2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Announcement No.2022-054
Yunnan Energy New Material Co., Ltd.
2021 Annual Report
April 2022
1
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 legal representative, Li Jian, financial controller, and Deng Jinhuan, financial manager (“Accounting
Principal”) 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 forward-looking statements in this Annual Report, such as estimates of operating results, are among the planned matters of the Company,
subjected to uncertainties and do not constitute material commitments of the Company to investors. Investors are advised to pay attention to
investment risks. 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.
1. Risk relating to lithium-ion battery separator film business being regulated by national policies
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 domestic and overseas subsidy policy, 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-ion battery separator film industry and the Company’s
operation result.
2. Fierce market competition risk
The rapid growth of the new energy vehicle industry has driven the fast development of lithium-ion battery separator film in the upstream part.
With the high gross profit margin of lithium-ion battery separator film, many domestic enterprises are attracted to invest in this segment. Massive
investment funds are driving the rapid increase in production capacity, and this segment is currently becoming increasingly competitive. 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.
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
developments, the demand and supply relation for enterprises in the upstream and downstream parts and other factors.
4. Risk relating to construction in progress
The Company needs a great amount of investment funds for the under-construction projects in the production bases, such as Jiangsu Energy,
Jiangsu Ruijie, Chongqing Energy, Jiangxi Ruijie, Hungary Project and Jiangxi Enpo. If the Company fails to raise sufficient funds in time, or
complete the projects and put into operation on schedule, the production, operation and profitability will be adversely affected.
5. Risk of technology leakage and talent outflow
An enterprise engaging in lithium-ion battery separator film 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 sales. 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.
6. Risk of technological progress and alternatives
Lithium-ion battery is mainly used for mobile phones, computers, new energy vehicles and energy storage power stations. After development
for many years, lithium-ion batteries have been superior to traditional secondary batteries, such as nickel-cadmium batteries, nickel-hydrogen
batteries and lead-acid batteries with respect to volumetric specific energy, mass specific energy, mass specific power, cycle life, charge/discharge
efficiency, becoming a new energy industry with priority support and key development from the governments. Although the lithium-ion battery is
currently the first choice for electronics and pure electric vehicles, and other emerging batteries like all-solid-state batteries and other technologies
2
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
are not yet mature and still need a long time before commercialization, the market demand for lithium-ion battery will be affected when emerging
batteries such as all-solid-state batteries break the technical bottlenecks, achieve mass production and are fully commercialized, and the lithium-ion
battery separator film in the industry chain will also be affected adversely.
7. Risk of exchange rate fluctuation
The export sales volume of the Company increases constantly as it 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.
8. Risk of China-US trade frictions
Since 2018, China-US trade disputes have occurred frequently. The U.S. has restricted import of Chinese products by means of tariff increases to
reduce the trade deficit with China. Lithium-ion batteries are also among the products subject to the tariff increase. From the perspective of industry
chain, the total revenue of the Company has been less affected by the China-US trade disputes because the exports to US account for a small
proportion in the total revenue of the Company. However, if the demands of the downstream customers change due to the China-US trade frictions,
the results of the Company may be affected adversely. In addition, some of the Company’s raw materials and mechanical equipment are imported
from overseas. If the trade frictions between the U.S. and China intensifies and results in changes in the global trade environment, but the Company
fails to make timely adjustments, the stability of the Company’s supply chain may be adversely affected.
9. Risk of COVID-19 pandemic
Since 2020, the COVID-19 pandemic broke out in China and other parts of the world, and spread rapidly. During the Reporting Period, the
Company has resumed normal production and operation in all respects. However, there still exists great uncertainty about the global pandemic
situation and its control, and the overseas spread also imposes risk of importing cases to China. If the international pandemic can’t be controlled
effectively in the future and spread continuously for a long time, the global economy and new energy vehicle industry will be affected adversely, and
the results of the Company will be affected negatively.
10. 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.
The Board of Directors has reviewed and approved the following profit distribution scheme:
To distribute a cash dividend of RMB 3.03 (tax inclusive) and 0 bonus share (tax inclusive) for
every 10 shares to all the shareholders, taking 890,821,385 shares as the base, without
converting the reserve fund into share capital.
3
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Contents
Section 1 Important Notes, Contents and Definitions ................................................... 2
Section 2 Company Profile & Key Financial Indicators ............................................... 9
Section 3 Management Discussion and Analysis ........................................................ 13
Section 4 Corporate Governance ................................................................................. 47
Section 5 Environment and Social Responsibility ...................................................... 68
Section 6 Significant Events........................................................................................ 72
Section 7 Share Changes and Shareholder Details ................................................... 107
Section 8 Details about Preferred Shares ............................................................... 116
Section 9 Details about bonds ................................................................................ 117
Section 10 Financial Report ...................................................................................... 122
4
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 copy of audit report containing the seal of the accounting firm and the signature and seal of the certified public accountant.
III. The original copies of all documents and announcements of the Company which have been publicly disclosed in newspapers designated by the
China Securities Regulatory Commission during the Reporting Period.
IV. The original text of the 2021 annual report signed by the chairman of the Board of Directors.
V. The place where the above documents are maintained: the Company’s Securities Department.
5
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Definitions
Term Definition
Energy Technology, the listed company, this
Yunnan Energy New Material Co., Ltd.
Company, the Company
Actual controller, Paul Xiaoming Lee PAUL XIAOMING LEE, Li Xiaohua, Yan Ma, Yanyang Hui, Sherry Lee, JERRY
family 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 New Material Technology Co., Ltd., a controlled subsidiary of the
Shanghai Energy
Company
Zhuhai Energy New Material Technology Co., Ltd., a wholly-owned subsidiary of
Zhuhai Energy
Shanghai Energy
Wuxi Energy New Material Technology Co., Ltd., a wholly-owned subsidiary of
Wuxi Energy
Shanghai Energy
Chongqing Energy Newmi Technological Co., Ltd , a controlled subsidiary of
Newmi Tech
Shanghai Energy
Chongqing Energy New Material Technology Co., Ltd., a wholly-owned subsidiary of
Chongqing Energy
Shanghai Energy
Jiangxi Tonry New Energy Technology Development Co., Ltd., a wholly-owned
Jiangxi Tonry
subsidiary of Shanghai Energy
Jiangxi Energy New Materials Technology Co., Ltd., a wholly-owned subsidiary of
Jiangxi Energy
Shanghai Energy
Jiangxi Enpo New Materials Co., Ltd., formerly known as Jiangxi Mingyang New
Jiangxi Enpo
Material Technology Co., Ltd., a controlled subsidiary of Shanghai Energy
Jiangsu Energy New Materials Technology Co., Ltd., a wholly-owned subsidiary of
Jiangsu Energy
Shanghai Energy
Jiangsu Ruijie New Materials Technology Co., Ltd., a wholly-owned subsidiary of
Jiangsu Ruijie
Shanghai Energy
Jiangxi Ruijie New Material Technology Co., Ltd., a controlled subsidiary of Jiangsu
Jiangxi Ruijie
Ruijie
Suzhou Green Power New Energy Material Co., Ltd., a wholly-owned subsidiary of
Suzhou Green Power
Shanghai Energy
Chuangxin New Material (Hong Kong) Co., Ltd., a wholly-owned sub-subsidiary of
Hong Kong Chuangxin
Shanghai Energy
SEMCORP Global Holdings Korlátolt Felelsség Társaság (Hungary), a
SEMCORP Global Holdings KFT
wholly-owned subsidiary of Hong Kong Chuangxin
SEMCORP Hungary Korlátolt Felelsség Társaság (Hungary), a wholly-owned
SEMCORP Hungary KFT
subsidiary of SEMCORP Global Holdings KFT
Yuxi Heyi Investment Co., Ltd., a shareholder of the Company holding more than 5%
Heyi Investment
shares
Heli Investment Yuxi Heli Investment Co., Ltd., a shareholder of the Company
Shanghai Hengzou Enterprise Management Office (Limited Partnership), formerly
Shanghai Hengzou known as Shanghai Hengzou Enterprise Management Office (Limited Partnership), a
shareholder of the Company
Yuxi Kunshasi Plastic Masterbatch Co., Ltd., a joint-stock Company of Hongta Plastic
Kunshasi
Co., Ltd.
6
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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.
Board of Supervisors The Board of Supervisors of Yunnan Energy New Material Co., Ltd.
CSRC China Securities Regulatory Commission
SZSE Shenzhen Stock Exchange
CSDCC Shenzhen Branch Shenzhen Branch of China Securities Depository and Clearing Company Limited
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.
CITIC Securities CITIC Securities Co., Ltd., the sponsor and financial advisor of the Company
cninfo.com www.cninfo.com.cn
Media designated for information China Securities Journal, Shanghai Securities Journal, Securities Times, Securities
disclosure Daily, cninfo.com
RMB, RMB 10 thousand, RMB 100 million RMB, RMB 10 thousand, RMB 100 million
Reporting Period, this Reporting Period January 1, 2021 to December 31, 2021
Same period last year January 1, 2020 to December 31, 2020
Rechargeable battery (chargeable battery), which works through the lithium ion
movement between the positive and negative electrodes. It generally used the
Lithium-ion battery, lithium battery
electrodes contain lithium materials, and is representative of modern high-performance
battery.
In the structure of lithium battery, the film is one of the key inner components. Its main
function is to separate the positive and negative electrodes of the battery, prevent the
Lithium-ion battery separator film
contact between the two poles and short circuit, and achieve the function of blocking
current conduction and preventing the battery from overheating
Aluminum laminated composite film for lithium-ion pouch cell, a packaging
Aluminum laminated film material for lithium-ion batteries, which protects the internal materials of
lithium-ion batteries
The film immersed in the electrolyte of lithium battery is widely distributed with
Base film nano-scale micropores on its surface to allow lithium ion to move freely between the
positive and negative electrodes
Coating film The film with coating treatment
A production process of lithium-ion battery separator film, also known as phase
separation or thermal phase separation. It is a preparation process of microporous film
material by adding small molecules with high boiling point into polyolefin as pore
Wet-process, Wet processing
forming agent, heating and melting into a uniform system, extruding the casting piece
by screw, extracting the pore forming agent with organic solvent after simultaneous or
sequential stretching, and then heat setting with stretching amplitude.
Also known as melt-stretching method, including unilateral stretching and biaxial
stretching process, and blow molding process. It refers to a preparation process of
melting and extruding polyolefin resin into crystalline thin polymer film, obtaining
Dry-process, Dry processing
high crystallinity structure after crystallization treatment and annealing, and then
further stretching at high temperature to peel off the crystalline interface to form
porous structure.
Cigarette label Cigarette external packing, commonly known as “cigarette box”
Composite packaging materials for aseptic filling of dairy products or non-carbonated
Aseptic packaging
soft drinks
Special paper refers to paper with special functions, a general term for all kinds of
Special paper special purpose paper or art paper. The term “special paper” in this Report mainly
refers to special packaging paper.
The film made of high polymer polypropylene melt is drawn at a certain temperature
BOPP film
and speed in a special drawing machine before proper process (e.g. corona, coating)
7
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Cigarette film BOPP film used for external packing of cigarette, also known as “BOPP cigarette film”
Flat film BOPP film for general packaging, also known as “BOPP flat film”
Panasonic Panasonic Corporation
Samsung Samsung SDI, a subsidiary of Samsung Group in the field of electronics
LGES LG Energy Solution, Ltd., formerly known as LG Chem, Ltd
CATL Group, CATL Contemporary Amperex Technology Co., Ltd.
BYD Shenzhen BYD Lithium Battery Co., Ltd.
GOTION HIGH-TECH GOTION HIGH-TECH Co., Ltd.
Farasis Energy Farasis Energy (Ganzhou) Co., Ltd.
Lishen Tianjin Lishen Battery Joint-Stock Co., Ltd.
Convertible Bonds, Energy Convertible The convertible corporate bonds of RMB1.6 billion issued on February 11, 2020, with
Bonds an abbreviation of “Energy Convertible Bonds, and a code of 128095.
Non-public issuance of 69,444,444 new shares and the funds raised (including issuance
Non-public issuance in 2020
expenses) of RMB49,999,999,680,000 in 2020
Non-public issuance of no more than 267,721,996 new shares and the total amount of
Non-public issuance in 2021
funds raised (including issuance expenses) of no more than RMB12.8 billion in 2021
8
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Section 2 Company Profile & Key Financial Indicators
I. Corporate Information
Stock Name Energy Technology Stock Code 002812
Stock Exchange Shenzhen Stock Exchange
Name of the Company in
云南恩捷新材料股份有限公司
Chinese
Short Name of the Company in
恩捷股份
Chinese
Name of the Company in
YUNNAN ENERGY NEW MATERIAL CO., LTD.
English (If Any)
Short Name of the Company in
ENERGY TECHNOLOGY
English (If Any)
Legal Representative of the
Paul Xiaoming Lee
Company
Registered Address No.125, Fuxian Road, High-tech Zone, Yuxi City, Yunnan Province
Postal Code for Registered
653100
Address
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.cxxcl.cn
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
Tel. 0877-8888661
Fax 0877-8888677
Email groupheadquarter@cxxcl.cn
III. Information Disclosure and Place Where the Annual Report Is Kept
Stock Exchange Website for the Annual Report
Shenzhen Stock Exchange (www.szse.cn)
Disclosed by the Company
Media Name and Website for the Annual Report Securities Times, China Securities Journal, Shanghai Securities Journal, Securities Daily and
Disclosed by the Company the Cninfo website (www.cninfo.com.cn)
Place Where the Annual Report Is Kept Securities Department of the Company
9
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
IV. Registration Changes
Organization
91530000727317703K
Code
When the Company was listed, its main businesses were divided into two categories: (1) packaging materials: BOPP films
(cigarette film and flat film) and special paper products (laser transfer anti-counterfeiting paper, direct plating paper and
Changes in Main cellophane); (2) packaging printing: mainly including cigarette label products and aseptic packaging products.
Businesses Since
Upon the completion of major asset restructuring in 2018, the Company’s main businesses were divided into three
the Company’s
Listing (If Any) categories: (1) Film products (lithium-ion battery separator film, cigarette film and flat film); (2) packaging printing
products (cigarette label and aseptic packaging); (3) packaging products (special paper, holographic anti-counterfeiting
electrochemical aluminum and other products).
Mr. Paul Xiaoming Lee and Ms. Sherry Lee, who are shareholders of the Company and members of Xiaoming Lee’s family
Changes of and the de facto controllers of the Company, signed the Power of Attorney for Shareholding on January 14, 2020, by which
Previous Ms. Sherry Lee fully delegated the shareholders’ rights, such as rights to question, proposal and vote, in connection with all
Controlling 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
Shareholders (If Power of Attorney. After the signing of the above-mentioned Power of Attorney for Shareholding, Mr. Paul Xiaoming Lee
Any) becomes the single shareholder of the Company with the most voting shares, and the controlling shareholder of the
Company is changed from Heyi Investment to Mr. Paul Xiaoming Lee.
