standards, the quality assurance constitutes a single performance
obligation. Otherwise, the Company will account for the quality assurance responsibility in accordance with the Accounting
Standards for Business Enterprises No. 13 – Contingencies.
(3）Sales contracts with additional customer purchase options
The additional purchase option of customers includes sales incentives, customer reward points, option of renewal, other
discounts for future goods or services, etc. With respect to the additional purchase option with material rights provided to
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customers, the Company regards it as a single performance obligation, and recognizes relevant revenue upon obtaining the control
over relevant goods or services by the customers who exercise the purchase option in future or upon lapse of such option. If the
separate selling price of the customer's additional purchase option cannot be directly observed, an estimate shall be made after
comprehensively considering all relevant information such as the difference in discounts obtained by the customer upon exercise
and non-exercise of the option and the possibility of the customer exercising the option.
(4) Contracts for granting intellectual property licenses to customers
Assess whether the intellectual property license constitutes a single performance obligation, and further determine whether it
is performed within a certain period or at a certain point in time. If the Company grants an intellectual property license to a
customer and agrees to collect royalties according to the actual sales or use of the customer, the revenue shall be recognized at the
later of the following two points: the subsequent sales or use of the customer occurs; and the Company performs relevant
performance obligations.
(5) After-sales repurchase
1) Contracts with repurchase obligations due to forward arrangements with customers: in this case, the customer does not
obtain control of the relevant goods at the time of sales, so they are accounted for accordingly as lease transactions or financing
transactions. Where the repurchase price is lower than the original selling price, it shall be regarded as a lease transaction and
accounted for in accordance with the relevant provisions of the Accounting Standards for Business Enterprises.; If the repurchase
price is not lower than the original selling price, it shall be regarded as a financing transaction, and the financial liabilities shall be
recognized when the customer's payment is received, and the difference between the payment and the repurchase price shall be
recognized as interest expenses during the repurchase period. If the Company does not exercise the repurchase right when it
expires, the financial liabilities shall be derecognized when the repurchase right expires, and the revenue shall be recognized at the
same time.
2) Contracts with repurchase obligations incurred at the request of customers: if it is assessed that the customer has
significant economic drivers, the after-sales repurchase shall be treated as a lease transaction or a financing transaction and
accounted for in accordance with the provisions of 1) of this article; otherwise, it shall be treated as a sales transaction with sales
return clauses.
(6) Contracts that charge customers initial fees that do not need to be returned
The initial fee charged to the customer at (or near) the commencement of the contract that is not refundable shall be included
in the transaction price. If the Company assesses that the initial fee is related to the transfer of promised goods to the customer and
the goods constitute a single performance obligation, the revenue shall be recognized according to the transaction price
apportioned to the goods when the goods are transferred; If the initial fee is related to the transfer of promised goods to the
customer but the goods do not constitute a single performance obligation when the single performance obligation containing the
goods is performed, the revenue shall be recognized according to the transaction price apportioned to the single performance
obligation; If the initial fee is not related to the transfer of the promised goods to the customer, the initial fee shall be recognized as
the advance receipt for the goods to be transferred in the future and shall be recognized as revenue when the goods are transferred
in the future.
40. Contract cost
(1) Costs to fulfil a contract
For the cost incurred for the fulfillment of a contract, if it does not fall within the scope of other accounting standards for
business enterprises other than the revenue standards and meets all the following criteria, it shall be recognized as an asset from
the costs incurred to fulfill a contract:
1) The cost is directly related to a current or to an anticipated contract, including direct labor, direct materials, manufacturing
expenses (or similar expenses), costs clearly borne by the customer, and other costs incurred solely due to the contract;
2) The costs enhance resources of the Company that will be used in satisfying performance obligations in the future.
3) The costs are expected to be recovered.
The asset is reported in inventories or other non-current assets based on whether the amortization period exceeds one normal
business cycle at the time of its initial recognition.
(2) Costs to obtain a contract
If the incremental cost incurred by the Company in obtaining the contract is expected to be recoverable, it shall be
recognized as an asset of obtaining a contract. Incremental cost refers to the cost that the Company incurs to obtain a contract with
a customer that it would not have incurred if the contract had not been obtained, such as sales commission. If the amortization
period does not exceed one year, it shall be included in the current profits and losses when it occurs.
(3) Amortization of contract costs
The above assets related to contract costs are amortized at the time of fulfilment of performance obligations or according to
the fulfillment progress of performance obligations on the same basis as the recognition of revenue from goods or services related
to the assets and included in current profits and losses.
(4) Impairment of contract costs
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If the book value of the above-mentioned assets related to the contract cost is higher than the difference between the residual
consideration expected to be obtained by the Company due to the transfer of the goods related to the asset and the estimated cost to
be incurred for the transfer of the related goods, the excess shall be provided for impairment and recognized as asset impairment
loss.
After the impairment provision is made, if the factors of impairment in the previous period change, making the difference
between the above two items higher than the book value of the asset, the originally made asset impairment provision shall be
reversed and included in the current profits and losses, but the book value of the reversed asset shall not exceed the book value of
the asset on the reversal date assuming that no impairment provision is made.
41. Government grant
(1) Type
Government subsidies are transfers of monetary or non-monetary assets from the government to the Group at nil
consideration. According to the subsidy targets stipulated in the relevant government documents, government subsidies are
classified into government subsidies related to assets and government subsidies related to income.
For government subsidies where the subsidy targets have not been specified in the government documents, the Company
categorizes them into classified into government subsidies related to assets and government subsidies related to income according
to the actual subsidy targets. For details of relevant basis of judgments, please refer to Note V “51. Deferred income”/“74. Non-
operating income”.
The government subsidies related to assets refer to the government subsidies obtained by the Company for purchasing and
constructing or forming long-term assets in other ways. Government subsidies related to income refer to government subsidies
other than those related to assets.
(2) Recognition of government subsidies
If there is evidence at the end of the period that the Company can meet the relevant conditions specified in the financial support
policy and it is expected to receive the financial support funds, the government subsidy shall be recognized according to the
receivable amount. Otherwise, government subsidies are recognized when they are actually received.
If a government subsidy is a monetary asset, it is measured at the amount received or receivable. If a government subsidy is a non-
monetary asset, it is measured at fair value. If the fair value cannot be obtained in a reliable way, it is measured at the nominal
amount (RMB1). Government subsidies measured at nominal amounts are recognized directly in the current profit and loss.
(3) Accounting treatment
According to the essence of economic business, the Company determines whether the total amount method or the net amount method should
be used for accounting treatment of a certain type of government subsidy business. Generally, the Company only selects one method for the same
or similar government subsidy business, and consistently uses the method for the business.
The government subsidies related to the assets shall be written off against the book value of the relevant assets or recognized as deferred
income. If the government subsidy related to the asset is recognized as deferred income, it shall be recorded into the profit and loss in stages in
accordance with a reasonable and systematic method during the service life of the asset built or purchased.
If the government subsidy related to the income is used to compensate the relevant expenses or losses of the enterprise in the future period, it
shall be recognized as deferred income and recorded into the current profit and loss, or write down the relevant costs during the period of
recognition of the relevant expenses or losses; If it is used to compensate the related expenses or losses incurred by the enterprise, it shall be
directly recorded into the current profit and loss or write down the relevant costs when obtained.
The government subsidies related to the daily activities of the enterprise shall be included in other income or used to write off related costs
and expenses; Government subsidies not related to the daily activities of the enterprise shall be included in the non-operating revenue and
expenditure.
Government subsidies related to the discount interest received from policy-related preferential loans offset the relevant borrowing costs; if
the policy-based preferential interest rate loan provided by the lending bank is obtained, the borrowing amount actually received shall be taken as
the entry value of the borrowings, and borrowing cost should be calculated using the preferential interest rate according to the loan principal and
the policy.
In case that a confirmed government subsidy is required to be returned, the book value of the asset is adjusted if the book value of relevant
assets is offset at the initial recognition; if there is related deferred income, the book balance of deferred income should be offset, and the excess is
included in the current profit and loss; in case of other circumstances, it is directly included in the current profit and loss.
42. Deferred income tax assets/Deferred income tax liabilities
Deferred tax assets and deferred tax liabilities are calculated and recognized based on the differences arising between the tax bases of assets
and liabilities and their carrying amounts (temporary differences). On the balance sheet date, deferred tax assets and deferred tax liabilities are
measured at the applicable tax rate during the period when the asset is expected to be recovered or the liability is expected to be settled.
(1) Basis for recognition of deferred income tax assets
The Company recognizes the deferred tax assets generated by the deductible temporary differences to the extent that it is likely to obtain the
taxable income that can be used to offset the deductible temporary differences, carry forward the deductible losses and tax credits in the following
years. However, deferred tax assets arising from the initial recognition of assets or liabilities in transactions with the following characteristics shall
not be recognized: 1) the transaction is not a business combination; and 2) the transaction does not affect the accounting profit or taxable income or
deductible loss.
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For the deductible temporary differences related to the investment of associated enterprises, if the following conditions are met at the same
time, the corresponding deferred tax assets shall be confirmed: the temporary differences are likely to be reversed in the foreseeable future, and the
taxable income used to deduct the deductible temporary differences is likely to be obtained in the future.
(2) Basis for recognition of deferred income tax liabilities
The Company recognizes the taxable temporary differences that should be paid but not paid in the current period and the previous period as
deferred tax liabilities, excluding:
1) The temporary difference formed by the initial confirmation of goodwill;
2) The transaction or event not formed by business combination, and the occurrence of the transaction or event does not affect the
accounting profit or the temporary difference formed by the taxable income (or deductible loss);
3) For the taxable temporary difference related to the investment in subsidiaries and associated enterprises, the time of reversal of the
temporary difference can be controlled and the temporary difference is unlikely to be reversed in the foreseeable future.
(3) When the following conditions are met at the same time, the deferred income tax assets and deferred income tax
liabilities are presented at the net amount after offset
1) The enterprise has the legal right to settle the current income tax assets and current income tax liabilities with net
amount;
2) The deferred income tax assets and the deferred income tax liabilities may be related to the income tax levied by the
same tax office on the same or different taxpayer. In the latter case, the involved tax payers intend to settle the current income tax
assets and current income tax liabilities with net amount, or obtain assets and pay off debts at the same time in each future period
when the important deferred income tax assets and deferred income tax liabilities are reversed.
43. Leases
(1) Accounting treatment of the leases as the lessee
At the commencement of the lease term, the Company recognizes the right-of-use assets and lease liabilities for leases,
except for short-term leases and low-value asset leases that apply simplified treatment.
1) Short-term lease and low-value asset lease
A short-term lease is a lease that has a lease term of 12 months or less and does not include an option to purchase. Low-value
asset lease refers to the lease with lower value when a single leased asset is a brand-new asset.
The Company recognizes right-of-use assets and lease liabilities for short-term leases and low-value asset leases.
2) See Notes 27 and 36 in this section for the accounting policies of right-of-use assets and lease liabilities.
(2) Accounting treatment of the leases as the lessor
1) Classification of leases
Leases are divided by the Company into finance leases and operating leases at the commencement of leases. Finance lease is
a lease that has transferred in substance all the risks and rewards related to the ownership of an asset. The ownership of it may or
may not eventually be transferred. Operating lease refers to a lease other than a financing lease.
Where a lease satisfies one or more of the following criteria, the Company shall recognize it as a finance lease:
A. The ownership of the leased asset is transferred to the lessee when the term of lease expires.
B. The lessee has the option to buy the leased asset at a price which is expected to be far lower than the fair value of the
leased asset at the date when the option becomes exercisable.
C. Even if the ownership of the asset is not transferred, the lease term covers the major part of the use life of the leased asset.
D. The present value of the minimum lease receipts on the lease beginning date amounts to substantially all of the fair value
of the leased asset on the lease beginning date;
E. The leased assets are of a specialized nature that only the lessee can use them without making major modifications.
Where a lease satisfies one or more of the following criteria, the Company may also recognize it as a finance lease:
A. If the lessee cancels the lease, the lessee shall bear the losses caused to the lessor by the cancellation of the lease.
B. Gains or losses arising from fluctuations in the fair value of residual values of assets are attributable to the lessee.
C. The lessee can continue the lease at a rent that is far below the market level until the next period.
2) Accounting treatment for finance leases
On the date when lease starts, the Company recognizes the finance leases as the receivable of the financial lease which is
finally derecognized as the finance leasing assets.
When the finance lease receivables are initially measured, the sum of the unsecured residual value and the present value of
the lease receivables that have not been received on the beginning date of the lease term discounted at the implicit interest rate of
the lease shall be taken as the entry value of the finance lease receivables. Lease receipts include:
A. The amount of fixed payment and actual fixed payment amount after deducting the relevant amount of lease incentive;
B. Variable lease payments depending on index or ratio;
C. When it is reasonably determined that the lessee will exercise the options, the received amount of lease includes the
exercise price of the options;
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D. When the lease term reflects that the lessee will exercise the option to terminate the lease, the lease collection includes the
amount to be paid by the lessee to exercise the option to terminate the lease;
E. The guaranteed residual value provided by the lessee, the party related to the lessee and the independent third party with
the financial ability to perform the guarantee obligation to the lesser.
The Company calculates and recognizes the interest income during each lease term according to the fixed interest rate
implicit in lease, and the variable lease payment obtained but not included in the measurement of net lease investment is included
in the current profits and losses when it actually arises.
3)Accounting treatment of operating leases
The Company recognizes the lease receipts from operating leases as rental income by the straight-line method or other
systematic and reasonable methods during each lease term; The incurred initial direct costs related to the operating lease shall be
amortized over the lease term on the same basis as the recognition of rental income and included in the current profits and losses
by stages; The variable lease payments obtained that are related to the operating lease but not included in the lease receipts are
included in the current profits and losses when they actually arise.
44. Debt Restructuring
(1) Recording debt restructuring obligations as a debtor
A debt restructuring in which the debt is settled by assets is derecognized when the relevant assets and the settled debt meet
the conditions for derecognition, and the difference between the carrying amount of the settled debt and the carrying amount of the
transferred assets is recognized in profit or loss for the current period.
A debt restructuring that converts a debt into an equity instrument is derecognized by the Company when the settled debt
meets the conditions for derecognition. The equity instrument of the Company is measured at its fair value upon initial recognition,
and if the fair value cannot be reliably measured, it is measured at the fair value of the settled debt. The difference between the
carrying amount of the settled debt and the amount recognized for the equity instrument is recognized in current profit or loss.
Debt restructuring by modifying other terms shall be recognized and measured in accordance with Accounting Standards for
Business Enterprises No. 22 – Recognition and Measurement of Financial Instruments and Accounting Standards for Business
Enterprises No. 37 – Presentation of financial instruments.
If debt restructuring is carried out by using multiple assets to pay off debts or combination, equity instruments and
restructured debts shall be recognized and measured according to the abovementioned methods. The difference between the
carrying amount of the settled debts and the carrying amount of the transferred assets and the sum of the recognized amounts of
the equity instruments and restructured debts shall be included in the current profits or losses.
(2) Recording debt restructuring obligations as a creditor
For debt restructuring in which assets are used to pay off debts, assets other than the transferred financial assets are initially
recognized at cost. The cost of inventory includes the fair value of abandoned creditor’s rights and other costs directly attributable
to the asset, such as taxes, transportation costs, handling charges, insurance premiums, etc., incurred to enable the asset to reach its
current position and state. The cost of an investment in an associate or joint venture and the cost of investment property
respectively include the fair value of abandoned creditor’s rights and other costs directly attributable to the asset, such as taxes.
The cost of a fixed asset includes the fair value of abandoned creditor’s rights and other costs directly attributable to the asset, such
as taxes, transportation costs, handling charges, installation costs, professional services fee, incurred before bringing the asset to its
intended usable condition. The cost of an intangible asset includes the fair value of abandoned creditor’s rights and other costs
such as taxes that are directly attributable to bringing the asset to its intended use. The difference between the fair value and the
carrying value of abandoned creditor’s rights should be recognized in profit or loss for the current period.
If the debt restructuring of converting debt into equity instrument causes the Company to convert the creditor’s right into
equity investment in an associate or a joint venture, the initial investment cost shall be measured according to the fair value of the
abandoned creditor’s right and other costs such as taxes directly attributable to the asset. The difference between the fair value and
the carrying amount of the abandoned creditor’s rights recognized in profit or loss for the current period.
For debt restructuring by modifying other terms, the creditor’s rights restructured shall be recognized and measured in
accordance with the Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of Financial
Instruments.
If debt restructuring is carried out by using multiple assets to pay off debts or combination, firstly, the transferred financial
assets and creditor’s right restructured are recognized and measured in accordance with the provisions of Accounting Standards for
Business Enterprises No. 22 – Recognition and Measurement of Financial Instruments, and then the net amount of the fair value of
the abandoned creditor’s rights after deducting the recognized amount of the transferred financial assets and the restructured
creditor’s rights are allocated in proportion to the fair value of each asset other than the transferred financial assets. On this basis,
the cost of each asset is determined separately in accordance with the above method. The difference between the fair value and the
carrying amount of the abandoned creditor’s rights is recognized in profit or loss for the current period.
45. Repurchase of shares of the Company
Consideration and transaction costs paid by the Company to repurchase its own equity instruments reduce owners’ equity. If
the Company reduces its capital by purchasing the Company’s shares in accordance with legal procedures, the share capital shall
be reduced according to the total book value of the shares canceled, and the difference between the price (including transaction
expenses) paid for the repurchase of shares and the par value of the shares shall be adjusted to the owner’s equity, and the portion
exceeding the total par value shall be deducted from the capital reserve (share premium), surplus reserve and undistributed profit
sequentially; if it is less than the total book value, the portion less than the total book value will be increased to the capital reserve
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(share premium). No gain or loss is recognized by the Company as a result of the issue, repurchase, sale or cancelation of the
Company’s own equity instruments.
The repurchased shares prior to cancellation or transfer of shares are managed as treasury shares. All costs incurred from
repurchase of shares are recognized as the costs of treasury shares.
Upon transfer of treasury shares, the excess of transfer income over the cost of treasury shares is credited to capital reserve
(share premium); the portion lower than the cost of treasury shares shall be deducted from capital reserve (share premium), surplus
reserve and undistributed profit sequentially.
Treasury shares formed by the Company’s repurchase of its ordinary shares shall not participate in the Company’s profit
distribution and shall be presented as an item of allowance for owner’s equity in the balance sheet.
46. Hedge accounting
According to the hedging relationship, the Company divides hedging into fair value hedging, cash flow hedging and
overseas net investment hedging.
(1) Hedging instruments that meet the following conditions at the same time shall be treated with hedging
accounting method
1) The hedging relationship is only composed of qualified hedging instruments and hedged items.
2) At the beginning of hedging, the Company formally designated hedging instruments and hedged items, and prepared
written documents on hedging relationship, risk management strategy and risk management objectives for hedging.
3) The hedging relationship meets the requirements of hedging effectiveness.
If the hedging meets the following conditions at the same time, the hedging relationship shall be deemed to meet the
requirements of hedging effectiveness:
A. There is an economic relationship between the hedged item and the hedging instrument. This economic relationship
makes the value of the hedging instrument and the hedged item change in the opposite direction due to the same hedged risk.
B. In the value changes caused by the economic relationship between the hedged item and the hedging instrument, the
impact of credit risk does not dominate.
C. The hedging ratio of the hedging relationship is equal to the ratio of the actual number of hedged items hedged by the
Company to the actual number of hedging instruments hedged, but does not reflect the imbalance of the relative weight of the
hedged items and hedging instruments. This imbalance will lead to ineffective hedging and may produce accounting results
inconsistent with the hedging accounting objectives.
(2) Accounting treatment for fair value hedges
1) Gains or losses arising from hedging instruments shall be included in current profit and loss. If the hedging instrument
hedges the non-tradable equity instrument investment (or its components) that is selected to be measured at fair value and its
change is included in other comprehensive income, the gains or losses generated by the hedging instrument are included in other
comprehensive income.
2) Gains or losses of the hedged item arising from the hedged risk exposure are included in the current profit and loss, and
the book value of the hedged item that is not measured at fair value is adjusted. If the hedged item is a financial asset (or its
component) measured at fair value and its change is included in other comprehensive income, the profit or loss generated from the
hedged risk exposure is included in the current profit and loss, and its book value has been measured at fair value without
adjustment; the hedged item is the non-tradable equity instrument investment (or its components) that the company chooses to
measure at fair value and its change is included in other comprehensive income, the gains or losses arising from the hedged risk
exposure are included in other comprehensive income, and its book value has been measured at fair value without adjustment.
If the hedged item is an unrecognized firm commitment (or its component), the accumulated change in fair value caused by
the hedged risk after the designation of the hedging relationship shall be recognized as an asset or liability, and the relevant gains
or losses shall be included in the profits and losses of each relevant period. When the asset or liability is acquired by fulfilling the
established commitment, the initial recognized amount of the asset or liability is adjusted to include the fair value cumulative
change of the recognized hedged item.
3) If the hedged item is a financial instrument (or its component) measured at amortized cost, the adjustment of book value
of the hedged item shall be amortized according to the actual interest rate recalculated on the amortization date and included in the
current profit and loss. The amortization can start from the adjustment date, but not later than the time point when the hedging
gains and losses are adjusted for the termination of the hedged item. If the hedged item is a financial asset (or its component)
measured at fair value and its change is included in other comprehensive income, the accumulated recognized hedging gains or
losses shall be amortized in the same way and included in the current profit and loss, but the book value of the financial asset (or
its component) shall not be adjusted.
(3) Accounting for cash flow hedges
1) The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge, which is regarded as
the cash flow hedging reserve, and shall be recognized in other comprehensive income: The amount of the cash flow hedge reserve
shall be determined by the lower of the absolute amount of the following two items:
A. the cumulative gain or loss on the hedging instrument from inception of the hedge; and
B. the present value of the cumulative change in the hedged expected future cash flows of the hedged item from inception of
the hedge. The amount of the cash flow hedge reserve recognized in the other comprehensive income during each accounting
period is the change in the current cash flow hedge reserve.
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2) The portion of gain or loss on the hedging instrument (that is, other gains or losses after deducting other comprehensive
income) is hedge ineffectiveness that shall be recognized in profit or loss.
3) The amount of cash flow hedge reserve shall be accounted for as follows:
A. The hedged item is an expected transaction, and the expected transaction causes the company to subsequently results in
the recognition of a non-financial asset or non-financial liability, or the expected transaction of non-financial asset or a non-
financial liability becomes a firm commitment for which fair value hedge accounting is applied, the Company shall remove that
amount from the cash flow hedge reserve and include it directly in the initial cost or other carrying amount of the asset or the
liability.
B. For cash flow hedges other than those covered by previous clause, that amount shall be reclassified from the cash flow
hedge reserve originally recognized in other comprehensive income to profit or loss as a reclassification adjustment in the same
period or periods during which the hedged expected future cash flows affect profit or loss.
C. However, if that amount is a loss and the Company expects that all or a portion of that loss will not be recovered in one or
more future periods, it shall immediately reclassify the amount that is not expected to be recovered into profit or loss as a
reclassification adjustment.
(4) Hedges of a net investment in a foreign operation
Hedges of a net investment in a foreign operation, including a hedge of a monetary item that is accounted for as part of the
net investment, shall be accounted for similarly to cash flow hedges:
1) The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge shall be recognized in
other comprehensive income. The gain or loss on the hedging instrument relating to the effective portion of the hedge that has
been accumulated in the foreign currency translation reserve shall be reclassified from equity to profit or loss as a reclassification
adjustment on the disposal or partial disposal of the foreign operation.
2) The ineffective portion shall be recognized in profit or loss.
(5) Termination of hedge accounting
In case of any of the following circumstances, the application of hedge accounting shall be terminated:
1) the hedging relationship no longer meets the risk management objective due to changes in risk management objective.
2) the hedging instrument or instruments have been expired, sold or contract terminated or executed.
3) there is no longer an economic relationship between the hedged item and the hedging instrument or the effect of credit
risk starts to dominate the value changes that result from that economic relationship.
4) The hedging relationship does not satisfy other conditions of undertaking hedge accounting. If rebalancing of the
hedging relationship applies, the Company shall consider the rebalancing the hedging relationship first and subsequently assess
whether the hedging relationship satisfies the conditions of undertaking hedge accounting.
The termination of hedging accounting may affect the whole or a part of the hedging relationship. When only a part of it is
affected, the remaining unaffected parts still applies hedging accounting.
(6) Option to designate a credit exposure as measured at fair value
When the credit risk exposure of a financial instrument (or its components) is managed by using a credit derivative
instrument measured at fair value through current profit and loss, the financial instrument (or its components) can be at the time of
initial recognition, subsequent measurement or unconfirmed, it shall be designated as a financial instrument measured at fair value
with its changes included in the current profit and loss, and written records shall be made at the same time, but the following
conditions shall be met simultaneously:
1) the name of the credit exposure (for example, the borrower, or the holder of a loan commitment) matches the reference
entity of the credit derivative (‘name matching’);
2) the seniority of the financial instrument matches that of the instruments that can be delivered in accordance with the
credit derivative.
47. Discontinued operations
Discontinued components are those components of the Company that meet one of the following conditions and can be
separately distinguished, and which have been disposed of or classified as held for sale:
(1) The component represents a separate major business or a major area of operation.
(2) The component is part of an associated plan for the proposed disposal of a separate major business or a separate major
operating area.
(3) The component is a subsidiary acquired exclusively for resale.
Operating gains and losses such as impairment losses and reversals of amounts from discontinued operations and gains and
losses on disposals are presented in the statement of profit or loss as gains and losses of discontinued operations.
48. Changes in other critical accounting policies and accounting estimates
49. Changes in critical accounting policies and accounting estimates
(1) Changes in critical accounting policies
Applicable □Not applicable
159
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Unit: RMB
Content and reason of accounting policy change Names of the items materially affected Amounts affected
The Company has started to implement the Interpretation No. 16 of Accounting
Standards for Business Enterprises “accounting treatment of deferred income
Deferred tax assets, deferred tax
tax relating to assets and liabilities arising from a single transaction for which
liabilities and income tax expense
the initial recognition exemption does not apply” issued by the Ministry of
Finance in 2022 since January 1, 2023.
The Company has started to implement the Interpretation No. 17 of Accounting
Standards for Business Enterprises "accounting treatment on sale leaseback" 0.00
issued by the Ministry of Finance in 2023 since October 25, 2023.