V. Other Related Information
Accounting firm hired by the Company
Name of Accounting Firm Dahua CPAs (SGP)
Office Address of the Accounting
Floor 12, Building 7, 16 West 4th Ring Middle Road, Haidian District, Beijing
Firm
Name of Accountant (Signature) Kang Wenjun, Yao Rui
Sponsor engaged by the Company to perform continuous supervision duties during the Reporting Period
√ Applicable □ N/A
Name of Sponsor Office Address Name of Sponsor Representative Continuous Supervision Period
CITIC Securities Building, 48
July 18, 2019 to December 31,
CITIC Securities Liangmaqiao Road, Chaoyang Wang Jiaji, Liu Chunqin
2021
District, Beijing
Financial adviser engaged by the Company to perform continuous supervision duties during the Reporting Period
√ Applicable □ N/A
Name of Principal of Financial
Name of Financial Adviser Office Address Continuous Supervision Period
Adviser
CITIC Securities Building, 48
July 18, 2019 to December 31,
CITIC Securities Liangmaqiao Road, Chaoyang Wang Jiaji, Liu Chunqin
2021
District, Beijing
VI. Key Accounting Data and Financial Indicators
Whether the Company is required to retroactively adjust or restate prior years’ accounting data
√ Yes □ No
YoY Increase or
2021 2020 2019
Decrease
Operating income (RMB) 7,982,426,810.59 4,283,007,589.11 86.37% 3,159,561,554.91
Net profits attributable to
shareholders of the listed company 2,717,628,798.01 1,115,604,020.47 143.60% 849,837,425.81
(RMB)
Net profits attributable to
shareholders of the listed company
2,567,054,537.19 990,507,177.08 159.17% 752,823,445.85
(without non-recurring profit and
loss) (RMB)
10
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Net cash flows from operating
1,418,645,377.82 1,055,180,013.19 34.45% 763,297,007.77
activities (RMB)
Basic earnings per share
3.06 1.34 128.36% 1.06
(RMB/share)
Diluted earnings per share
3.05 1.34 127.28% 1.06
(RMB/share)
Weighted average return on net
21.85% 17.15% 4.70% 20.36%
assets
YoY Increase or
End of 2021 End of 2020 End of 2019
Decrease
Total assets (RMB) 26,122,184,844.54 20,572,234,846.40 26.98% 12,193,188,361.42
Net assets attributable to
shareholders of the listed company 13,831,866,927.31 11,102,880,648.67 24.58% 4,551,052,876.43
(RMB)
The lower of the Company’s net profit before and after deduction of non-recurring gains or losses for the last three fiscal years is negative, and the
audit report for the latest year shows that there is uncertainty about the Company’s ability to continue as a going concern
□ Yes √ No
The lower of the net profit before and after deduction of non-recurring gains or losses is negative
□ Yes √ No
VII. Differences in Accounting Data under Accounting Standards of the PRC and the
International Accounting Standards
1．Differences in net profits and net assets disclosed in the financial reports prepared under the accounting
standards of the PRC and international accounting standards
□ Applicable √ N/A
There is no difference in the net profits and net assets disclosed in the financial reports for the Reporting Period prepared under the accounting
standards of the PRC and international accounting standards.
2．Differences in net profit and net assets disclosed in the financial reports prepared under the accounting
standards of the PRC and overseas accounting standards.
□ Applicable √ N/A
There is no difference in the net profits and net assets disclosed in the financial reports for the Reporting Period prepared under the accounting
standards of the PRC and overseas accounting standards.
VIII. Key Financial Indicators by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating income 1,443,231,634.43 1,950,587,674.69 1,945,267,100.88 2,643,340,400.59
Net profits attributable to
432,093,790.46 618,098,908.97 705,230,709.23 962,205,389.35
shareholders of the listed company
Net profits attributable to
shareholders of the listed company
404,953,748.72 578,801,911.27 644,625,664.09 938,673,213.11
(without non-recurring profit and
loss)
Net cash flows from operating
196,836,825.69 47,016,582.63 229,748,349.31 945,043,620.19
activities
Whether the above financial indicators or their sums are materially different from those disclosed in the quarterly and semiannual reports of the
Company
□ Yes √ No
11
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
IX. Items and Amounts of Non-Recurring Gains or Losses
√ Applicable □ N/A
Unit: RMB
Item Amount in 2021 Amount in 2020 Amount in 2019 Description
Gains or losses on disposal of non-current assets (including the write-off portion of
-1,303,244.16 -144,872.28 2,066.58
the provision for asset impairment)
Government subsidies recognized in current gains or losses (except for those closely
related to the Company’s normal business, comply with the provisions of national
140,888,128.01 139,305,009.71 121,993,732.08
policies and are either in fixed amounts or determined under quantitative methods in
accordance with a certain standard)
Profit generated for the costs of the Company in the acquisition of subsidiaries,
associates or joint ventures are lower than the fair value of the Company’s share in 673,727.72
the identifiable net assets of the investees
Gains or losses on entrusted investments or assets management 25,422,322.79 7,111,089.67 191,780.82
Gains or losses from changes in fair value arising from the holding of trading
financial assets and trading financial liabilities and investment income from disposal
of trading financial assets, trading financial liabilities and available-for-sale financial 137,194.34 10,951,914.18
assets, excluding the effective hedging business related to the Company’s normal
business operations
Write back of the provision for impairment of accounts receivable that is individually
11,749,733.34
tested for impairment
Other non-operating income/expenses other than items above-mentioned 4,316,746.86 -4,201,996.76 -549,671.34
Other items within the definition of non-recurring gains or losses 5,038,461.95 357,802.66 4,692,941.18
Less: amount affected by the income tax 27,937,401.47 23,107,901.22 18,944,093.93
Influences on minority interest (after tax) 7,737,680.84 5,847,930.29 10,372,775.43
Total 150,574,260.82 125,096,843.39 97,013,979.96 --
Details of other profit and loss items that meet the definition of non-recurring profit or loss:
□ Applicable √ N/A
The Company didn’t have details of other profit and loss items that meet the definition of non-recurring profit or loss.
Description of defining 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 √ N/A
The Company didn’t 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.
12
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Section 3 Management Discussion and Analysis
I. Industry Overview of the Company during the Reporting Period
The Company is required to comply with the disclosure requirements for “rubber and plastic product manufacturing” in “chemical
industry-related business” set forth in the Self-Regulatory Guidelines for Listed Companies of the Shenzhen Stock Exchange No. 3 –
Industry Information Disclosure.
1. Industry conditions and the industry position of the Company
In 2021, the global NEV market underwent a period of rapid growth. Major countries around the world have been consistently
increasing investment in new energy industries focused on lithium battery technology. Against the backdrop of China’s national
strategic objectives of carbon neutrality and carbon peaking, China’s NEV and energy storage industries will also continue to develop
rapidly. As one of the four key components of lithium batteries, separators are playing an important role in the development of new
energy industries in China and even the world.
The Company is a world leader in the lithium battery separator industry, capable of competing on the global scale in terms of
production capacity, product quality, cost efficiency, and technology R&D. The Company has been integrated into the supply chain
systems of most mainstream lithium battery manufacturers around the world, supplying products covering the major application
fields of power lithium batteries, consumer lithium batteries and energy storage lithium batteries. The Company experienced rapid
growth in 2021 as production capacity and revenue grew substantially, ranking first in the world in terms of production capacity and
shipments of separators. In order to actively seize upon development opportunities in the industry, the Company will continue to
expand production capacity and diligently explore domestic and foreign markets, thereby meeting the demand of global
mid-to-high-end lithium battery customers for the Company’s highly consistent and safe wet process separator products and services.
2. Industry development trends
The high-speed growth of NEVs worldwide and expanding market scale of the lithium battery industry have brought broad market
prospects and historic development opportunities to the lithium battery separator industry. According to a research report by
Chuancai Securities, the domestic yield of separators in 2021 was 7.9 billion sq m, representing a YoY increase of 112.5%, among
which the yield of wet separators is 6.06 billion sq m, accounting for 76.7%, representing a YoY growth of 132%. In the future, the
rapid growth of energy storage will further bring about an incremental market for wet and dry separators.
(1) Downstream customers continue to increase their production capacity requirements of separator companies. With the rapid
growth of the NEV and energy storage markets, the production capacity and output of lithium battery manufacturers continue to
expand. According to announcements and public information of the Company’s main downstream customers, the production capacity
of the Company’s existing customers will reach 1,396GWh by 2025, an increase of more than 1,000GWh from the end of 2020,
corresponding to an annual demand for separators in excess of 15 billion sq m. Lithium battery separators are an indispensable and
important raw material for lithium battery manufacturing, and stable and reliable production capacity has become an important
prerequisite for separator companies to undertake large-scale orders from downstream customers. Therefore, separator manufacturers
with production capacity advantages can continue to deepen cooperation with important customers, which is conducive to further
increasing market share.
(2) The proportion of coating films in lithium-ion battery applications is on the rise. The lithium-ion battery is one of the core
components in new energy vehicles. As the new energy vehicle market is switching from being policy-oriented to market-driven,
manufacturers have continuously raised their requirements of the key indicators such as battery safety, battery life, and service life.
While coating inorganic ceramic materials, PVDF, and aramid on the base film can effectively enhance the puncture resistance and
heat resistance of lithium-ion battery separator films and provide liquid absorption capacity, improving battery safety, service life and
other performances. Therefore, the shipment of coating films occupies an increasing proportion of lithium-ion battery separator films.
This trend provides greater future development space for separator companies that have mastered the core formulation and
processing of high-quality separator coatings. In addition, with safety guaranteed, separator films are becoming thinner and lighter.
Thinner and lighter lithium-ion battery separator films effectively raise the energy density in lithium-ion batteries so that more
electrode materials can be accommodated in the battery per volume or weight, thereby improving battery life. Therefore, regardless
of consumer-related or power-related, under the premise of ensuring safety and service life as well as high-rate and high-power
charging/discharging, the thinner is the better. Becoming thinner and lighter is an important trend in the development of lithium-ion
battery separator film industry.
In addition, polypropylene, polyethylene and other polyolefin materials are the main base materials of film materials, which are also
further expanded. It is a key direction in the research and development of the base material to improve the temperature resistance of
the base material through chemical modification or by adding inorganic filler and other composite materials based on the existing
base material system. In addition, because the polarity of polyolefin material is greatly different from that of electrolyte solution, it is
also an important direction in the research and development of base material for power lithium-ion battery separator film to improve
the electrolyte affinity of polyolefin separator by chemical and physical methods.
(3) Against the backdrop of the rapid growth in downstream demand, lithium battery manufacturers have put forward higher
requirements for the product quality of upstream separator manufacturers in order to ensure the competitiveness of their products in
terms of quality and stability. At the same time, with the rapid increase in overall production capacity of the lithium battery separator
industry, competition industry-wide has become increasingly fierce. In this context, the importance of product quality, production
13
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
efficiency and cost control to separator companies has become increasingly prominent.
In addition, the Company has extensive product offerings in other segments such as BOPP film, aseptic packaging, cigarette packs,
specialty papers and aluminum laminated film. Over the last three decades, the BOPP film industry in China has undergone
technological advancements and intensified market competition. The future development of the industry is trending towards
producing differentiated products that meet customer demand, such as cigarette pack wrapping film and laser film, which are used in
cigarettes, food and other packaging segments with broad development prospects. The continuous development of these end markets
will drive growth in the BOPP film industry. With the advancement in recent years, China’s aseptic packaging market has established
a product system with mature technologies, complete product mixes, and adaptability for the aseptic filling of various liquids. The
downstream industries of aseptic packaging are primarily food and consumer goods such as liquid dairy products and non-carbonated
beverages. With China’s sustained and rapid economic growth and the rise in the disposable income of urban residents, together with
the increasingly sophisticated consumption and health concepts, dairy products and non-carbonated beverages have been enjoying a
booming market. As the government and consumers pay increasing attention to food safety, the food and beverage industries have
raised their requirements and demand for packaging materials, particularly aseptic packaging. Although international packaging
giants still occupy a leading position by leveraging the first-mover advantage in the market, in recent years, with the continuous
progress of material technology and production technology of domestic manufacturers, China’s aseptic packaging market began to
grow rapidly. Based on the existing trend, domestic manufacturers will gradually enter high-end aseptic packaging market from the
medium and low-end market in the future thanks to the cost-effective advantages, and the market share of domestic aseptic packaging
manufacturers will gradually increase.
The cigarette label printing industry is a sub-segment of the packaging and printing industry, and is characterized by advanced
technologies, complex printing processes and high added value. Its development is highly aligned with the development and changes
of the larger cigarette industry, i.e., the stable development of the cigarette industry ensures stable demand for cigarette labels. The
cigarette label printing industry is constantly innovating in terms of printing materials, ink materials and technical processes to
remain relevant in the ever-developing cigarette industry. With the increased scrutiny of environmental protection and energy
conservation in modern society, the scope of specialty packaging paper used in downstream industries such as tobacco, alcohol,
cosmetics and food are becoming more and more extensive, and market application will develop towards differentiation to meet the
unique demands of different customers. China’s specialty paper industry is developing in the direction of improving and enhancing
the special functions of products, enriching product varieties, reducing consumption, vigorously advocating comprehensive
development and utilization of resources, and high-quality, high-value-added and serialized production and processing.
As the packaging material used in pouch cells, aluminum laminated film is one of the most technically difficult links in the
pouch cell industry chain, and has a crucial impact on the quality of the pouch cell. Compared with cylindrical cell and prismatic cell,
pouch cell enjoy certain advantages in energy density, cycle life, safety and flexibility. pouch cell have gradually become the standard
in high-capacity, thin and lightweight consumer electronics. According to Techno Systems Research, in 2020, pouch cells were used
in more than 80% of mobile phones and laptop computers. In the power battery field, the European and American NEV markets have
shown a preference for soft-pack power batteries. According to GGII, among the top 20 electric vehicle models sold in Europe in
2020, 15 use pouch cells. International car companies such as Volkswagen, Daimler, Mercedes-Benz and Renault have adopted
pouch cells as the main battery technology, accounting for more than 70% of the European electric vehicle market. With the steady
growth of the consumer electronics market represented by 5G communications and emerging consumer electronics products as well
as the rapid increase in sales of NEVs from European and American manufacturers, the market demand for pouch cells and
aluminum laminated film will continue to expand. During the Reporting Period, the Company launched the Jiangsu Ruijie Power
Automobile Lithium Battery Aluminum Laminated Film Industrialization Project, expanded its footprint in the pouch cell field,
diversified its product line, strengthened its cooperation with downstream manufacturers, and enhanced its overall competitiveness,
which were important steps for deepening its industrial penetration in the field of new energy materials.
3. Industry policies
The Company’s main product, lithium battery separators, is one of the key components of lithium batteries, and stands as one of
the national key support industries. Relevant industrial policies promulgated by the State in recent years include:
Date Issuing Authority Name of Policy or Regulation Main Content
“By 2020, key materials and components such as positive and negative electrodes,
Plan of Action for Promoting the
separators, and electrolytes will reach world-class status, the upstream industrial chain
February 2017 MIIT、NDRC, MOST, MOF Development of Automotive Battery
will achieve balanced and coordinated development, and innovative backbone
Industry
enterprises with core competitiveness will be formed.”
Catalogue of the First Batch of
Includes high-performance lithium battery separators to the first batch of application
June 2017 MIIT Application Demonstration Guidance for
demonstration guidelines for key new materials
Key New Materials (2017 Edition)
Implementation Plan for the
Focuses on the development of functional film materials such as flexible packaging
December 2017 NDRC Industrialization of Key Technologies for
films for lithium-ion batteries
New Materials
Specifies the terms and definitions, classifications, requirements, test methods,
SAMR, Standardization National Standard for Polyolefin
June 2018 inspection rules, packaging, marking, transportation and storage of polyolefin
Administration of China Separators for Lithium-ion Separators
separators for lithium-ion batteries.
Catalogue of the First Batch of
September Includes nonwoven ceramic separators for high-performance lithium-ion batteries in
MIIT Application Demonstration Guidance for
2018 the first batch of application demonstration guidelines for key new materials
Key New Materials (2018 Edition)
14
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Date Issuing Authority Name of Policy or Regulation Main Content
Further improves the criteria that relevant enterprises need to meet, and adds relevant
requirements for R&D expenditure and actual output; in addition, encourages
enterprises to engage in intelligent manufacturing and green manufacturing, proposes
Industry Regulation Requirements
January 2019 MIIT to reduce operating costs and improve production efficiency through intelligent
Lithium-ion Batteries
manufacturing, and establishes resource-saving and eco-friendly procurement,
production, marketing, recycling and logistics systems through green manufacturing to
produce green products.
15
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Date Issuing Authority Name of Policy or Regulation Main Content
Catalogue for Guiding Industry
August 2019 NDRC Continues to include “functional separator materials” in the encouraged category
Restructuring (2019 Edition)
Catalogue of the First Batch of
Includes ultrafine alumina material for lithium battery separator coating in the first
December 2019 MIIT Application Demonstration Guidance for
batch of application demonstration guidelines for key new materials
Key New Materials (2019 Edition)
The plan proposes to implement battery technology breakthrough initiatives in core
technology research projects on new energy vehicles. Research should be carried out
on critical technologies such as positive and negative electrodes, electrolytes,
November New Energy Vehicle Industrial
State Council separators, and membrane electrodes, technical research on short-board technologies
2020 Development Plan (2021-2035)
for high-strength, lightweight, high-safety, low-cost, and long-lasting power batteries
and fuel cell systems should be strengthened, and research and development and
industrialization of solid-state power battery technology should be accelerated.