1) Impact of implementing the Interpretation No. 16 of the Accounting Standards for Business Enterprises on the Company
On December 13, 2022, the Ministry of Finance issued the Interpretation No. 16 of the Accounting Standards for Business Enterprises (Cai
Kuai [2022] No. 31, hereinafter referred to as "Interpretation No. 16"). Interpretation No. 16 “accounting treatment of deferred income tax relating
to assets and liabilities arising from a single transaction for which the initial recognition exemption does not apply" has been implemented from
January 1, 2023, which allows companies to implement ahead of schedule from the release year. The Company has implemented accounting
treatment on this matter this year.
The implementation of “accounting treatment of deferred income tax relating to assets and liabilities arising from a single transaction for
which the initial recognition exemption does not apply" has no significant impact on the financial statements during the Reporting Period.
2) Impact of implementing Interpretation No. 17 of the Accounting Standards for Business Enterprises on the Company
On October 25, 2023, the Ministry of Finance issued Interpretation No. 17 of the Accounting Standards for Business Enterprises (Cai Kuai
[2023] No. 21, hereinafter referred to as "Interpretation No. 17"). The Company has started to implement the "accounting treatment on sale
leaseback" from October 25, 2023.
The implementation of "accounting treatment on sale leaseback" has no significant impact on the financial statements during the Reporting
Period.
(2) Critical accounting estimate change
□ Applicable Not applicable
(3) Adjustments to relevant items of financial statements at the beginning of the first implementation year due to the
implementation of the new accounting standards in 2023
□Applicable □Not applicable
50. Other
VI. Taxation
1. Main Tax Types and Tax Rates
Tax type Taxation basis Tax rate
Value added tax (“VAT”) Sales of goods, taxable sales service income,
13%, 9%, 6%
intangible assets or real estate
City maintenance and construction tax Amount of VAT paid 7%, 5%, 1%
Based on 70% of the original value of the property
Property tax 1.2%/12%
(or rental income) as the tax benchmark
Explanation of disclosure for taxpayers with different corporate income tax rates
Taxpayer Income tax rate
The Company 25%
Yunnan Dexin Paper Co., Ltd. 15%
Yunnan Jiechen Packaging Materials Co., Ltd. 25%
Yunnan Hongchuang Packaging Co., Ltd. 15%
Yunnan Hongta Plastic Co., Ltd. 15%
Hongta Plastic (Chengdu) Co., Ltd. 15%
Yuxi Feiermu Trading Co., Ltd. 25%
Shanghai Energy New Material Technology Co., Ltd. 15%
Zhuhai Energy New Material Technology Co., Ltd. 15%
Guangdong Energy New Material Institute Co., Ltd. 25%
Wuxi Energy New Material Technology Co., Ltd. 15%
Jiangxi Tonry New Energy Technology Development Co., Ltd. 15%
160
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Jiangsu Ruijie New Material Technology Co., Ltd. 25%
Jiangxi Ruijie New Material Technology Co., Ltd. 15%
Suzhou GreenPower New Energy Materials Co., Ltd 15%
Chongqing Energy Newmi Technological Co., Ltd. 15%
Jiangxi Enpo New Material Technology Co., Ltd. 25%
Jiangxi Energy New Material Technology Co., Ltd. 25%
Jiangsu Energy New Material Technology Co., Ltd. 25%
Hunan Energy Advanced New Material Technology Co., Ltd 25%
Ningbo Energy New Material Co., Ltd. 25%
Chongqing Energy New Material Technology Co., Ltd. 15%
Hainan Energy Investment Co., Ltd. 25%
Hubei Energy New Material Technology Co., Ltd. 25%
Jiangsu Sanhe Battery Material Technology Co., Ltd. 25%
Hongchuang Packaging (Anhui) Co., Ltd. 25%
Shanghai Energy New Materials Research Co., Ltd. 25%
Energy (Zhuhai Hengqin) New Material Technology Co., Ltd. 25%
Xiamen Energy New Material Co., Ltd. 25%
Yuxi Energy New Material Co., Ltd. 25%
Shanghai Energy Trading Co., Ltd. 25%
Jiangsu Energy New Materials Research Co., Ltd. 25%
Chuangxin New Material (Hong Kong) Co., Ltd. 16.5%
SEMCORP Global Holdings Kft. 9%
SEMCORP Hungary Kft. 9%
SEMCORP Properties Kft. 9%
SEMCORP America Inc. 20%
SEMCORP Manufacturing USA LLC 20%
2. Preferential tax treatment
In accordance with the Announcement on Enterprise Income Tax Issues Related to the In-depth Implementation of the Western
Development Strategy (Announcement No. 12, 2012 of the State Administration of Taxation), the subsidiary Yunnan Hongchuang Packaging Co.,
Ltd., the sub-subsidiary Chongqing Energy New Material Technology Co., Ltd. continue to enjoy the preferential tax policies for the western
development during this period. The enterprise income tax shall be paid at the reduced tax rate of 15%.
According to the Enterprise Income Tax Law of the People’s Republic of China (2018 Amendment) and Notice of the Ministry of Science
and Technology, the Ministry of Finance, the State Administration of Taxation on the Revision and Printing of the Administrative Measures for the
Recognition of High and New Technology Enterprises (Guo Ke Fa Huo [2016] No. 32), its subsidiaries Yunnan Hongta Plastic Co., Ltd. and
Yunnan Dexin Paper Co., Ltd., its sub-subsidiary Hongta Plastic (Chengdu) Co., Ltd., its subsidiary Shanghai Energy New Material Technology
Co., Ltd., its sub-subsidiaries Zhuhai Energy New Material Technology Co., Ltd., Jiangxi Tonry New Energy Technology Development Co., Ltd.,
Jiangxi Ruijie New Material Technology Co., Ltd., Wuxi Energy New Material Technology Co., Ltd., Suzhou GreenPower New Energy Materials
Co., Ltd., Chongqing Energy Newmi Technological Co., Ltd., are recognized as high-tech enterprises upon application, and the preferential tax
rate for high-tech enterprises shall be 15%.
3. Other
VII. Notes to Items in Consolidated Financial Statements
1. Monetary funds
Unit: RMB
Item Closing balance Opening balance
Cash 53,243.07 89,904.57
Cash at bank 2,788,980,758.78 2,971,966,221.44
Other currency fund 1,046,496,536.85 982,260,703.30
Total 3,835,530,538.70 3,954,316,829.31
Including: total amount of funds
144,903,602.10 165,306,437.54
deposited abroad
Other explanations:
The details of restricted monetary funds are as follows:
Item Closing balance Opening balance
161
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Bank acceptance guarantee deposit 948,496,165.94 564,943,382.12
L/C deposit 83,177,241.54 351,765,589.48
L/G deposit 10,321,400.00 14,600,182.55
Performance bond 3,478,063.38 46,169,473.09
Security deposit for lock exchange 4,500,000.00
Deposits regulated by the bank 49,200.04 244,721.07
Total 1,045,522,070.90 982,223,348.31
2. Trading financial assets
Unit: RMB
Item Closing balance Opening balance
Financial assets that are measured at fair value
and whose changes are included in the current 9,850,069.59
profit and loss
Including:
Derivative financial assets 9,850,069.59
Including:
Total 9,850,069.59
Other explanations:
3. Notes receivable
(1) Notes receivable by type
Unit: RMB
Item Closing balance Opening balance
Bank acceptance 521,271,854.08 373,752,860.32
Commercial acceptance 248,750,000.00 282,058,196.57
Provision for bad debts -9,053,466.83 -18,055,900.42
Total 760,968,387.25 637,755,156.47
(2) Disclosure by bad debt provision methods
Unit: RMB
Closing balance Opening balance
Book balance Provision for bad debts Book value Book balance Provision for bad debts Book value
Type
Amount Proportion Amount Provision Amount Proportion Amount Provision
proportion proportion
Including:
Notes
receivable
with bad debt
reserve
770,021, 9,053, 760,968, 655,811, 18,055,9 637,755,
withdrawn as 100.00% 1.18% 100.00% 2.75%
854.08 466.83 387.25 056.89 00.42 156.47
per the
portfolio of
credit risk
characteristics
Including:
Bank
521,271, 521,271, 373,752, 373,752,
acceptance 67.70% 56.99%
854.08 854.08 860.32 860.32
note portfolio
Commercial
248,750, 9,053, 239,696, 282,058, 18,055,9 264,002,
acceptance 32.30% 3.64% 43.01% 6.40%
000.00 466.83 533.17 196.57 00.42 296.15
bill portfolio
162
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Total 770,021, 9,053, 760,968, 655,811, 18,055,9 637,755,
100.00% 1.18% 100.00% 2.75%
854.08 466.83 387.25 056.89 00.42 156.47
If provision was made for bad debts of notes receivable in accordance with the general expected credit loss model:
□ Applicable Not applicable
(3) Provision for bad debts accrued, recovered or reversed during the Reporting Period
Provision for bad debts during the Reporting Period:
Unit: RMB
Changes in amount for the period
Type Opening balance Provision Recovery or Write-offs Other Closing balance
reverse
Notes receivable
subject to
18,055,900.42 -9,002,433.59 9,053,466.83
provision for bad
debts by portfolio
Total 18,055,900.42 -9,002,433.59 9,053,466.83
Among them, the important amount of recovery or reverse of bad debt provision for the period:
□ Applicable Not applicable
(4) Notes receivable pledged by the Company at the end of the Reporting Period
Unit: RMB
Item Amount pledged at the end of the Reporting Period
Bank acceptance note 248,473,890.50
Total 248,473,890.50
(5) Notes receivable endorsed or discounted by the Company, which were not yet due on the balance sheet date as at the
end of the Reporting Period
Unit: RMB
Item Derecognized amount at the end of the Recognized amount at the end of the
Reporting Period Reporting Period
Bank acceptance note 429,647,605.93
Total 429,647,605.93
4. Accounts receivable
(1) Disclosure by aging
Unit: RMB
Book balance at the end of the Reporting Book balance at the beginning of the
Aging
Period Reporting Period
Less than 1 year (inclusive) 6,126,420,159.69 5,861,888,390.15
1-2 years 590,091,823.97 643,794,466.73
2-3 years 23,644,434.60 65,856,575.88
Over 3 years 125,125,171.09 122,356,195.60
3-4 years 6,235,113.36 15,606,473.84
4-5 years 14,217,259.73 29,747,534.47
Over 5 years 104,672,798.00 77,002,187.29
Total 6,865,281,589.35 6,693,895,628.36
(2) Disclosure by bad debt provision methods
Unit: RMB
Closing balance Opening balance
Book balance Provision for bad debts Book balance Provision for bad debts
Type
Amount Proportio Amount Provision Book value Amount Proportion Amount Provision Book value
n proportion proportion
163
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Accounts
receivable
with
significant
single
102,694, 102,694, 92,553,0 92,553,0
amount and 1.50% 100.00% 1.38% 100.00%
913.11 913.11 01.41 01.41
having bad
debt
reserve
independen
tly
Including:
Accounts
receivable
with bad
debt
reserve
6,762,58 98.50 42,886,9 6,719,69 6,601,34 41,625,5 6,559,71
withdrawn 0.63% 98.62% 0.63%
6,676.24 % 14.06 9,762.18 2,626.95 09.59 7,117.36
as per the
portfolio of
credit risk
characterist
ics
Including:
Aging 6,762,58 100.00 42,886,9 6,719,69 6,601,34 100.00 41,625,5 6,559,71
0.63% 0.63%
portfolio 6,676.24 % 14.06 9,762.18 2,626.95 % 09.59 7,117.36
6,865,28 100.00 145,581, 6,719,69 6,693,89 100.00 134,178, 6,559,71
Total 2.12% 2.00%
1,589.35 % 827.17 9,762.18 5,628.36 % 511.00 7,117.36
Provision for bad debts by individual:
Unit: RMB
Opening balance Closing balance
Name Book balance Provision for bad Book balance Provision for bad Provision Provision reason
debts debts proportio
n
Estimated to be
OptimumNano Energy Co., Ltd. 32,249,003.26 32,249,003.26 32,249,003.26 32,249,003.26 100.00%
uncollectible
Estimated to be
eTrust Power Group Ltd. 17,481,429.49 17,481,429.49 17,481,429.49 17,481,429.49 100.00%
uncollectible
Shaanxi OptimumNano New Estimated to be
14,847,098.36 14,847,098.36 14,847,098.36 14,847,098.36 100.00%
Energy Co., Ltd. uncollectible
Yunnan Zhongyun Li’ao Package Estimated to be
6,062,972.00 6,062,972.00 6,062,972.00 6,062,972.00 100.00%
Printing Co., Ltd. uncollectible
Heilongjiang Longdan Dairy Estimated to be
5,075,381.00 5,075,381.00 5,075,381.00 5,075,381.00 100.00%
Technology Co., Ltd. uncollectible
Estimated to be
Jiangxi Far East Battery Co., Ltd. 3,779,397.05 3,779,397.05 3,676,530.89 3,676,530.89 100.00%
uncollectible
Estimated to be
Xinyu Eternal ENERGY Co., Ltd. 3,025,906.40 3,025,906.40 100.00%
uncollectible
Chengdu Henglide Food Co., Ltd. Estimated to be
2,780,677.50 2,780,677.50 2,780,677.50 2,780,677.50 100.00%
uncollectible
Zhongshan Yuankangyuan Food Estimated to be
2,591,501.42 2,591,501.42 2,591,501.42 2,591,501.42 100.00%
Co., Ltd. uncollectible
Hubei Yu Long New Energy Co., Estimated to be
2,177,165.60 2,177,165.60 100.00%
Ltd. uncollectible
AnHui Teamsky New Energy Estimated to be
1,477,646.78 1,477,646.78 100.00%
Technology Co., Ltd. uncollectible
Shenzhen Teamgiant New Energy Estimated to be
1,470,081.04 1,470,081.04 1,470,081.04 1,470,081.04 100.00%
Technology Co., Ltd. uncollectible
Jingzhou Wotema Battery Co., Estimated to be
1,175,130.00 1,175,130.00 1,175,130.00 1,175,130.00 100.00%
Ltd. uncollectible
164
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Shenzhen GRAND Powersource Estimated to be
1,004,401.76 1,004,401.76 100.00%
Group Co., Ltd. uncollectible
Shenzhen Lukewan Technology Estimated to be
1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 100.00%
Co., Ltd. uncollectible
Sub-total of less than RMB1 Estimated to be
4,040,330.29 4,040,330.29 6,599,987.61 6,599,987.61 100.00%
million uncollectible
Total 92,553,001.41 92,553,001.41 102,694,913.11 102,694,913.11
Provision for bad debts by portfolio:
Unit: RMB
Closing balance
Name
Book balance Provision for bad debts Provision proportion
Less than 1 year 6,126,389,525.89 7,569,283.78 0.12%
1-2 years 589,982,749.56 5,521,281.92 0.94%
2-3 years 15,005,999.70 640,742.08 4.27%
3-4 years 3,323,338.08 1,427,533.16 42.95%
4-5 years 2,614,666.73 2,457,676.84 94.00%
Over 5 years 25,270,396.28 25,270,396.28 100.00%
Total 6,762,586,676.24 42,886,914.06
Explanations of the basis for determination of the portfolio:
If provision was made for bad debts of accounts receivable in accordance with the general expected credit loss model:
□ Applicable Not applicable
(3) Provision for bad debts accrued, recovered or reversed during the Reporting Period
Provision for bad debts during the Reporting Period:
Unit: RMB
Changes in amount for the period
Type Opening balance Provision Recovery or Write-offs Other Closing balance
reverse
Bad debt provision made
92,553,001.41 10,294,637.07 102,866.16 377,623.00 327,763.79 102,694,913.11
on individual basis
Bad debt provision made
41,625,509.59 2,482,809.24 893,640.98 -327,763.79 42,886,914.06
on a collective basis
Total 134,178,511.00 12,777,446.31 102,866.16 1,271,263.98 145,581,827.17
(4) Actual write-off of accounts receivable for the period
Unit: RMB
Item Amount of write-off
Actual write-off of accounts receivable 1,271,263.98
(5) Top five customers with closing balance of accounts receivable collected by arrear party
Unit: RMB
Percentage of total Closing balance of bad
Closing Closing balance of
Closing balance of of closing balance debt provision for
balance of accounts
Company name accounts of accounts accounts receivable and
contract receivable and
receivable receivable and impairment provision for
assets contract assets
contract assets contract assets
Company 1 1,033,587,142.70 1,033,587,142.70 15.06% 1,778,382.69
Company 2 705,647,352.68 705,647,352.68 10.28% 352,820.05
Company 3 425,297,171.27 425,297,171.27 6.19% 212,648.59
Company 4 418,132,124.01 418,132,124.01 6.09% 209,066.06
Company 5 347,029,963.48 347,029,963.48 5.05% 173,514.98
Total 2,929,693,754.14 2,929,693,754.14 42.67% 2,726,432.37
165
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
5. Accounts receivable financing
(1) Accounts receivable financing by type
Unit: RMB
Item Closing balance Opening balance
Notes receivable 408,354,641.63 692,286,629.08
Total 408,354,641.63 692,286,629.08
(2) Accounts receivable financing endorsed or discounted by the Company, which were not yet due on the balance sheet
date as at the end of the Reporting Period
Unit: RMB
Item Derecognized amount at the end of the Recognized amount at the end of the
Reporting Period Reporting Period
Bank acceptance note 2,882,456,673.36
Total 2,882,456,673.36
(3) Other explanations
6. Other receivables
Unit: RMB
Item Closing balance Opening balance
Other receivables 26,568,094.26 20,596,472.81
Total 26,568,094.26 20,596,472.81
（(1) Other receivables
1) Other receivables by nature
Unit: RMB
Book balance at the end of the Reporting Book balance at the beginning of the
Nature of amount
Period Reporting Period
Guarantees and deposits 14,092,694.79 13,605,388.98
Reserve fund 2,523,618.93 2,159,379.95
Substitute advance 5,158,505.75 4,229,597.77
Other 6,544,924.41 2,349,468.28
Total 28,319,743.88 22,343,834.98
2）Disclosure by aging
Unit: RMB
Book balance at the end of the Reporting Book balance at the beginning of the
Aging
Period Reporting Period
Less than 1 year (inclusive) 17,914,957.69 19,545,497.64
1-2 years 8,862,725.63 717,797.90
2-3 years 217,095.12 782,560.00
Over 3 years 1,324,965.44 1,297,979.44
3-4 years 464,050.00 91,980.00
4-5 years 15,780.00 24,507.50
Over 5 years 845,135.44 1,181,491.94
Total 28,319,743.88 22,343,834.98
3）Disclosure by bad debt provision methods
Applicable □Not applicable
Unit: RMB
166
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Closing balance Opening balance
Book balance Provision for bad debts Book balance Provision for bad debts
Type
Amount Proportion Amount Provision Book value Amount Proportion Amount Provision Book value
proportion proportion
Bad debt
provision
268,475.4 268,475.4 455,491.9 455,491.9
made on 0.95% 100.00% 2.04% 100.00%
4 4 4 4
individual
basis
Including:
Bad debt
provision
28,051,26 1,483,174 26,568,09 21,888,34 1,291,870 20,596,47
made on a 99.05% 5.29% 97.96% 5.90%
8.44 .18 4.26 3.04 .23 2.81
collective
basis
Including:
28,319,74 1,751,649 26,568,09 22,343,83 1,747,362 20,596,47
Total 100.00% 6.18% 100.00% 7.82%
3.88 .62 4.26 4.98 .17 2.81
Provision for bad debts by individual:
Unit: RMB
Opening balance Closing balance
Name Provision for Provision for Provision
Book balance Book balance Provision reason
bad debts bad debts proportion
Guangzhou Yucheng Energy Estimated to be
157,534.54 157,534.54 157,534.54 157,534.54 100.00%
Technology Co., Ltd. uncollectible
Shantou HAIXIN Development Co., Estimated to be
45,108.30 45,108.30 45,108.30 45,108.30 100.00%
Ltd. uncollectible
Estimated to be
Fu Qiong 29,000.00 29,000.00 29,000.00 29,000.00 100.00%
uncollectible
Estimated to be
Luo Lin 20,000.00 20,000.00 20,000.00 20,000.00 100.00%
uncollectible
Yixing Hengyuan Environmental Estimated to be
13,200.00 13,200.00 13,200.00 13,200.00 100.00%
Protection Machinery Company uncollectible
Estimated to be
Other 3,632.60 3,632.60 3,632.60 3,632.60 100.00%
uncollectible
Total 268,475.44 268,475.44 268,475.44 268,475.44
Bad debt provision assessed based on ECL model:
Unit: RMB
Stage I Stage II Stage III
Provision for bad debts Lifetime ECL (not Lifetime ECL Total
12-month ECL
credit-impaired) (credit-impaired)
Balance of January 1, 2023 919,770.23 372,100.00 455,491.94 1,747,362.17
Balance of January 1, 2023 for the period
Provision for the period 275,403.95 -75,000.00 200,403.95
Reversed for the period 39.90 39.90
Write-offs for the period 9,100.00 186,976.60 196,076.60
Balance of December 31, 2023 1,195,174.18 288,000.00 268,475.44 1,751,649.62
Classification basis and bad debt provision ratio for each stage
Changes in book balance with significant changes in loss reserves for the period
□ Applicable Not applicable
4）Provision for bad debts accrued, recovered or reversed during the Reporting Period
Provision for bad debts during the Reporting Period:
Unit: RMB
Type Opening Changes in amount for the period Closing balance
167
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
balance Provision Recovery or Write-offs Other
reverse
Bad debt provision made on individual basis 455,491.94 39.90 186,976.60 268,475.44
Bad debt provision made on a collective basis 1,291,870.23 200,403.95 9,100.00 1,483,174.18
Total 1,747,362.17 200,403.95 39.90 196,076.60 1,751,649.62
5) Actual write-off of other receivables for the period:
Unit: RMB
Item Amount of Write-offs
Actual write-off of other receivables 196,076.60
6) Top five customers with closing balance of other receivables collected by arrear party
Unit: RMB
Name of company Nature of other Closing balance Aging Percentage of total of Closing balance of
receivable closing balance of other bad debt provision
receivables
Bureau of Natural Resources and Guarantees and
8,114,200.00 1-2 years 28.65% 352,967.70
Planning of Jintan District, Changzhou deposits
Endowment insurance Substitute Less than 1
2,205,718.38 7.79% 95,948.75
advance year
Housing fund Substitute Less than 1
1,707,708.47 6.03% 74,285.32
advance year
State Administration of Taxation of Guarantees and Less than 1
1,100,000.00 3.88% 47,850.00
Hongta District, Yuxi, Yunnan deposits year
Yunnan Lingdong Paper Industry Co., Guarantees and Less than 1
548,734.00 1.94% 23,869.93
Ltd. deposits year
Total 13,676,360.85 48.29% 594,921.70
7. Prepayments
(1) Prepayments by aging
Unit: RMB
Book balance at the end of the Reporting Book balance at the beginning of the
Aging Period Reporting Period
Amount Proportion Amount Proportion
Less than 1 year (inclusive) 175,163,739.05 99.75% 219,773,112.71 99.79%
1-2 years 188,822.79 0.11% 272,315.21 0.12%
2-3 years 126,752.48 0.07% 43,880.21 0.02%
Over 3 years 126,388.64 0.07% 150,161.96 0.07%
Total 175,605,702.96 220,239,470.09
Explanation of reasons for delayed settlement of important prepayments with an aging exceeding 1 year:
(2) Top five suppliers with closing balance of prepayment collected by prepaid entity
Company name Closing balance Proportion (%) Time Reason
Company 1 37,972,257.65 21.62 Less than 1 year Contract not been
performed
Company 2 13,724,032.57 7.82 Less than 1 year Contract not been
performed
Company 3 11,961,651.28 6.81 Less than 1 year Contract not been
performed
Company 4 9,443,035.72 5.38 Less than 1 year Contract not been
performed
Company 5 8,230,856.02 4.69 Less than 1 year Contract not been
performed
Total 81,331,833.24 46.32
168
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
8. Inventories
Did the Company need to comply with the disclosure requirements of the real estate industry
No
(1) Classification of Inventories
Unit: RMB
Closing balance Opening balance
Inventory Inventory
provision reserve provision reserve
Item or contract or contract
Book balance Book value Book balance Book value
performance cost performance cost
depreciation depreciation
reserve reserve
Raw material 540,759,974.02 3,482,756.26 537,277,217.76 732,684,233.61 3,387,999.66 729,296,233.95
Goods in process 5,554,243.47 5,554,243.47 8,039,493.75 8,039,493.75
Finished goods 2,366,399,195.15 223,726,592.32 2,142,672,602.83 1,576,705,880.42 91,327,179.57 1,485,378,700.85
Turnover material 141,408,010.67 141,408,010.67 76,766,583.56 76,766,583.56
Goods in transit 125,095,000.14 101,045.05 124,993,955.09 118,482,726.44 1,891,361.63 116,591,364.81
Consigned processing
1,756,624.05 1,756,624.05 1,854,345.23 1,854,345.23
material
Semi-finished goods 51,065,707.25 4,169,507.48 46,896,199.77 48,468,133.40 2,904,616.75 45,563,516.65
Total 3,232,038,754.75 231,479,901.11 3,000,558,853.64 2,563,001,396.41 99,511,157.61 2,463,490,238.80
(2) Inventory provision reserve and contract performance cost depreciation reserve
Unit: RMB
Item Increase for the period Decrease for the period
Opening balance Provision Others Recovery or Others Closing balance
reversal
Raw material 3,387,999.66 2,120,979.72 2,026,223.12 3,482,756.26
Finished goods 91,327,179.57 181,216,485.21 48,817,072.46 223,726,592.32
Goods in transit 1,891,361.63 96,768.42 1,887,085.00 101,045.05
Semi-finished goods 2,904,616.75 2,941,946.87 1,677,056.14 4,169,507.48
Total 99,511,157.61 186,376,180.22 54,407,436.72 231,479,901.11
Description of inventory provision reserve: Resales for the year are due to the sale of the inventory of the inventory provision reserve already
accrued.
Provision for inventory depreciation by group
Unit: RMB
At the end of period At the beginning of period
Portfolio name Provision ratio of Provision ratio of
Allowance for Allowance for
Closing balance allowance for Opening balance allowance for
impairment impairment
impairment impairment
The provision standards for inventory depreciation reserves by group
(3) Other description of inventory
The main reason for the larger increase in the ending balance of the Company’s inventories over the opening balance is the rapid growth of the
Company’s business, and the corresponding business volume growth.