Accelerates the promotion and application of advanced green technologies; the
Catalogue of Promoted Green
December 2020 NDRC, MOST, MIIT, MNR promotional catalogue includes single large-capacity and solid-state polymer
Technologies (2020)
lithium-ion battery technologies packaged with aluminum laminated film
Focuses on key areas and accelerates the development of automotive standards in
strategic emerging areas. In the field of new energy vehicles, the roadmap mainly
China Electric Vehicle Standardization includes strengthening the safety guarantee of electric vehicles, focusing on improving
June 2021 MIIT
Roadmap (2021) the overall performance of electric vehicles, focusing on the use of fuel cell electric
vehicles, supporting the innovative development of battery swapping models and
supporting the green development of electric vehicles
Guiding Opinions on Scientific and Incorporates “anti-hydrolysis, anti-aging flame retardant film for power batteries,
China Plastics Processing Technological Innovation for the ultra-thin high-temperature resistant separators, BOPA film for lithium battery
July 2021
Industry Association Plastics Processing Industry in the 14th packaging, and multi-purpose coating separator material” into the development
Five-Year Plan direction of battery film during the 14th Five-Year Plan
Proposes to “promote research on energy storage theories and key materials, units,
modules, and short-board technologies in the system, accelerate the realization of
Guiding Opinions on Accelerating the autonomy of core technologies, and strengthen research on electrochemical energy
July 2021 NDRC, NEA
Development of New Energy Storage storage safety technology, while adhering to the diversification of energy storage
technologies, and promoting continuous cost reduction and commercialization of
mature new energy storage technologies such as lithium-ion batteries.”
As an excellent backup power source, energy storage power stations are gradually becoming one of the key technologies for constructing a
modern power system. Lithium-ion batteries are currently the most widely used energy storage batteries. Compared with electric vehicles, energy
storage power stations have higher requirements for the capacity of lithium-ion batteries, as well as a wider range of application.
II. Main Businesses of the Company during the Reporting Period
1. Main businesses and products of the Company
During the Reporting Period, the Company’s main products are divided into three categories: (1) film products, mainly including lithium-ion
battery separator film (base film and coated film), BOPP film (cigarette film and flat film); (2) packaging printing products, mainly including cigarette
label and aseptic packaging; (3) paper packaging, mainly including special paper products (laser transfer anti-counterfeiting paper, direct plating paper
and coated paper), holographic anti-counterfeiting electrochemical aluminum, transfer film and other products.
The wet-process lithium-ion battery separator film produced by the Company is mainly used for manufacturing lithium-ion battery for the new
energy vehicle, 3C products and energy storage; cigarette film is mainly used for cigarette manufacturing; flat film is mainly used for printing, food,
cosmetics and other industries; cigarette label is applied to cigarette packing materials; aseptic packaging is mainly applied to milk boxes, beverage
boxes, etc.; among special paper products, laser transfer anti-counterfeiting paper is mainly applied to cigarette labels, cosmetic boxes, toothpaste
boxes, pharmaceutical boxes, etc., direct plating paper is mainly used for lining of cigarette label, and packing chocolate and other food, and coated
paper is mainly applied to tobacco, food, pharmaceutical, cosmetic and food industries. The major customers of the Company are large domestic and
foreign producers of lithium-ion battery, cigarette, food and beverage and plastic packaging, and printers. The major customers of wet-process
lithium-ion battery separator film of the Company include Panasonic, LGES, Samsung, CATL Group, GOTION HIGH-TECH, BYD, Farasis Energy,
Lishen and other domestic well-established lithium-ion battery enterprises. The Company is the a-class supplier of non-exclusive cigarette material in
Yunnan province. The main customers of its cigarette label products are the large domestic cigarette manufacturing enterprises, including Yunnan
16
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Zhongyan Material (Group) Co., Ltd. and Chongqing Zhongyan Industrial Co., Ltd., etc. Our products are widely used in “Yuxi”, “Hongtashan”,
“Yunyan”, “Honghe”, “Snow World”, “Longfengchengxiang”, and other well-known domestic brand of cigarettes. The major customers of cigarette
films of the Company include cigarette plants of domestic well-known cigarette producers, such as Yunnan Zhongyan, Sichuan Zhongyan, Chongqing
Zhongyan, Hunan Zhongyan, Anhui Zhongyan, Hubei Zhongyan, Guizhou Zhongyan, Heilongjiang Tobacco, Jiangxi Zhongyan, and Gansu Tobacco.
The major customers of aseptic packaging products of the Company include Yili, Mengniu, Bright Dairy, Dongpeng, Royal Group, Dali Foods Group,
Guizhou Haoyiduo Dairy, Wondersun Sunshine Dairy, Yunnan Ouya Dairy, and Beijing Sanyuan Food, etc.. Some companies became our new
customers in 2021, such as New Hope Dairy Co., Ltd., Shenzhen Chenguang Dairy Co., Ltd., Zhuhai VV Bigshot Dairy Co., Ltd., etc.
2. Business models
The Company adopts different business models for different products. Customization applies to wet-process lithium-ion battery separator films,
cigarette labels, aseptic packaging, special paper, aluminum laminated film products and cigarette films, subject to the customer requirements, while
flat films are produced based on sales prospects, with appropriate number of inventory stocked up.
(1) Procurement mode: the Supply Department of the Company makes a List of Qualified Suppliers (or a List of Qualified Suppliers/Materials)
after evaluating and selecting suppliers. The materials listed on the purchase list can only be purchased from suppliers included on the List of
Qualified Suppliers. For each type of materials, at least 2 suppliers should be selected. The Company conducts a comprehensive supplier evaluation
every year and updates the List of Qualified Suppliers (or the List of Qualified Suppliers/Materials) in time.
(2) Production mode: the Company carries out production based on orders and centralized scheduling so as to reasonably control the costs and
improve the efficiency. The Production Scheduling Department makes the production schedule based on orders and sales plan, and manages the
production and quality in a unified manner so as to ensure the completion of production tasks within the standards in terms of quality, quantity and
time frame.
(3) Sales mode: direct selling is adopted for wet-process lithium-ion battery separator film, and the salespersons of the Marketing Department
are responsible for the sale, promotion and order solicitation; customization is adopted for cigarette label and cigarette film whose production and sale
are organized based on the orders the Company obtains through the participation in the nationwide bids called for by the downstream cigarette
enterprises in the cigarette label printing industry according to Administrative Measures for Cigarette Materials Procurement; flat films are produced
based on sales prospects, with appropriate number of inventory stocked up; aseptic packaging and special paper products are customized pursuant to
the customer requirements.
3. Market position of the Company
(1) Film products
The film products of the Company are divided into two categories: lithium-ion battery separator film, and BOPP film. From a global perspective,
the Company and a few other domestic manufacturers have entered the supply chain of the global major battery manufacturers by virtue of their
technological accumulation and business scale. The Company has established a good cooperative relationship with three major foreign lithium-ion
battery manufacturers, namely Panasonic, Samsung, LGES, and other domestic well-established lithium-ion battery enterprises, including CATL
Group, BYD, GOTION HIGH-TECH, Farasis Energy and Lishen. With the improvement of technology and capacity scale of domestic lithium-ion
battery manufacturers, the domestic demands for the separator films are basically satisfied by local manufacturers. With the fierce competition,
manufacturers of lithium-ion battery separator film without independent R&D design capacity will have narrower space of development. Domestic
competition of will focus on raw materials and formula technology, micropore preparation technology and design capacity of complete equipment,
product quality and sales channels, etc.. Manufacturers with independent core technology, stable product quality and sales channels will grow their
market shares. Relying on the accurate market judgment made by the management team and the technical advantages of its own R&D team, the
Company is currently a leader in wet-process lithium-ion battery separator film, with global competitiveness in terms of capacity scale, product
quality, cost efficiency, and technological research and development. The Company has established production bases of separator film in Shanghai,
Wuxi, Jiangxi, Zhuhai, Suzhou, Changzhou, Chongqing, etc. and constructed the first overseas production base of lithium-ion battery separator film in
Hungary to expand the overseas market, and meet the demands of the global medium and high-end lithium-ion battery customers for wet-process
separator films and services with high consistency and safety. The Company has established a good brand image in the global medium and high-end
separator film markets, as its wet-process separator films have stable quality and large production capacity. Besides, with the global growth of new
energy vehicles and the rapid rise of the energy storage market, the demands for dry-process lithium-ion battery separator films will increase rapidly
in the power battery segment and the energy storage field which all have low requirements for energy density, brightening the market outlook. During
the Reporting period, the Company has started the production base project for dry-process lithium-ion battery separator films in Jiangxi to meet the
market demand for dry-process lithium-ion battery separator films in the future.
As a director member, Shanghai Energy established the Separator Film Manufacturers Association to build an exemplary image and lead the
positive and healthy development of China’s separator film industry. In addition, Shanghai Energy has received many titles and awards, such as
“National High-Tech Enterprise”, “Shanghai Municipal Technology Center”, “Top 10 Exemplary Headquarters in Pudong New Area”, and “Shanghai
Specialized, Sophisticated, Special and New SMEs”.
BOPP films are produced by Hongta Plastic and Chengdu Hongta Plastic, its subsidiary, which are among the few Chinese enterprises with
ability to produce BOPP cigarette films, and anti-counterfeit printing cigarette films. The production scale of BOPP films ranked among the best of its
kind in the Southwest China. Hongta Plastic is a national high-tech enterprise, and was awarded the titles such as “Yunnan Provincial Excellent and
Strong Industrial Enterprises”, “Yunnan Provincial Innovative Enterprises”, and “Yunnan Provincial Private Small Giant Enterprises”, and undertook
two National Torch Plan projects. The trademark of “Hongta Plastic Plus Symbol” (“红塑及图”) was recognized by the Trademark Office of the State
Administration for Industry and Commerce as a national well-known trademark and was awarded the titles of “Yunnan Provincial Famous
Trademark” and “Yunnan Provincial Famous Brand Product”. Chengdu Hongta Plastic was recognized as a “high-tech enterprise”, “Sichuan
Enterprise Technology Center”, etc.
(2) Packaging printing products
The Company is one of the important cigarette label suppliers in China and Class-A suppliers of the non-exclusive cigarette materials in Yunnan,
and its major customers are large domestic well-known cigarette manufacturers. Its products have been widely used by domestic famous cigarette
brands.
The Company independently develops roll-form aseptic brick package, pre-made aseptic brick package, A-type gable top package (mainly used
for fresh milk) and B-type gable top package (mainly used for tea drinks, fruit juice and non-carbonated beverages), making it become one of the few
enterprises able to produce roll-form aseptic brick package, pre-made aseptic brick package and gable top package. Domestic famous large diary and
beverage producers are the major customers of HongChuang Packaging, such as Yili, Mengniu, Bright Dairy, New Hope Dairy, Dali, Dongpeng,
17
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Beijing Sanyuan Food, Royal Group, Guizhou Haoyiduo Dairy, Wondersun and Ouya Dairy. The product quality and service of HongChuang
Packaging have gained recognition of a large number of customers. “Hongchuang Packaging” (红创包装) has been recognized as a Yunnan Province
famous trademark by Yunnan Administration for Industry and Commerce. The “paper-based aluminum-plastic eight-layer composite packing paper”
was certified as the national key new product, and Hongchuang Packaging was awarded the titles of “High-Tech Enterprise”, “Yunnan Provincial
Enterprise Technology Center”, “Yunnan Provincial Leading Packaging Enterprise”, “Yunnan Provincial Growing SMEs”, etc.
(3) Special paper and other products
Dexin Paper mainly produces special paper products, holographic anti-counterfeiting electrochemical aluminum products and transfer films.
They are widely used for the cigarette labels for domestic famous cigarette brands, such as “Yunyan”, “Hongtashan”, “Yuxi”, “Hongshuangxi”,
“Jiaozi”, “Chunghwa”, etc. Thanks to the Company’s strong capability in product development, excellent product quality and good adaptability, the
special paper products have developed rapidly and fill the gap of no special paper deep processing enterprise in Southwest China where a large
number of packaging printing enterprises operate. As a national high-tech enterprise, Dexin Paper has won recognition of downstream customers by
virtue of the seam avoidance technology of laser transfer paper, the positioning and transfer technology of pre-printed cursor, and the transfer
technology of water-based films. Its “rainbow laser transfer anti-counterfeiting paperboard” was certified as National Key New Product and Yunnan
Provincial Key New Product. Dexin Paper was awarded the titles of “Yunnan Provincial Enterprise Technology Center”, “Yunnan Provincial
Technology SMEs”, “Yunnan Provincial Specialization, Refinement, Uniqueness and Innovation”, etc.
4. Main performance drivers
The Company focuses its development on lithium-ion battery separator film products and actively exploits in the fields of lithium-ion battery
separator films, BOPP films, cigarette labels, aseptic packaging, special paper and aluminum laminated film products, etc. Making in-depth
cooperation with customers in the lithium-ion battery separator film business, the Company’s revenue from lithium-ion battery separator film products
increased substantially in the wake of growth of market demands and continuous development of new products. The Company gathers extensive
experience in the industry, puts forth efforts to introduce and cultivate advanced technical talents and invest more in the technology research and
development, while giving quick responses to provide customized products and service solutions for customers. The Company has a strict quality
control system and rigorous quality control measures, ensuring its products can meet the higher industrial requirements and be recognized by
customers from various business areas, so as to keep long-term and stable relationships with customers.
III. Core Competitiveness Analysis
1. Scale advantage
As at the end of the Reporting Period, the Company has the world’s first production scale of wet-process lithium-ion battery separator film, with
the world’s largest supply capacity. As a supplier of wet-process lithium-ion battery separator film with the world’s first shipments, the Company is
capable of undertaking large-scale orders from large battery manufacturers, such as LGES, Samsung SDI, Panasonic, CATL, and CALB. Furthermore,
the Company’s scale advantage also improves the production efficiency, creates the procurement advantage, and effectively reduces the cost. In terms
of cost control, the Company’s scale advantage firstly creates the cost advantage for raw materials procurement. Large-scale centralized procurement
makes the cost of raw materials lower than that of the competitors in this industry. 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 the cost
caused by downtime through reasonable production scheduling. As a result, the Company has the largest operating rate and capacity utilization rate.
In terms of sales development, the industry concentration of the lithium-ion battery is increasing day by day. The existing and under-construction
production lines of domestic first-class lithium-ion battery manufacturers boast huge production scale. Therefore, whether they have a supply capacity
to satisfy the current and future demands of international first-class lithium-ion battery manufacturers will be the first consideration in their selection
of suppliers. As the world’s largest lithium-ion battery separator film supplier, the Company has a competitive advantage thanks to its sufficient
supply capacity.
2. Cost advantage
The Company has long been committed to development and improvement of production technology for advanced wet-process lithium-ion
battery separator film. Thanks to the continuous improvement of production equipment and production process by the Company’s production
management and technical teams, the Company’s output from a single production equipment line of lithium-ion battery separator film ranks the best
in the industry to further reduce the cost in unit depreciation, energy consumption and labor. Moreover, thanks to the Company’s continuous
improvement of production technology and production management, the Company’s yield coefficient and first pass yield of lithium-ion battery
separator film rank the best in the industry. Besides, the Company continues to improve the recovery efficiency of auxiliary materials, so that the
consumption of auxiliary materials is far lower than that of counterparts in the industry.
In addition, the Company, after years of R&D and constant improvement, has applied the online coating technology to its production lines,
making it become the only separator film producer in the industry that has grasped this technology and applied it to production lines. Compared with
the conventional offline coating technology, the online coating technology can omit pre-coating processes, such as rolling and slitting, so as to
significantly enhance production efficiency and save production costs. Also, it can strengthen products’ indicator consistency, such as the uniformity
of thickness, thermal contraction, and permeability and effectively reduce the negative influence of offline processes on product quality. On the whole,
the Company’s cost advantage is the result of synthetic action, including continuous improvement of production equipment, continuous improvement
of production technology, continuous investment in research and development, constant improvement of production management, strong market
development ability and huge production scale, and the Company will maintain this advantage for a long term.