9. Non-current assets due within one year
Unit: RMB
Item Closing balance Opening balance
Large deposit certificate 571,927,500.00 82,832,319.38
Undue interest receivable 46,368,076.83 4,196,847.29
Total 618,295,576.83 87,029,166.67
169
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
(1) Debt investment due within one year
□ Applicable Not applicable
(2) Other debt investment due within one year
□ Applicable Not applicable
10. Other current assets
Unit: RMB
Item Closing balance Opening balance
prepayment of tax 6,819,992.30 23,919,612.73
Input tax to be deducted 487,696,936.11 298,078,605.60
Time deposit 251,828,755.71
Total 746,345,684.12 321,998,218.33
Other explanations:
Explanation of other current assets: As of December 31, 2023, the Company has pledged RMB251,828,755.71 of fixed deposit to obtain
bank loans and bank acceptance.
11. Other equity instrument investment
Unit: RMB
Reason for
designating as
a financial
Profit Accumulated Accumulated
Loss charged Dividend asset
recognized in profit in other losses in other
to other income measured at
Closing Opening other comprehensiv comprehensiv
Item comprehensiv recognize fair value and
balance balance comprehensiv e income at e income at
e income for d during its changes
e income for the end of the the end of the
the period the period are included
the period period period
in other
comprehensiv
e income
The Company
Suzhou plans to hold
Jiesheng 89,000,000.0 111,000,000.0 it for a long
22,000,000.00 21,000,000.00
Technolog 0 0 time for
y Co., Ltd strategic
purposes
89,000,000.0 111,000,000.0
Total 22,000,000.00 21,000,000.00
0 0
Disclosure by non-transactional equity instrument investment during the period
Unit: RMB
Reason for
designating as a
Reason for
financial asset
Amount transferred transferring from
Recognized measured at fair
Accumulated Accumulated from other other
Item dividend value and its
gains losses comprehensive income comprehensive
income changes are
to retained earnings income to
included in other
retained earnings
comprehensive
income
Suzhou Jiesheng
Technology Co., 21,000,000.00
Ltd
Other explanations:
Other explanations of other equity instrument investments: As evaluated by Shanghai Pan-China Assets Valuation Co., Ltd* (上海众华资产评估
有限公司), as of December 31, 2023, the overall equity value of Suzhou Jiesheng Technology Co., Ltd is RMB 890,000,000.00, and the Company
holds 10% equity of Suzhou Jiesheng Technology Co., Ltd and the fair value of the corresponding equity is RMB 89,000,000.00.
12. Long-term equity investment
Unit: RMB
170
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Openin Increase/Decrease for the period Closing Closing
g balance balance
Increase Decreas Investment Adjustment Other Cash Provisio Oth
Opening balance (book of
in e in profit or s to other chang dividend s n for er
Name of balance of value) provisio
investm investm loss comprehen es in orprofit impairm
investees (book provisio n for
ent ent recognized sive equity declared ent
value) n for impairm
under income
impairm ent
equity
ent method
I. Joint ventures
II. Associates
Yuxi
Kunshasi
Plastic -
5,017,642 1,351,086 3,209,980
Color 3,158,748
.31 .12 .10
Masterba .33
tch Co.,
Ltd.
-
5,017,642 1,351,086 3,209,980
Subtotal 3,158,748
.31 .10 .10
.33
-
5,017,642 1,351,086 3,209,980
Total 3,158,748
.31 .10 .10
.33
The recoverable amount is determined based on the net amount after deducting disposal expenses from fair value
□ Applicable Not applicable
The recoverable amount is determined based on the present value of expected future cash flows
□ Applicable Not applicable
Reasons for significant discrepancies between the aforementioned and the information or external information used in previous years' impairment
testing
Reasons for significant discrepancies between the information used in the Company’s previous annual impairment tests and the actual situation of
the current year
Other explanations:
13. Investment properties
(1) Adoption of the cost measurement mode for investment properties
Applicable □Not applicable
Unit: RMB
Item Property and Land use rights Construction in
Total
plant progress
I. Original book value
1. Opening balance 11,871,802.82 11,871,802.82
2. Increase for the period
(1) External purchase
(2) Transfer of inventory/fixed assets/construction
in progress
(3) Increase in business combination
3. Decrease for the period
(1) Disposal
(2) Other transferred out
4. Closing balance 11,871,802.82 11,871,802.82
II. Accumulative depreciation and amortization
1. Opening balance 3,472,502.28 3,472,502.28
2. Increase for the period 534,231.12 534,231.12
171
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
(1) Provision or amortization 534,231.12 534,231.12
3. Decrease for the period
(1) Disposal
(2) Other transferred out
4. Closing balance 4,006,733.40 4,006,733.40
III Provision for impairment
1. Opening balance
2. Increase for the period
(1) Provision
3. Decrease for the period
(1) Disposal
(2) Other transferred out
4. Closing balance
IV book value
1. Closing book value 7,865,069.42 7,865,069.42
2. Opening book value 8,399,300.54 8,399,300.54
The recoverable amount is determined based on the net amount after deducting disposal expenses from fair value
□ Applicable Not applicable
The recoverable amount is determined based on the present value of expected future cash flows
□ Applicable Not applicable
Reasons for significant discrepancies between the aforementioned and the information or external information used in previous years’ impairment
testing
Reasons for significant discrepancies between the information used in the Company’s previous annual impairment tests and the actual situation of
the current year
Other explanations:
(2) Fixed assets not obtaining the title certificate
Unit: RMB
Item Book value Reason
Property and plant 7,865,069.42 Being processed
Other explanations:
14. Fixed assets
Unit: RMB
Item Closing balance Opening balance
Fixed assets 19,380,327,177.42 14,306,873,399.88
Fixed assets pending for disposal
Total 19,380,327,177.42 14,306,873,399.88
(1) Fixed assets
Unit: RMB
Property and Machinery and Transportation Electronic equipment
Item Total
plant equipment equipment and Other
I. Original book value
1. Opening balance 3,306,510,126.80 14,835,902,778.01 37,006,952.48 780,284,428.73 18,959,704,286.02
2. Increase for the period 1,424,833,001.31 5,060,260,483.30 12,374,718.99 35,510,428.48 6,532,978,632.08
(1) External purchase 86,910,908.37 268,461,609.55 10,344,527.94 22,430,736.92 388,147,782.78
(2) Transfer of 1,337,896,346.52 4,791,798,873.75 2,012,503.09 10,152,369.01 6,141,860,092.37
172
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
construction in progress
(3) Increase in business
combination
Converted difference in Foreign
25,746.42 17,687.96 2,927,322.55 2,970,756.93
Currency Statements
3. Decrease for the period 11,993,224.97 548,291.50 1,039,545.22 13,581,061.69
(1) Disposal or scrapping 11,993,224.97 548,291.50 1,038,243.42 13,579,759.89
Converted difference in Foreign
1,301.80 1,301.80
Currency Statements
4. Closing balance 4,731,343,128.11 19,884,170,036.34 48,833,379.97 814,755,311.99 25,479,101,856.41
II. Accumulative depreciation
1. Opening balance 493,255,204.60 3,732,303,873.81 19,601,409.34 115,963,612.57 4,361,124,100.32
2. Increase for the period 169,305,101.30 1,211,586,189.29 4,851,126.81 63,109,267.58 1,448,851,684.98
(1) Provision 169,304,617.79 1,211,586,189.29 4,849,781.93 63,104,775.66 1,448,845,364.67
Converted difference in Foreign
483.51 1,344.88 4,491.92 6,320.31
Currency Statements
3. Decrease for the period 1,701,784.48 380,101.86 739,668.00 2,821,554.34
(1) Disposal or scrapping 1,701,784.48 380,101.86 739,141.28 2,821,027.62
Converted difference in Foreign
526.72 526.72
Currency Statements
4. Closing balance 662,560,305.90 4,942,188,278.62 24,072,434.29 178,333,212.15 5,807,154,230.96
III. Provision for impairment
1. Opening balance 291,682,004.56 15,759.89 9,021.37 291,706,785.82
2. Increase for the period
(1) Provision
3. Decrease for the period 86,337.79 86,337.79
(1) Disposal or scrapping 86,337.79 86,337.79
4. Closing balance 291,595,666.77 15,759.89 9,021.37 291,620,448.03
IV. Book value
1. Closing book value 4,068,782,822.21 14,650,386,090.95 24,745,185.79 636,413,078.47 19,380,327,177.42
2. Opening book value 2,813,254,922.20 10,811,916,899.64 17,389,783.25 664,311,794.79 14,306,873,399.88
(2) Fixed assets in temporary idle
Unit: RMB
Original book Accumulative Provision for
Item Book value Notes
value depreciation impairment
As of December 31, 2023, the recoverable amount was
estimated based on the selling prices of similar houses and
Property
2,105,695.50 1,062,274.18 1,043,421.32 buildings in the same lot. The recoverable amount was higher
and plant
than the book value, so no provision for impairment of fixed
assets was made.
As of December 31, 2023, the recoverable amount was
Machinery estimated based on the selling price of similar machinery and
and 9,135,247.28 6,956,840.88 2,178,406.40 equipment. The recoverable amount was higher than the book
equipment value, so no provision for impairment of fixed assets was
made.
Total 11,240,942.78 8,019,115.06 3,221,827.72
(3) Fixed assets not obtaining the title certificate
Unit: RMB
Item Book value Reason
173
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Property and plant 2,702,786,726.75 Being processed
Other explanations:
(4) Other explanations of fixed assets
1) The main reason for the larger increase in the ending balance of the Company’s fixed assets over the opening balance is: the increase in
assembly lines completed of the subsidiary Shanghai Energy New Material Technology Co., Ltd. and its subsidiaries in this year accordingly.
2) As of December 31, 2023, the Company has obtained comprehensive bank credit and loans by mortgaging fixed assets of
RMB518,129,104.90.
15. Construction in progress
Unit: RMB
Item Closing balance Opening balance
Construction in progress 6,194,674,917.74 3,560,975,559.05
Engineering materials 12,733,550.25 23,578,950.68
Total 6,207,408,467.99 3,584,554,509.73
(1) Construction in progress
Unit: RMB
Closing balance Opening balance
Item
Provision for Book value Provision for Book value
Book balance Book balance
impairment impairment
Hungarian factory 2,716,335,255.30 2,716,335,255.30 979,491,095.17 979,491,095.17
Jiangsu Energy EV Lithium Battery
880,545,589.70 880,545,589.70 245,785,358.61 245,785,358.61
Separator Industrialization Project
Jiangxi Enpo New Material Co., Ltd.
Lithium-ion Battery Dry Process Separator 610,590,508.50 610,590,508.50 320,992,819.79 320,992,819.79
Film Construction Project
Hubei Energy EV Lithium Battery
579,124,129.51 579,124,129.51
Separator Industrialization Phase II Project
Microporous Membrane Project of High-
performance Lithium-ion Battery of 283,616,453.18 283,616,453.18 283,663,955.03 283,663,955.03
Chongqing Energy (Phase II)
American factory 279,543,528.16 279,543,528.16 193,048,364.00 193,048,364.00
Jiangsu Ruijie EV Lithium Battery
Aluminum Laminated Film 237,272,443.83 237,272,443.83 334,566,119.25 334,566,119.25
Industrialization Project
Hubei Energy EV Lithium Battery
221,353,261.99 221,353,261.99 57,554,406.26 57,554,406.26
Separator Industrialization Project
Suzhou GreenPower Project with an
Annual Output of 200 Million Square
65,443,591.49 65,443,591.49 451,556,502.60 451,556,502.60
Meters of Lithium-ion Battery Coated
Separator
All Solid State Electrolyte Coating
47,264,794.65 47,264,794.65 79,766,481.76 79,766,481.76
Separator Phase I Project of Jiangsu Sanhe
Other 273,585,361.43 273,585,361.43 614,550,456.58 614,550,456.58
Total 6,194,674,917.74 6,194,674,917.74 3,560,975,559.05 3,560,975,559.05
(2) Changes in important projects in progress for the period
Unit: RMB
174
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Item Budge Openin Increase Transfe Decrease Closing Proport Progr Capitali Including Capita Sourc
t g for the r to in other balance ion of ess of zed : lizatio e of
balance period Fixed amounts total the accumul Capitaliz n rate capita
assets for the project proje ated ed of l
for the period invest ct amount amount interes
period ment of of t for
in interest interest the
budget for the period
period
979,49 1,712,4 -
272,90 2,716,33 99.86
Hungarian factory 1,095.1 20,424. 24,423,7 76.50 Other
2.61 5,255.30 %
7 58 35.55
Jiangsu Energy EV
245,78 2,374,4 1,739,6
Lithium Battery 520,00 880,545, 60.00 20,219,8 18,011,7
5,358.6 53,347. 93,116. 60.00 3.43% Other
Separator 0.00 589.70 % 66.40 71.28
1 86 77
Industrialization Project
Jiangxi Enpo New
Material Co., Ltd. 320,99
200,00 574,171 284,573 610,590, 45.84 10,008,0 5,377,57
Lithium-ion battery dry 2,819.7 50.00 4.47% Other
0.00 ,113.17 ,424.46 508.50 % 10.50 3.78
process separator film 9
construction project
Hubei Energy EV
Lithium Battery
190,00 717,476 138,352 579,124, 43.85 3,250,64 3,250,64
Separator 45.00 3.05% Other
0.00 ,471.46 ,341.95 129.51 % 1.78 1.78
Industrialization phase II
Project
Microporous membrane
project of high- 283,66
300,00 996,071 996,118 283,616, 85.00 20,035,2 9,098,86
performance lithium-ion 3,955.0 85.00 3.94% Other
0.00 ,433.63 ,935.48 453.18 % 52.40 8.68
battery of Chongqing 3
Energy (phase II)
193,04 -
196,89 82,845, 279,543, 14.20
American factory 8,364.0 3,649,65 10.00 Other
9.06 510.25 528.16 %
0 3.91
Jiangsu Ruijie EV
Lithium Battery 334,56
160,00 155,597 252,890 237,272, 43.00 7,702,78 6,124,14
Aluminum Laminated 6,119.2 48.00 3.52% Other
0.00 ,069.62 ,745.04 443.83 % 3.60 7.99
Film Industrialization 5
Project
Hubei Energy EV
1,048,9
Lithium Battery 190,00 57,554, 885,113 221,353, 68.32 908,966. 908,966.
11,973. 70.00 3.05% Other
Separator 0.00 406.26 ,118.09 261.99 % 04 04
82
Industrialization Project
Suzhou GreenPower
Project with an annual
451,55
output of 200 million 100,00 139,777 525,890 65,443,5 66.71 10,230,9 5,991,04
6,502.6 95.00 3.42% Other
square meters of lithium- 0.00 ,126.21 ,037.32 91.49 % 00.31 2.53
0
ion battery coated
separator
All solid state electrolyte
65,000 79,766, 73,181, 105,683 47,264,7 30.84
coating separator phase I 30.84 Other
.00 481.76 547.49 ,234.60 94.65 %
project of Jiangsu Sanhe
2,946,4 7,874,9 4,928,3 -
2,194, 5,921,08 72,356,4 48,763,0
Total 25,102. 06,018. 14,953. 28,073,3
801.67 9,556.31 21.03 12.08
47 09 71 89.46
(3) Impairment testing of construction in progress
□ Applicable Not applicable
(4) Project materials
Unit: RMB
Item Closing balance Opening balance
175
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Book balance Provision for Book value Book balance Provision for Book value
impairment impairment
Engineering materials 11,426,690.84 11,426,690.84
Equipment not installed 12,733,550.25 12,733,550.25 12,152,259.84 12,152,259.84
Total 12,733,550.25 12,733,550.25 23,578,950.68 23,578,950.68
16. Right-of-use assets
(1) Right-of-use assets
Unit: RMB
Item Property and buildings Other Total
I. Original book value
1. Opening balance 3,828,415.83 1,376,146.80 5,204,562.63
2. Increase for the period
3. Decrease for the period
4. Closing balance 3,828,415.83 1,376,146.80 5,204,562.63
II. Accumulative depreciation
1. Opening balance 1,208,973.42 68,807.31 1,277,780.73
2. Increase for the period 1,263,841.59 275,229.24 1,539,070.83
(1) Provision 1,263,841.59 275,229.24 1,539,070.83
3. Decrease for the period
(1) Disposal
4. Closing balance 2,472,815.01 344,036.55 2,816,851.56
III. Provision for impairment
1. Opening balance
2. Increase for the period
(1) Provision
3. Decrease for the period
(1) Disposal
4. Closing balance
IV. Book value
1. Closing book value 1,355,600.82 1,032,110.25 2,387,711.07
2. Opening book value 2,619,442.41 1,307,339.49 3,926,781.90
17. Intangible assets
(1) Intangible assets
Unit: RMB
Non-patent
Item Land use rights Patent rights Software Total
technology
I. Original book value
1. Opening balance 1,081,619,526.59 30,854,368.93 23,338,200.00 35,376,607.37 1,171,188,702.89
2. Increase for the period 77,428,704.66 4,786,898.11 14,509,467.70 96,725,070.47
(1) Purchase 77,428,704.66 4,786,898.11 14,502,845.82 96,718,448.59
(2) Internal R&D
176
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
(3) Increase in business combination
Converted difference in Foreign Currency
6,621.88 6,621.88
Statements
3. Decrease for the period
(1) Disposal
4. Closing balance 1,159,048,231.25 35,641,267.04 23,338,200.00 49,886,075.07 1,267,913,773.36
II. Accumulative amortization
1. Opening balance 78,274,407.83 7,730,744.38 20,693,244.35 9,243,797.46 115,942,194.02
2. Increase for the period 22,793,539.63 3,364,318.90 491,228.55 4,777,779.72 31,426,866.80
(1) Provision 22,793,539.63 3,364,318.90 491,228.55 4,776,133.32 31,425,220.40
Converted difference in Foreign Currency
1,646.40 1,646.40
Statements
3. Decrease for the period
(1) Disposal
4. Closing balance 101,067,947.46 11,095,063.28 21,184,472.90 14,021,577.18 147,369,060.82
III. Provision for impairment
1. Opening balance 1,203,498.45 1,203,498.45
2. Increase for the period
(1) Provision
3. Decrease for the period
(1) Disposal
4. Closing balance 1,203,498.45 1,203,498.45
IV. Book value
1. Closing book value 1,057,980,283.79 24,546,203.76 950,228.65 35,864,497.89 1,119,341,214.09
2. Opening book value 1,003,345,118.76 23,123,624.55 1,441,457.20 26,132,809.91 1,054,043,010.42
The proportion of intangible assets produced through internal research and development of the Company in the balance of intangible assets at the
end of the current period.
(2) Details of intangible assets
As of December 31, 2023, the Company obtained comprehensive bank credit and loans by pledging intangible assets with an amount of
RMB288,826,669.43.
18. Goodwill
(1) Original book value of goodwill
Unit: RMB
Increase for the period Decrease for the
period
Events that may generate goodwill through investee Opening Closing
names balance Generated by balance
business Other Disposal Other
combination
Jiangxi Tonry New Energy Technology Development
34,483,188.64 34,483,188.64
Co., Ltd.
Chongqing Energy Newmi Technological Co., Ltd. 15,589,757.32 15,589,757.32
Suzhou GreenPower New Energy Materials Co., Ltd. 470,157,733.69 470,157,733.69
Total 520,230,679.65 520,230,679.65
(2) Provision for impairment of goodwill
Unit: RMB
177
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Increase for the Decrease for the period
Events that may generate goodwill through investee Opening period Closing
names balance balance
Provision Other Disposal Other
Jiangxi Tonry New Energy Technology Development
Co., Ltd.
Chongqing Energy Newmi Technological Co., Ltd.
Suzhou GreenPower New Energy Materials Co., Ltd.
Total
(3) The process and key parameters of goodwill impairment testing, as well as the recognition method of goodwill
impairment losses
1) Goodwill related to Jiangxi Tonry New Energy Technology Development Co., Ltd.
Goodwill calculation process of Jiangxi Tonry New Energy Technology Development Co., Ltd. (“Jiangxi Tonry”) merged by enterprises not
under common control:
The acquisition cost minus the fair value of the book identifiable net assets of Jiangxi Tonry on the acquisition date multiplied by the
proportion of acquired equity equals to goodwill, that is, 200,000,000.00 minus 165,516,811.36 multiplied by 100% equals to RMB34,483,188.64.
The Company identified Jiangxi Tonry New Energy Technology Development Co., Ltd. as an asset group and conducted goodwill
impairment test. The recoverable amount of goodwill is calculated according to the present value of estimated future cash flow. The estimated
future cash flow is determined according to the financial budget of the relevant asset group from 2024 to 2028. After 2028, it will be a perpetual
period. It is estimated that the annual cash flow will keep unchanged, and the recoverable value of the asset group will be calculated according to
the discount rate of 6.98%. The recoverable value exceeds the book value of the asset group including all shareholders goodwill, and there is no
goodwill impairment.
2) Goodwill related to Suzhou GreenPower New Energy Material Co., Ltd.
Goodwill calculation process of Suzhou GreenPower New Energy Material Co., Ltd. (“Suzhou GreenPower”) merged by enterprises not
under common control:
The acquisition cost minus the fair value of the book identifiable net assets of Suzhou GreenPower on the acquisition date multiplied by the
proportion of acquired equity equals to goodwill, that is, 739,219,511.67 minus 269,061,777.98 multiplied by 100% equals to RMB470,157,733.69.
The Company identified Suzhou GreenPower New Energy Material Co., Ltd. as an asset group and conducted goodwill impairment test. The
recoverable amount of goodwill is calculated according to the present value of estimated future cash flow. The estimated future cash flow is
determined according to the financial budget of the relevant asset group from 2024 to 2028. After 2028, it will be a perpetual period. It is estimated
that the annual growth rate of cash flow will be 1.96%, and the recoverable value of the asset group will be calculated according to the discount
rate of 13.68%. The recoverable value exceeds the book value of the asset group including all shareholders goodwill, and there is no goodwill
impairment.
3) Goodwill related to Chongqing Energy Newmi Technological Co., Ltd.
Goodwill calculation process of Chongqing Energy Newmi Technological Co., Ltd. (“Newmi Tech”) merged by enterprises not under
common control:
The acquisition cost minus the fair value of the book identifiable net assets of Newmi Tech on the acquisition date multiplied by the
proportion of acquired equity equals to goodwill, that is, 68,259,500.00 minus 68,977,915.28 multiplied by 76.3574% equals to
RMB15,589,757.32.
The Company identified Chongqing Energy Newmi Technological Co., Ltd. as an asset group and conducted goodwill impairment test. The
recoverable amount of goodwill is calculated according to the present value of estimated future cash flow. The estimated future cash flow is
determined according to the financial budget of the relevant asset group from 2024 to 2028. After 2028, it will be a perpetual period. It is estimated
that the annual cash flow will be stable, and the recoverable value of the asset group will be calculated according to the discount rate of 12.05%.
The recoverable value exceeds the book value of the asset group including all shareholders goodwill, and there is no goodwill impairment.
19. Long-term unamortized expenses
Unit: RMB
Increase for the Amortized amount Decrease in other
Item Opening balance Closing balance
period for the period amounts
Renovation cost 437,783.16 109,794.36 327,988.80
Software system
492,657.24 372,437.04 120,220.20
implementation fee
Technical service fee 350,000.00 300,000.00 50,000.00
Power grid access fee 37,532.34 11,259.84 26,272.50
Total 1,317,972.74 793,491.24 524,481.50
Other explanations:
178
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
20. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets before offset
Unit: RMB
Closing balance Opening balance
Item Deductible Deferred income Deductible Deferred income
temporary difference tax assets temporary difference tax assets
Asset impairment provision 678,621,646.31 102,285,613.92 547,896,879.72 83,770,394.31
Unrealized profit ofinternal transaction 322,965,743.09 64,272,680.66 277,615,165.77 58,267,096.82
Deductible losses 569,317,545.40 100,878,883.39 174,757,523.83 35,329,320.47
Government subsidy 980,671,337.01 152,902,430.39 811,175,227.79 124,328,538.97
Stock incentive 35,142,855.13 5,271,428.28 91,108,307.69 13,341,111.40
Changes in fair value of other equity instrument
21,000,000.00 5,250,000.00
investments
Other 14,741,121.22 2,346,728.27 3,346,918.44 502,037.76
Total 2,622,460,248.16 433,207,764.91 1,905,900,023.24 315,538,499.73
(2) Deferred income tax liabilities before offset
Unit: RMB
Closing balance Opening balance
Item Taxable temporary Deferred income Taxable temporary Deferred income
difference tax liabilities difference tax liabilities
Appraisal and appreciation of assets in mergers of
64,061,162.33 9,609,174.35 73,262,048.87 10,989,307.33
companies not under common control
Pre-tax deduction of equipment and instruments at one
1,918,835,132.08 297,600,075.77 1,442,317,999.00 223,014,994.83
time
Other 8,840,787.78 1,461,678.25 14,937,672.15 2,755,180.27
Total 1,991,737,082.19 308,670,928.37 1,530,517,720.02 236,759,482.43
(3) Net amount of offset deferred income tax assets or liabilities
Unit: RMB
Offsetting amount of Offsetting amount of
deferred income tax assets Closing balance of deferred income tax assets Opening balance of
Item and deferred income tax deferred income tax assets and deferred income tax deferred income tax assets
liabilities at the end of the or liabilities after offset liabilities at the beginning or liabilities after offset
Reporting Period of the Reporting Period
Deferred income tax assets 338,900.21 432,868,864.70 315,538,499.73
Deferred income tax 338,900.21 308,332,028.16 236,759,482.43
（4） Details of unrecognized deferred income tax assets
Unit: RMB
Item Closing balance Opening balance
Deductible loss 38,261,232.97 5,494,780.64
Provision for asset impairment 2,069,144.90 71,547.21
Total 40,330,377.87 5,566,327.85
(5) Deductible losses for which deferred income tax assets were unrecognized will expire in the following years
Unit: RMB
Year Closing amount Opening amount Notes
2026 155,294.79 155,294.79
2027 12,225,377.12 5,339,485.85
2028 25,880,561.06
Total 38,261,232.97 5,494,780.64
179
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Other explanations:
Description of one-time pre-tax deduction of equipment and instruments in the deferred income tax liabilities before offset:
1. According to the Notice of the Ministry of Finance and the State Administration of Taxation on the Policy of Deducting the Enterprise
Income Tax of Equipment and Instruments (Cai Shui [2018] No. 54) and Announcement the Ministry of Finance and the State Administration of
Taxation on Extending the Implementation Period of Some Preferential Tax Policies (Announcement of the Ministry of Finance and the State
Administration of Taxation of 2021 No. 6), the Company and its subsidiaries deducted the enterprise income tax of equipment and instruments
with the unit value of below RMB5 million purchased from January 1, 2018 to December 31, 2023 in one time when calculating the taxable
income. As a result, taxable temporary difference is formed and further turned into deferred income tax liabilities.