3. Product advantage
The Company has long been committed to the research and development of lithium-ion battery separator film and committed to creating value
for customers with high-quality products and excellent service. Mainstream lithium-ion battery manufacturers, especially international first-class
lithium-ion battery manufacturers, have strict requirements for material quality. As one of the core materials for lithium-ion batteries, the separator
film has high technical barrier and its performance directly affects the discharge capacity, cycle life and safety of lithium-ion battery. Lithium-ion
battery manufacturing requires strong properties of separator films, such as the size, distribution uniformity and consistency of separator film
micropores. Mainstream lithium-ion battery manufacturers apply a long system verification process covering product, technology and production flow
to introduce material suppliers. So far, the Company has successfully passed the product certification of most domestic and foreign mainstream
lithium-ion battery manufacturers, and entered the overseas power battery supply chain system with the most stringent requirements. The product
quality has been recognized by many lithium-ion battery manufacturers. In addition, the Company continues to invest in the development of new
18
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
products, and carry out product research and forward-looking technical reserve while meeting customized needs. So far, the Company has become a
supplier with the most diversified lithium-ion battery separator film products to meet multiple demands of different customers.
4. R&D advantage
The Company has established a research and development team with sound system through years of accumulation. The research and
development scope covers the separator film and coated production equipment, separator film preparation process, raw & auxiliary materials
improvement, coating process, slurry formula, recovery and energy saving technology, as well as R&D for forward-looking technical reserve projects.
The Company’s research and development team of lithium-ion battery separator film has made a series of achievements in improving production
efficiency, enhancing the quality of lithium-ion battery separator film and developing new products. So far, the Company has had 280 effective
patents currently, including 13 international patents, and 236 ongoing patent applications, including 56 international patent applications. What’s more,
the Company’s research and development team of lithium-ion battery separator film can not only customize a variety of new products for downstream
customers, but also jointly develop products with downstream customers to meet their diversified demands.
5. Talent advantage
The lithium-ion battery separator film is currently an emerging industry in China, with only more than ten years of history. With the rapid global
growth of energy industry in recent years, there are insufficient talents and no qualified professionals in the whole industry of lithium-ion battery
separator film. The Company relies on the talents accumulated in more than 20 years in BOPP film industry that is similar to the lithium-ion battery
separator film industry. The Company has established a good talent incentive mechanism and also recruited talents worldwide. As at the end of the
Reporting Period, the Company has more than 100 professionals with master’s degree or above in the lithium-ion battery separator film, and has
established a core technology research and development team composed of professional research and development staff from the United States, Japan,
South Korea and other countries. Furthermore, through long-term efforts, the Company has established a complete professional team 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 grow the Company into an internationally competitive leader
in the lithium-ion battery separator film.
6. Advantage of market and customer resources
In 2021, the Company still maintained the leading position in the market of wet-process lithium-ion battery separator film. So far, the Company
has entered the supply chain system of most mainstream lithium-ion battery manufacturers in the world, including overseas lithium-ion battery
production giants, such as Panasonic, LGES and Samsung, and domestic mainstream lithium-ion battery enterprises such as CATL, BYD, GOTION
HIGH-TECH, Farasis Energy and Lishen. The Company has established a stable and good cooperation relationship with downstream customers, and
had an in-depth technical exchange with them during cooperation. Therefore, the Company has a profound understanding of customer needs and is
able to quickly respond to customer needs and provide corresponding services. With the rapid development of the industry and continuous release of
the capacity, the Company will grow along with the rapid growth of downstream customers.
IV. Analysis on Main Businesses
1. Overview
2021 marked the beginning of China’s “14th Five-year” Plan period. In the context of the strategic goals of peak carbon emissions and carbon
neutrality, the markets of new energy electric vehicles and energy storage have flourished, as driven by the demand in the global new energy market.
Moreover, the sharp increase in the demand for lithium-ion batteries has stimulated the rapid growth in the demand for separator films. During the
reporting period, under the leadership of the Board of Directors and thanks to the concerted effort of all employees, the Company fought against the
pandemic, seized opportunities, and endeavored to make breakthroughs. Amid the market environment where the demand of the industry grew rapidly
while the supply of materials was tight, the Company, as a leading player in the industry, vigorously expanded its capacity, continuously enhanced its
management and operation efficiency, and strove to ensure the stable and timely supply of high-quality lithium-ion battery separator films to
downstream customers. Furthermore, it raised the technological level and product standard of the whole industry through constant improvements in
processes, product R&D, and better product quality. Meanwhile, the reporting period witnessed constant growth in the Company’s business scale,
profitability, and market position. In 2021, the Company recorded a consolidated operating income of RMB7,982 million, up by 86.37% year on year
(YoY), and net profit attributable to shareholders of the listed company of RMB2,718 million, surging by 143.60% YoY.
(1) Description of film products
The Company has focused on the separator film business, kept raising its input in capacity, earnestly expanded its market presence at home and
abroad, and reinforced its market status and core competitiveness.
The rapid growth in the markets of new energy vehicles (NEVs) and energy storage has benefited the prominent increases in the income scale and
profitability of the Company’s lithium-ion battery separator film business. More than 3 billion square meters of lithium-ion battery separator films
were delivered during the reporting period, accounting for a leading market share in the industry. In 2021, Shanghai Energy’s operating income stood
at RMB6,437 million, and its net profit attributable to the listed company amounted to RMB2,452 million. Thanks to the accelerated progress of the
industry, domestic and overseas lithium-ion battery manufacturers are raising their capacities and outputs. Therefore, a stable and reliable capacity has
become an essential prerequisite for the Company to deliver large orders from downstream customers. It is worth mentioning that the Company is
ranked top globally in terms of capacity. Its separator film production bases can be found in Shanghai, Wuxi, Jiangxi, Zhuhai, and Suzhou, with a total
capacity of up to RMB5 billion square meters. Besides, the first overseas lithium-ion battery separator film production base is being constructed in
Hungary. Additionally, during the reporting period, the Company kept speeding up the investment in and building of production lines, including the
Chongqing Energy High-performance Lithium-ion Battery Micropore Separator Film Project consisting of 16 production lines, the Jiangsu Energy
EV Lithium Battery Separator Film Industrialization Project consisting of 16 production lines, and the Suzhou Green Power Project of Annual
Production of 200 Million Square Meters of Lithium-ion Battery Coating Separator Films. Concurrently, the Company constantly raised its capacity
to meet the demand for wet-process separator film products and services featuring high consistency and safety from mid- and high-end lithium-ion
battery customers worldwide. At present, the Company’s new projects are in progress. As at the date of disclosure of this report, three production lines
19
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
in the lithium-ion battery separator film project (Phase I) of Chongqing Energy had been put into production, while the rest production lines are being
developed, as scheduled. For the coating film project of Suzhou Green Power, the foundation construction and the basic steel-frame structure had
been completed, and the subsequent construction is in progress. The project is expected to be put into production by December 2022. The separator
film project of the Management Committee of Jiangsu Jintan Economic Development Zone had been filed, and the approval documents on
environmental assessment had been obtained. Preparation is being made for civil engineering. Besides, the Hungarian project of wet-process
lithium-ion battery separator films is being promoted orderly. The project, after being put into operation, will locally supply 400 million square meters
of wet-process lithium-ion battery separator films to rapidly respond to the demand of the European market and customers. Along with the
implementation of new projects, the Company will gradually release its capacity and is well positioned to further raise its global market share.
Currently, because of the favorable stability, high consistency, and rich variety (more than 110 types) of its lithium-ion battery separator film products,
the Company can satisfy customers’ customized and diverse demands and has joined the global supply chain system consisting of the majority of
mainstream lithium-ion battery manufacturers. Based on the strong demand for separator films brought by the rapid growth in the new energy
industry and its competitive edges in products, technologies, and costs, the Company has actively expanded its footprint in domestic and overseas
markets and deepened its cooperation with strategic downstream customers. Specifically, during the reporting period, the Company and CATL, a
leader in the global lithium-ion battery industry, cooperated to invest in a project of dry-process and wet-process lithium-ion battery separator films
with a total planned investment of RMB8 billion. Besides, a joint venture agreement was signed with EVE Energy Co., Ltd. (EVE), a leading player
in the lithium-ion battery industry, to build a project of wet-process lithium-ion battery separator films of 1.6 billion square meters with a total
planned investment of RMB5.2 billion in Jingmen City, Hubei Province. Additionally, the Company signed separator film supply agreements with
multiple high-end customers at home and abroad, such as CATL, CALB, and a large-scale overseas automobile enterprise, to constantly deepen the
long-term cooperation with important customers and reinforce its competitiveness.
The Company has established a strong presence in the separator film industry and established pioneering advantages in capacity, product quality,
technological R&D, and market expansion. Given the increasingly fierce industry competition, production efficiency and cost control are turning
prominent day by day. Thus, the Company maximizes the continuous output efficiency of a single production line, based on advanced equipment and
adequate orders from quality customers, and adopts measures to cut production costs, such as the recovery of auxiliary materials. In addition, by
virtue of technological advantages, it keeps improving equipment and optimizes processes to raise production efficiency, further reduce costs, and
strengthen the comprehensive competitiveness of products. During the reporting period, the Company applied the worldwide first online coating
technology to its production lines, making it become the only separator film producer in the industry that has grasped this technology and applied it to
mass production. Due to the removal of pre-coating processes, such as rolling and slitting, the online coating technology can significantly enhance
production efficiency and save production costs. Meanwhile, it plays a vital role in improving the indicators of product quality, such as the uniformity
of thickness, thermal contraction, and permeability. Moreover, the Company will extensively apply this technology to new projects, build up its
strength in coating films, and push forward the unceasing progress of the technological level of the industry.
As a separator film manufacturer with independent core technologies and processes, the Company has accumulated rich experience in equipment
upgrading. With a strong and improving ability in equipment upgrading, the Company, started to jointly manufacture domestic separator film
production equipment with its de facto controller and its designated third party, Suzhou Victory Precision Manufacture Co., Ltd. (Victory Precision),
through equity participation, during the reporting period. Additionally, the Company has further reinforced internal management by building digital
factories. During the reporting period, a system management platform based on the manufacturing execution system (MES) was created at Wuxi
Energy. Other factories will successively implement the project of digital factories, which is beneficial to the enhancement of the Company’s overall
management and production efficiency.
During the reporting period, in order to further improve its strategic layout in the separator film field, the Company completed the integration with
Newmi Tech, initiated the Suzhou Green Power Project of Annual Production of 200 Million Square Meters of Lithium-ion Battery Coating Separator
Films, raised the capacity and supply of consumer separator films, and earnestly expanded the consumer battery market. In addition, the energy
storage market has broad prospects and plays a significant role in promoting peak carbon emissions and carbon neutrality in the energy field. In order
to meet the future demand in the energy storage market, the Company, during the reporting period, continuously promoted the joint venture project of
dry-process lithium-ion battery separator films with Celgard. The capacity will be built up gradually in 2022 to offer more cost-effective products. In
the meantime, after years of R&D input and technological accumulation, the Company launched the project of Jiangsu Ruijie of eight production lines
of aluminum laminated film during the reporting period, with a planned investment of RMB1.6 billion and an annual capacity of approximately 280
square meters. Aluminum laminated film are mainly used to pack soft-packing batteries. This project will further enrich the Company’s product lines,
further consolidate the presence in the industry chain of new energy materials, based on separator films, and facilitate the Company to raise its status
and sustainable development in the new energy industry. Additionally, during the reporting period, the Company cooperated with Beijing WeLion
New Energy Technology Co., Ltd. (WeLion) and Iopsilion to develop the projects of coating separator films and special and customized coating
separator films as a push into the field of semi-solid and solid batteries.
During the reporting period, the Company’s BOPP film business improved steadily by 8.08% YoY. The BOPP separator film upgrade and expansion
project of Hongta Plastics with an annual output of 70,000 tons was steadily promoted and is expected to be completed in 2022.
(2) Packaging printing products and special paper
The aseptic packaging business of the Company is well developed, focusing on large-scale dairy enterprises and regionally famous dairy enterprises.
By constantly developing new products and providing its customers with customized services, the Company has rapidly raised the sales of aseptic
packaging products. The year 2021 witnessed rapid growth in the Company’s aseptic packaging business. The operating income reached RMB578
million, with a YoY increase of 43.25%, and the sales amounted to 2,898 million, rising by 25.49% YoY. Characterized by superb heat-sealing
performance, strong machine compatibility, and low losses during filling, the Company’s aseptic packaging products are leading in the industry in
both quality and performance. In the future, the Company will keep expanding its market presence, join hands with large-scale dairy enterprises to
seize opportunities for market growth, and drive the rapid development of the aseptic packaging business. During the reporting period, the aseptic
packaging customers served by the Company included Yili, Mengniu, Bright Dairy, Eastroc Beverage, Dali Food Group, Europe-Asia, and Royal
Group, all of which are large-scale and renowned dairy enterprises and regionally famous dairy enterprises. Meanwhile, Hongchuang Packaging
established strategic cooperation with New Hope Dairy Holdings Co., Ltd. and Grass Green Group during the reporting period, became their preferred
partners, and propose innovative measures to turn food packaging materials greener and more personalized and better retain freshness. Thanks to the
20
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
growth in the markets of liquid dairy products and non-carbonated beverages in China, the demand for aseptic packaging is rising. During the
reporting period, the Company launched an aseptic packaging project in Changzhou to expand the capacity of such packaging. Currently, preparation
for the project is being made orderly. In the meantime, the Company will redouble its effort for packaging printing products and utilize its good
product design, material optimization, customization, and timely after-sales services to constantly raise its market share.
The cigarette label business recorded an operating income of RMB115 million, down by 10.52% year on year, during the reporting period, mainly
because of the price reduction of some products. The sales of special paper rose steadily during the reporting period, and its operating income was
RMB203 million, with a year-on-year increase of 16.45%. The Company vigorously expanded its market presence, rapidly responded to customer
requirements, refined its management, and kept reducing costs and strengthening efficiency.
(3) Review of other works
During the Reporting Period, the Company started the non-public offering, and intended to raise no more than RMB12.8 billion, which will be used
for the Chongqing Energy High-performance Lithium-ion Battery Micropore Separator Film Project Phase I and Phase II, Jiangsu EV Lithium Battery
Separator Film Industrialization Project, Jiangsu Ruijie EV Lithium Battery Aluminum Laminated Film Industrialization Project, Suzhou Green
Power Annual Production of 200 Million Square Meters of Lithium-ion Battery Coating Separator Films Project, and to supplement the working
capital. The proposed proceeds raised will all be invested in projects related to the Company’s main businesses, which is commensurate with the
Company’s strategic development. The implementation of such projects will help the Company further increase its capacity of separator films and
improve the technological level of the industry. Besides, the Company will expand its business layout and seize opportunities for industrial
development to lay a solid foundation for future expansion and development of potential customers, and consolidate its leading position in the field of
new energy materials.
The Company repurchased 1,585,437 shares during the reporting period to implement the equity incentive plan so as to further establish and improve
its long-acting incentive mechanism, attract and retain excellent talents, arouse the working enthusiasm of the senior and middle management
personnel as well as core technical and business elites, effectively combine the interests of shareholders, the Company, the core team, and employees,
and guide all parties to pay attention to the Company’s long-term development. So far, the Company has completed the repurchase and the registration
of the granting of stock options.
The Company plans to invest no more than RMB1.72 billion to construct the New Energy Shanghai Management Headquarters, the Energy Institute,
and the Overseas Operations Headquarters at the Jinqiao Economic and Technological Development Zone in Pudong New Area, Shanghai, to address
the issue of inadequate sites for R&D and work, provide a strong guarantee for the mid- and long-term development strategies, effectively improve
the R&D and office environment, boost its image, improve hardware facilities for production, R&D, operations, management, and market expansion,
better attract and retain high-caliber talent at home and abroad, and further intensify its comprehensive strengths.
During the Reporting Period, the Company signed the Strategic Cooperation Framework Agreement with Yuxi Municipal People’s Government,
based on which the Company will help to introduce manufacturers of battery and battery materials, including but not limited to positive and negative
battery materials, separator films, electrolyte and other battery materials, through the development and utilization of lithium, nickel and other mineral
resources in Yuxi City. In February 2022, the Company signed the New Energy Battery Industry Chain Project Cooperation Agreement with Yuxi
Municipal People’s Government, EVE Energy Co., Ltd., Zhejiang Huayou Holding Co., Ltd. and Yunnan Yuntianhua Co., Ltd., based on which the
parties will establish 2 joint ventures in Yuxi city, and jointly engage in the mining of mineral resources, mineral deep processing, research and
development, production and sales of new energy battery and new energy battery upstream and downstream materials after obtaining exploration and
mining rights through the joint venture company in accordance with laws and regulations, so as to promote the construction of new energy battery
industry chain, and promote the formation of the whole industry chain cluster of new energy battery in Yuxi City. In March 2022, the Company and
the People’s Government of Hongta District, Yuxi City, entered into an Investment Agreement and a supplementary agreement. The Company will
invest approximately RMB4.5 billion in total to establish a company with an independent legal personality in Hongta District, Yuxi City, as the
implementation entity of a project of lithium-ion battery separator films with a capacity of 1.6 billion square meters.
Multiple breakthroughs in technological innovation were achieved during the Reporting Period. As at the end of the Reporting Period, the Company
and its subsidiaries had accumulatively obtained 459 patents, including 362 utility model patents, 86 invention patents (including 13 international
patents), and 11 design patents. In addition, the Company emphasizes the development of overseas patents. The applications for the registration of 56
international patents and 191 domestic patents have been accepted.
2. Income and cost
(1) Breakdown of operating income
Unit: RMB
2021 2020
Year-on-year
Proportion in the Proportion in the increase or decrease
Amount Amount
operating income operating income
Total operation
7,982,426,810.59 100% 4,283,007,589.11 100% 86.37%
income
By industry
Manufacturing 7,866,428,440.28 98.55% 4,205,724,684.56 98.20% 87.04%
Other businesses 115,998,370.31 1.45% 77,282,904.55 1.80% 50.10%
By product
21
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Film products 6,913,272,941.66 86.61% 3,464,096,284.00 80.88% 99.57%
Cigarette label 115,404,633.29 1.45% 128,976,058.50 3.01% -10.52%
Aseptic packaging 578,035,152.65 7.24% 403,513,678.80 9.42% 43.25%
Special paper 203,465,665.68 2.55% 174,724,290.56 4.08% 16.45%
Other Products 56,250,047.00 0.70% 34,414,372.70 0.80% 63.45%
Other businesses 115,998,370.31 1.45% 77,282,904.55 1.80% 50.10%
By region
Southwest 1,055,816,267.84 13.23% 652,445,734.88 15.23% 59.04%
East 3,940,320,948.30 49.36% 1,834,948,385.75 42.84% 109.83%
North 220,578,356.55 2.76% 112,167,705.95 2.62% 96.65%
South Central 1,525,714,178.36 19.11% 809,685,998.42 18.90% 87.71%
Northwest 295,656,593.50 3.70% 137,124,648.48 3.20% 115.55%
Northeast 38,818,315.58 0.49% 32,064,502.66 0.75% 21.06%
Abroad 905,522,150.46 11.34% 704,570,612.97 16.45% 28.27%
Direct sale 7,982,426,810.59 100.00% 4,283,007,589.11 100.00% 0.00%
(2) Industries, products, regions or sales models with a proportion more than 10% in the Company’s
operating income or operating profit
√ Applicable □ N/A
Unit: RMB
Year-on-year Year-on-year Year-on-year
Operating increase or increase or increase or
Operating cost Gross margin rate
income decrease in decrease in decrease in gross
operating income operating cost margin rate
By industry
Manufacturing 7,866,428,440.28 3,978,342,250.24 49.43% 87.04% 63.63% 7.24%
By product
Film products 6,913,272,941.66 3,234,546,911.19 53.21% 99.57% 70.99% 7.82%
By region
Southwest 1,055,816,267.84 724,100,518.38 31.42% 63.92% 49.98% 6.37%
East 3,940,320,948.30 1,676,989,802.60 57.44% 114.74% 97.70% 3.67%
South Central 1,525,714,178.36 939,241,849.72 38.44% 88.43% 50.39% 15.57%
Abroad 905,522,150.46 388,967,091.51 57.04% 28.52% 24.58% 1.36%
By sales model
Direct sale 7,982,426,810.59 4,002,023,714.23 49.86% 86.37% 62.88% 7.23%
Under the circumstances that the statistical standards for the Company’s main business data adjusted in the Reporting Period, the Company’s main
business data in the recent year is calculated based on adjusted statistical standards at the end of the Reporting Period.
22
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
□ Applicable √ N/A
(3) Whether revenue from physical sales is higher than service revenue
√ Yes □ No
Year-on-year
Business segment Item Unit 2021 2020
increase or decrease
Sales Ton 78,666.40 68,730.73 14.46%
Film products Production Ton 78,928.36 70,450.72 12.03%
Inventory Ton 7,060.70 6,798.75 3.85%
Sales 10,000 boxes 43.12 40.43 6.65%
Cigarette label Production 10,000 boxes 49.01 36.21 35.34%
Inventory 10,000 boxes 9.48 3.59 164.00%
Sales 10,000 289,803.12 230,943.97 25.49%
Aseptic packaging Production 10,000 288,974.57 232,814.28 24.12%
Inventory 10,000 25,841.93 26,670.48 -3.11%
Sales Ton 13,821.64 14,066.68 -1.74%
Special paper Production Ton 15,701.69 14,243.59 10.24%
Inventory Ton 3,363.19 1,483.14 126.76%
Reason for any over 30% YoY movements in the data above
√ Applicable □ N/A
During the reporting period, the significant year-on-year increase in the Company’s production and inventory of cigarette label products and the
inventory of special paper is mainly because the Company responded to customer demand, prepared stock to ensure the timeliness of supply, and
waited for customer’s notice of delivery.
(4) Execution of significant sales contracts and significant purchase contracts signed by the Company as at
the Reporting Period
√ Applicable □ N/A
Execution of significant sales contracts signed by the Company as at the Reporting Period
√ Applicable □ N/A
Contract Counterpar Total Total Amount Amount to Normal Amount of sales Recovery of
object ty contract amount paid in the be paid execution or revenue accounts receivable
amount paid current not recognized for
Reporting the current
Period period or
accumulatively
Lithium-io LGES No more RMB1,127 RMB422,7 No more Yes The sales The accounts
n battery than $6.17 ,512,300 98,600 than revenue was receivable at the
separator million RMB2.883 RMB423 end of the
film billion million, and the Reporting Period
(converted accumulated was RMB82
at the sales revenue million. The
exchange was RMB1.128 amount recovered
rate of 6.5) billion during accumulatively
the reporting after the Reporting
period Period at the end of
the first quarter of
2022 was RMB46
million, accounting
for 55.27%,
representing a
normal progress of
recovery.
23
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Major difference of the progress of the significant contracts from the agreement of the contracts which affects more than 30% of the contract amount
□ Applicable √ N/A
Execution of significant purchase contracts signed by the Company as at the Reporting Period
□ Applicable √ N/A
(5) Breakdown of operating cost
Product category
Unit: RMB
2021 2020
Year-on-year
Product category Item As a percentage As a percentage increase or
Amount of total operating Amount of total operating decrease
cost cost
Raw material 2,082,659,169.66 64.39% 1,085,857,106.87 57.40% 91.80%
Labor 154,825,073.99 4.79% 112,590,099.47 5.95% 37.51%
Film products
Manufacturing
671,396,304.17 20.76% 385,575,292.18 20.38% 74.13%
costs
Energy 325,666,363.37 10.07% 307,683,375.40 16.26% 5.84%
Raw material 59,056,240.47 88.33% 56,404,482.20 87.35% 4.70%
Labor 1,641,719.57 2.46% 5,455,678.38 8.45% -69.91%
Cigarette label Manufacturing
5,555,699.73 8.31% 2,434,225.49 3.77% 128.23%
costs
Energy 604,911.23 0.90% 276,988.96 0.43% 118.39%
Raw material 442,144,630.94 91.70% 277,755,799.13 89.34% 59.18%
Aseptic Labor 22,368,092.22 4.64% 15,819,168.05 5.09% 41.40%
packaging Manufacturing
13,133,577.93 2.72% 13,039,212.57 4.19% 0.72%
costs
Energy 4,492,472.93 0.93% 4,278,899.77 1.38% 4.99%
Raw material 147,608,537.66 93.00% 115,016,516.52 82.12% 28.34%
Labor 3,842,056.17 2.42% 8,604,180.09 6.14% -55.35%
Special paper Manufacturing
4,932,633.82 3.11% 10,722,052.01 7.66% -54.00%
costs
Energy 2,328,616.99 1.47% 5,717,968.26 4.08% -59.28%
Raw material 32,072,764.23 88.88% 16,618,594.08 68.83% 92.99%
Labor 1,480,837.59 4.10% 370,795.25 1.54% 299.37%
Other Products Manufacturing
1,540,063.23 4.27% 5,180,564.15 21.46% -70.27%
costs
Energy 992,484.33 2.75% 1,973,589.92 8.17% -49.71%
Notes
1. “Film products” include BOPP cigarette film, BOPP flat film and lithium-ion battery separator film products.
24
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
2. “Other products” referred to in the “Breakdown of operating income” and “Breakdown of operating cost” in Section IV of this Report mainly
include holographic electrochemical aluminum, film products, manual packaging film, aluminum laminated film and other irregular products and
disposed products. This category has a smaller sales volume, and smaller proportion in the total sales, so it is classified as other products within the
main business.
3. “Other businesses” referred to in the “Breakdown of operating income” in Section IV of this Report mainly refers to the Company’s income from
material sales, asset leasing and scrap sales outside of the main business.
(6) Changes in the scope of the consolidated financial statements for the Reporting Period
√ Yes □ No
Compared with the previous year, 9 new entities were included in and 3 entities were removed from the
consolidated financial statements in the current year:
New subsidiaries included in the consolidated financial statements in the current year:
Name Reason for change
Jiangsu Ruijie New Materials Technology Co., Ltd. Newly established
Jiangxi Enpo New Materials Co., Ltd. Newly established
Jiangsu Energy New Materials Technology Co., Ltd. Newly established
Hunan Energy Advanced New Materials Technology Co., Ltd. Newly established
Ningbo Energy New Materials Co., Ltd. Newly established
Jiangxi Energy New Materials Technology Co., Ltd. Newly established
Chongqing Energy New Materials Technology Co., Ltd. Newly established
Hubei Energy New Materials Technology Co., Ltd. Newly established
Jiangsu Sanhe Battery Material Technology Co., Ltd. Newly established
Subsidiaries removed from the consolidated financial statements in the current year:
Name Reason for change
Shenzhen Qingsong Jinze Technology Development Co., Ltd. Canceled
Hunan Qingsong Jingze Technology Development Co., Ltd. Canceled
Wuxi Energy Trading Co., Ltd. Canceled
(7) Major changes or adjustments in the business, products or services in the Reporting Period
□ Applicable √ N/A
(8) Major customers and suppliers
Major customers of the Company
Total sales amount from the top five customers (RMB) 4,704,969,327.48
Total sales amount from the top five customers in proportion
58.94%
of total annual sales
Total sales amount from related parties in the top five
0.00%
customers in proportion of total annual sales
Information on top five customers
25
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
As a percentage of the total sales revenue for
No. Customer Name Sales (RMB)
the Year
1 Customer 1 2,666,501,538.70 33.40%
2 Customer 2 1,200,887,664.60 15.04%
3 Customer 3 449,471,512.69 5.63%
4 Customer 4 216,958,341.21 2.72%
5 Customer 5 171,150,270.28 2.14%
Other information on major customers
√ Applicable □ N/A
Major suppliers of the Company
Total purchase amount of the top five suppliers (RMB) 1,844,969,538.22
Total purchase amount of the top five suppliers in proportion
27.77%
of total annual purchase amount
Total purchase amount of related parties in the top five
0.00%
suppliers in proportion of total annual purchase amount
Information on top five suppliers
As a percentage of the total purchase amount
No. Supplier Name Purchase Amount (RMB)
for the Year
1 Supplier 1 908,503,587.81 13.67%
2 Supplier 2 368,314,581.87 5.54%
3 Supplier 3 197,095,161.83 2.97%
4 Supplier 4 189,482,720.54 2.85%
5 Supplier 5 181,573,486.17 2.73%
Other information on major suppliers
√ Applicable □ N/A
3. Expense
Unit: RMB
Year-on-year
2021 2020 increase or Explanation on any material change
decrease
Mainly due to the expansion of the
Selling expenses 74,035,002.36 56,365,549.96 31.35%
Company’s business scale
Mainly due to the expansion of the
Administrative expenses 216,333,939.36 155,800,391.65 38.85%
Company’s business scale
Financial expenses 152,982,055.47 188,876,241.53 -19.00%
Mainly due to the increase of R&D
R&D expenses 409,178,730.28 178,243,333.28 129.56%
investment
4. R&D investment
√ Applicable □ N/A
Main R&D project Expected impact on the future
Project purpose Project progress Objectives to be achieved
name development of the Company
Development of
The next generation of The shut down temperature
high safety base Improve the product safety and
base film products for The project entered is lower and the puncture is
film products with increase the overseas market share
international high-end the pilot test stage higher than that of
lower shut down of lithium-ion batteries separators
customers conventional products
temperature
Development of Development of high-end The mass production To complete mass Create economic and brand
solvent-based overseas customers was completed production introduction benefits and enhance the overseas
26
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
coated power according to customer sales volume
battery requirements
The sample
preparation at
Advanced research and
Study on advanced laboratory stage was
development of To study the feasibility
separator for completed, and the Prospective research of the
electrolyte/separator for and verify technical
semi-solid state technical route for technical reserves
semi-solid batteries and route/flow.
battery the development of
solid batteries
the deparator was
defined.