2. According to the Announcement of the Ministry of Finance, the State Administration of Taxation and the Ministry of Science and
Technology on Strengthening the Pre-tax Deduction in Support of Scientific and Technological Innovation (Announcement No. [2022] 28 of the
Ministry of Finance, the State Administration of Taxation and the Ministry of Science and Technology), the subsidiaries of the Company deducted
the enterprise income tax of equipment and instruments purchased during the fourth quarter of 2022 in one time when calculating the taxable
income. As a result, taxable temporary difference is formed and further turned into deferred income tax liabilities.
21. Other non-current assets
Unit: RMB
Closing balance Opening balance
Provisi Provision
Item on for for
Book balance Book value Book balance Book value
impair impairmen
ment t
Advance payment for project
1,829,576,771.04 1,829,576,771.04 2,776,143,563.28 2,776,143,563.28
and equipment
Quality guarantee (Note 1) 1,350,000.00 1,350,000.00 1,350,000.00 1,350,000.00
Installment for sale of
32,425,949.76 32,425,949.76 13,327,609.02 13,327,609.02
equipment (Note 2)
Advance payment for house and
1,121,966,430.21 1,121,966,430.21 200,000,000.00 200,000,000.00
land
Time deposits (Note 3) 160,506,597.17 160,506,597.17 753,729,154.86 753,729,154.86
Total 3,145,825,748.18 3,145,825,748.18 3,744,550,327.16 3,744,550,327.16
Other explanations:
The main reason for the larger increase in the ending balance of the Company’s other non-current assets over the opening balance is: several
production bases of the Company were under construction during the period; the advance payment for construction and equipment increases
accordingly as well as the sub-subsidiary Zhuhai Energy New Material Technology Co., Ltd. purchase certificates of large deposit which they
prepare to hold to maturity.
Note 1: Guizhou Haoyiduo Dairy Co., Ltd. signed an agreement with the Company, and the two parties entered into a long-term strategic
partnership. The Company provided Guizhou Haoyiduo Dairy Co., Ltd. with the above money as its quality guarantee. Guizhou Haoyiduo Dairy
Co., Ltd. promised to purchase no less than 13 million packaging boxes of products from the Company every year, and return the above money
after the termination of the partnership. As long as the cooperation relationship is not terminated, the agreement will automatically continue after
expiration. During the reporting period, Guizhou Haoyiduo Dairy Co., Ltd. has a good cooperation relationship with the Company, and the annual
order quantity to the Company exceeds the agreed quantity in the above agreement. The Company expects that the above agreement will continue.
Note 2: The Company purchases filling machines and auxiliary equipment and sells them to customers by installment sales. The price of the
equipment shall be paid together with the payment for the Company’s products purchased by customers. Until the appointed time, all the payments
for equipment shall be recovered, invoices shall be issued and the property rights of the equipment shall be transferred to customers.
Note 3: As of December 31, 2023, term deposits of RMB53,500,694.44 were pledged to secure bank borrowings.
22. Short-term loans
(1) Classification of short-term borrowings
Unit: RMB
Item Closing balance Opening balance
Pledged loan 644,093,855.11 275,049,783.20
Guaranteed loan 6,604,597,126.61 9,147,455,802.07
Credit loan 37,852,112.49 94,190,000.00
Undue interest payables 4,151,812.06 11,157,849.28
Total 7,290,694,906.27 9,527,853,434.55
Explanation for Classification of short-term borrowings:
The main reason for the larger increase in the ending balance of the Company’s short-term loans over the opening balance is: The non-public
issuance of Renminbi ordinary shares of the Company leads to the relief of capital demand for daily business activities and the decrease of bank
loans.
180
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Pledged loan: the subsidiary Shanghai Energy New Material Technology Co., Ltd. obtained a loan of RMB99,745,908.64 by pledging its own
notes receivable of RMB100,234,469.14; the subsidiary Zhuhai Energy New Material Technology Co., Ltd. obtained a loan of RMB
147,486,873.04 by pledging its own large deposit certificate of RMB 160,590,833.33; the subsidiary Jiangxi Tonry New Energy Technology
Development Co., Ltd. obtained a loan of RMB147,275,865.12 by pledging its own notes receivable of RMB148,239,421.36 and obtained a loan
of RMB199,761,666.65 by pledging its own time deposit of RMB201,674,166.67; the subsidiary Suzhou GreenPower obtained a loan of
RMB49,823,541.66 by pledging its own time deposit of RMB50,154,589.04. See VII -61 assets with restricted ownership or use right for details of
pledge.
Guaranteed loans: please refer to XIV. Related Parties and Related Party Transactions - 5. Related party transactions - (5). Related party
guarantees for details of the loans guaranteed by the Company's actual controllers, the Company and its subsidiaries.
23. Trading financial liabilities
Unit: RMB
Item Closing balance Opening balance
Including:
Financial liabilities designated as measured at fair value and whose changes are included in other
94,394.79
comprehensive income
Including:
Derivative financial liabilities 94,394.79
Total 94,394.79
Other explanations:
24. Notes payable
Unit: RMB
Type Closing balance Opening balance
Commercial acceptance 798,224,515.32 604,656,235.72
Bank acceptance 4,709,188.70 4,659,463.30
Total 802,933,704.02 609,315,699.02
25. Accounts payable
(1) Accounts payable
Unit: RMB
Item Closing balance Opening balance
Materials payable 680,801,257.32 514,269,975.80
Engineering equipment payable 752,175,443.55 1,070,892,790.28
Accessories and spare parts payable 54,096,569.19 37,809,458.76
Transportation fee payable 43,961,121.64 41,599,051.31
Other payable 77,275,224.76 56,015,715.96
Total 1,608,309,616.46 1,720,586,992.11
(2) Major accounts payable aged over one year
Unit: RMB
Item Closing balance Reasons for outstanding or carry-over
Suzhou RS Technology Co., Ltd. 11,375,211.22 Not mature
Yunnan Yuxi Hengda Interspace Steel Not mature
9,674,433.76
Structure Co., Ltd.
Yunnan Shangjing Architectural Decoration Not mature
5,889,908.19
Engineering Co., Ltd.
Surui Intelligent (Mingguang) Co., Ltd. 5,849,197.02 Not mature
Total 32,788,750.19
Other explanations:
26. Other payables
Unit: RMB
181
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Item Closing balance Opening balance
Dividends payable 95,117,453.54 9,778,239.09
Other payables 149,580,848.79 199,901,993.77
Total 244,698,302.33 209,680,232.86
(1) Dividends payable
Unit: RMB
Item Closing balance Opening balance
Common share dividends 95,117,453.54 9,778,239.09
Total 95,117,453.54 9,778,239.09
Other explanations, including important dividends payable that have not been paid for more than one year, shall disclose the reasons for
nonpayment:
The year-end balance of dividends payable is the dividend payable by the subsidiary Shanghai Energy New Material Technology Co., Ltd. to
minority shareholders.
(2) Other payables
1) Other payables listed by nature of payment
Unit: RMB
Item Closing balance Opening balance
Restricted stock repurchase obligations 57,284,985.20 101,753,346.66
Equity acquisition 42,736,010.00 42,736,010.00
Deposits and guarantees 26,896,046.27 44,077,111.71
Withholding employees’ social insurance 1,916,544.15 3,758,967.93
Reimbursement 14,000,000.00
Other 1,105,898.00 1,865,087.72
Item 5,641,365.17 5,711,469.75
Total 149,580,848.79 199,901,993.77
2) Major other payables aged over one year or due
Unit: RMB
Item Closing balance Reasons for outstanding or carry-over
Gao’an Kewei investment partnership Payment terms not been met
22,380,000.00
(limited partnership)
DENCOLIMITED 20,356,010.00 Payment terms not been met
Total 42,736,010.00
3) Top five customers with closing balance of other payables collected by counterparty
Other explanations:
27. Contractual liabilities
Unit: RMB
Item Closing balance Opening balance
Advance receivable for goods 21,662,658.20 22,179,220.18
Rebate 8,129,313.05 2,416,933.97
Total 29,791,971.25 24,596,154.15
28. Employee benefits payable
(1) Employee benefits payable
Unit: RMB
Item Opening Increase for the period Decrease for the period Closing balance
balance
I. Short-term remuneration 48,625,919.20 1,172,265,125.01 1,136,158,487.84 84,732,556.37
II. Retirement pension program-defined 5,538,222.60 91,017,719.56 93,599,784.24 2,956,157.92
182
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
contribution plan
III. dismissal benefits 604,881.64 604,881.64
Total 54,164,141.80 1,263,887,726.21 1,230,363,153.72 87,688,714.29
(2) Short-term benefits
Unit: RMB
Item Opening balance Increase for the period Decrease for the period Closing balance
1. Wage, bonus, allowance and subsidies 43,284,880.55 1,021,606,122.16 983,840,255.53 81,050,747.18
2. Employee welfare 32,004.00 59,067,475.09 59,099,479.09
3. Social insurance 3,853,982.83 46,875,100.06 49,307,918.66 1,421,164.23
Including: medical insurance 3,592,763.70 41,859,688.20 44,118,578.54 1,333,873.36
Labor injury insurance 261,219.13 2,668,471.67 2,882,960.43 46,730.37
Maternity insurance premium 1,146,186.18 1,105,625.68 40,560.50
Supplementary medical insurance 1,103,428.36 1,103,428.36
4. Housing fund 605,311.99 39,270,101.36 38,543,455.35 1,331,958.00
5. Labor union budget and staff education fund 849,739.83 5,398,118.50 5,319,171.37 928,686.96
Other short-term benefits 48,207.84 48,207.84
Total 48,625,919.20 1,172,265,125.01 1,136,158,487.84 84,732,556.37
(3) Defined contribution plans
Unit: RMB
Item Opening balance Increase for the period Decrease for the period Closing balance
1. Basic pension 5,371,528.09 88,148,682.21 90,653,634.88 2,866,575.42
2. Unemployment
166,694.51 2,869,037.35 2,946,149.36 89,582.50
insurance
Total 5,538,222.60 91,017,719.56 93,599,784.24 2,956,157.92
Other explanations:
29. Taxes payable
Unit: RMB
Item Closing balance Opening balance
VAT 27,197,483.43 70,699,654.71
Corporate income tax 125,352,993.96 188,809,538.54
Personal income tax 7,468,828.49 1,328,104.94
City maintenance and construction tax 1,221,378.93 3,176,657.88
Property tax 13,107,647.84 7,997,292.20
Land using tax 2,402,253.38 1,069,578.09
Education surtax 997,712.64 2,720,034.27
Vehicle and vessel usage tax 1,378,475.54
Stamp duty 2,332,118.04 2,071,485.34
Other 213,439.40 210,909.28
Total 180,293,856.11 279,461,730.79
Other explanations:
30. Non-current liabilities due within one year
Unit: RMB
Item Closing balance Opening balance
Long-term loans due within 1 year 1,088,108,156.55 853,139,372.52
Bonds payable due within 1 year 6,070,366.96 3,980,586.67
Lease liabilities due within 1 year 1,375,995.60 1,375,995.60
Total 1,095,554,519.11 858,495,954.79
183
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Other explanations:
31. Other current liabilities
Unit: RMB
Item Closing balance Opening balance
Output value-added tax payable 2,219,902.48 2,536,656.79
Endorsement of unconfirmed bank acceptance bill 181,173,715.43 252,146,381.12
Endorsement for transfer of unconfirmed supply chain voucher 6,398,603.21 20,539,948.43
Total 189,792,221.12 275,222,986.34
Change in short-term bonds payable:
Unit: RMB
Interest Amortization Shares
Openin Issued Paid in Closin
provisio converte
Name of Par coupo Issue Issue g in of discount s the g Defaul
Term ned by and premium d in the
bond value n rate date size balanc current current balanc t or not
par current
e period s period e
value period
Convertibl
e corporate
bonds of 1,60
1,600, Februa 6 425,79 - 435,90
Yunnan 0,00 10,774,649.0
000,00 ry 11, year 5,937. 670,100 0,486. No
Energy 0,00 0
0.00 2020 s 76 .00 76
New 0.00
Material
Co., Ltd.
Total
Other explanations:
According to the Listing Rules of Shares on the Shenzhen Stock Exchange Stock and the Prospectus of Yunnan Energy New Material Co.,
Ltd. on the Public Issuance of Convertible Corporate Bonds, the debt and share conversion period of Yunnan Energy commences from the first
trading day in the six months after the end of the issuance to the maturity date of the convertible corporate bonds, that is, from August 17, 2020 to
February 11, 2026, and the initial conversion price is RMB64.61 per share.
On May 21, 2020, according to the Announcement on the Adjustment of the Conversion Price of Convertible Corporate Bonds, as the
Company implements the 2019 annual equity distribution plan, the conversion price of debts and shares of Yunnan Energy is adjusted from
RMB64.61 per share to RMB64.49 per share.
On September 3, 2020, according to the Announcement on the Adjustment of the Conversion Price of Convertible Corporate Bonds, as the
Company adopts the non-public issuance of new shares, the conversion price of debts and shares of Yunnan Energy is adjusted to RMB65.09 per
share.
As at September 28, 2020, in accordance with the Announcement on the Non-adjustment of Convertible Corporate Bond Conversion Price for
the Repurchase and Cancellation of Some Restricted Shares, the Company repurchased and cancelled the Company’s restricted shares held by the
four incentive objects because the personal assessment grade of the four incentive objects was “good” when the Company’s 2017 Restricted Stock
Incentive Plan was unlocked for the third time. Due to the small proportion of the repurchased and cancelled shares in the Company’s total share
capital, after the repurchase and cancellation, the conversion price of debts and shares of Yunnan Energy remained unchanged at RMB65.09 per
share.
On April 30, 2021, according to the Announcement on the Adjustment of the Conversion Price of Convertible Corporate Bonds, as the
Company implements the 2020 annual equity distribution plan, the conversion price of debts and shares of Yunnan Energy is adjusted to
RMB64.92 per share.
On May 16, 2022, according to the Announcement on the Adjustment of the Conversion Price of Convertible Corporate Bonds, as the
Company Implemented the 2021 annual equity allocation plan, the conversion price of debts and shares of Yunnan Energy is adjusted to
RMB64.62 per share.
On June 20, 2023, according to the Announcement on the Adjustment of the Conversion Price of Convertible Corporate Bonds, as the
Company implemented non-public issuance of Renminbi ordinary shares, the conversion price of debts and shares of Yunnan Energy is adjusted to
RMB66.64 per share.
On July 20, 2023, according to the Announcement on the Non-adjustment of Convertible Corporate Bond Conversion Price for the
Repurchase and Cancellation of Some Restricted Shares, the Company repurchased and cancelled the Company’s certain restricted shares held by
2022 Stock Options and Restricted Stock Incentive Plan, the conversion price of debts and shares of Yunnan Energy is adjusted to RMB64.64 per
share.
On August 21, 2023, according to the Announcement on the Adjustment of the Conversion Price of Convertible Corporate Bonds, as the
Company implements the 2022 annual equity distribution plan, the conversion price of debts and shares of Yunnan Energy is adjusted to
RMB66.46 per share.
On September 21, 2023, according to the Announcement on the Adjustment of the Conversion Price of Convertible Corporate Bonds, as the
Company implements the 2023 semi-annual equity distribution plan, the conversion price of debts and shares of Yunnan Energy is adjusted to
RMB66.26 per share.
184
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
32. Long-term borrowings
(1) Long-term borrowings by type
Unit: RMB
Item Closing balance Opening balance
Pledged loan 636,000,000.00 1,175,100,000.00
Mortgaged loan 1,191,337,067.22 833,353,874.05
Guaranteed loan 3,571,102,307.79 2,707,281,656.13
Credit loan 370,000,000.00 306,000,000.00
Undue interest payables 4,984,599.24 10,668,589.20
Long-term loans and interest due within 1 year -1,088,108,156.55 -853,139,372.52
Total 4,685,315,817.70 4,179,264,746.86
Description for long-term borrowings by type:
Other explanations of long-term borrowings:
The main reason for the larger increase in the ending balance of the Company’s long-term borrowings over the opening balance is: the
increase in special loan for project construction by the subsidiary Shanghai Energy and its subsidiaries.
Pledged loans: the subsidiary Shanghai Energy New Material Technology Co., Ltd. will pledge its 100% equity in Suzhou GreenPower New
Energy Materials Co., Ltd. to obtain a loan of RMB 636,000,000.00.
Mortgaged loan: the subsidiary Yunnan Hongta Plastic Co., Ltd., the sub- subsidiaries Zhuhai Energy New Material Technology Co., Ltd.,
Wuxi Energy New Material Technology Co., Ltd., Hubei Energy New Material Technology Co., Ltd., Jiangsu Energy New Material Technology
Co., Ltd., Chongqing Energy New Material Technology Co., Ltd. obtained a loan of RMB 1,191,337,067.22 by pledging their own fixed assets,
intangible assets and construction in progress. See VII 61. Assets with Restricted Ownership in this section for details of pledge.
Guaranteed loan: For details of loans obtained through the guarantee provided by actual controllers of the Company, the Company and its
subsidiaries, please refer to “XIV. Related Parties and Related Party Transactions - 5. Related party transactions - (5). Related party guarantees” in
this section.
Other explanations, including interest rate range:
33. Bonds payable
(1) Bonds payable
Unit: RMB
Item Closing balance Opening balance
Convertible corporate bonds 441,970,853.72 429,776,524.43
Less: Bonds payable due within 1 year -6,070,366.96 -3,980,586.67
Total 435,900,486.76 425,795,937.76
(2) Changes in bonds payable: (excluding preferred shares classified as financial liabilities, perpetual bonds and other
financial instruments)
Unit: RMB
Intere Amortizati
Issue
st Shares
d in on of Paid in
provi discount s converted
Name of coupo Issue Ter Issue Opening curre the Closing Default
Par value sione and in the
bond n rate date m size balance nt current balance or not
d by current
perio premium period
par period
d s
value
Convertible
corporate
bonds of Febr
0.40% 6 1,600, -
Yunnan 1,600,000 uary 425,795, 10,774,649 435,900
- year 000,00 670,100.0 No
Energy ,000.00 11, 937.76 .00 ,486.76
2.00% s 0.00 0
New 2020
Material
Co., Ltd.
Total —— ——
185
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
(3) Explanation on convertible corporate bonds
According to the Listing Rules of Shares on the Shenzhen Stock Exchange Stock and the Prospectus of Yunnan Energy New Material Co.,
Ltd. on the Public Issuance of Convertible Corporate Bonds, the debt and share conversion period of Yunnan Energy commences from the first
trading day in the six months after the end of the issuance to the maturity date of the convertible corporate bonds, that is, from August 17, 2020 to
February 11, 2026, and the initial conversion price is RMB64.61 per share.
On May 21, 2020, according to the Announcement on the Adjustment of the Conversion Price of Convertible Corporate Bonds, as the
Company implements the 2019 annual equity distribution plan, the conversion price of debts and shares of Yunnan Energy is adjusted from
RMB64.61 per share to RMB64.49 per share.
On September 3, 2020, according to the Announcement on the Adjustment of the Conversion Price of Convertible Corporate Bonds, as the
Company adopts the non-public issuance of new shares, the conversion price of debts and shares of Yunnan Energy is adjusted to RMB65.09 per
share.
As at September 28, 2020, in accordance with the Announcement on the Non-adjustment of Convertible Corporate Bond Conversion Price for
the Repurchase and Cancellation of Some Restricted Shares, the Company repurchased and cancelled the Company’s restricted shares held by the
four incentive objects because the personal assessment grade of the four incentive objects was “good” when the Company’s 2017 Restricted Stock
Incentive Plan was unlocked for the third time. Due to the small proportion of the repurchased and cancelled shares in the Company’s total share
capital, after the repurchase and cancellation, the conversion price of debts and shares of Yunnan Energy remained unchanged at RMB65.09 per
share.
On April 30, 2021, according to the Announcement on the Adjustment of the Conversion Price of Convertible Corporate Bonds, as the
Company implements the 2020 annual equity distribution plan, the conversion price of debts and shares of Yunnan Energy is adjusted to
RMB64.92 per share.
On May 16, 2022, according to the Announcement on the Adjustment of the Conversion Price of Convertible Corporate Bonds, as the
Company Implemented the 2021 annual equity allocation plan, the conversion price of debts and shares of Yunnan Energy is adjusted to
RMB64.62 per share.
On June 20, 2023, according to the Announcement on the Adjustment of the Conversion Price of Convertible Corporate Bonds, as the
Company implemented non-public issuance of Renminbi ordinary shares, the conversion price of debts and shares of Yunnan Energy is adjusted to
RMB66.64 per share.
On July 20, 2023, according to the Announcement on the Non-adjustment of Convertible Corporate Bond Conversion Price for the
Repurchase and Cancellation of Some Restricted Shares, the Company repurchased and cancelled the Company’s certain restricted shares held by
2022 Stock Options and Restricted Stock Incentive Plan, the conversion price of debts and shares of Yunnan Energy is adjusted to RMB64.64 per
share.
On August 21, 2023, according to the Announcement on the Adjustment of the Conversion Price of Convertible Corporate Bonds, as the
Company implements the 2022 annual equity distribution plan, the conversion price of debts and shares of Yunnan Energy is adjusted to
RMB64.46 per share.
On September 21, 2023, according to the Announcement on the Adjustment of the Conversion Price of Convertible Corporate Bonds, as the
Company implements the 2023 semi-annual equity distribution plan, the conversion price of debts and shares of Yunnan Energy is adjusted to
RMB64.26 per share.
34. Lease liabilities
Unit: RMB
Item Closing balance Opening balance
Within 1 year 1,375,995.60 1,375,995.60
1 to 2 years 229,332.60 1,375,995.60
2 to 3 years 229,332.60
Less: Unrecognized financing expenses -46,668.72 -273,843.04
Less: Lease liabilities due within one year -1,375,995.60 -1,375,995.60
Total 182,663.88 1,331,485.16
Other explanations:
The interest expense of lease liabilities was RMB227,174.32 for the period.
35. Deferred income
Unit: RMB
Item Opening Increase for the Decrease for the Closing Reason
balance period period balance
Government subsidies related Note 9: Government
823,467,109.47 219,247,493.64 80,100,443.82 962,614,159.29
to assets subsidies (II)
Government subsidies related Note 9: Government
1,032,073.81 372,693.31 659,380.50
to income subsidies (II)
VAT deduction 67,869,658.14 36,168,201.97 31,701,456.17
Total 823,467,109.47 288,149,225.59 116,641,339.10 994,974,995.96 --
186
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Other explanations:
36. Other non-current liabilities
Unit: RMB
Item Closing balance Opening balance
Government support for lithium battery separation film project (Note 1) 455,517,694.55 455,517,694.55
Investment in lithium battery separation film project (Note 2) 86,000,000.00 86,000,000.00
Subsidy for lithium battery separation film R&D project 700,000.00 700,000.00
Subsidy for high safety and reliability lithium battery and high strength separation film R&D
22,000,000.00
project for energy electronics (Note 3)
Total 564,217,694.55 542,217,694.55
Other explanations:
Explanations of other non-current liabilities:
Note 1: Jiangxi Tonry New Energy Technology Development Co., Ltd., a third-level subsidiary of the Company, has built an item production
base of lithiumion separator in Gao’an City, Yichun City, Jiangxi Province, with policy support from the local government. According to the
relevant provisions of the investment agreement, the government borrows money in advance to pay for the purchase of equipment. When each
lithium-ion film production line is put into use, the equipment subsidy shall be recognized in batches according to the corresponding proportion of
the value of the imported equipment of the production line that has been put into operation.
Note 2: Chongqing Energy New Material Technology Co., Ltd., a third-level subsidiary of the Company, has built a production line base of
high-performance lithium-ion battery micropore separator in Changshou Economic and Technological Development Zone, Chongqing City, with
policy support from the local government. According to the relevant provisions of the investment agreement, the government grants infrastructure
construction industry development funds in the form of a government subsidy, and after the commitment of the investment agreement is fulfilled,
the subsidy shall be recognized in batches as the plant and equipment subsidy according to the corresponding proportion of the value of the plant
and equipment.
Note 3: Chongqing Energy, the third-level subsidiaries of the Company, Chongqing Energy Newmi Technological Co., Ltd., Chongqing
Energy New Material Technology Co., Ltd., Suzhou GreenPower New Energy Materials Co., Ltd., constructed the joint venture with Suzhou RS
Technology Co., Ltd. and Hubei Eve Power Co., Ltd., to jointly participate in implementation of the key tasks recommended by the Chongqing
Economic and Information Technology Commission for high safety and reliability lithium batteries and high-strength separators for energy
electronics. According to the project contract, the Electronic Information Department of the Ministry of Industry and Information Technology
conducts assessments based on the annual progress and achievement of goals of the consortium, and issues funds according to the financial fund
plan. The proposed approval of fiscal funds shall not exceed 30% of the total project investment, and the amount of fiscal funds to be disbursed
shall be determined based on the final acceptance assessment.
37. Share capital
Unit: RMB
Increase or decrease(+、-) Closing balance
Opening
balance Bonus Conversion of
New issues Others Subtotal
issuance reserve into share
Total amount of
892,411,690.00 85,421,412.00 -78,885.00 85,342,527.00 977,754,217.00
shares
Other explanations:
Explanations on the change of share capital:
1. See “I. Basic information of the Company”. The convertible bonds publicly issued by the Company entered the share transfer period on
August 17, 2020. As of December 31, 2023, the Company’s share capital increased by RMB10,089.00 due to the share transfer.
2. See “I. Basic information of the Company”. Non-public issuance of Renminbi ordinary shares (A Share) of 85,421,412.
3. See “I. Basic information of the Company”. The Company repurchased and cancelled the restricted stocks of RMB88,974.00.