The feasibility test of
Development of the production line
Development of the new
2μm water-based was completed, and
generation of ultrathin To pass the mass Upgrade the product performance
coated film with the production line
and heat-resisting coated production feasibility to ensure the technological
alumina with high can meet the target of
film to keep the verification leadership
resistance to up to MD & TD thermal
technological leadership
150 ℃ temperature shrinkage
@150℃/h<5%
To achieve homogenization Increase the sales of the
Development of The product enters the
of the microstructure of the Company’s separator film products
ceramic coating supply chain of local
base film, develop high and raise the stickiness of
product with high battery companies in Shipment
heat-resistant coatings with high-quality, major overseas
heat resistance and Europe to achieve batch
low moisture and achieve customers to build stable
low moisture supply
batch supply partnership
Increase the sales of the
Development of The project entered
Company’s separator film products
base film with high lab-scale test with all
Batch supply for a and raise the stickiness of
safety at physical properties To achieve batch supply
Japanese customer high-quality, major overseas
simultaneous meeting customer
customers to build stable
process needs
partnership
Increase the sales of the
Development of
Company’s separator film products
solvent-based
Batch supply for a Mass production and and raise the stickiness of
PVDF-coated To achieve batch supply
Japanese customer shipment high-quality, major overseas
separator film for
customers to build stable
power
partnership
Raise the added value of the
Company’s products and enter the
Development of Batch supply for a US end Mass production and supply chain of high-end overseas
To achieve batch supply
aramid-coated film customer shipment consumer customers to enhance
the Company’s core
competitiveness
Increase the sales of the
Development of Batch supply for the need Company’s separator film products
separate film with of an overseas customer Mass production and and raise the stickiness of
To achieve batch supply
high safety for large for large cylindrical shipment high-quality, major overseas
cylindrical batteries batteries customers to build stable
partnership
Development of
base film with Improve film rate The project passed Use technology innovation to offer
Porosity≥45%, puncture
ultra-large porosity performance and cycle lab-scale tests at power-typed batteries to
intensity≥50gf/um
and ultra-high life while ensuring safety some customers consolidate market share
strength
The project is applied in Improve the quality of coating film
Industrialization of Successfully put into
production and reduces To put into mass production and reduce costs to increase
online coating mass production
costs competitiveness
Development of
Expand the Company’s
water treatment Expand separator film applications
business scope and widen To achieve sales in batch
membranes for Sales increased and the Company’s business scope
separator film supply
household water to enhance competitiveness
applications
purification
Development of
water treatment
Expand the Company’s
membranes for Expand separator film applications
business scope and widen To achieve sales in batch
municipal Lab-scale test and the Company’s business scope
separator film supply
wastewater and to enhance competitiveness
applications
industrial
wastewater
Development of Completion of four To achieve sales in batch Fully improve product
Expand the Company’s
aluminum types of aluminum supply, with all performance to reach globally
business scope
laminated film laminated film, performance indicators advanced level, which will lay a
27
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
including meeting or exceeding the solid foundation for entering the
high-forming, level of overseas high-end market and enhance the
high-durability, manufacturers Company’s competitiveness
high-insulation, and
black, with
promotion started
among customers
Corresponds to the
Development of development of 4μm
The mass production To achieve the mass Enhance the product
ultrathin separator ultrathin separator films
and shipment production and shipment competitiveness
film for lithium-ion batteries
with high-energy density
It is in line with the requirement
for ecological and environmental
protection, complies with relevant
Research and
regulations and policies, performs
development of Technical reserve for
To develop degradable film social responsibilities, and benefits
new-type adaption to market Lab-scale test
materials the improvement of the market
degradable film demands
competitiveness of the Company’s
materials
products and enhancement of its
economic benefits and enterprise
image
Development of
The next generation of The shut down temperature
high safety base Improve the product safety and
base film products for The project entered is lower and the puncture is
film products with increase the overseas market share
international high-end the pilot test stage higher than that of
lower shut down of lithium-ion batteries separators
customers conventional products
temperature
Development of To complete mass
Create economic and brand
solvent-based Development of high-end The mass production production introduction
benefits and enhance the overseas
coated power overseas customers was completed according to customer
sales volume
battery requirements
Information about the Company’s R&D personnel
2021 2020 Year-on-year change (%)
Number of R&D personnel
409 369 10.84%
(Person)
R&D personnel as a percentage
6.87% 7.32% -0.45%
in total employees
Educational background structure
—— —— ——
of R&D personnel
Bachelor’s degree and below 334 313 6.71%
Master’s degree and above 75 56 26.53%
Age structure of R&D personnel —— —— ——
Under 30 140 126 3.97%
Aged 30-40 199 185 2.70%
Information about R&D investment
2021 2020 Year-on-year change (%)
R&D investment (RMB) 409,178,730.28 178,243,333.28 129.56%
28
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
R&D investment as a percentage
5.13% 4.16% 0.97%
in operating income
Capitalized R&D investment
0.00 0.00 0.00%
(RMB)
Capitalized R&D investment as a
percentage in total R&D 0.00% 0.00% 0.00%
investment
Reason for and impact of any significant change of composition of the Company’s R&D personnel
□ Applicable √ N/A
The Company’s business scale was expanded and the investment in R&D personnel was increased, and R&D personnel with master’s degree and
above increased by 33.93% year on year, which is conducive to further improving the talent advantage and consolidating the core competitiveness of
the Company.
Reason for any significant year-on-year change in the percentage of the R&D investment in the operating income
□ Applicable √ N/A
Explanation of reason and rationality for any sharp variation in the percentage of the capitalized R&D investment
□ Applicable √ N/A
5. Cash flow
Unit: RMB
Item 2021 2020 Year-on-year increase or decrease
Subtotal of cash inflows from
6, 846,043,812.83 3,780,284,210.92 81. 10%
operating activities
Subtotal of cash outflows due to
5,427,398, 435.01 2,725,104,197.73 99.16%
operating activities
Net cash flows from operating
1, 418,645,377.82 1,055,180,013.19 34.45%
activities
Subtotal of cash inflows from
1,814,884,845.70 873,613,933.13 107.74%
investment activities
Subtotal of cash outflows due to
5,530,360,175.52 6,149,118,177.71 -10.06%
investment activities
Net cash flows from investment
-3,715,475,329.82 -5,275,504,244.58 -29.57%
activities
Subtotal of cash inflows from
6,116,519,647.62 13,221,955,416.70 -53.74%
financing activities
Subtotal of cash outflows from
4,503,459,616.59 7,662,371,315.54 -41.23%
financing activities
Net cash flows from financing
1,613,060,031.03 5,559,584,101.16 -70.99%
activities
Net increase in cash and cash
-685,616,215.95 1,339,259,869.77 -151.19%
equivalents
Explanation of main reasons for any significant year-on-year change in the data above
√ Applicable □ N/A
(1) The significant increase in cash inflows from operating activities is mainly due to the Company’s rapid business growth, and increase of the
Company’s recovery of sales. The significant increase in cash outflows due to operating activities is mainly due to the Company’s rapid business
growth. The significant increase in net cash flows from operating activities is mainly due to the Company’s rapid business growth during the
Reporting Period, resulting in the significant increase in cash inflows from operating activities;
(2) The significant increase in cash inflows from investment activities is mainly due to the Company’s recovery of due financial products;
(3) The significant decrease in cash inflows from financing activities is mainly due to the Company’s major refinancing that has not been completed
during the Reporting Period. The significant decrease in cash outflows from financing activities is mainly due to the decrease in debt repayment of the
Company and the Company’s controlled subsidiary. Therefore, net cash flows from financing activities decreased significantly;
(4) The significant decrease in net increase in cash and cash equivalents is mainly due to the decrease in net cash flows from financing activities.
29
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Explanation of main reasons leading to the material difference between net cash flow from operating activities during the Reporting Period and net
profit for the Year
□ Applicable √ N/A
V. Analysis of Non-main Business
□ Applicable √ N/A
VI. Analysis of Assets and Liabilities
1. Material changes of composition of assets
Unit: RMB
End of 2021 Beginning of 2021
As a As a Increase or
percentage percentage decrease in Explanation on any material change
Amount Amount percentage
of total of total
assets assets
Mainly due to the Company’s
repayment of due debts during the
Reporting Period, increased
1,833,450,205 2,374,743,862.
Monetary capital 7.02% 11.55% -4.53% construction of production lines of
.69 70
lithium battery separator film
business and business growth,
resulting in increased capital demand
Mainly due to the Company’s rapid
Accounts 4,405,436,085 2,328,215,706. business growth during the Reporting
16.86% 11.33% 5.53%
receivable .52 27 Period, and the accounts receivable
increased accordingly
1,681,448,170 1,157,030,660.
Inventories 6.44% 5.63% 0.81%
.29 71
Investment
8,933,531.66 0.03% 9,467,762.78 0.05% -0.02%
properties
Long-term equity
3,545,984.21 0.01% 3,375,208.87 0.02% -0.01%
investments
10,877,888,21 8,420,764,216.
Fixed assets 41.64% 40.97% 0.67%
2.91 20
Construction in 1,752,915,718 1,639,803,967.
6.71% 7.98% -1.27%
progress .82 92
Mainly due to the Company’s
business growth, increased demand
Short-term 4,116,148,340 1,795,679,528.
15.76% 8.74% 7.02% for capitals from daily operating
borrowings .30 91
activities and borrowings from the
bank
Contractual 761,923,312.3
2.92% 7,677,129.87 0.04% 2.88%
liabilities 8
Long-term 2,803,108,832 2,666,911,132.
10.73% 12.97% -2.24%
borrowings .30 37
High percentage of overseas assets
□ Applicable √ N/A
2. Assets and liabilities measured at fair value
√ Applicable □ N/A
30
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Unit: RMB
Gain or loss
Accumulated Provision for Amount of
from change Amount of
changes at impairment purchase
Beginning at fair value sales during Other Ending
Item fair value for the during the
amount during the the current changes amount
recognized in current current
current period
equity period period
period
Financial
assets
1.
Held-for-trad
ing financial
assets
1,340,551,91 84,637,194.3 1,420,051,91 5,137,194.
(excluding
4.18 4 4.18 34
derivative
financial
assets)
4. Investment
in other 110,000,000. 110,000,00
equity 00 0.00
instruments
Others 399,552,829. 526,473,335. 399,552,829. - 526,473,33
70 53 70 5.53
Of which:
bank
22,174,829.7 412,477,885. 22,174,829.7 412,477,88
acceptance
0 83 0 5.83
draft
Accounts
377,378,000. 113,995,449. 377,378,000. 113,995,44
receivable
00 70 00 9.70
Total of the
1,740,104,74 721,110,529. 1,819,604,74 641,610,52
above items
3.88 87 3.88 9.87
Financial
0.00 0.00
liabilities
Other changes
Whether there are any significant changes in the measurement attributes of the Company’s major assets during the Reporting Period
□ Yes √ No
3. Restricted asset rights as of the end of the Reporting Period
Item Balance Reason for restriction
Monetary capital 462,772,214.04 Bank draft deposit, L/C deposit, L/G deposit
Other non-current assets 387,856,800.77 Bank loan obtained by pledge
Receivable financing 154,912,704.68 Bank borrowings obtained by pledge and bank acceptance draft issued
Notes receivable 17,141,467.20 Bank loan obtained by pledge
Accounts receivable 6,769,341.65 Bank loan obtained by pledge
Fixed assets 2,488,699,031.50 Bank unified credit and loan obtained by mortgage
Intangible assets 224,635,117.58 Bank unified credit and loan obtained by mortgage
Total 3,742,786,677.42
31
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
VII. Analysis of Investments Made
1. Summary
√ Applicable □ N/A
Total investment amount during the Reporting Total investment amount in the prior year
Change (%)
Period (RMB) (RMB)
6,676,555,356.59 3,919,952,513.22 70.32%
2. Significant equity investment made in the Reporting Period
□ Applicable √ N/A
32
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
3. Significant non-equity investments ongoing in the Reporting Period
√ Applicable □ N/A
Unit: RMB
Reasons
Accumu
for the
lative Accumu
failure
actual lative
Investm to make
Industry investm income
Investm ent the
involve ent realized
Way of ent in amount Progress Projecte planned
d in the amount as at the Disclosure date
Item name investm fixed in the Source of fund of d progress Index to disclosed information (if any)
investm as at the end of (if any)
ent assets or Reporti project earnings and
ent end of the
not ng receive
project the Reporti
Period the
Reporti ng
projecte
ng Period
d
Period
earnings
Lithium Please refer to the Announcement on
Wuxi Energy New Self-con -ion 2,034,8 1. self owned and self raised Implementation of Wuxi Energy New
130,471 100.00 335,452
Material Industrial structio Yes Battery 33,716. funds; 2. raise funds by -- N/A July 4, 2018 Material Industrial Base by Wuxi Energy
,895.31 % ,403.82
Base n Separat 09 convertible bonds (No.: 2018-062) disclosed on the Cninfo
or Film website.
Please refer to the Announcement on
Lithium Capital Increase by Shanghai Energy to
Wuxi Energy New Self-con -ion 1,567,0 1. self owned and self raised Wuxi Energy and Investment in Wuxi
850,220 92,379,
Material Industrial structio Yes Battery 99,065. funds; 2. raise funds by way of 80.98% -- N/A July 2, 2019 Energy New Material Industrial Base
,080.02 524.47
Base Phase II n Separat 44 non-public offering in 2020 Phase II - Lithium-ion Battery Separator
or Film Film (No.: 2019-076) disclosed on the
Cninfo website.
Lithium Please refer to the Announcement on
Self-con -ion 1,338,8 Investment by Zhuhai Energy in
Zhuhai Energy 133,438 396,956
structio Yes Battery 98,253. Self owned and self raised funds 99.00% -- N/A March 15, 2019 Lithium-ion Battery Separator Film Project
Phase II ,580.66 ,751.53
n Separat 74 Phase II (No.: 2019-024) disclosed on the
or Film Cninfo website.
Lithium Please refer to the Announcement on A
Self-con -ion 1,737,3 1. self owned and self raised Controlled Subsidiary’s Acquisition of
Jiangxi Tonry 36,146, 469,491 November 2,
structio Yes Battery 63,651. funds; 2. raise funds by 96.65% -- N/A 100% Equity of Jiangxi Tonry New Energy
Phase I 910.85 ,825.03 2018
n Separat 08 convertible bonds Technology Development Co., Ltd.(No.:
or Film 2018-141) disclosed on the Cninfo website.
33
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Lithium
Please refer to the Announcement on Plan
Self-con -ion 1,493,9 1,633,3 1. self owned and self raised
Jiangxi Tonry 77,181, for Non-public Offering of A Shares in
structio Yes Battery 02,276. 07,273. funds; 2. raise funds by way of 71.35% -- N/A March 24, 2020
Phase I Expansion 618.56 2020 (No.: 2020-050) disclosed on the
n Separat 43 14 non-public offering in 2020
Cninfo website.
or Film
Lithium Please refer to the Announcement on
Hungary Lithium Self-con -ion Construction of Wet-process Lithium
80,981, 80,981, November 11,
Battery Separator structio Yes Battery Self owned and self raised funds 8.12% -- 0.00 N/A Battery Separator Film Project in Hungary
499.95 499.95 2020
Film n Separat (No.: 2020-204) disclosed on the Cninfo
or Film website.
Chongqing Energy
Lithium
High-performance Please refer to the Announcement on Plan
Self-con -ion
Lithium Battery 238,309 238,309 November 23, for Non-public Offering of A Shares in
structio Yes Battery Self owned and self raised funds 16.41% -- 0.00 N/A
Micropore ,290.62 ,290.62 2021 2021 (No.: 2021-188) disclosed on the
n Separat
Separator Film Cninfo website.
or Film
(Phase I)
Chongqing Energy
Lithium
High-performance Please refer to the Announcement on Plan
Self-con -ion
Lithium Battery 1,078,8 1,078,8 November 23, for Non-public Offering of A Shares in
structio Yes Battery Self owned and self raised funds 0.04% -- 0.00 N/A
Micropore 27.36 27.36 2021 2021 (No.: 2021-188) disclosed on the
n Separat
Separator Film Cninfo website.
or Film
(Phase II)
Chongqing Energy
Lithium Please refer to the Announcement on the
High-performance
Self-con -ion Progress of Chongqing Energy
Lithium Battery 334,467 334,467 December 8,
structio Yes Battery Self owned and self raised funds 0.01% -- 0.00 N/A High-performance Lithium Battery
Micropore .92 .92 2021
n Separat Micropore Separator Film Project (No.:
Separator Film
or Film 2021-203) disclosed on the Cninfo website.
(Phase III)
Jiangsu Energy EV Lithium
Please refer to the Announcement on Plan
Lithium Battery Self-con -ion
124,028 124,028 November 23, for Non-public Offering of A Shares in
Separator Film structio Yes Battery Self owned and self raised funds 0.00% -- 0.00 N/A
.69 .69 2021 2021 (No.: 2021-188) disclosed on the
Industrialization n Separat
Cninfo website.
Project or Film
34
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Jiangsu Ruijie EV
Lithium Battery Alumin Please refer to the Announcement on Plan
Self-con
Aluminum um 485,204 485,204 November 23, for Non-public Offering of A Shares in
structio Yes Self owned and self raised funds 0.00% -- 0.00 N/A
Laminated Film laminate .19 .19 2021 2021 (No.: 2021-188) disclosed on the
n
Industrialization d film Cninfo website.
Project
Suzhou Green
Power Annual
Production of 200 Lithium
Please refer to the Announcement on Plan
Million Square Self-con -ion
2,050,0 2,050,0 November 23, for Non-public Offering of A Shares in
Meters of structio Yes Battery Self owned and self raised funds 0.21% -- 0.00 N/A
87.72 87.72 2021 2021 (No.: 2021-188) disclosed on the
Lithium-ion n Separat
Cninfo website.
Battery Coating or Film
Separator Films
Project
Announcement on Gaoan Municipal
Dry-process Lithium People’s Government in Jiangxi Province
Lithium-ion Self-con -ion Signing the Contract for the Construction
53,280, 53,280,
Battery Separator structio Yes Battery Self owned and self raised funds 4.63% -- 0.00 N/A February 1, 2021 of Dry-process Lithium-ion Battery
407.11 407.11
Films n Separat Separator Films Project (Announcement
Project or Film No.: 2021-018) disclosed on the Cninfo
website.
3,020,8 8,688,1 1,371,4
Total -- -- -- 23,556. 45,773. -- -- -- 62,123. -- -- --
83 05 41
4. Financial asset investments
(1) Securities investments
□ Applicable √ N/A
No such cases in the Reporting Period.
(2) Derivatives investments
□ Applicable √ N/A
No such cases in the Reporting Period.
35
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
5. Use of funds raised
√ Applicable □ N/A
(1) Overall use of funds raised
√ Applicable □ N/A
Unit: RMB’0,000
Total
Percentage
Total amount of Total
Total of the total
amount funds accumulate Total
Total amount accumulate
accumulati raised with d amount of amount of Amount of funds raised
Year of amount of used from d amount Purpose and investment direction of
Way of raising vely used change in funds unused that have been idle for
raising funds the funds funds unused funds raised
from the use during raised with funds more than two years
raised raised in raised with
funds the change in raised
the Year change in
raised Reporting use
use
Period
Initial public Deposited in the bank’s special
2016 74,776.7 0 74,776.7 0 10,588.68 14.16% 10,588.68 10,588.68
offering account for raised funds
Public offering of
convertible
2020 158,612.26 0 158,612.26 0 0 0.00% 0 N/A 0
corporate bonds
in 2020
Non-public
Deposited in the bank’s special
2020 offering of shares 498,250.46 263,774.31 489,127.2 0 0 0.00% 10,782.04 0
account for raised funds
in 2020
Total -- 731,639.42 263,774.31 722,516.16 0 10,588.68 1.45% 21,370.72 -- 10,588.68
Explanation on the general use of the funds raised
I. Initial Public Offering
With the approval of CSRC ZJXK [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 inquiry and allotment to investors and online subscription based on market value to public investors. This issuance is all new shares, without 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/share. In addition, after deducting RMB3,599.98 of newly increased external expenses
directly related to the issuance of equity securities, such as online issuance fee, prospectus printing fee, reporting accountant fee, lawyer fee and evaluation fee, 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 of “DHYZ [2016] No. 000897”. As of September 30, 2016, the self-owned funds invested
for the projects for which funds were raised reached RMB236.6591 million, which was audited by Dahua CPAs (SGP) with the appraisal report of DHHZ [2016] No. 004562. In 2017, the total amount of used
funds raised was RMB26,067,736.89; in 2018, the total amount of used funds raised was RMB36,288,006.85; in 2019, the total amount of used funds raised was RMB24,728,775.11; in 2020, the total amount of
used funds raised was RMB0.00; in this year, the total amount of used funds raised was RMB0.00. As of December 31, 2020, the balance of funds raised is RMB113,962,434.57 (including the net amount of
RMB8,075,670.62 as interest income of raised funds after deducting bank charges).
36
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
II. Public Offering of Convertible Corporate Bonds in 2020
Upon approval from the CSRC with the Reply to Yunnan Energy New Material Co., Ltd. to Approve Its Public Offering of Convertible Corporate Bonds (ZJXK [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 (excluding tax)
of RMB9,433,962.26 and other offering expenses (excluding tax) of RMB4,443,396.23 from the total amount of proceeds from public offering of convertible corporate bonds, the net amount of proceeds from
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 of “DHYZ [2020] No. 000047”. As of March
16, 2020, before the availability of funds raised, the self-owned funds invested for the projects for which funds were raised reached RMB1,697,984,425.54, which was replaced fully with the
RMB1,586,122,641.51 of funds raised through issuing convertible corporate bonds, and was audited by Dahua CPAs (SGP) with the appraisal report of DHHZ [2020] No. 001799. As of December 31, 2020, the
Company’s proceeds from offering of convertible corporate bonds were all replaced, and the balance of the special account was RMB0.00. The Company completed the cancellation procedure for the special
account.
III. Non-public Offering of Shares in 2020
Upon approval from the CSRC with the Reply to Yunnan Energy New Material Co., Ltd. to Approve Its Non-public Offering of Shares (ZJXK [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/share, and the total proceeds from this offering was
RMB4,999,999,968.00. After deducting the underwriting and sponsorship fees (excluding tax) of RMB14,150,943.40 and other offering expenses (excluding tax) of RMB3,344,470.11 from the total amount of
proceeds from this offering, the net amount of proceeds from this offering by the Company was RMB4,982,504,554.49. The availability of funds raised through this offering was verified by Dahua CPAs (SGP)
with the capital verification report of “DHYZ [2020] No. 000460”. Before the availability of funds raised, the self-owned funds invested for the projects for which funds were raised reached RMB 254,221,260.11,
which was audited by Dahua CPAs (SGP) with the appraisal report of DHHZ [2020] No. 007436. The amount of used funds raised was RMB1,999,307,646.21 in 2020. The amount of used funds raised was
RMB2,637,743,136.15 this year. As of December 31, 2021, the balance in the account of funds raised was RMB144,989,592.08 (including the net amount of RMB53,757,080.06 as interest income of raised funds
after deducting bank charges)
(2) Projects with committed use of funds raised
√ Applicable □ N/A
Unit: RMB’0,000
Whethe
Whether
r the
Accumulativ Investmen the
project Total Total Date of Whether
Investment e investment t progress Benefits feasibility
has committed investment project the
amount in amount as at as at the achieved of the
Project with committed investment and investment direction of been investment amount reaching expected
the the end of end of the in the project
funds excessively raised changed amount of after intended benefits
Reporting the Reporting Reporting has
, funds adjustment usable are
Period Reporting Period (3) Period changed
includin raised (1) condition achieved
Period (2) ＝(2)/(1) significant
g part
ly
change
Project with committed investment
1. Reconstruction and expansion project of color packaging boxes August 1
No 28,414.7 28,414.7 0 28,414.7 100.00% 4,928.75 No No
with annual production output of 3 billion pieces 5, 2019
2. Reconstruction and expansion project of high-grade
environmental-friendly special paper with annual production output Yes 10,684.57 3,617.5 0 3,617.5 100.00% N/A Yes
of 13,000 tons
37
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
3. R&D center construction project Yes 4,993.17 1,471.56 0 1,471.56 100.00% N/A Yes
4. Repayment of bank loans No 20,000 20,000 0 20,000 100.00% Yes No
5. Addition to current capital (IPO) No 10,684.26 10,684.26 0 10,684.26 100.00% Yes No
6. Lithium-ion battery separator film project (Phase I) with annual
December
production output of 400 million square meters of Jiangxi Tonry No 58,612.26 58,612.26 0 58,612.26 100.00% 42,580.38 No No
31, 2019
New Energy Technology Development Co., Ltd.
September
7. Wuxi Energy New Material Industrial Base No 100,000 100,000 0 100,000 100.00% 26,819.24 No No
30, 2020
8. Expansion of lithium-ion battery separator film project (Phase I) July 31,
No 148,250.46 148,250.46 109,520.12 149,909.24 100.00% 8,870.91 No No
of Jiangxi Tonry New Energy Technology Development Co., Ltd. 2022
June 30,
9. Expansion of Wuxi Energy New Material Industrial Base Phase II No 200,000 200,000 154,254.19 189,217.96 94.61% 10,429.7 No No
2022
10. Addition to current capital (non-public offering) No 150,000 150,000 0 150,000 100.00% Yes No
Subtotal of committed investment projects -- 731,639.42 721,050.74 263,774.31 711,927.48 -- -- 93,628.98 -- --
Investment direction of funds excessively raised
None
Total -- 731,639.42 721,050.74 263,774.31 711,927.48 -- -- 93,628.98 -- --
The projected earnings are the estimated annual net profit when the project reaches a usable state and the production capacity is fully
released. As of December 31, 2021, the reconstruction and expansion project of color packaging boxes with 3 billion pieces annual
production output has reached the production capacity, while the benefit of the current year failed to meet the expected target due to the
Cases and reasons for failing to reach the planned progress or
increase in the price of bulk raw materials; the lithium-ion battery separator film project (Phase I) with annual production output of 400
predicted return (by specific projects)
million square meters of Jiangxi Tonry New Energy Technology Development Co., Ltd., and the Wuxi Energy New Material Industrial Base
project are in the climbing up stage; the expansion of lithium-ion battery separator film project (Phase I) of Jiangxi Tonry New Energy
Technology Development Co., Ltd., and the expansion of Wuxi Energy New Material Industrial Base Phase II have not been completed.
I. Initial Public Offering
1. The “reconstruction and expansion project of high-grade environmental-friendly special paper with annual production 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 purchase mode of downstream tobacco manufacturers for special paper products has been
Significant changes in the feasibility of projects adjusted from quantity allocation by cigarette manufacturers to the independent purchasing mode through centralized bidding or commercial
negotiation by cigarette label printing enterprises. Cigarette-related enterprises can expand the bargaining range from region to the whole
country by means of bidding or the commercial negotiation mode of public market inquiry and price negotiation by themselves, breaking the
original competition pattern featuring fixed share and region. As a result, special paper manufacturers took active competition strategies like
price reduction to seize orders, and the industry pattern changed. As a result of the above industrial policy adjustment, the special paper
industry has formed a new pattern featuring full market competition, with more fierce market competition and sharp drop in price. If the
38
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
project went on as scheduled previously, it may face the 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. “R&D center construction project” was to meet the demand of the R&D for the main business before listing. With the completion of the
Company’s major asset restructuring in 2018, the Company’s main business covered lithium-ion battery separator film, which has high
technological requirements. The manufacturing of lithium-ion battery has a high requirement for the characteristics of separator film
materials, especially the consistency, and also for the uniformity of the size and distribution of separator film micropores. Based on the
Company’s business development plan and market demand, in order to better implement the Company’s development strategy, the Company
planned to integrate the technology centers currently scattered in each subordinate company, 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
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 General Meeting of Shareholders.
N/A
Amount, purpose and actual use of funds excessively raised
Applicable
Change in previous year
Upon the deliberation and approval for the Proposal on Changing Some Projects with Investments Out of the Funds Raised at the 27th
meeting of the 3rd Board of Directors of the Company, it was agreed to terminate the “reconstruction and expansion project of high-grade
Change in location to implement the projects with investments out
environmental-friendly special paper with annual production output of 13,000 tons” and the “R&D center construction project”, and invest
of the funds raised
the balance of the funds raised for these two projects, totaling RMB105.8868 million, and the interest income, in the new project - 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 business registry) as the entity to implement the project of Energy Technology Research Institute, and 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.
N/A
Adjustment to the implementation method of projects with
investment out of funds raised
Applicable
I. Initial Public Offering
With the deliberation and approval at the 18th meeting of the second Board of Directors of the Company on the Proposal on Use of Funds
Raised to Replace the Preliminarily Invested Self-raised Funds, it is agreed to replace the self-raised funds of RMB236,659,100 that have
been invested in the projects for which the funds were raised. RMB197,935,700 was preliminarily invested in the “the reconstruction and
Preliminary investment in projects and replacement with the funds expansion project of color packaging boxes with an annual production output of 3 billion pieces”, RMB24,213,800 was preliminarily
raised invested in the “reconstruction and expansion project of high-grade environmental-friendly special paper with annual production output of
13,000 tons”, and RMB14,509,600 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-raised Funds Preliminarily Invested in Fund-raising Investment Projects was deliberated and approved, and it was agreed
that the Company used the proceeds from this offering to replace part self-raised funds already invested in the projects for which the funds
were raised. As of March 16, 2020, the Company accumulatively used self-raised funds of RMB1.6979844 billion for the projects, and the
39
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
net amount of proceeds from this offering of convertible corporate bonds was RMB1.5861226 billion, which was used fully to replace the
preliminarily invested self-raised funds, including RMB596.8886 million invested for “Wuxi Energy New Material Industrial Base” and
replaced with the proceeds of RMB586.1226 million; RMB1.1010959 billion invested for the “lithium-ion battery separator film project
(Phase I) with annual production output of 400 million square meters of Jiangxi Tonry New Energy Technology Development Co., Ltd.” and
replaced with the proceeds of RMB1.00 billion.
III. Non-public Offering of Shares in 2020
At the 11st meeting of the fourth Board of Directors and the 11st meeting of the fourth Supervisory Committee, the Proposal on
Replacement of Preliminarily Invested Self-raised Funds with the Proceeds from the Non-public Offering of A Shares in 2020 was
deliberated and approved, and it was agreed to replace the self-raised funds of RMB254.2213 million already invested in the projects with
the proceeds. RMB157.1693 million was preliminarily invested in the “expansion project of lithium-ion battery separator film (Phase I) of
Jiangxi Tonry New Energy Technology Development Co., Ltd.”; RMB97.0520 million was preliminarily invested in the “expansion project
of Wuxi Energy New Material Industrial Base Phase II”.
Applicable
I. Initial Public Offering
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 Use of Part Unused Proceeds to Temporarily Supplement the Current Capital was deliberated and approved, and it was agreed to
use the unused proceeds to the extent of not more than RMB110 million to temporarily supplement the current capital within 12 months
from the date the above proposal was approved, and the independent directors and sponsor also expressed the opinion to agree upon the
proposal. On August 26, 2020, the Company transferred the above RMB110 million to the special account for the funds raised, and informed
Unused proceeds temporarily added to current capital the sponsor CITIC Securities and its representative of such transfer.
II. Non-public Offering of Shares in 2020
On September 7, 2020, at the 11st meeting of the fourth Board of Directors and the 11st meeting of the fourth Supervisory Committee, the
Proposal on Use of Part Unused Proceeds to Temporarily Supplement the Current Capital was deliberated and approved, and it was agreed to
use the unused proceeds from the non-public offering of shares in 2020 to the extent of not more than RMB800 million to temporarily
supplement the current capital for the production and operation related to the main business within 12 months from the date the sixth
Extraordinary General Meeting of Shareholders of 2020 approved the proposal. The independent directors and sponsor also expressed the
opinion to agree upon the proposal.
Amount of and reason for any balance of the funds raised after the N/A
project implementation
Defects and other problems in utilization and disclosure of the
None
Raised Funds
(3) Project with changed use of funds raised
√ Applicable □ N/A
40
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Unit: RMB’0,000
Total amount
Actual
of intended Investment Date of Whether the
Actual accumulative
investment progress as at project Benefits Whether the feasibility of
Project investment investment
from the the end of the reaching achieved in expected the changed
after Project before change amount in the amount as at
funds raised Reporting intended the Reporting benefits are project has
change Reporting the end of the
in the Period usable Period achieved changed
Period Reporting
changed (3)=(2)/(1) condition significantly
Period (2)
project (1)
Project of 1. Reconstruction and expansion project of high-grade
Energy environmental-friendly special paper with annual
10,588.68 0.00 0.00 0.00% 0.00 N/A No
Research production output of 13,000 tons; 2. R&D center
Institute construction project
Total -- 10,588.68 0.00 0.00 -- -- 0.00 -- --
1. The “reconstruction and expansion project of high-grade environmental-friendly special paper with annual production 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 purchase mode of downstream tobacco manufacturers for special paper
products has been adjusted from quantity allocation by cigarette manufacturers to the independent purchasing mode through centralized
bidding or commercial negotiation by cigarette label printing enterprises. Cigarette-related enterprises can expand the bargaining range
from region to the whole country by means of bidding or the commercial negotiation mode of public market inquiry and price
negotiation by themselves, breaking the original competition pattern featuring fixed share and region. As a result, special paper
manufacturers took active competition strategies like price reduction to seize orders, and the industry pattern changed. As a result of the
above industrial policy adjustment, the special paper industry has formed a new pattern featuring full market competition, with more
fierce market competition and sharp drop in price. If the project went on as scheduled previously, it may face the risks that the
utilization rate of raised funds will decline and the expected investment objective may not be achieved. Therefore, the Company
Reason for change, decision making procedure and information disclosure terminated the implementation of this project in 2019.
(by specific project)
2. “R&D center construction project” was to meet the demand of the R&D for the main business before listing. With the completion of
the Company’s major asset restructuring in 2018, the Company’s main business covered lithium-ion battery separator film, which has
high technological requirements. The manufacturing of lithium-ion battery has a high requirement for the characteristics of separator
film materials, especially the consistency, and also for the uniformity of the size and distribution of separator film micropores. Based on
the Company’s business development plan and market demand, in order to better implement the Company’s development strategy, the
Company planned to integrate the technology centers currently scattered in each subordinate company, 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 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 General Meeting of Shareholders. For details, please refer to the Announcement on Changing Part
Investment Projects for Which Funds Were Raised (Announcement No.: 2019-041) published by the Company on the Cninfo website
on April 26, 2019.