38. Other equity instruments
(1) Outstanding preferred shares, perpetual bonds and other financial instruments as at the end of the Reporting
Period
Under the Approval of the Issuance of Convertible Corporate Bonds by Yunnan Energy New Material Co., Ltd. (Zheng Jian Xu Ke [2019] No.
2701) issued by the China Securities Regulatory Commission, the Company publicly issued 16 million convertible corporate bonds on February 11,
2020, which was calculated as the value of the debt instruments of the convertible corporate bonds was RMB1,408,703,126.08, and the value of
the equity instruments was RMB177,419,515.43 by referring to the interest rates of the credit bonds of similar enterprises with AA credit rating
and similar maturities in the market and deducting the bond issuance expenses.
187
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
(2) Table of changes in outstanding preferred shares, perpetual bonds and other financial instruments as at the end
of the Reporting Period
Unit: RMB
At the beginning of the period Increase for the period Decrease for the period At the end of the period
Outstanding financial
instruments Number of Book value Number of Book value Number ofBook value Number of Book value
shares shares shares shares
Equity instrument of
50,317,083.84 74,305.52 50,242,778.32
convertible corporate bonds
Total 50,317,083.84 74,305.52 50,242,778.32
Explanations on changes in other financial instruments and reasons thereof as at the end of the Reporting Period, and basis for related
accounting treatment:
In 2023, the Company’s “Energy Convertible Bond” decreased by RMB670,100.00 (6,701.00 bonds) due to the transfer of 10,089.00 shares
and reduced the other equity instrument by RMB74,305.52.
Other explanations:
In 2023, the Company’s “Energy Convertible Bond” decreased by RMB670,100.00 (6,701.00 bonds) due to the transfer of 10,089.00 shares
and reduced the other equity instrument by RMB74,305.52.
39. Capital reserve
Unit: RMB
Item Opening balance Increase for the period Decrease for the Closing balance
period
Capital premium (capital stock premium) 7,600,521,676.06 7,368,984,534.30 5,643,152.20 14,963,863,058.16
Other capital reserve 84,810,922.74 22,280,126.86 107,091,049.60
Total 7,685,332,598.80 7,391,264,661.16 5,643,152.20 15,070,954,107.76
Other explanations, including changes and reasons thereof as at the end of the Reporting Period:
1. The capital premium (capital stock) increased by RMB 7,368,984,534.30 for the period, mainly because:
(1) The convertible bonds publicly issued by the Company entered the share transfer period on August 17, 2020. The Company’s capital
reserve increased by RMB732,247.16 due to the share transfer.
(2) The Company’s capital reserve increased by RMB7,368,124,689.02 due to the non-public issuance of Renminbi ordinary shares.
(3) The minority shareholders of the sub-subsidiary Jiangxi Enpo New Materials Co., Ltd. injected capital for the period, resulting in an
increase of RMB127,598.12 in capital reserve.
2. The capital premium (share capital premium) decreased by RMB5,643,152.20 for the period, mainly due to the repurchase and cancellation
of restricted stocks by the Company.
3. The increase of other capital reserves was RMB22,280,126.86 for the period, mainly due to:
(1) The Company implemented stock incentive for employees and recognized related expenses for share based payments, resulting in an
increase of RMB21,993,180.34 in other capital reserves.
(2) The subsidiary Yunnan Hongchuang Packaging Co., Ltd. implemented stock incentive for employees and recognized related expenses for
share-based payments, resulting in an increase of RMB286,946.52 in other capital reserves.
40. Treasury stock
Unit: RMB
Item Opening balance Increase for the period Decrease for the period Closing balance
Equity incentive repurchase 549,976,686.75 549,976,686.75
Restricted share-based payment 101,753,346.66 44,468,361.46 57,284,985.20
Total 101,753,346.66 549,976,686.75 44,468,361.46 607,261,671.95
Other explanations, including changes and reasons thereof as at the end of the Reporting Period:
1. Because the Company used the repurchased shares for stock incentive, the treasury shares decreased by RMB549,976,686.75;
2. Please refer to XIII. Share-based payment. Due to the cancellation of restricted stock repurchases and dividends of the Company, the
treasury shares decreased by RMB44,468,361.46.
3. In 2023, the Company repurchased 88,974.00 shares due to the implementation of stock incentive, accounting for 0.01% of the total
issued shares of the Company, representing the cumulative proportion of treasury stocks to the total issued shares of 0.98%.
41. Other comprehensive income
Unit: RMB
188
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Amount for the current period
Amount Less: Less: Less: After-tax After-tax
incurred Amount Amount Income tax amount amount
before the included into included expense attributable to attributable
income tax other into other the parent to minority
in the current comprehensi comprehe company shareholder
period ve income in nsive s
the prior income in
Opening period and the prior Closing
Item
balance transferred period balance
into the and
profit and transferre
loss in the d into the
current retained
period earnings
in the
current
period
I. Other
comprehensi
ve income
that cannot - -
- -
be 750,000.00 22,000,000.0 15,750,000.0
5,500,000.00 16,500,000.00
reclassified 0 0
subsequently
to profit or
loss
Changes in
fair value of - -
- -
other equity 750,000.00 22,000,000.0 15,750,000.0
5,500,000.00 16,500,000.00
instrument 0 0
investments
II. Other
comprehensi
ve income
that will be 103,588,686. 4,951,539.2 105,661,398.
7,024,250.92 98,637,147.11
reclassified 32 1 03
subsequently
to profit or
loss
Exchange
differences
from
translation of 103,588,686. 4,951,539.2 105,661,398.
7,024,250.92 98,637,147.11
statements 32 1 03
denominated
in foreign
currencies
Total other
81,588,686.3 - 4,951,539.2 89,911,398.0
comprehensi 7,774,250.92 82,137,147.11
2 5,500,000.00 1 3
ve income
Other explanations, including adjusting the effective portion of cash flow hedging profit and loss to the initial recognition amount of the hedged
item:
42. Surplus reserve
Unit: RMB
Item Opening balance Increase for the period Decrease for the period Closing balance
Statutory surplus reserve 169,074,481.22 207,369,959.40 376,444,440.62
Reserve fund 21,153,681.64 21,153,681.64
Enterprise development
1,416,680.73 1,416,680.73
fund
189
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Total 191,644,843.59 207,369,959.40 399,014,802.99
Explanations on surplus reserve, including explanation about the reason of the change:
The increase in surplus reserve for the year was due to the provision of 10% of the net profit of the parent company for the year.
43. Undistributed profit
Unit: RMB
Item Current period Previous period
Undistributed profit before adjustments at the
9,000,475,751.88 5,288,265,431.08
end of the prior period
Undistributed profit adjusted at the beginning of
9,000,475,751.88 5,288,265,431.08
the period
Add: Net profit attributable to owners of parent
2,526,688,570.92 4,000,461,964.37
company in the current period
Less: Withdrawal of statutory surplus reserve 207,369,959.40 18,251,921.33
Common share dividends payable 373,914,501.31 269,999,722.24
Undistributed profits at the end of the period 10,945,879,862.09 9,000,475,751.88
Breakdown of the undistributed profit at the beginning of the period of adjustment:
44. Operating income and operating cost
Unit: RMB
Amount for current period Amount for previous period
Item
Income Cost Income Cost
Main businesses 11,749,728,885.23 7,486,113,707.42 12,217,521,522.39 6,360,676,130.43
Other businesses 292,500,904.07 49,109,748.92 373,404,007.29 207,472,252.22
Total 12,042,229,789.30 7,535,223,456.34 12,590,925,529.68 6,568,148,382.65
Whether the lower of the audited net profit before and after deduction of non-recurring gains or losses is negative
□ Yes No
Other explanations
Information on transaction price allocated to remaining performance obligations:
The corresponding revenue from performance obligations that have been contracted but not yet performed or completed amounted to RMB0.00 as
at the end of the Reporting Period.
45. Taxes and surcharges
Unit: RMB
Item Amount for current period Amount for previous period
City maintenance and construction tax 11,959,666.52 10,137,102.35
Education surcharge 9,228,982.47 8,928,750.72
Property tax 32,927,258.96 24,477,126.87
Land using tax 11,181,669.21 6,789,704.51
Vehicle and vessel usage tax 38,704.59 25,019.80
Stamp duty 8,354,706.02 6,466,537.77
Other 1,074,092.67 856,713.01
Total 74,765,080.44 57,680,955.03
190
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
46. Administrative expenses
Unit: RMB
Item Amount for the current period Amount for previous period
Item
Employee compensation 206,470,581.73 158,061,912.74
Share-based expense 12,760,449.61 51,022,209.61
Depreciation and amortization 54,578,336.94 43,343,632.86
Agencies 27,679,857.67 14,296,148.37
Maintenance costs 5,663,215.76 4,223,440.57
Office expense 9,921,970.42 7,044,955.89
Travel expense 6,423,228.89 4,088,667.43
Entertainment expense 7,546,211.37 2,531,330.21
Environmental protection fee 14,810,244.45 8,110,686.32
Others 37,561,391.88 30,568,947.01
Total 383,415,488.72 323,291,931.01
47. Selling expenses
Unit: RMB
Item Amount for current period Amount for previous period
Item
Sales commission 23,423,364.38 15,749,712.52
Labor costs 28,291,192.38 29,479,359.97
Sales agency expense 8,618,890.35 9,528,124.63
Depreciation and amortization 10,385,360.44 5,805,912.99
Entertainment expense 5,312,208.11 3,459,975.18
Travel expense 4,564,811.36 2,899,891.55
Share-based payment 590,797.55 2,293,041.47
Other 8,152,109.88 5,239,025.16
Total 89,338,734.45 74,455,043.47
48. R&D expenses
Unit: RMB
Item Amount for the current period Amount for previous period
Item
Material costs 345,485,094.08 403,898,381.02
Employee compensation 214,976,253.76 179,390,617.59
Depreciation and amortization 41,886,506.67 44,490,331.35
Utility costs 63,170,087.39 46,238,014.05
Others 61,963,059.77 50,280,355.65
Total 727,481,001.67 724,297,699.66
49. Financial expenses
Unit: RMB
Item Amount for the current period Amount for previous period
Item
Interest expenses 376,997,402.81 287,498,131.60
Less: interest income -84,200,436.11 -26,258,474.95
191
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Exchange gain/loss -62,517,076.68 -61,184,128.02
Bank charges and other 8,359,787.06 11,476,342.34
Total 238,639,677.08 211,531,870.97
50. Other Income
Unit: RMB
Other sources of income Amount for the current period Amount for previous period
Government subsidy 170,294,191.72 155,302,624.29
Return of individual income tax service
589,416.97 1,131,403.22
charge
VAT deduction 36,168,201.97
Tax incentives for independent
2,068,401.09
entrepreneurship
Total 209,120,211.75 156,434,027.51
51. Gains on fair value change
Unit: RMB
Source of gains on fair value change Amount for the current period Amount for previous period
Trading financial assets 9,850,069.59
Trading financial liabilities -94,394.79
Total 9,755,674.80
Other explanations:
52. Investment income
Unit: RMB
Item Amount for the current period Amount for previous period
Gain on long-term equity investments subject to
1,351,086.12 1,471,658.10
accounting with equity method
Investment income from disposal of trading
7,906,094.29 12,080,580.37
financial assets
Proceeds from wealth management products 29,064,274.85 27,838,099.70
Investment income from derecognition of financial
-21,537,307.12 -18,658,871.90
assets at amortized cost
Total 16,784,148.14 22,731,466.27
53. Credit impairment losses
Unit: RMB
Item Amount for the current period Amount for previous period
Bad debt losses on notes receivable 9,002,433.59 -8,690,103.00
Bad debt losses on receivables -12,674,580.15 80,338.10
Bad debt losses on other receivables -200,364.05 -649,051.50
Impairment losses on accounts receivable
934,762.69
financing
Total -3,872,510.61 -8,324,053.71
Other explanations:
In the above table, loss is indicated with “-”.
192
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
54. Asset impairment losses
Unit: RMB
Item Amount for the current period Amount for previous period
I. Inventory falling price losses and contract
-186,376,180.23 -42,921,534.91
performance cost depreciation losses
Total -186,376,180.23 -42,921,534.91
55. Gains on disposal of assets
Unit: RMB
Source Amount for the current period Amount for previous period
Disposal of fixed assets 204,866.12 223,345.22
56. Non-operating income
Unit: RMB
Amount of non-recurring gain or
Item Amount for the current period Amount for previous period
loss included in the current period
Accepting donations 26,000.00 111,645.43 26,000.00
Compensation received 354,106.48 249,743.26 354,106.48
Payments that do not need to be
1,019,939.10 614,291.80 1,019,939.10
made upon approval
Others 1,116,185.56 986,822.77 1,116,185.56
Total 2,516,231.14 1,962,503.26 2,516,231.14
57. Non-operating expenses
Unit: RMB
Amount of non-recurring gain or
Item Amount for the current period Amount for previous period
loss included in the current period
Donation 645,413.15 524,578.80 645,413.15
Abandonment losses of non-
2,840,110.13 5,093,236.75 2,840,110.13
current assets
Others 1,915,066.99 619,138.51 1,915,066.99
Total 5,400,590.27 6,236,954.06 5,400,590.27
58. Income tax expense
(1) Table of income tax expenses
Unit: RMB
Item Amount for the current period Amount for previous period
Current income tax 416,385,943.32 520,107,429.64
Deferred income tax -40,257,819.24 32,902,134.24
Total 376,128,124.08 553,009,563.88
(2) Adjustment process of accounting profit and income tax expense
Unit: RMB
Item Amount for the current period
Total profit 3,026,342,526.64
Income tax expenses calculated based on the statutory (or applicable)
756,585,687.36
tax rates
Impact of different tax rates applied to subsidiaries -277,801,695.00
193
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Impact of adjusting income tax in previous periods 4,157,782.23
Impact of non-taxable income -202,662.92
Impact of non-deductible cost, expense and loss 2,090,683.23
Impact of deductible losses not recognized as deferred income tax
348,236.53
assets before utilization
Impact of deductible temporary differences or deductible losses not
6,851,580.43
recognized as deferred income tax assets for the period
Impact of R&D expenses plus deduction -110,583,320.62
Impact of income tax credit for investment in special equipment -14,994,738.27
Impact of stock incentive 7,891,571.85
Tax rate adjustment leads to changes in the balance of deferred tax
1,565,871.00
assets/liabilities at the beginning of the period
Others 219,128.26
Income tax expenses 376,128,124.08
59. Cash flow statement
(1) Cash received relating to operating activities
Cash received relating to other operating activities
Unit: RMB
Item Amount for the current period Amount for previous period
Interest Income 83,263,325.15 27,599,543.01
Subsidy income 332,690,039.01 228,642,477.43
Recovered deposit 23,568,900.61 38,768,179.58
Reserve funds received 1,439,058.27
Other receivables received 16,292,885.44 5,656,068.58
Others 1,496,292.04 1,348,211.46
Total 458,750,500.52 302,014,480.06
Cash payments relating to other operating activities
Unit: RMB
Item Amount for the current period Amount for previous period
Deposit payment 252,595,453.94 132,561,185.22
Other payable paid 2,381,661.10 1,217,235.92
Administrative expenses and R&D expenses 219,285,376.85 149,669,000.84
Operating expenses 49,819,589.40 36,248,947.35
Service charge 8,359,787.06 11,476,342.34
Donation expenditure 645,413.15 524,578.80
Reserve fund paid 2,612,486.97 3,101,817.82
Others 1,915,066.99 270,929.34
Total 537,614,835.46 335,070,037.63
(2) Cash payments relating to investing activities
Cash payments relating to other investing activities
Unit: RMB
Item Amount for the current period Amount for previous period
Deposit for letter of credit and bill 40,991,765.29 150,164,555.53
Total 40,991,765.29 150,164,555.53
194
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
(3) Cash payments relating to financing activities
Cash payments relating to other financing activities
Unit: RMB
Item Amount for the current period Amount for previous period
Forfaiting Business Deposit 777,800,000.00 253,459,886.80
Lease payment 1,375,995.60 2,649,939.18
Share repurchase 549,976,686.75
Restricted stock repurchase 5,732,126.20
Total 1,334,884,808.55 256,109,825.98
Explanations on cash payments relating to other financing activities:
Changes in liabilities arising from financing activities
Applicable□Not applicable
Unit: RMB
Increase for the period Decrease for the period
Item Opening balance Non-cash Non-cash Closing balance
Cash movements Cash movements
movements movements
Short-term
9,527,853,434.55 10,139,434,318.26 160,076,613.42 11,876,805,624.28 659,863,835.68 7,290,694,906.27
borrowings
Long-term
5,032,404,119.38 2,719,779,918.72 189,624,197.95 2,168,384,261.80 5,773,423,974.25
borrowings
Bonds
429,776,524.43 17,402,031.29 4,537,602.00 670,100.00 441,970,853.72
payable
Lease
2,707,480.76 227,174.32 1,375,995.60 1,558,659.48
liabilities
Total 14,992,741,559.12 12,859,214,236.98 367,330,016.98 14,051,103,483.68 660,533,935.68 13,507,648,393.72
60. Supplementary information of cash flow statement
(1) Supplementary information of cash flow statement
Unit: RMB
Amount for the
Supplementary information Amount for the current period
previous period
1. Reconciliation of net profit to cash flows from operating activities
Net profit 2,650,214,402.56 4,212,134,557.39
Plus: impairment provision for assets 190,248,690.84 51,245,588.62
Credit impairment losses 1,448,870,122.29 1,043,974,672.99
Depreciation of fixed assets, depreciation of oil and gas assets, and depreciation of
1,539,070.83 1,208,973.42
productive biological assets
Depreciation of right-of-use assets 28,503,276.98 20,775,544.18
Amortization of intangible assets 793,491.24 3,261,644.43
Amortization of long-term unamortized expenses -204,866.12 -223,345.22
Losses from disposal of fixed assets, intangible assets, and other long-term assets
2,840,110.13 5,093,236.75
(gain is indicated with “-”)
Losses from scrapping of fixed assets (gain is indicated with “-”) -9,755,674.80
Losses from change of fair value (gain is indicated with “-”) 332,671,324.28 275,513,745.88
Financial expenses (gain is indicated with “-”) -16,784,148.14 -22,731,466.27
Investment losses (gain is indicated with “-”) -117,330,364.97 -62,684,028.87
Decrease in deferred income tax assets (increase is indicated with”-”) 71,572,545.73 95,615,449.71
195
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Increase in deferred income tax liabilities (decrease is indicated with”-”) -723,444,795.06 -824,963,603.42
Decrease in inventory (increase is indicated with”-”) -2,526,548,835.52 -4,529,233,502.65
Decrease in operating receivables (increase is indicated with”-”) 1,300,453,267.13 152,648,586.65
Increase in operating payables (decrease is indicated with”-”) 24,059,967.12 91,707,219.87
Others 2,667,453,259.32 503,587,598.66
Net cash flows from operating activities
2. Significant investment and financing activities not involving cash receipts and
payments:
Conversion of debt into capital
Convertible bonds due within one year
Fixed assets acquired under finance leases
3. Net changes in cash and cash equivalents: 2,789,034,001.85 2,972,056,126.01
Closing balance of cash 2,972,056,126.01 1,369,299,568.60
Less: opening balance of cash
Plus: closing balance of cash equivalents
Less: opening balance of cash equivalents -183,022,124.16 1,602,756,557.41
(2) Total cash outflow related to lease
Total cash outflow related to lease for the current period was RMB1,375,995.60 (previous period: RMB2,649,939.18).
(3) Composition of cash and cash equivalents
Unit: RMB
Item Closing balance Opening balance
I. Cash 2,789,034,001.85 2,972,056,126.01
Including: Cash on hand 53,243.07 89,904.57
Cash at bank that can be readily drawn
2,788,980,758.78 2,971,966,221.44
on demand
III. Cash and cash equivalents at the end of the
2,789,034,001.85 2,972,056,126.01
Reporting Period
61. Assets with Restricted Ownership or Use Rights
Item Closing book value Closing book value Reason of restriction
Bank draft margin, letter of credit margin, letter of guarantee margin,
Monetary capital 1,045,522,070.90 1,045,522,070.90 performance deposit, security deposits for lock exchange, deposit
regulated by banks
Notes receivable 248,473,890.50 248,473,890.50 Bank loans through pledge
Other current assets 251,828,755.71 251,828,755.71 Bank loans and bank acceptance through pledge
Other non-current assets 53,500,694.44 53,500,694.44 Bank loans through pledge
Non-current assets due
268,759,015.31 268,759,015.31 Bank loans and bank acceptance through pledge
within one year
Fixed assets 581,698,498.88 518,129,104.90 Bank loans through pledge
Construction in progress 92,118,326.54 92,118,326.54 Bank loans through pledge
Intangible assets 309,173,107.74 288,826,669.43 Bank loans through pledge
Total 2,851,074,360.02 2,767,158,527.73
In addition to the items listed in the above table, the Company's subsidiary Shanghai Energy pledged its 100% equity interest in Suzhou
GreenPower to obtain bank loans, which resulted in the above Company's equity interest being restricted assets.
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Yunnan Energy New Material Co., Ltd. 2023 Annual Report
62. Monetary items denominated in foreign currencies
(1) Monetary items denominated in foreign currencies
Unit: RMB
Item Ending balance of foreign Exchange rate Ending balance converted into
currency RMB
Monetary capital 357,860,441.32
Including: USD 24,736,411.72 7.08270 175,200,583.29
Euro 17,417,685.56 7.85920 136,889,074.35
HKD 9.23 0.90622 8.36
JPY 772,807,782.14 0.050213 38,804,997.16
HUF 340,721,456.23 0.020444 6,965,709.45
Accounts receivable 555,563,573.06
Including: USD 69,650,072.81 7.08270 493,310,570.69
Euro 499,491.62 7.85920 3,925,604.54
JPY 1,161,599,532.00 0.05021 58,327,397.30
Accounts payables 240,891,782.12
Including: USD 33,900,073.59 7.08270 240,104,051.22
Euro 81,063.20 7.8592 637,091.90
JPY 3,000,000.00 0.050213 150,639.00
Other explanations:
63. Lease
(1) The Company as the lessor
Applicable □Not applicable
The variable lease payments that are not included in the measurement of the lease liabilities
□ Applicable Not applicable
The short-term leases and low-value asset leases that are simplified
□ Applicable Not applicable
VIII R&D expenses
Unit: RMB
Item Amount for the current period Amount for previous period
Material costs 345,485,094.08 403,898,381.02
Employee compensation 214,976,253.76 179,390,617.59
Depreciation and amortization 41,886,506.67 44,490,331.35
Utility costs 63,170,087.39 46,238,014.05
Others 61,963,059.77 50,280,355.65
Total 727,481,001.67 724,297,699.66
Including: R&D expenditure 727,481,001.67 724,297,699.66
IX. Changes in the Consolidation Scope
1. Merger of enterprises not under common control
(1) Other explanations
Business combination not under common control occurred this period
197
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
2. Merger of enterprises under common control
(1) Other explanations
No business combination under common control occurred this period
3. Reverse purchase
Basic information of the transaction, basis for reverse purchase of the transaction, whether the assets and liabilities retained by the listed company
constitute business and their basis, determination of merger costs, adjustment of equity amount and calculation when treating equity transactions:
No reverse purchase occurred this period
4. Disposal of subsidiaries
Whether the right of control is lost after transactions or events in subsidiaries
□ Applicable Not applicable
Whether the right of control is lost for the current period after disposal of investment in subsidiaries through multiple transactions
□ Applicable Not applicable
5. Changes in the consolidation scope due to other reasons
Explain the changes in the scope of consolidation caused by other reasons (such as the establishment of new subsidiaries, liquidation of
subsidiaries, etc.) and relevant information:
During the period, the number of entities included into the consolidated financial statement increased by 1 and decreased by 0, including:
Subsidiaries newly included in the consolidation scope in the current period
Name Reason for change
Yunnan Jiechen Packaging Materials Co., Ltd. New investment
X. Interests in Other Entities
1. Interests in subsidiaries
(1) Constitution of the enterprise group
Unit: RMB
Place Nature of Shareholding proportion
Principal place of business Method of
Name of subsidiaries Registered capital Direct Indirect
of business registra acquisition
tion
Yunnan Dexin Paper Co., Ltd. Paper
Yuxi, Newly
138,210,800.00 Yuxi, Yunnan production 100.00% 0.00%
Yunnan established
and sales
Production and
Yunnan Jiechen Packaging Materials Yuxi, sales of Newly
150,000,000.00 Yuxi, Yunnan 100.00% 0.00%
Co., Ltd. Yunnan packaging established
materials
Production
Yunnan Hongchuang Packaging Co., Yuxi, and sales of Newly
152,381,819.00 Yuxi, Yunnan 60.90% 0.00%
Ltd. Yunnan aseptic established
packing box
Production
Ma'ansh
Hongchuang Packaging (Anhui) Co., Ma'anshan, and sales of Newly
300,000,000.00 an, 0.00% 100.00%
Ltd. Anhui aseptic established
Anhui
packing box
Yuxi, Bopp film Newly
Yunnan Hongta Plastic Co., Ltd. 330,723,618.00 Yuxi, Yunnan 100.00% 0.00%
Yunnan production established
198
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
and sales
Bopp film
Chengdu, Chengdu Newly
Hongta Plastic (Chengdu) Co., Ltd. 172,581,213.00 production 0.00% 100.00%
Sichuan , Sichuan established
and sales
Yuxi, Trading Newly
Yuxi Feiermu Trading Co., Ltd. 39,907,500.00 Yuxi, Yunnan 0.00% 100.00%
Yunnan established
Ningbo, Ningbo, Trading Newly
Ningbo Energy New Material Co., Ltd. 10,000,000.00 100.00% 0.00%
Zhejiang Zhejiang established
Production
Xiamen, Newly
Xiamen Energy New Materials Co., Ltd. 1,600,000,000.00 Xiamen, Fujian and sales of 0.00% 100.00%
Fujian established
new materials
Shanghai Energy New Material Technical Newly
100,000,000.00 Shanghai Shanghai 100.00% 0.00%
Research Co., Ltd. services established
Production Merger of
and sales of enterprises
Shanghai Energy New Material
389,210,834.00 Shanghai Shanghai lithium battery 95.22% 0.00% under
Technology Co., Ltd.
separator common
control
Production
Zhuhai,
Zhuhai Energy New Material Zhuhai, and sales of Newly
1,600,000,000.00 Guangdo 0.00% 100.00%
Technology Co., Ltd. Guangdong lithium battery established
ng
separator
Zhuhai,
Guangdong Energy New Material Zhuhai, Newly
10,000,000.00 Guangdo Technical 0.00% 100.00%
Institute Co., Ltd. Guangdong established
ng services
Production
Wuxi Energy New Material Technology Wuxi, and sales of Newly
1,600,000,000.00 Wuxi, Jiangsu 0.00% 100.00%
Co., Ltd. Jiangsu lithium battery established
separator
Production Business
and sales of combinatio
Jiangxi Tonry New Energy Technology Yichun, Yichun, lithium battery n not under
1,200,000,000.00 0.00% 100.00%
Development Co., Ltd. Jiangxi Jiangxi separator the
common
control
Production and Business
sales of combinatio
Jiangxi Ruijie New Material Yichun, Yichun, packaging n not under
8,000,000.00 0.00% 82.00%
Technology Co., Ltd. Jiangxi Jiangxi materials the
common
control
Production Business
and sales of combinatio
Suzhou GreenPower New Energy Suzhou, Suzhou, lithium battery n not under
421,741,781.00 0.00% 100.00%
Materials Co., Ltd. Jiangsu Jiangsu separator the
common
control
Production Business
and sales of combinatio
Chongqing Energy Newmi Chongqi lithium battery n not under
291,000,000.00 Chongqing 0.00% 76.36%
Technological Co., Ltd. ng separator the
common
control
Production
Yichun, Yichun, and sales of Newly
Jiangxi Enpo New Material Co., Ltd. 600,000,000.00 0.00% 51.00%
Jiangxi Jiangxi lithium battery established
separator
Production
Jiangxi Energy New Material Yichun, Yichun, and sales of Newly
100,000,000.00 0.00% 100.00%
Technology Co., Ltd. Jiangxi Jiangxi lithium battery established
separator
Chongqing Energy New Material 1,600,000,000.00 Chongqing Chongqi Production 0.00% 100.00% Newly
199
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Technology Co., Ltd. ng and sales of established
lithium battery
separator
Chengm Investment
Chengmai ai and technology
Newly
Hainan Energy Investment Co., Ltd. 390,000,000.00 County, Hainan County, services 0.00% 100.00%
established
Province Hainan
Province
Chuangxin New Material (Hong Kong) Hong Trading Newly
Hong Kong 0.00% 100.00%
Co., Ltd. Kong established
Investment
Newly
SEMCORP Global Holdings Kft. Hungary Hungary and technology 0.00% 100.00%
established
services
Production
and sales of Newly
SEMCORP Hungary Kft. Hungary Hungary 0.00% 100.00%
lithium battery established
separator
Sale of self-
Newly
SEMCORP Properties Kft. Hungary Hungary owned real 0.00% 100.00%
established
estate
Investment
Newly
SEMCORP America Inc. USA USA and technology 0.00% 100.00%
established
services
Production
and sales of Newly
SEMCORP Manufacturing USA LLC USA USA 0.00% 100.00%
lithium battery established
separator
Production
Changzh
Jiangsu Energy New Material Changzhou, and sales of Newly
550,000,000.00 ou, 0.00% 100.00%
Technology Co., Ltd. Jiangsu lithium battery established
Jiangsu
separator
Production and
Changzh
Jiangsu Ruijie New Material Changzhou, sales of Newly
200,000,000.00 ou, 0.00% 100.00%
Technology Co., Ltd. Jiangsu packaging established
Jiangsu
materials
Production
Hunan Energy Frontier New Material Changsha, Changsh Newly
20,000,000.00 and sales of 0.00% 65.00%
Technology Co., Ltd. Hunan a, Hunan established
new materials
Production
Hubei Energy New Material Jingmen, Jingmen, Newly
1,600,000,000.00 and sales of 0.00% 55.00%
Technology Co., Ltd. Hubei Hubei established
new materials
Production
Jiangsu Sanhe Battery Material Liyang, Liyang, Newly
100,000,000.00 and sales of 0.00% 51.00%
Technology Co., Ltd. Jiangsu Jiangsu established
new materials
Zhuhai, Trading
Energy (Zhuhai Hengqin) New Zhuhai, Newly
5,000,000.00 Guangdo 0.00% 100.00%
Materials Technology Co., Ltd. Guangdong established
ng
Production
Yuxi, Newly
Yuxi Energy New Materials Co., Ltd. 500,000,000.00 Yuxi, Yunnan and sales of 0.00% 100.00%
Yunnan established
new materials
Trading Newly
Shanghai Energy Trading Co., Ltd. 30,000,000.00 Shanghai Shanghai 0.00% 100.00%
established
Changzh Trading/
Jiangsu Energy New Material Research Changzhou, Newly
200,000,000.00 ou, technology 0.00% 100.00%
Co., Ltd. Jiangsu established
Jiangsu services
Explanation of the difference between shareholding ratio in subsidiaries and voting right ratio:
Basis for the control of an investee while holding its half or less than half voting rights, and the non-control of an investee while holding its more
than half voting rights：
For important structured entities included in the consolidation scope, the basis for control:
200
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Basis for determining whether the company is an agent or principal:
Other explanations:
(2) Key non-wholly owned subsidiaries
Unit: RMB
Percentage of
Profit or loss attributable Dividends declared to
shares held by Ending balance of
Name of subsidiaries to minority shareholders minority shareholders in
minority minority interests
in the current period the current period
shareholders
Shanghai Energy New Material
4.78% 110,756,903.59 85,339,214.45 545,143,657.61
Technology Co., Ltd.
Explanation of the difference between shareholding ratio in subsidiaries and voting right ratio:
Other explanations:
(3) Main financial information of key non-wholly owned subsidiaries
Unit: RMB
Closing balance Opening balance
Name of Current Non- Total Current Non- Total Current Non- Total Current Non- Total
subsidia assets current assets liabiliti current liabiliti assets current assets liabilitie current liabilitie
ries assets es liabiliti es assets s liabiliti s
es es
Shangh
ai
Energy
New 13,716,6 29,701, 43,418, 24,645, 6,453,9 31,099, 13,502, 22,422, 35,925,0 19,133,0 5,703,8 24,836,8
Materia 51,194.4 952,419 603,614 128,994 80,374. 109,369 604,003 407,308 11,312.2 53,749.4 45,349. 99,098.7
l 5 .55 .00 .96 27 .23 .27 .96 3 3 32 5
Technol
ogy Co.,
Ltd.
Unit: RMB
Amount for current period Amount for previous period
Name of Operating Net profit Total Cash flow Operating Net profit Total Cash flow
subsidiaries income comprehensi from income comprehensi from
ve income operating ve income operating
activities activities
Shanghai
Energy New
10,378,457,2 2,306,778,42 2,488,527,44 2,385,389,94 10,995,549,7 3,884,344,52 2,410,367,11 336,486,281.
Material
82.96 5.88 7.83 6.51 86.70 0.12 2.20 72
Technology
Co., Ltd.
2. Interests in joint arrangement or associates
(1) Important joint ventures or associates
Shareholding proportion Accounting
Name of joint treatment for
Principal place of Place of Nature of
ventures or Investments in
business registration business Direct Indirect
associates joint ventures or
associates
Yuxi Kunshasi Yuxi, Yunnan Yuxi, Yunnan
Plastic
Plastic products 40% Equity method
Masterbatch Co.,
Ltd.
201
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
(2) Main financial information of important associates
Unit: RMB
Closing balance/Amount for the current Opening balance/Amount for the previous
period period
Current assets 10,520,809.76 15,373,699.64
Non-current assets 298,204.40 134,814.50
Total assets 10,819,014.16 15,508,514.14
Current liabilities 2,794,063.91 2,964,408.36
Non-current liabilities
Total liabilities 2,794,063.91 2,964,408.36
Minority interest
Shareholders’ equity attributable to the parent
8,024,950.25 12,544,105.78
company
Pro rata shares of the net assets calculated 3,209,980.10 5,017,642.31
Adjustment
-- Goodwill
-- unrealized profits from internal transactions
-- Other
Book value of equity investments in associates 3,209,980.10 5,017,642.31
Fair value of equity investment in associates
with public quotation
Operating income 29,874,156.04 35,018,727.82
Net profit 3,377,715.29 3,679,145.26
Net profit from discontinued operations
Other comprehensive income
Total comprehensive income 1,351,086.12 1,471,658.10
Dividends received from associates during the
3,158,748.33
year
XI. Government grants
1、Liability items relating to government grants
Applicable □Not applicable
Unit: RMB
Item related to Opening balance Amount of new Amount Amount Other Closing balance Relation with
accounting grants for the recognize transferred to chan assets/revenue
period d in non- other income for ges
operating the period for
income the
for the perio
period d
Deferred income 823,467,109.47 220,279,567.45 80,473,137.13 963,273,539.79
Support and incentive 247,166,279.03 51,298,000.00 22,463,447.44 276,000,831.59 Related to
payment of the Xishan assets
Economic and
Technological
Development Zone
202
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Item related to Opening balance Amount of new Amount Amount Other Closing balance Relation with
accounting grants for the recognize transferred to chan assets/revenue
period d in non- other income for ges
operating the period for
income the
for the perio
period d
Equipment subsidies of 245,247,614.82 25,125,178.56 220,122,436.26 Related to
the Gao’an Municipal assets
People’s Government
Item subsidy for the 148,179,039.62 14,308,295.40 133,870,744.22 Related to
development of advanced assets
Subsidies for buildings of 45,141,000.00 189,668.07 44,951,331.93 Related to
Jiangsu Energy assets
Subsidies for equipment 35,907,266.17 35,907,266.17 Related to
of Ruijie assets
Special funds for the 26,538,461.58 2,307,692.31 24,230,769.27 Related to
development of assets
provincial strategic
emerging industries of
Wuxi Energy
Subsidies for 22,790,200.24 1,340,599.92 21,449,600.32 Related to
infrastructure assets
construction
Subsidy with interests of 8,535,608.65 11,687,700.00 800,707.17 19,422,601.48 Related to
Imported equipment for assets
Jiangxi Tonry
Support fund for 18,109,140.71 1,545,796.28 16,563,344.43 Related to
imported equipment assets
industry of Gao'an
Municipal People’s
Government
National import discount 10,784,050.78 6,061,400.00 1,055,406.38 15,790,044.40 Related to
for Wuxi Energy assets
Subsidies for equipment 15,113,066.73 98,226.66 15,014,840.07 Related to
of Jiangsu Energy assets
Land subsidy for Sanhe 8,413,407.19 6,464,700.00 267,063.69 14,611,043.50 Related to
village, Jiangsu assets
Enterprise support funds 15,406,082.68 804,404.76 14,601,677.92 Related to
allocated by Gao’an New assets
World Industrial City
Finance Office
Special funds for the 12,000,000.00 59,282.79 11,940,717.21 Related to
development of assets
provincial strategic
emerging industries of
Jiangsu Energy
High-performance 10,835,090.16 2,696,405.76 8,138,684.40 Related to
lithiumion battery assets
separator project with an
output of 90 million
square meters
Municipal technological 8,906,250.00 1,125,000.00 7,781,250.00 Related to
transformation project for assets
high-quality development
National import discount 7,726,599.00 166,761.12 7,559,837.88 Related to
for Chongqing Energy assets
Land subsidies granted 6,766,262.19 777,000.00 440,202.10 7,103,060.09 Related to
by the Administrative assets
Committee of Yuxi High-
tech Industrial
Development Zone for
203
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Item related to Opening balance Amount of new Amount Amount Other Closing balance Relation with
accounting grants for the recognize transferred to chan assets/revenue
period d in non- other income for ges
operating the period for
income the
for the perio
period d
the annual production of
1 billion liquid packing
boxes
Technological 8,006,026.90 1,080,781.56 6,925,245.34 Related to
transformation project of assets
the production line of
lithium-ion battery
separator
Enterprise development 6,315,328.00 336,817.49 5,978,510.51 Related to
support funds (subsidy assets
for plant construction of
Jiangxi Enpo)
Technical transformation 6,000,000.00 136,812.92 5,863,187.08 Related to
funds for Jiangxi Tonry assets
Technological 6,450,000.00 900,000.00 5,550,000.00 Related to
transformation project of assets
the second batch of
industrial transformation
in 2020
Technical transformation
guidance funds 5,299,515.00 264,975.75 5,034,539.25 Related to
assets
Special funds for 70,000- 5,300,000.00 530,000.03 4,769,999.97 Related to
ton BOPP projects assets
Lithium-ion battery 4,000,000.00 52,173.90 3,947,826.10 Related to
microporous separator assets
production digitalized
workshop B of
Chongqing Energy
Special fund for the 3,300,000.00 211,939.86 3,088,060.14 Related to
development of small and assets
medium-sized enterprises
at the provincial level for
Jiangxi Tonry
Fund for the development 3,000,000.00 21,739.13 2,978,260.87 Related to
of digital economy and assets
digital transformation for
Wuxi Energy
Support subsidies of 3,000,000.00 125,000.00 2,875,000.00 Related to
cleaner production for assets
Shanghai Energy
Special funds for basic 3,083,332.99 307,692.48 2,775,640.51 Related to
projects assets
Special fund for the 2,239,898.21 143,265.70 2,096,632.51 Related to
development of small and assets
medium-sized enterprises
at the provincial level in
2021 by Yuxi Municipal
Bureau of Industry and
Information Technology
Boiler upgrading and 2,165,138.56 196,830.72 1,968,307.84 Related to
reconstruction projects assets
National import discount 1,936,935.00 27,084.36 1,909,850.64 Related to
for Suzhou GreenPower assets
Cable trench subsidy 2,181,667.17 339,999.96 1,841,667.21 Related to
204
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Item related to Opening balance Amount of new Amount Amount Other Closing balance Relation with
accounting grants for the recognize transferred to chan assets/revenue
period d in non- other income for ges
operating the period for
income the
for the perio
period d
assets
National import discount 1,637,100.00 11,415.13 1,625,684.87 Related to
for Jiangxi Energy assets
Investment subsidies for 1,000,000.00 13,452.90 986,547.10 Related to
high-performance assets
lithium-ion battery
microporous separator
key project (phase I) of
Chongqing Energy
Core technical know-how 1,000,000.00 31,744.57 968,255.43 Related to
for industrialization of assets
Wuxi Energy
Low-nitrogen 928,571.44 71,428.56 857,142.88 Related to
transformation project assets
subsidy of the Finance
Bureau of Changshou
Key industrial 700,000.00 700,000.00 Related to
technology innovation assets
project funds of Suzhou
Special funds for basic 769,231.16 76,922.88 692,308.28 Related to
projects of Jiangxi Tonry assets
Enterprise development 707,692.25 61,538.52 646,153.73 Related to
support funds of Wuxi assets
Energy
Subsidies for talent 600,000.00 29,787.23 570,212.77 Related to
leading of Shanghai assets
Energy
VOCs subsidies for 585,000.00 48,750.00 536,250.00 Related to
project governance of assets
Hongchuang Packaging
District-level 443,926.05 443,926.05 Related to
administrative approval assets
pre-intermediary service
project of Hubei Energy
Special funds for the 469,282.40 34,977.60 434,304.80 Related to
construction of the Yuxi assets
municipal industrial park
in 2017
Provincial-level special 400,000.00 5,161.29 394,838.71 Related to
funds for high quality assets
development of
manufacturing industry
for Hubei Energy
Subsidies of the Yuxi 415,094.48 113,207.52 301,886.96 Related to
Municipal Bureau of assets
Finance for the first
major technical
equipment
Reward for Suzhou to 329,670.24 65,933.97 263,736.27 Related to
build an intelligent assets
demonstration workshop
of advanced
manufacturing base in
2020
Funds for the preparation 262,506.61 14,720.04 247,786.57 Related to
205
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Item related to Opening balance Amount of new Amount Amount Other Closing balance Relation with
accounting grants for the recognize transferred to chan assets/revenue
period d in non- other income for ges
operating the period for
income the
for the perio
period d
of touring inspection assets
activities in Yichun and
centralized
commencement and
completion activities of
major projects in Yichun,
allocated by Gao’an New
World Industrial City
Finance Office
National-level subsidy 167,800.69 2,151.30 165,649.39 Related to
for new energy projects assets
of Shanghai Energy
Subsidies for the 166,666.41 50,000.04 116,666.37 Related to
renovation of power assets
supporting projects
outside the plants in the
Jiulong district of the
Yuxi High-Tech
Development Zone
Management Committee
National-level subsidy
Related to
for new energy projects 1,032,073.81 372,693.31 659,380.50
revenue
of Shanghai Energy
2. Government grants recognized in profit or loss for the period
Applicable □Not applicable
Unit: RMB
Item related to accounting Amount incurred in the current period Amount incurred in the previous period
Other income 28,818,978.59 28,315,730.87
Other income 24,252,700.00 27,456,200.00
Other income 22,463,447.44 16,557,514.46
Other income 14,308,295.40 14,308,295.40
Other income 12,854,416.65
Other income 11,897,179.30 3,102,696.34
Other income 8,136,616.07
Other income 5,802,187.32 5,802,187.32
Other income 31,140,000.00
Other income 13,000,000.00
Other income 41,760,370.95 15,619,999.90
Financial expenses -1,099,103.16 -91,800.00
Financial expenses -253,200.00 -16,693,000.00
XII. Risks Related to Financial Instruments
1. Categories of risks arising from financial instruments
The Company’s primary financial instruments include cash and cash equivalents, equity investment, loans, receivables, payables and
convertible bonds, etc. In daily business activities, the Company is faced with various risks of financial instruments, mainly including
credit risk, liquidity risk and market risk. The risks associated with these financial instruments and the risk management policies adopted
206
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
by the Company to mitigate these risks are described as follows:
The board of directors is responsible for planning and establishing the Company’s risk management framework, formulating risk
management policies and relevant guidelines, and supervising the implementation of risk management measures. The Company has
formulated risk management policies to identify and analyze the risks. These risk management policies clearly stipulated the specific
risks, covering market risk, credit risk, liquidity risk management and many other aspects. The Company regularly evaluates the market
environment and changes in its business activities to determine whether to update its risk management policies and systems. The
Company’s risk management is carried out by the risk management committee in accordance with the policies approved by the board of
directors. The risk management committee identifies, evaluates and avoids relevant risks through close cooperation with other
departments. The internal audit department performs regular audit on risk management controls and procedures, and reports the audit
results to the audit committee. The Company disperses the risk of financial instruments through appropriate diversified investment and
business portfolio, and reduces the risks of being concentrated on a single industry, specific region or specific counterparty by
formulating corresponding risk management policies.
(I) Credit risk
Credit risk refers to the risk of financial loss to the Company caused by the counterparty’s failure to perform its contractual obligations.
The management has formulated appropriate credit policies and constantly monitors the exposure of credit risk.
The Company has adopted a policy of trading only with credit worthy counterparties. In addition, the Company assesses the credit
qualification of customers and sets corresponding credit period based on their financial status, the possibility of obtaining guarantee
from a third party, credit records and other factors such as current market conditions. The Company continuously monitors the balance
and recovery of notes and accounts receivable. For customers with poor credit records, the Company will use written dunning,
shortening credit period or canceling credit period to ensure that the Company will not face significant credit loss. In addition, the
Company reviews the recovery of financial assets on each balance sheet date to ensure that the relevant financial assets are fully
prepared for the expected credit loss.
Other financial assets of the Company include cash and cash equivalents, other receivables, etc. The credit risk of these financial assets
comes from the default of the counterparty, and the maximum credit risk exposure is the book amount of each financial asset in the
statement of financial position. The company does not provide any other guarantee that may expose company to credit risk, except for
the financial guarantees made by the Company as stated in Note XIV. (II).
The cash and cash equivalents held by the Company are mainly deposited in the state-owned holding banks and other large and
medium-sized commercial banks and other financial institutions. The management believes that these commercial banks have high
reputation and asset status, there is no significant credit risk, and there will be no significant loss caused by the default of the other party.
The company’s policy is to control the amount of deposit deposited according to the market reputation, business scale and financial
background of each well-known financial institution, so as to limit the amount of credit risk to any single financial institution.
As a part of the Company’s credit risk asset management, the Company uses account aging to assess the impairment loss of accounts
receivable and other receivables. The accounts receivable and other receivables involve a large number of customers. The aging
information can reflect the solvency and bad debt risk of these customers for accounts receivable and other receivables. Based on
historical data, the Company calculates the historical actual bad debt rate of different account age periods, and takes into account the
forecast of current and future economic conditions, such as national GDP growth, total infrastructure investment, national monetary
policy and other forward-looking information to adjust the expected loss rate. For long term receivables, the Company comprehensively
considers the settlement period, payment period agreed in the contract, the financial situation of the debtor and the economic situation of
the debtor’s industry, and reasonably evaluates the expected credit loss after adjusting the aforesaid forward-looking information.
As of December 31, 2023, the book balance and expected credit impairment loss of related assets are as follows:
Item Book balance Provision for impairment
207
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Notes receivable 770,021,854.08 9,053,466.83
Accounts receivable 6,865,281,589.35 145,581,827.17
Other receivables 28,319,743.88 1,751,649.62
Other current assets 251,828,755.71
Non-current assets due within one year 618,295,576.83
Other non-current assets 160,506,597.17
Receivable financing 408,354,641.63
Total 9,102,608,758.65 156,386,943.62
As of December 31, 2023, the amount of financial guarantees provided by the Company was RMB43,680.3422 million. Please refer to
XIV. (II) for details of financial guarantee contracts. The management of the Company has assessed whether the guaranteed loans are
overdue, the financial positions of borrowers and the economic conditions of the industries which the borrowers are in. it is believed that
the relevant credit risks have not increased significantly since the initial recognition of financial guarantee contracts. Therefore, the
Company measures its impairment provision at the amount equivalent to the expected credit loss of the above-mentioned financial
guarantee contracts in the next 12 months. During the Reporting Period, the Company's assessment methods and major assumptions
have not changed. According to the assessment of the Company's management, there are no significant expected provision of
impairments on the relevant financial guarantees.
The major clients of the Company have reliable and good reputation. Therefore, the Company does not believe that such customers have
significant credit risks. As the Company has a wide range of customers, there is no significant credit concentration risk.
No collateral is required as the Company only transacts with approved and reputable third parties. Credit risk concentration is managed
on a customer basis. As at December 31, 2023, the Company has certain concentration of credit risk. 42.67% (December 31, 2022:
44.23%) of the Company's accounts receivable came from the top five customers in the balance. The Company does not hold any
collateral or other measures on credit enhancement on its accounts receivable balances.
The maximum credit risk exposure of the Company is the book value of each financial asset in the balance sheet.
In terms of the wealth management products of banks, which are invested in by the Company, the credit rating of the counterparty must
be higher than or the same as that of the Company. In view of the good credit rating of the counterparty, the management of the
Company does not expect that the counterparty will be unable to perform its obligations.
(II) Liquidity risk
Liquidity risk refers to the risk of fund shortage when the Company satisfies the obligation of settlement by delivering cash or other
financial assets. Each member of the Company is responsible for their own cash flow forecast. Based on the cash flow forecast results of
each member enterprise, the subordinate financial department of the Company continuously monitors the short-term and long-term
capital demand of the Company at the Company level to ensure that sufficient cash reserves are maintained; at the same time, it
continuously monitors whether it conforms to the provisions of the loan agreement and obtains the commitment of providing sufficient
reserve funds from the main financial institutions to meet the short-term and long-term capital demand. In addition, the Company
entered into a financing line credit agreement with major business banks to provide support for the Company to fulfill its obligations
related to commercial bills. As of December 31, 2023, the Company has had a bank credit line of RMB32,140.3422 million granted by
several domestic banks, RMB12,031.9544 million of which has been used.
As of December 31, 2023, all the financial liabilities and off-balance sheet guarantees of the Company are presented at undiscounted
contractual cash flows by maturity date as follows:
Item Closing balance
Less than 1 year 1-5 years Total
208
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Non-derivative financial
liabilities
Short-term borrowings 7,290,694,906.27 7,290,694,906.27
Notes payable 802,933,704.02 802,933,704.02
Accounts payable 1,441,243,438.57 167,066,177.89 1,608,309,616.46
Other payables 134,044,694.47 110,653,607.86 244,698,302.33
Long-term borrowings 1,088,108,156.55 4,685,315,817.70 5,773,423,974.25
Bonds payable 6,070,366.96 435,900,486.76 441,970,853.72
Subtotal of non-derivative
10,763,095,266.84 5,398,936,090.21 16,162,031,357.05
financial liabilities
Total 10,763,095,266.84 5,398,936,090.21 16,162,031,357.05
Market risk
1. Exchange rate risk
The Company’s major operational activities are carried out in China, and its main business is settled in RMB. However, the recognized
assets and liabilities denominated in foreign currencies and future transactions denominated in foreign currencies (the assets and
liabilities denominated in foreign currencies and transactions denominated in foreign currencies are mainly denominated in USD, EUR
and JPY) still have exchange rate risk. The financial department of the Company is responsible for monitoring the scale of transactions
denominated in foreign currencies and assets and liabilities of the Company denominated in foreign currencies to minimize the
exchange rate risk; therefore, the Company may sign forward foreign exchange contracts or currency swap contracts to avoid exchange
rate risk.
(1) There was on forward exchange contracts or currency swap contracts signed by the Company for the year.
(2) As of December 31, 2023, the financial assets and the financial liabilities denominated in foreign currencies held by the Company, are
expressed in RMB as follows:
Item Closing balance
USD JPY EUR HKD HUF Total
Financial assets
denominated in
foreign currencies:
Monetary capital 175,200,583.29 38,804,997.16 136,889,074.35 8.36 6,965,709.45 357,860,372.61
Accounts receivable 493,310,570.69 58,327,397.30 3,925,604.54 555,563,572.53
Subtotal 668,511,153.98 97,132,394.46 140,814,678.89 8.36 6,965,709.45 913,423,945.14
Financial liabilities
denominated in
foreign currencies:
Accounts payable 240,104,051.22 150,639.00 637,091.90 240,891,782.12
Sub-total 240,104,051.22 150,639.00 637,091.90 240,891,782.12
(3) Sensitivity analysis:
As of December 31, 2023, for all kinds of USD, EUR and JPY financial assets and USD, EUR and JPY financial liabilities of the
Company, if RMB appreciates or depreciates 10% against USD, EUR and JPY, and other factors remain unchanged, the Company will
reduce or increase its net profit by about RMB57.1652 million (about RMB35.2179 million in 2022).
2. Interest rate risk
The interest rate risk of the Company mainly derives from bank loans and others. The financial liabilities at floating interest rate expose
209
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
the Company to the interest rate risk of cash flow, and financial liabilities with fixed interest rate expose the Company to the interest
rate risk of fair value. The company determines the relative proportion of fixed rate and floating rate contracts according to the market
environment at that time.
The financial department of the Company continuously monitors the interest rate level of company. The rising interest rate will increase
the cost of new interest-bearing debt and the interest expense of the outstanding interest-bearing debt at floating interest rate, and
have a significant adverse impact on the financial performance of company. The management will make timely adjustments according
to the latest market conditions, which may be interest rate swap arrangements to reduce interest rate risk.
(1) The Company had no significant interest rate swap arrangements this year.
(2) As of December 31, 2023, the Company’s long-term interest-bearing liabilities were the floating rate contract denominated in
RMB, amounting to RMB5,768.4394 million, as set out in note V. 32.
(3) Sensitivity analysis:
As of December 31, 2023, if the loan interest rate on the floating interest rate borrowings rises or falls by 50 basis points, while other
factors remain unchanged, the Company’s net profit will decrease or increase by about RMB42,246,600 (approximately
RMB29,618,500 in 2022).
The above sensitivity analysis assumes that the interest rate has changed on the balance sheet date and has been applied to all
borrowings obtained by the Company at a floating interest rate.
3. Price risk
Price risk refers to the risk of fluctuation due to the change of market price other than exchange rate risk and interest rate risk, which
mainly comes from the change of commodity price, stock market index, equity instrument price and other risk variables.
210
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
XIII. Disclosure of Fair Value
1. Fair value of assets and liabilities measured at fair value at the end of the period
Unit: RMB
Closing fair value
Item Fair value measured at the Fair value measured at the Fair value measured at the Total
first level second level third level
I. Continuous fair value
-- -- -- --
measurement
(II) Other debt investment 408,354,641.63 408,354,641.63
(III) Other equity instrument
89,000,000.00 89,000,000.00
investment
Total assets measured at fair
497,354,641.63 497,354,641.63
value on a continuous basis
II. Non-continuous fair value
-- -- -- --
measurement
2. Determination basis of the market price of the item measured using the first-level
continuous and non-continuous fair value measurement
None
3. Valuation techniques and qualitative and quantitative information on important
parameters adopted for the second-level continuous and non-continuous fair value measurement
None
4. Valuation techniques and qualitative and quantitative information on important
parameters adopted for the third-level continuous and non-continuous fair value measurement
The non-trading equity instruments at fair value through other comprehensive income held by the Company, whose fair value is
measured at the third level, are mainly the equity investment projects that are not available for verification by data in observable active
markets, for which the financial forecast is made using their own information,
The receivables financing held by the Company were the bank acceptance bills held by the Company, whose remaining life is short and
book value is close to their fair value.
211
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
5. Continuous third-level fair value measurement items, adjustment information between the opening and closing book values and
sensitivity analysis of unobservable parameters
(1) Reconciliation information between opening and closing book values
Changes in
Total gains or losses for the period Purchases, issues, sales and settlements
unrealized
gains or losses
for the period
Transfer into Transfer out included in
Item Opening balance Ending balance
Level 3 of level 3 Charged to Charged to other Issue Sales profit or loss
Purchase Settlement for assets held
profit or loss comprehensive income
at the end of the
Reporting
Period
Receivables financing 692,286,629.08 408,354,641.63 692,286,629.08 408,354,641.63
Investments in other
111,000,000.00 -22,000,000.00 89,000,000.00
equity instruments
Total assets 803,286,629.08 -22,000,000.00 408,354,641.63 692,286,629.08 497,354,641.63
212
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
6. For the continuous fair value measurement items, if there is a conversion between levels in
the current period, describe the reason for the conversion and the policy for determining the time
point of the conversion
The above continuous fair value measurement project of the Company has not changed between different levels in this year.
7. Changes in valuation techniques and the cause of changes in the current period
The fair value valuation technology of the Company’s financial instruments has not changed in this year.
8. Fair value of financial assets and financial liabilities that are not measured at fair value
Financial assets and liabilities not measured at fair value mainly include receivables, short term loans, payables, non-current liabilities
maturing within one year and long-term loans. The difference between book value and fair value of the above financial assets and
liabilities not measured at fair value is very small.
XIV. Related Parties and Related Party Transactions
1. Information about Parent Company of the Company
Description of Information about Parent Company of the Company:
As of December 31, 2023, the actual controller of the Company was the Paul Xiaoming Lee family. The Paul Xiaoming Lee family held
41.60% of the Company’s shares directly and indirectly, and actually controlled the Company. The shareholding of Paul Xiaoming Lee’s
family is as follows: his family member Paul Xiaoming Lee holds 13.03% of the shares directly, his family member Li Xiaohua holds
6.93% of the shares directly, his family member Sherry Lee holds 7.29% of the shares directly, and his family member Jerry Yang Li
holds 1.51% of the shares directly. Paul Xiaoming Lee’s family members indirectly hold 12.84% equity of the Company through Yuxi
Heyi Investment Co., Ltd, Yuxi Heli Investment Co., Ltd and Shanghai Hengzou Enterprise Management Firm (Limited Partnership).
The ultimate controller of the Company was the Paul Xiaoming Lee family.
Other explanations:
2. Information about subsidiaries of the Company
Please refer to Note X (I). Interest in Subsidiaries for details of the subsidiaries of the Company.
3. Information about joint ventures and associates of the Company
Please refer to Note X (II). Equity in Joint Ventures or Associates Enterprises for details of joint ventures and associates of the
Company.
Information on other associates or joint ventures which have related-party transactions with the Company in the current period or whose
related-party transactions with the Company produced balance in previous years is as follows:
Name of joint venture or associate Relationship with the Company
Yuxi Kunshasi Plastic Masterbatch Co., Ltd. An associate of the Company
Other explanation:
4. Information about Other Related Parties
Name of other related party Relationship with the Company
Yuxi Heli Investment Co., Ltd. Shareholder
Yuxi Heyi Investment Co., Ltd. Shareholder
Zhuhai Chenyu New Material Technology Co., Ltd. Li Xiaohua, one of the actual controllers of the Company, vice chairman
and general manager, holds 5% of its equity interests, and Shanghai
Energy New Material Technology Co., Ltd., a subsidiary of the Company,
213
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
holds 8% of its equity interests
Suzhou Jiesheng Technology Co., Ltd. Li Xiaohua, one of the actual controllers of the Company, vice chairman
and general manager, serves as its executive director and general manager
Suzhou Fuqiang Technology Co., Ltd. Li Xiaohua, one of the actual controllers of the Company, vice chairman
and general manager, serves as its chairperson
Suzhou Fuqiang Jianeng Machinery Co., Ltd. Li Xiaohua, one of the actual controllers of the Company, vice chairman
and general manager, serves as its chairperson
Changshu Juxing Machinery Co., Ltd. Li Xiaohua, one of the actual controllers of the Company, vice chairman
and general manager, serves as its executive director and general manager
Paul Xiaoming Lee Main member of the ultimate controller family
Li Xiaohua Main member of the ultimate controller family
Sherry Lee Main member of the ultimate controller family
Jerry Yang Li Main member of the ultimate controller family
Industrial and Commercial Bank of China Limited The spouse of Ms. Zheng Haiying, an independent Director who ceased to
hold office on March 24, 2023, is a non-executive Director of ICBC
Other explanations:
5. Related party transactions
(1) Related party transactions on purchase and sales of goods and rendering and receiving of
services
Statement of purchase of goods/acceptance of services
Unit: RMB
Particulars of Related Amount for the Approved transaction Whether exceeding the Amount for the previous
Related party party transaction current period limit transaction limit period
Yuxi Kunshasi Plastic Purchase ofadditives 40,000,000.00-
29,859,590.68 No 35,018,727.82
Masterbatch Co., Ltd. 55,000,000.00
Zhuhai Chenyu New Procurement of
Not more than
Material Technology materials 112,972,507.96 No 93,132,510.82
283,500,000.00
Co., Ltd.
Suzhou Jiesheng Purchase of
Not more than
Technology Co., Ltd. equipment and spare 271,815,892.27 No 103,670,771.66
324,970,300.00
and its subsidiaries parts
Total 414,647,990.91 No 231,822,010.30
Statement of sales of goods/rendering ofservices
Unit: RMB
Particulars of related party
Related party transaction Amount for the current period Amount for the previous period
Yuxi Kunshasi Plastic Masterbatch
8,394,304.54 10,055,309.73
Co., Ltd. Sales of raw materials
Zhuhai Chenyu New Material Sales of packaging materials
1,114,800.87 125,486.73
Technology Co., Ltd.
Total 9,509,105.41 10,180,796.46
Description of related-party transactions on purchase and sales of goods and rendering and receiving of services
(2) Related party trustee management/contracting and proxy management/ situation of outsourcing: None
(3) Leases with related parties
The Company as the lessor:
214
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Unit: RMB
Lessee’s name Type of leased assets Rental income recognized for the Rental income recognized in the
period previous period
Yuxi Heli Investment Co., Ltd. Office 2,285.72 2,285.72
Yuxi Heyi Investment Co., Ltd. Office 3,077.77 3,142.84
Yuxi Kunshasi Plastic Masterbatch Workshop
22,018.34 22,857.14
Co., Ltd.
Total 27,381.83 28,285.70
The Company as a Lessee: None
(4) Related party guarantees
The Company as the guarantor
Unit:
RMB
Commencement date of Whether the
Secured party Guarantee amount guarantee Expiry date of guarantee guarantee has
been fully
fulfilled
Yunnan Hongta Plastic Co., Ltd. 44,000,000.00 April 25, 2023 March 24, 2024 No
Yunnan Hongta Plastic Co., Ltd. 40,000,000.00 November 9, 2020 October 23, 2025 No
Yunnan Hongta Plastic Co., Ltd. 78,000,000.00 November 29, 2021 November 29, 2024 No
Yunnan Hongta Plastic Co., Ltd. 51,650,000.00 May 5, 2022 May 4, 2025 No
Yunnan Hongta Plastic Co., Ltd. 80,000,000.00 October 24, 2022 October 23, 2026 No
Yunnan Hongta Plastic Co., Ltd. 35,000,000.00 March 18, 2023 March 18, 2026 No
Yunnan Hongta Plastic Co., Ltd. 100,000,000.00 March 30, 2023 March 30, 2024 No
Yunnan Hongta Plastic Co., Ltd. 129,000,000.00 July 7, 2023 April 6, 2026 No
Yunnan Hongta Plastic Co., Ltd. 60,000,000.00 July 15, 2023 July 15, 2025 No
Yunnan Hongta Plastic Co., Ltd. 50,000,000.00 August 21, 2023 August 21, 2024 No
Yunnan Hongta Plastic Co., Ltd. 50,000,000.00 August 25, 2023 August 10, 2024 No
Yunnan Dexin Paper Co., Ltd. 8,000,000.00 March 30, 2021 December 31, 2024 No
Yunnan Dexin Paper Co., Ltd. 10,000,000.00 June 7, 2022 December 31, 2024 No
Yunnan Dexin Paper Co., Ltd. 10,000,000.00 October 24, 2022 October 23, 2026 No
Yunnan Dexin Paper Co., Ltd. 20,000,000.00 March 30, 2023 March 30, 2024 No
Yunnan Dexin Paper Co., Ltd. 20,000,000.00 April 18, 2023 April 18, 2026 No
Yunnan Hongchuang Packaging Co., April 25, 2023 March 24, 2024
66,000,000.00 No
Ltd.
Yunnan Hongchuang Packaging Co., February 23, 2022 February 23, 2027
50,000,000.00 No
Ltd.
Yunnan Hongchuang Packaging Co., March 1, 2022 March 1, 2025
30,000,000.00 No
Ltd.
Yunnan Hongchuang Packaging Co., March 15, 2022 March 15, 2025
56,000,000.00 No
Ltd.
Yunnan Hongchuang Packaging Co., March 21, 2022 March 20, 2025
162,000,000.00 No
Ltd.
Yunnan Hongchuang Packaging Co., May 1, 2022 April 30, 2024
40,000,000.00 No
Ltd.
Yunnan Hongchuang Packaging Co., October 21, 2022 October 20, 2026
120,000,000.00 No
Ltd.
Yunnan Hongchuang Packaging Co., 40,000,000.00 December 20, 2022 December 19, 2023 No
215
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Commencement date of Whether the
Secured party Guarantee amount guarantee Expiry date of guarantee guarantee has
been fully
fulfilled
Ltd.
Yunnan Hongchuang Packaging Co., March 30, 2023 March 30, 2024
110,000,000.00 No
Ltd.
Yunnan Hongchuang Packaging Co., June 27, 2023 June 26, 2024
8,438,340.60 No
Ltd.
Yunnan Hongchuang Packaging Co.,
Ltd., Shanghai Energy New Material
Technology Co., Ltd., Wuxi Energy
392,249,000.00 No
New Material Technology Co., Ltd.,
Jiangxi Energy New Material November 30, 2020 May 30, 2028
Technology Co., Ltd.
Yunnan Hongchuang Packaging Co., August 8, 2023 August 8, 2024
100,000,000.00 No
Ltd.
Yunnan Hongchuang Packaging Co., September 22, 2023 September 22, 2026
60,000,000.00 No
Ltd.
Hongta Plastic (Chengdu) Co., Ltd. 75,000,000.00 July 24, 2023 December 31, 2024 No
Hongta Plastic (Chengdu) Co., Ltd. 30,000,000.00 November 23, 2023 November 22, 2024 No
Shanghai Energy New Material September 28, 2020 September 27, 2027
856,000,000.00 No
Technology Co., Ltd.
Shanghai Energy New Material February 7, 2022 February 7, 2027
660,000,000.00 No
Technology Co., Ltd.
Shanghai Energy New Material November 30, 2020
110,000,000.00 No
Technology Co., Ltd.
Shanghai Energy New Material June 5, 2022 June 4, 2025
240,000,000.00 No
Technology Co., Ltd.
Shanghai Energy New Material June 9, 2022 June 8, 2025
900,000,000.00 No
Technology Co., Ltd.
Shanghai Energy New Material June 10, 2022 June 10, 2027
46,225,860.00 No
Technology Co., Ltd.
Shanghai Energy New Material March 5, 2021 March 5, 2026
450,000,000.00 No
Technology Co., Ltd.
Shanghai Energy New Material
Technology Co., Ltd.、Wuxi Energy 100,000,000.00 December 28, 2022 June 28, 2024 No
New Material Technology Co., Ltd.
Shanghai Energy New Material August 18, 2022 August 18, 2027
300,000,000.00 No
Technology Co., Ltd.
Shanghai Energy New Material
Technology Co., Ltd., Zhuhai Energy 343,820,000.00 April 10, 2023 April 10, 2026 No
New Material Technology Co., Ltd.
Shanghai Energy New Material April 18, 2023 April 17, 2024
200,000,000.00 No
Technology Co., Ltd.
Shanghai Energy New Material April 12, 2023 April 11, 2024
200,000,000.00 No
Technology Co., Ltd.
Shanghai Energy New Material April 11, 2023 April 10, 2024
120,000,000.00 No
Technology Co., Ltd.
Shanghai Energy New Material April 23, 2023 April 17, 2024
800,000,000.00 No
Technology Co., Ltd.
Shanghai Energy New Material May 4, 2023 May 4, 2025
586,959,000.00 No
Technology Co., Ltd.
Shanghai Energy New Material July 7, 2023 July 6, 2024
500,000,000.00 No
Technology Co., Ltd.
Shanghai Energy New Material August 1, 2023 August 1, 2038
1,200,000,000.00 No
Technology Co., Ltd.
Shanghai Energy New Material 875,000,000.00 July 27, 2023 July 20, 2024 No
216
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Commencement date of Whether the
Secured party Guarantee amount guarantee Expiry date of guarantee guarantee has
been fully
fulfilled
Technology Co., Ltd.
Shanghai Energy New Material September 20, 2023 September 20, 2025
209,000,000.00 No
Technology Co., Ltd.
Shanghai Energy New Material October 27, 2023 October 26, 2025
165,000,000.00 No
Technology Co., Ltd.
Shanghai Energy New Material November 10, 2023 October 12, 2024
606,000,000.00 No
Technology Co., Ltd.
Shanghai Energy New Material November 13, 2023 July 11, 2024
196,000,000.00 No
Technology Co., Ltd.
Shanghai Energy New Material December 22, 2023 December 21, 2027
500,000,000.00 No
Technology Co., Ltd.
Shanghai Energy New Material December 27, 2023 December 27, 2024
50,000,000.00 No
Technology Co., Ltd.
Shanghai Energy New Material December 12, 2023 December 11, 2024
200,000,000.00 No
Technology Co., Ltd.
Zhuhai Energy New Material February 21, 2023 February 21, 2028
200,000,000.00 No
Technology Co., Ltd.
Zhuhai Energy New Material September 1, 2021 December 31, 2023
220,000,000.00 No
Technology Co., Ltd.
Zhuhai Energy New Material January 19, 2022 January 11, 2023
300,000,000.00 No
Technology Co., Ltd.
Zhuhai Energy New Material February 7, 2022 February 6, 2025
270,000,000.00 No
Technology Co., Ltd.
Zhuhai Energy New Material July 8, 2022 July 8, 2026
100,000,000.00 No
Technology Co., Ltd.
Zhuhai Energy New Material September 23, 2022 September 22, 2023
32,000,000.00 No
Technology Co., Ltd.
Zhuhai Energy New Material September 7, 2022 August 29, 2023
300,000,000.00 No
Technology Co., Ltd.
Zhuhai Energy New Material October 27, 2022 October 26, 2023
200,000,000.00 No
Technology Co., Ltd.
Zhuhai Energy New Material May 11, 2023 May 10, 2024
200,000,000.00 No
Technology Co., Ltd.
Zhuhai Energy New Material July 13, 2023 July 14, 2025
300,000,000.00 No
Technology Co., Ltd.
Zhuhai Energy New Material May 29, 2023 May 29, 2026
150,000,000.00 No
Technology Co., Ltd.
Wuxi Energy New Material August 7, 2021 August 7, 2024
100,000,000.00 No
Technology Co., Ltd.
Wuxi Energy New Material October 8, 2022 October 7, 2023
100,000,000.00 No
Technology Co., Ltd.
Wuxi Energy New Material
Technology Co., Ltd., Jiangxi Tonry
New Energy Technology
Development Co., Ltd., Suzhou
GreenPower New Energy Materials
Co., Ltd., Chongqing Energy New
Material Technology Co., Ltd.,
Jiangxi Ruijie New Material 700,000,000.00 May 6, 2022 April 10, 2026 No
Technology Co., Ltd., Jiangxi Energy
New Material Technology Co., Ltd.,
Jiangsu Ruijie New Materials
Technology Co., Ltd., Jiangxi Enpo
New Materials Co., Ltd., Hubei
Energy New Material Technology
Co., Ltd., Jiangsu Sanhe Battery
217
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Commencement date of Whether the
Secured party Guarantee amount guarantee Expiry date of guarantee guarantee has
been fully
fulfilled
Material Technology Co., Ltd., Yuxi
Energy New Material Co., Ltd.
Wuxi Energy New Material
Technology Co., Ltd., Jiangxi Tonry
New Energy Technology
Development Co., Ltd., Suzhou
GreenPower New Energy Materials
Co., Ltd., Chongqing Energy New
Material Technology Co., Ltd.,
Jiangxi Ruijie New Material
Technology Co., Ltd., Jiangxi Energy
New Material Technology Co., Ltd.,
Jiangsu Ruijie New Materials
Technology Co., Ltd., Jiangxi Enpo 3,000,000,000.00 March 1, 2023 December 31, 2024 No
New Materials Co., Ltd., Hubei
Energy New Material Technology
Co., Ltd., Jiangsu Sanhe Battery
Material Technology Co., Ltd., Yuxi
Energy New Material Co., Ltd.,
Xiamen Energy New Materials Co.,
Ltd., Chongqing Energy Newmi
Technological Co., Ltd., Jiangxi
Energy New Material Technology
Co., Ltd., Jiangxi Energy New
Materials Technology Co., Ltd.
Wuxi Energy New Material
Technology Co., Ltd., Jiangxi Tonry
New Energy Technology
Development Co., Ltd., Suzhou
GreenPower New Energy Materials
Co., Ltd., Chongqing Energy New
Material Technology Co., Ltd.,
Jiangxi Ruijie New Material
Technology Co., Ltd., Jiangxi Energy
1,500,000,000.00 April 10, 2023 April 10, 2026 No
New Material Technology Co., Ltd.,
Jiangsu Ruijie New Materials
Technology Co., Ltd., Jiangxi Enpo
New Materials Co., Ltd., Hubei
Energy New Material Technology
Co., Ltd., Yuxi Energy New Material
Co., Ltd., Xiamen Energy New
Materials Co., Ltd., Jiangxi Energy
New Material Technology Co., Ltd.
Wuxi Energy New Material
Technology Co., Ltd., Jiangxi Tonry
New Energy Technology
Development Co., Ltd., Suzhou
GreenPower New Energy Materials
Co., Ltd., Chongqing Energy New
Material Technology Co., Ltd.,
Jiangxi Ruijie New Material
Technology Co., Ltd., Jiangxi Energy
New Material Technology Co., Ltd., 1,500,000,000.00 April 11, 2022 April 11, 2025 No
Jiangsu Ruijie New Materials
Technology Co., Ltd., Jiangxi Enpo
New Materials Co., Ltd., Hubei
Energy New Material Technology
Co., Ltd., Jiangsu Sanhe Battery
Material Technology Co., Ltd., Yuxi
Energy New Material Co., Ltd.,
Xiamen Energy New Materials Co.,
Ltd.
Wuxi Energy New Material 70,000,000.00 May 18, 2023 May 11, 2024 No
218
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Commencement date of Whether the
Secured party Guarantee amount guarantee Expiry date of guarantee guarantee has
been fully
fulfilled
Technology Co., Ltd.
Wuxi Energy New Material August 31, 2023 July 24, 2024
200,000,000.00 No
Technology Co., Ltd.
Wuxi Energy New Material November 6, 2023 July 3, 2024
150,000,000.00 No
Technology Co., Ltd.
Jiangxi Tonry New Energy January 22, 2021 January 21, 2024
135,000,000.00 No
Technology Development Co., Ltd.
Jiangxi Tonry New Energy May 24, 2023 June 23, 2024
100,000,000.00 No
Technology Development Co., Ltd.
Jiangxi Tonry New Energy May 24, 2023 June 23, 2024
100,000,000.00 No
Technology Development Co., Ltd.
Jiangxi Tonry New Energy May 24, 2023 June 23, 2024
100,000,000.00 No
Technology Development Co., Ltd.
Jiangxi Tonry New Energy August 4, 2023 August 4, 2024
200,000,000.00 No
Technology Development Co., Ltd.
Jiangxi Tonry New Energy September 15, 2023 October 14, 2024
50,000,000.00 No
Technology Development Co., Ltd.
Jiangxi Tonry New Energy October 31, 2023 October 31, 2024
100,000,000.00 No
Technology Development Co., Ltd.
Suzhou GreenPower New Energy March 9, 2022 March 9, 2027
104,000,000.00 No
Materials Co., Ltd.
Suzhou GreenPower New Energy November 30, 2021 November 30, 2026
100,000,000.00 No
Materials Co., Ltd.
Suzhou GreenPower New Energy December 27, 2023 November 20, 2024
100,000,000.00 No
Materials Co., Ltd.
Chongqing Energy New Material December 27, 2023 October 8, 2024
300,000,000.00 No
Technology Co., Ltd.
Jiangxi Ruijie New Material April 12, 2023 April 12, 2030
400,000,000.00 No
Technology Co., Ltd.
SEMCORP HUNGARY LIMITED July 14, 2021 July 13, 2026
1,000,000,000.00 No
LIABILITY COMPANY
SEMCORP HUNGARY LIMITED December 27, 2021 December 26, 2025
450,000,000.00 No
LIABILITY COMPANY
Jiangxi Energy New Material August 7, 2023 August 6, 2024
200,000,000.00 No
Technology Co., Ltd.
Hubei Energy New Material May 24, 2023 May 23, 2028
495,000,000.00 No
Technology Co., Ltd.
Hubei Energy New Material May 24, 2023 November 21, 2032
1,650,000,000.00 No
Technology Co., Ltd.
Yuxi Energy New Material Co., Ltd. 500,000,000.00 November 24, 2022 November 23, 2025 No
Yuxi Energy New Material Co., Ltd. 1,000,000,000.00 March 1, 2023 December 31, 2026 No
Yuxi Energy New Material Co., Ltd. 800,000,000.00 October 26, 2023 October 25, 2032 No
Shanghai Energy Trading Co., Ltd. 10,000,000.00 September 21, 2023 September 20, 2024 No
Hongchuang Packaging (Anhui) Co., November 15, 2023 November 14, 2024
210,000,000.00 No
Ltd.
Jiangxi Tonry New Energy December 28, 2023 December 27, 2024
500,000,000.00 No
Technology Development Co., Ltd.
Jiangxi Tonry New Energy June 10, 2021 April 9, 2024
1,800,000,000.00 No
Technology Development Co., Ltd.
Jiangxi Enpo New Materials Co., Ltd. 1,800,000,000.00 June 10, 2021 April 9, 2024 No
Jiangxi Tonry New Energy September 17, 2019 December 31, 2024
1,500,000,000.00 No
Technology Development Co., Ltd.
219
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
The Company as the secured party
Unit: RMB
Commencement date of Whether the guarantee has
Guarantor Guarantee amount guarantee Expiry date of guarantee been fully fulfilled
Yunnan Dexin Paper Co., 15 July, 2023 15 July, 2025 No
50,000,000.00
Ltd.
Description of related guarantees
(5) Remuneration for key management
Item Amount for current period Amount for previous period
Remuneration for key management personnel 8,565,304.72 12,889,745.41
Unit: RMB
(6) Other related party transactions
Type of transaction Name of related party Amount for the Amount for the Pricing method and
current period previous period Procedure for decision-
making
Loans with related banks (including applicationIndustrial and Market price / as approved at
for comprehensive facility, acceptance draft,Commercial Bank of2,357,627,477.75 791,539,307.31 the General Meeting of
letter of credit, bank guarantee, etc.) China Limited Shareholders
Deposits with related banks (including demand Industrial and Market price / as approved at
deposits, time deposits, call deposits, etc.) Commercial Bank of125,874,834.09 165,881,639.38 the General Meeting of
China Limited Shareholders
Mutual guarantees between companies within Industrial and Market price / as approved at
the scope of the company’s consolidated Commercial Bank of4,987,000,000.00 4,016,900,000.00 the General Meeting of
financial statements through the related banks China Limited Shareholders
6. Amounts due to and due from related parties
(1) Receivable
Unit: RMB
Closing balance Opening balance
Item Related party Provision for bad
Book balance Book balance Provision for bad debt
debt
Zhuhai Chenyu New
Accounts receivable Material Technology Co., 1,294,218.60 11,840.48
Ltd.
Other non-current Suzhou Fuqiang Jianeng
43,734,000.00
asset Machinery Co., Ltd.
Other non-current Changshu Juxing
155,840,000.00 93,548,000.00
asset Machinery Co., Ltd.
(2) Payables
Unit: RMB
Book balance at the end of the Book balance at the beginning of
Item Related party Reporting Period the Reporting
Yuxi Kunshasi Plastic Masterbatch Co., Ltd.
7,565,425.22 9,291,722.26
Accounts payable
220
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Accounts payable Suzhou Jiesheng Technology Co., Ltd 10,751,701.00
Accounts payable Suzhou Fuqiang Technology Co., Ltd. 31,914,852.79 19,539,555.22
Accounts payable Zhuhai Chenyu New Material Technology
26,867,834.58 44,210,584.04
Co., Ltd.
XV. Share-based Payment
1. General information about share-based payment
Applicable □Not applicable
Unit: RMB
Exercise for the
Category of Grant for the period Unlock for the period Lapse for the period
period
grantee
Number Amount Number Amount Number Amount Number Amount
Sales 14,866.00 954,099.88 1,996.00 128,103.28
Management 180,000.00 990,000.00 325,126.00 20,866,586.68 118,876.00 4,108,661.68
R&D 73,547.00 4,720,246.46 5,654.00 362,873.72
Production 38,624.00 2,478,888.32 121,792.00 775,010.56
Total 180,000.00 990,000.00 452,163.00 29,019,821.34 248,318.00 5,374,649.24
Options or other equity instruments outstanding at the end of the period
Applicable □Not applicable
Other equity instruments outstanding at the end of the
Options outstanding at the end of the period
period
Category of grantee
Range of option exercise Remaining contractual Range of option exercise Remaining contractual
price term price term
Sales RMB265.36 per share 2 months and 14 months
Management RMB265.36 per share 2 months and 14 months
R&D RMB265.36 per share 2 months and 14 months
Production RMB265.36 per share 2 months and 14 months
Oher explanations:
2. Information on equity-settled share-based payment
Applicable □Not applicable
Unit: RMB
(1) The fair value of restricted shares is recognized at the closing price
Determination method of the fair value of equity instruments on the
on the grant date; (2) The fair value of stock options is recognized by
grant date
Black-Scholes model
Important parameters of fair value of equity instruments at grant date Historical volatility, risk-free return rate, dividend yield
On each balance sheet date of lock-up periods, the estimation shall be
Basis for determining the number of vested equity instruments made according to the latest number of people whose stock options are
vested, performance indicators and other follow-up information
Reasons for significant differences between the current estimates and
N/A
the previous estimates
Accumulated amount of equity-settled share-based payment included in
107,091,049.60
capital reserve
Total expenses recognized for equity-settled share-based payment in
24,097,017.37
the current period
Other explanation:
221
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
3 Information on cash-settled share-based payment
□Applicable Not applicable
4. Share-based payment for the period
Applicable □Not applicable
Unit: RMB
Information on equity-settled share- Information on cash-settled share-based
Category of grantee
based payment payment
Sales 590,797.55
Management 12,760,449.61
R&D 3,362,613.46
Production 7,383,156.75
Total 24,097,017.37
Other explanation:
XVI. Commitments and Contingencies
1. Significant commitments
Significant commitments on the balance sheetdate
(1) Mortgage of assets
As of December 31, 2023, the Company has obtained the bank’s comprehensive credit line with the mortgage of property and plant in fixed
assets, machinery and equipment, land use right in intangible assets and construction in progress of RMB899,074,100. See note VII 61 for
more.
(2) Pledge of assets
As of December 31, 2023, the Company obtained bank loans of RMB1,280,093,900 by pledging certificate of deposit, notes receivable, and 100%
equity interest in its sub-subsidiary Suzhou GreenPower New Energy Materials Co., Ltd. For details, see note VII 22, 32 and 61.
2. Contingencies
(1) Significant contingencies on the balance sheet date
1) Contingencies arising from pending litigation or arbitration and their financial impacts
The controlling subsidiary of the Company, Shanghai Energy New Material Technology Co., Ltd. and its subsidiary, Zhuhai Energy New Material
Technology Co., Ltd. received the subpoena [Case number: No. 2419 and 3054 of Yue 73 Zhi Min Chu (2023)] (【案号为（2023）粤 73 知民初
2419、3054 号】) and the civil indictment and other legal documents served by the Guangzhou Intellectual Property Court on December 15, 2023,
in which Hebei Gellec New Energy Science & Technology Joint Stock Co., Ltd. (“Gellec”) filed a lawsuit against Shanghai Energy and Zhuhai
Energy. In its lawsuit, Gellec claimed that Shanghai Energy and Zhuhai Energy infringed its patent rights and applied for financial compensation in
total of RMB149 million. As of December 31, 2023, this lawsuit has not yet been heard and the final verdict is uncertain.
2) Contingencies arising from external debt guarantee and their financial implications
For details of guarantees provided to related parties, please refer to Note XII, Related Guarantees for Related Party Transactions
3) Letter of guarantee and letter of credit
As of December 31, 2023, the balance of letters of credit issued by financial institutions for the Company was RMB333,078,202.82,
USD1,747,755.00, JPY21,644,516,000.00 and Euro444,444.40, and the amount of the L/G was RMB211,428,000.00 and Euro1,023,300.00.
222
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
As at 31 December 2023, except for the disclosures above, there were no other major contingencies that are required to be disclosed.
(2) Where the Company has no disclosable significant contingencies, relevant explanations should be made:
The Company has no significant contingencies to disclose.
XVII. Events Subsequent to the Balance Sheet Date
1. Profit distribution
Based on the total share capital of the Company as at April 11, 2024 after deducting 10,412,256 shares from the special securities account for
repurchase of the Company, namely 967,342,327 shares, distribute RMB15.51 in cash (inclusive of tax) for every 10 shares to all shareholders,
distribute a total cash dividend of RMB1,500,000,000.00 billion, distribute no dividend shares, convert no surplus reserve into share capital.
In accordance with the relevant provisions of Self-Regulatory Guidelines for Listed Companies of the Shenzhen Stock Exchange No. 9– Share
Repurchase, the Company’s share repurchase amount of RMB549,976,686.75 (excluding transaction expenses such as commission fee and stock
exchange fee) implemented in 2023 is deemed as cash dividend.
If the total share capital of the Company entitled to the profit distribution rights changes due to the listing of newly issued shares, exercise of equity
incentive scheme, convertible bonds, share repurchase and other matters during the period from April 11, 2024 to the implementation of the
distribution plan, the distribution ratio will be adjusted according to the principle that the total distribution amount remains unchanged.
2. Details of other events after the balance sheet date
The subsidiary of the Company, Jiangxi Tonry New Energy Technology Development Co., Ltd. received the Copy List from the Office of the
People’s Government of Gao’an City (《高安市人民政府办公室抄告单》) on January 30, 2024, and the People’s Government of Gao’an City
agreed to, in accordance with the joint acceptance determination of the relevant authorities for 9-16 separation film production lines of Jiangxi
Tonry (including the supporting in-line coating line) and the 5 off-line coating line, transfer the remaining borrowings of Jiangxi Tonry from the
People’s Government of Gao’an City of RMB455,517,694.55 into project support funds. This government subsidy is not sustainable.
Except for the above events after the balance sheet date, as at the date of approval of the financial statements, the Company has no
other significant events after the balance sheet date that need to be disclosed but have not been disclosed.
XVIII. Other Significant Events
1. Segment information
(1) Determination basis and accounting policy of reporting segments
The Company determines the business segment based on its internal organizational structure, management requirements and internal
reporting system. The operating segments of the Company refer to the components meeting the following conditions at the same time:
1) The component can generate income and expenses in daily activities;
2) The management can regularly evaluate the operation results of the component to decide to allocate resources to it and evaluate its performance;
3) The relevant accounting information can be obtained from the financial status, operating results and cash flow of the component.
The Company determines the reporting segment based on the operating segment, and the operating segment meeting one of the following
conditions is determined as the reporting segment:
1) The segment revenue of the business segment accounts for 10% or more of the total revenue of allsegments;
2) The absolute profit (loss) of the segment accounts for 10% or more of the absolute sum of the total profits of all profit segments or
the total losses of all deficit segments.
When the total amount of external transaction revenue of the operating segment of the reporting segment determined according to the
223
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
above accounting policies does not account for 75% of the total consolidated revenue, increase the number of reporting segments, and
include other operating segments not as reporting segments into the scope of reporting segments according to the following provisions
until the proportion reaches 75%:
1) Determine the operating segment that the management believes the disclosure of the operating segment information is useful to the
users of accounting information as the reporting segment;
2) The business segment is merged with one or more other business segments which have similar economic characteristics and meet
the merger conditions of the business segment as a reporting segment.
The transfer price between segments is determined by referring to the market price, and the assets and related expenses used together with
each segment are distributed among different segments according to the income proportion.
(2) The Company’s factors considered in determining the reporting segment, and the types of products and services of the
reporting segment:
The report segments of the Company are all business units providing different products and services. As various businesses require
different technologies and market strategies, the Company independently manages the production and operation activities of each
reporting segment, and separately evaluates its operating results to determine its allocation of resources and evaluate its performance.
The Company has 2 reporting segments: the lithium battery separator business segment and the BOPP film business segment. The
lithium battery separator business segment is responsible for the production of lithium battery separator, which is mainly used for the
production of EV batteries and 3C product batteries; the BOPP film business segment is responsible for the production of BOPP film,
which is mainly used for the outer packaging of cigarette boxes, food and other products.
(3) Financial information of reporting segments
Closing balance/ amount for the period
Lithium battery BOPP film business Elimination
Item separation film segment Others Total
business segment
Operating income 1,037,845.73 69,893.05 104,748.68 -8,264.48 1,204,222.98
Including: Income from
1,037,845.73 69,893.05 96,484.20 1,204,222.98
external trade
Income from inter-segment trade 8,264.47 -8,264.47
Operating cost 780,095.67 65,803.65 68,291.27 -9,304.25 904,886.34
Including: Depreciation and
126,902.75 2,672.79 483,366.63 1,297.26 614,239.43
amortization costs
Income from investment in
135.11 135.11
joint ventures and associates
Asset impairment losses -292.61 -178.41 701.75 156.52 387.25
Credit impairment losses 18,015.71 75.69 546.22 18,637.62
Total profit 260,325.61 4,740.07 221,685.32 -184,116.75 302,634.25
Income tax expense 29,647.77 269.61 7,474.62 220.81 37,612.81
Net profit 230,677.84 4,470.46 214,210.70 -184,337.56 265,021.44
Total assets 4,305,696.00 105,673.32 2,252,334.10 -1,986,898.64 4,676,804.78
Total liabilities 3,079,203.95 52,776.59 170,908.93 -1,481,854.52 1,821,034.95
XIX. Notes to Major Items of Financial Statements of the Parent Company
1. Accounts receivable
224
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
(1) Disclosure by age
Unit: RMB
Aging Closing book balance Opening book balance
Less than 1 year (inclusive) 14,842,420.52 33,092,406.15
1 to 2 years 32,553.90
2 to 3 years 5,927.37
Over 3 years 5,927.37
3 to 4 years 5,927.37
Total 14,848,347.89 33,130,887.42
(2) Disclosure by bad debt provision method
Unit: RMB
Closing balance Opening balance
Provision for bad
Book balance Provision for bad debts Book balance
Category Book debts Book
Percentag value Percentag Proporti value
Amount Amount Proportion Amount Amount
e e on
Accounts
receivable
subject to
provision
for bad
5,390.00 0.04% 5,390.00 100.00%
debt
made on
an
individual
basis
Including:
Accounts
receivable
subject to
provision
14,842,957 14,842,1 33,130,887. 33,130,27
for bad 99.96% 816.42 0.01% 100.00% 617.05 0.00%
.89 41.47 42 0.37
debt
made on a
portfolio
basis
Including:
Ageing 697,344. 25,100,634. 25,100,01
698,160.59 4.70% 816.42 0.12% 75.76% 617.05 0.00%
portfolio 17 86 7.81
Related
parties
portfolio
14,144,797 14,144,7 8,030,252.5 8,030,252
within the 95.30% 24.24%
.30 97.30 6 .56
scope of
consolidat
ion
Total 14,848,347 14,842,1 33,130,887. 33,130,27
100.00% 6,206.42 0.04% 100.00% 617.05 0.00%
.89 41.47 42 0.37
Provision for bad debts made on an individual basis:
Unit: RMB
Closing balance Opening balance
Name Provision for bad Provision for bad
Book balance Book balance Proportion Reason
debts debts
225
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Yunnan Fuyueda
Business and Estimated to be
5,390.00 5,390.00 5,390.00 5,390.00 100.00%
Economy Co. uncollectible
Ltd.
Total 5,390.00 5,390.00 5,390.00 5,390.00
Provision for bad debts made on a portfolio basis:
Unit: RMB
Closing balance
Name
Book balance Provision for bad debts Proportion
Less than 1 year 697,623.22 279.05 0.04%
1-2 years
2-3 years
3-4 years 537.37 537.37 100.00%
Total 698,160.59 816.42
A description of the basis for determining the portfolio:
If provision was made for bad debts of accounts receivable in accordance with the general expected credit loss model:
□Applicable Not applicable
(3) Provision for bad debts accrued, recovered or reversed during the Reporting Period
Provision for bad debts during the Reporting Period:
Unit: RMB
Type Opening Changes in amount for the period
balance Closing balance
Provision Recovery or Write-offs Other
reverse
Provision for bad debts made
5,378.68 11.32 5,390.00
on an individual basis
Provision for bad debts made
617.05 210.69 -11.32 816.42
on an portfolio basis
Portfolio of related parties
within the scope of
consolidation
Total 617.05 5,589.37 6,206.42
Among them, the important amount recovered or reversed of bad debt provision for the period:
Unit: RMB
Basis for determining the
Amount recovered or original bad debt
Company name Reversal reason Recover measure
reversed provision percentage and
its reasonableness
(4) Top five customers with closing balance of accounts receivable and contract assets collected by arrear party
Unit: RMB
Closing balance of
provision for bad
Percentage of total of
Closing balance of debts on accounts
Closing balance of Closing balance of closing balance of
Company name accounts receivable receivable and
accounts receivable contract assets accounts receivable
and contract assets provision for
and contract assets
impairment on
contract assets
Company 1 14,102,187.59 14,102,187.59 94.97%
226
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Company 2 697,623.22 697,623.22 4.70% 279.05
Company 3 40,706.51 40,706.51 0.27%
Company 4 5,390.00 5,390.00 0.04% 5,390.00
Company 5 1,903.20 1,903.20 0.01%
Total 14,847,810.52 14,847,810.52 99.99% 5,669.05
2. Other receivables
Unit: RMB
Item Closing balance Opening balance
Dividends receivable 2,011,040,000.00 211,040,000.00
Other receivables 12,121,782,217.29 6,620,072,472.90
Total 14,132,822,217.29 6,831,112,472.90
(1) Dividends receivable
1) Dividends receivable by type
Unit: RMB
Item (or investee) Closing balance Opening balance
Yunnan Dexin Paper Co., Ltd. 40,000,000.00 70,000,000.00
Shanghai Energy New Material Technology Co.,
1,841,040,000.00 141,040,000.00
Ltd.
Yunnan Hongta Plastic Co., Ltd. 130,000,000.00
Total 2,011,040,000.00 211,040,000.00
(2) Other receivables
1) Information on other receivables by nature
Unit: RMB
Nature of amount Book balance at the end of the period Book balance at the beginning of the period
Security deposit and guarantee deposit 486,939.90
Petty cash 1,464,876.46
Advance money 21,686.80
Others 5,937,803.88 609,566.09
Capital lending 12,116,102,707.88 6,617,788,956.75
Total 12,122,040,511.76 6,620,372,026.00
2) Disclosure by aging
Unit: RMB
Aging Book balance at the end of the period Book balance at the beginning of the period
Less than 1 year (inclusive) 6,349,115,309.07 608,992,319.74
1 to 2 years 584,822,661.99 4,984,332,772.34
2 to 3 years 4,421,873,925.04 1,026,771,717.42
Over 3 years 766,228,615.66 275,216.50
3 to 4 years 766,228,615.66 68,200.00
4 to 5 years 20,000.00
Over 5 years 187,016.50
Total 12,122,040,511.76 6,620,372,026.00
227
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
3) Disclosure by bad debt provision method
Unit: RMB
Closing balance Opening balance
Provision for bad
Book balance Provision for bad debts Book balance
Category Book debts Book
Percentag value Percentag Proporti value
Amount Amount Proportion Amount Amount
e e on
Provision
for bad
debt
187,016. 100.00
made on 187,016.50 0.00%
50 %
an
individual
basis
Including:
Provision
for bad
12,121,7
debt 12,122,040 258,294. 6,620,185,0 112,536. 6,620,072
100.00% 0.00% 82,217.2 100.00% 0.00%
made on a ,511.76 47 09.50 60 ,472.90
9
portfolio
basis
Including:
Ageing 5,937,803. 258,294. 5,679,50 2,396,052.7 112,536. 2,283,516
0.05% 4.35% 0.04% 4.70%
portfolio 88 47 9.41 5 60 .15
Related
parties
portfolio 12,116,1
12,116,102 6,617,788,9 6,617,788
within the 99.95% 02,707.8 99.96%
,707.88 56.75 ,956.75
scope of 8
consolidat
ion
Total 12,121,7
12,122,040 258,294. 6,620,372,0 299,553. 6,620,072
100.00% 0.00% 82,217.2 100.00% 0.01%
,511.76 47 26.00 10 ,472.90
9
Provision for bad debts made on a portfolio basis:
Unit: RMB
Closing balance
Name
Book balance Provision for bad debts Proportion
Less than 1 year 5,716,799.88 248,680.80 4.35%
1-2 years 1,004.00 43.67 4.35%
2-3 years 20,000.00 870.00 4.35%
3-4 years 200,000.00 8,700.00 4.35%
Total 5,937,803.88 258,294.47
A description of the basis for determining the portfolio:
If provision was made for bad debts in accordance with the general expected credit loss model:
Unit: RMB
Stage I Stage II Stage III
Provision for bad debts 12-month ECL Lifetime ECL (not credit- Lifetime ECL Total
impaired) (credit-impaired)
Balance on January 1, 2023 103,436.60 9,100.00 187,016.50 299,553.10
Balance on January 1, 2023
228
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
for the current period
Provision for the period 154,857.87 154,857.87
Reversal for the period 39.90 39.90
Write-off for the period 9,100.00 186,976.60 196,076.60
Balance on December 31,
258,294.47 258,294.47
2023
Basis of classification of each stage and percentage of provision for bad debts
Movement of book balance of significant change in provision for loss for the period
□Applicable Not applicable
4) Provision for bad debts accrued, recovered or reversed during the period
Provision for bad debts during the period:
Unit: RMB
Type Opening Changes in amount for the period
balance Closing balance
Provision Recovery or Offset or Other
reverse write-off
Provision for bad debts
187,016.50 39.90 186,976.60
made on an individual basis
Provision for bad debts
112,536.60 154,857.87 9,100.00 258,294.47
made on a portfolio basis
Total 299,553.10 154,857.87 39.90 196,076.60 258,294.47
5) Other receivables actually written off during the period
Unit: RMB
Item Amount written off
Other receivables actually written off 196,076.60
6) Top five customers with closing balance of other receivables collected by arrear party
Unit: RMB
As a percentage of Closing balance of
Company name Nature of amount Closing balance Aging total closing balance of provision for bad debts
other receivables
Shanghai Energy New Capital lending Less than 1 year, 1-2
Material Technology Co., 5,460,046,571.37 years and 2-3 years 45.04%
Ltd.
Wuxi Energy New Capital lending Less than 1 year, 1-2
Material Technology Co., 3,431,529,640.47 years and 2-3 years 28.31%
Ltd.
Jiangxi Tonry New Capital lending Less than 1 year, 1-2
Energy Technology 2,357,531,428.00 years, 2-3 years and 3- 19.45%
Development Co., Ltd. 4 years
Jiangsu Energy New Capital lending Less than 1 year
Materials Technology 848,676,586.25 7.00%
Co., Ltd.
Shanghai Energy New Capital lending
Materials Research Co., 17,018,481.79 Less than 1 year 0.14%
Ltd.
Total 12,114,802,707.88 99.94%
3. Long-term equity investment
Unit: RMB
229
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Closing balance Opening balance
Item Book balance Provision for Book value Book balance Provision for Book value
impairment impairment
Investment in
4,959,728,962.52 4,959,728,962.52 4,750,066,580.90 4,750,066,580.90
subsidiaries
Total 4,959,728,962.52 4,959,728,962.52 4,750,066,580.90 4,750,066,580.90
(1) Investments in subsidiaries
Unit: RMB
Increase/Decrease for the period Closing Closing
Name of Opening balance Opening balance of Increase in balance (book balance of
Decrease in Provision for
investee (book value) provision for value) provision for
investment investment impairment Others
impairment impairment
Yunnan Dexin
162,135,598.40 162,135,598.40
Paper Co., Ltd.
Yunnan Hongta
418,898,313.03 418,898,313.03
Plastic Co., Ltd.
Yunnan
Hongchuang
441,809,808.43 441,809,808.43
Packaging
Co., Ltd.
Shanghai
Energy
New 3,683,485,584.3
3,672,486,280.07 10,999,304.28
Material 5
Technolog
y Co., Ltd.
Zhuhai
Energy
New
8,155,258.92 2,109,064.17 10,264,323.09
Material
Technolog
y Co., Ltd.
Jiangxi Tonry
New Energy
Technology 7,181,169.11 2,141,251.81 9,322,420.92
Development
Co., Ltd.
Jiangxi Enpo
New Materials 321,122.98 107,548.34 428,671.32
Co., Ltd.
Energy (Zhuhai
Hengqin) New
Materials 4,852,881.22 1,307,387.39 6,160,268.61
Technology Co.,
Ltd.
Jiangxi Ruijie
New Material
2,572,109.89 659,946.83 3,232,056.72
Technology Co.,
Ltd.
Suzhou
GreenPower New
9,451,353.93 1,583,786.89 11,035,140.82
Energy Materials
Co., Ltd.
Wuxi Energy
New Material
12,792,257.04 3,003,828.78 15,796,085.82
Technology Co.,
Ltd.
230
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Chongqing
Energy Newmi
9,156,039.27 1,665,065.00 10,821,104.27
Technological
Co., Ltd.
Chongqing
Energy New
Material 33,135.86 11,097.65 44,233.51
Technology Co.,
Ltd.
Jiangsu Energy
New Materials
221,252.75 74,100.48 295,353.23
Technology Co.,
Ltd.
Shanghai Energy
New Materials 100,000,000.0
100,000,000.00
Research Co., 0
Ltd.
Yunnan Jiechen
Packaging
86,000,000.00 86,000,000.00
Materials Co.,
Ltd.
Total 209,662,381.6 4,959,728,962.5
4,750,066,580.90
2 2
4. Operating income and operating cost
Unit: RMB
Amount for the current period Amount for the previous period
Item Income Cost Income Cost
Main businesses 47,324,192.93 37,369,699.69 145,520,947.85 82,994,977.23
Other businesses 15,791,845.68 12,555,992.03 4,712,468.20 2,518,851.06
Total 63,116,038.61 49,925,691.72 150,233,416.05 85,513,828.29
Information on transaction price allocated to remaining performance obligations:
The corresponding revenue from performance obligations that have been contracted but not yet performed or completed amounted to
RMB0.00 million as at the end of the Reporting Period.
5. Investment income
Unit: RMB
Item Amount for the current period Amount for the previous
period
Gain from long-term equity investment under the cost method 1,850,000,000.00
Total 1,850,000,000.00
XX. Supplementary Information
1. Breakdown of non-recurring gain or loss for the current period
Applicable □ Not applicable
Unit: RMB
Item Amount Notes
Gains and losses from the disposal of non-current assets -2,635,244.01
Government subsidies recognized in current gains or losses (except for those closely related to the Company’s business and are
in line with the national policies based on established criteria, which have a continuous impact on the profit or loss of the 91,546,051.06
Company )
231
Yunnan Energy New Material Co., Ltd. 2023 Annual Report
Gains or losses from changes in fair value arising from the holding of financial assets and trading financial liabilities by non-
financial enterprises, and income arising from disposal of financial assets and financial liabilities, excluding the effective 15,433,062.02
hedging business related to the Company’s normal business operations
Reversal of the provisions for impairment of receivables subject to separate impairment test 102,906.06
One-off share-based payment expense recognized for cancellation and modification of equity incentive plans -21,942,152.71
Non-operating income and expenses other than above-mentioned items -44,249.00
Other items within the definition of non-recurring gains or losses 589,416.97
Less: effect of the income tax 12,614,212.47
Effect of minority equities (after tax) 5,004,935.99
Total 65,430,641.93 --
Details of other profit or loss items that fall within the meaning of non-recurring gain or loss:
□ Applicable Not applicable
There was no other profit or loss item of the Company that fall within the meaning of non-recurring gain or loss
The reason for the Company to define the non-recurring profit or loss items illustrated in the Information Disclosure and Presentation
Rules for Companies Making Public Offering of Securities No. 1 – Non-recurring Profit or Loss as recurring profit or loss items
□Applicable Not applicable
2. Return on equity and earnings per share
Earnings per share
Profit during the Reporting Period Weighted average return on equity Basic earnings per share Diluted earnings per share
(RMB/share) (RMB/share)
Net profits attributable to common
13.31% 2.68 2.58
stockholders of the Company
Net profits attributable to common
stockholders of the Company after the
12.96% 2.62 2.61
deduction of non-recurring gains and
loss
232