Status of and reason for the failure to make planned progress or projected
N/A
earnings (by specific project)
Description of major changes in project feasibility after changes N/A
41
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
VIII. Sale of Significant Assets and Equity Interests
1. Sale of significant assets
□ Applicable √ N/A
The Company did not sell any significant assets during the Reporting Period.
2. Sale of significant equity interests
□ Applicable √ N/A
IX. Analysis of Major Holding Companies and Joint Stock Companies
√ Applicable □ N/A
Major subsidiaries and joint stock companies that contribute over 10% of net profits to the Company
Unit: RMB billion
Company Main Registered Operating Operating
Company Type Total Assets Net Assets Net Profit
name Business Capital Income Profit
Lithium-ion
Shanghai Battery
Subsidiary 0.39 23.71 6.86 6.44 2.90 2.60
Energy Separator
Film
Acquisition and disposal of subsidiaries during the Reporting Period
√ Applicable □ N/A
Acquisition or Disposal of Subsidiaries Impact on Overall Production Operations and
Company name
During the Reporting Period Performance
Ningbo Energy New Material Co., Ltd. Established by investment Unavailable
Chongqing Energy New Material Technology Under construction and has not been put into
Established by investment
Co., Ltd. operation
Under construction and has not been put into
Jiangxi Enpo New Materials Co., Ltd. Established by investment
operation
Jiangxi Energy New Material Technology Under construction and has not been put into
Established by investment
Co., Ltd. operation
Jiangsu Energy New Material Technology Under construction and has not been put into
Established by investment
Co., Ltd. operation
Jiangsu Ruijie New Material Technology Co., Under construction and has not been put into
Established by investment
Ltd. operation
Hunan Energy Advanced New Material
Established by investment Unavailable
Technology Co., Ltd.
Hubei Energy New Material Technology Co., Under construction and has not been put into
Established by investment
Ltd. operation
Jiangsu Sanhe Battery Material Technology Under construction and has not been put into
Established by investment
Co., Ltd. operation
Explanation on major holding companies and joint-stock companies
Shanghai Energy is a controlled subsidiary of the Company. As at the end of the Reporting Period, the Company held its 95.22% equity, its major
product is lithium-ion battery separator film, and its major subordinate companies include Zhuhai Energy, Wuxi Energy, Jiangxi Tonry, Suzhou Green
Power and Newmi Tech. With the constant increase of the production capacity of the Company in lithium-ion battery separator film, Shanghai Energy
achieved an operating income of RMB6,437 million in 2021, representing an increase of 141.99% year on year, and a net profit attributable to the
owner of the parent company of RMB2,575 million, representing an increase of 166.52% year on year.
X. Structured Bodies Controlled by the Company
□ Applicable √ N/A
42
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
XI. Outlook for the Company’s Future Prospects
1. Corporate strategy
The Company will focus on the lithium-ion battery separator film 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 research and development. 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 integrate global technical and professional resources, 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. At the same time, the Company will attack the, sterile package, cigarette label, BOPP film, special paper AND aluminum laminated
film sectors to become the most competitive new material producer in China.
2. Operating plan for 2022
The global new energy sector has been thriving. As a leader in the wet-process lithium-ion battery separator film sector, the Company offers products
covering the markets of power lithium-ion battery separator film and lithium-ion battery separator film in the 3C field. Meanwhile, the Company
continued to carry forward the dry-process separator film project in cooperation with Celgard, the global leader in the dry-process separator film
sector, to edge into the energy storage market, and further improve the Company’s strategic presence in the separator film field. The Company paid
ongoing attention to the development of cutting-edge technologies, launched solid electrolyte separator film projects, and attached importance to the
development of cutting-edge technologies, such as solid electrolyte coating separator film and other projects to further refine the strategic presence in
the separator film field. In addition, the Company further improved its core competitiveness by actively edging into the aluminum laminated film
business and enriching the product lines.
In the future, the Company will continue to expand the capacity, continue independent research and development and continuous innovation and
consolidate its industrial position with its comprehensive advantages in technology, capacity, product quality, cost and market. (1) The Company will
procure the world’s most advanced production equipment and build eight separator film production bases in China and overseas regions. In 2022, the
Company will further expand the capacity for lithium-ion battery separator film by accelerating the Jiangsu Energy EV Lithium Battery Separator
Film Industrialization Project, the Chongqing Energy High-performance Lithium-ion Battery Micropore Separator Film Project, the lithium-ion
battery coating separator film project of Suzhou Green Power with annual production of 200 million square meters, the wet-process lithium-ion
battery separator film production line and supporting plant project in Hungary, the dry-process separator project in cooperation with Jiangxi Enpo, and
project in cooperation with Hubei Energy, etc. The expansion plan of the Company matches its major downstream customers’ large-scale expansion
plans in the future. After the completion of these projects, the Company’s market share will be further improved and its leading position in the
industry will be consolidated. (2) In 2022, the Company will actively promote the Jiangsu Ruijie and Jiangxi Ruijie EV Lithium Battery Aluminum
Laminated Film Industrialization Project to further enrich its product lines. Besides, the ability to supply multiple types of materials will further
deepen the partnership between the Company and its downstream lithium battery customers, thereby raising its profitability as well as consolidating
and strengthening its market position. Ongoing efforts have been made to push forward the aseptic liquid packaging board project in Changzhou
established by the Company’s controlled subsidiary Hongchuang Packaging and the BOPP separator film upgrade and expansion project by its
exclusively-owned subsidiary Hongta Plastic. (3) The Company will promote lean management. In 2022, the Company will continue to carry forward
the development of the supplier management platform, the budget management platform, and the financial sharing center in order to improve internal
management efficiency and achieve mid- and long-term development targets. In addition, the Company will continuously improve its equipment,
process and quality to ensure it can increase the production efficiency and enhance the product quality without cease. The Company will continue to
scale up the research and development spending, cooperate with domestic research institutes and universities, reinforce the technical research,
development and conversion capacity and gradually establish an integral and high-efficiency research and development system to ensure the
Company can further increase the production efficiency through technical research and development, enhance the product quality and new product
development capacity, provide a mighty technical support for the Company’s implementation of functional polymer separator film products and
provide new profit growth engines powering the future development.
3. Risks the Company may face
(1) National regulatory risk relating to lithium-ion battery separator film 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 domestic and overseas subsidy policy, 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-ion battery separator film 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-ion battery separator film in the upstream part, and
the lithium-ion battery separator film 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 certain advantages in production capacity, R&D capacity,
product quality, lean management, business channels 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, 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,
43
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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
procurement system as a whole, and improved the bargaining power and reduced the cost of raw materials by means of large-scale procurement. 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 Jiangxi Tonry, Jiangxi Enpo, Jiangxi Ruijie, Chongqing Energy, Jiangsu Enjie, Jiangsu Ruijie 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 will make reasonable arrangements for future investment plans (including funds) by making private offering of
A shares and 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-ion battery separator film 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, mass specific energy, mass 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 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-ion battery separator film 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 avoid or reduce 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) Risk of China-US trade frictions
Since 2018, China-US trade disputes have occurred frequently. The U.S. has restricted import of Chinese products by means of tariff increases
to reduce the trade deficit with China. Lithium-ion batteries are also among the products subject to the tariff increase. From the perspective of industry
chain, the total revenue of the Company has been less affected by the China-US trade disputes because the exports to US account for a very small
proportion in the total revenue of the Company. However, if the demands of the downstream customers change due to the China-US trade frictions,
the results of the Company may be affected adversely. In addition, some of the Company’s raw materials and mechanical equipment are imported
from overseas. If the trade frictions between the U.S. and China intensifies and results in changes in the global trade environment, but the Company
fails to make timely adjustments, the stability of the Company’s supply chain may be adversely affected.
Countermeasures: The current business portfolio of the Company, including printing product and paper product, mainly targets the domestic
market and domestic customers, so it will suffer a limited impact from the China-US trade frictions. As to the lithium battery film business, China’s
lithium-ion battery industrial chain is getting increasingly sound, and the global lithium-ion battery industry is gradually shifting to China. At the
same time, Europe and China have continuously improved their market statuses in the new energy vehicle sector, and downstream power battery
customers of the Company, which are getting increasingly concentrated, mainly come from China, Japan and South Korea, and the China-US trade
frictions are expected not to deliver a material adverse impact on the lithium-ion battery separator film business. However, the Company will
continuously pay attention to the research, development and technical upgrade of products under different business lines, and improve product quality
and production efficiency. The Company will strengthen market expansion in China and overseas regions while carrying forward cost reduction and
efficiency enhancement, and actively establish stable business relations with global customers.
(9) Risk of COVID-19 Pandemic
44
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Since 2020, the COVID-19 pandemic broke out in China and other parts of the world, and spread rapidly. During the Reporting Period, the
Company has resumed normal production and operation in all respects. However, there exists still great uncertainty about the global pandemic
situation and its control, and the overseas spread also imposes risk of importing cases to China. If the international pandemic can’t be controlled
effectively in the future and spread continuously for a long time, the global economy and new energy vehicle industry will be affected adversely, and
the results of the Company will be affected negatively.
Countermeasures: While conducting the COVID-19 pandemic prevention and control in earnest, the Company and its subsidiaries will do the
work in every aspect with a focus on the established annual operating plans in accordance with the general arrangements made by the governments in
the regions of the Company and its subsidiaries. The Company will take multiple effective measures to stabilize production, maintain continuous
production, research and development spending. The Company will deepen cooperation and communication with customers, and strengthen the effort
to increase the management level and cost control, and minimize the impact of the pandemic on the production and operation of the Company. While
the global pandemic is further coming under effective control, the market demand has recovered to some extent, and the negative impact of the
pandemic on the production and operation of the Company will be further reduced.
(10) 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 refine its management system, assure efficient operation of different operation elements, including
production, quality control, sales and management. In the meantime, the Company will strengthen talent cultivation, establish an effective incentive
mechanism, and safeguard the Company’s development with multiple measures, including share incentive and cultivation of management members.
XII. Reception of Visitors to the Company for Purposes of Research, Communication,
Interview during the Reporting Period
√ Applicable □ N/A
Type of
Major Discussion and Index to Main Inquiry
Reception Date Reception Place Reception Mode Received Received Visitor
Materials Provided Information
Visitor
Impact of the introduction of
Record on Investor
UBS Securities, Green Court semi-solid and solid batteries
Relations Activities on
Shanghai Energy Capital Management, Franchise on the Company and its
January 13, January 13, 2021
Conference Field research Organization Capital Management, responses; progress of online
2021 (Updated Version)
Room Evalueserve and other coating technology; future
disclosed at
institutional investors development direction of
www.cninfo.com.cn
lithium battery separator films.
Future competition landscape
of the wet-process separator
film industry; the Company’s
competitive edge in expanding
Record on Investor
overseas markets; the
Relations Activities on
March 18, Investors’ participation through Company’s Hungary Project
Livestreaming Others All investors March 18, 2021
2021 the livestreaming platform and online coating technology;
disclosed at
the production capacity and
www.cninfo.com.cn
output planning of the
Company’s products in global
regions; the Company’s results
in the first quarter of 2021.
Hillhouse Capital, Changjiang
Securities, CITIC Securities,
UOB-Kay Hian, GF Fund Progress of the Company’s
Management, ABC-CA Fund self-produced equipment;
Management, China Southern industry and operation of the
Fund Management, Company’s separator film
AEGON-Industrial Fund business and future capacity Record on Investor
Shanghai Energy Management, Green Court plan; the Company’s online Relation Activities on
August 27, Telephone
Conference Organization Capital Management, Bosera coating, equipment August 27, 2021
2021 communication
Room Fund Management, ICBC Credit manufacturers, aluminum disclosed at
Suisse Asset Management, laminated film project, www.cninfo.com.cn
Orient Fund Management, dry-process separator film
Fullgoal Fund Management, project and Hungary Project;
CICC Fund Management, ZO the Company’s Stock
Fund Management, and Goldman Ownership Incentive Scheme.
Sachs Assets Management (HK)
and other institutional investors
45
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
The Company’s business
Changjiang Securities, Soochow
operation of separator films;
Securities, Bosera Fund Record on Investor
self-developed equipment,
Shanghai Energy Management, China Wealth Relations Activities on
October 26, Telephone online coating and dry-process
Conference Organization Management, J.P. Morgan Asset October 26, 2021
2021 communication separator film project; supply
Room Management, and CITIC disclosed at
of equipment, and raw
Securities and other institutional www.cninfo.com.cn
materials; the Company’s
investors
conventional businesses.
46
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Section 4 Corporate Governance
I. Basic Information of Corporate Governance
During the Reporting Period, the Company established and improved the modern enterprise system in strict accordance with the Company Law,
Securities Law, Shenzhen Stock Exchange Listing Rules, 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 held 8 shareholders’ general meetings, 20 board meetings, 17 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.
III. Horizontal Competition
□ Applicable √ N/A
47
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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
Investor
Meeting Meeting Type Date Convened Disclosure Date Meeting Resolution
Participation
Extraordinary Announcement on Resolutions of
First Extraordinary General Meeting of the First Extraordinary General
General Meeting of Shareholders 60.14% January 11, 2021 January 12, 2021 Meeting of Shareholders in 2021
Shareholders in 2021 (Announcement No.: 2021-007) on
cninfo.com
Extraordinary Announcement on Resolutions of
Second
General Meeting of the Second Extraordinary General
Extraordinary
Shareholders 58.96% January 25, 2021 January 26, 2021 Meeting of Shareholders in 2021
General Meeting of
(Announcement No.: 2021-013) on
Shareholders in 2021
cninfo.com
Announcement on Resolutions of
Annual General Annual General the Annual General Meeting of
Meeting of Meeting of 66.89% April 8, 2021 April 9, 2021 Shareholders of 2020
Shareholders of 2020 Shareholders (Announcement No.: 2021-064) on
cninfo.com
Extraordinary Announcement on Resolutions of
Third Extraordinary General Meeting of the Third Extraordinary General
General Meeting of Shareholders 61.33% April 15, 2021 April 16, 2021 Meeting of Shareholders in 2021
Shareholders in 2021 (Announcement No.: 2021-065) on
cninfo.com
Extraordinary Announcement on Resolutions of
Fourth Extraordinary General Meeting of the Fourth Extraordinary General
General Meeting of Shareholders 62.49% August 19, 2021 August 20, 2021 Meeting of Shareholders in 2021
Shareholders in 2021 (Announcement No.: 2021-137) on
cninfo.com
Extraordinary Announcement on Resolutions of
Fifth Extraordinary General Meeting of the Fifth Extraordinary General
General Meeting of Shareholders 16.32% October 25, 2021 October 26, 2021 Meeting of Shareholders in 2021
Shareholders in 2021 (Announcement No.: 2021-165) on
cninfo.com
Extraordinary Announcement on Resolutions of
Sixth Extraordinary General Meeting of the Sixth Extraordinary General
General Meeting of Shareholders 56.18% November 22, 2021 November 23, 2021 Meeting of Shareholders in 2021
Shareholders in 2021 (Announcement No.: 2021-195) on
cninfo.com
Extraordinary Announcement on Resolutions of
Seventh
General Meeting of the Seventh Extraordinary General
Extraordinary
Shareholders 56.18% December 2, 2021 December 3, 2021 Meeting of Shareholders in 2021
General Meeting of
(Announcement No.: 2021-200) on
Shareholders in 2021
cninfo.com
2. Extraordinary general meeting requested by the preferred shareholder with restituted voting rights
□ Applicable √ N/A
V. Details on Directors, Supervisors, and Senior Management
1. Basic information
Service Gender Age Start End Shares Shar Restric Quantit Quantit Other Quantit Reason for
Name Title
status date date held at e ted y Of y of increas y of share
48
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
the optio shares shares shares ed or shares increase/decre
beginni n granted increas decreas decreas held at ase
ng of (share) ed in ed in ed the end
the the the change of the
period current current s period
(share) period period (share) (share)
(share) (share)
Paul April
Curren April 7, 127,792 1,600,4 126,19 Own demand
Xiaoming Chairman Male 64 20,
t 2023 ,657 00 2,257 for funds
Lee 2011
Vice Chairman April
Curren April 7, 69,837, 69,837,
Li Xiaohua and General Male 60 20,
t 2023 889 889
Manager 2011
April
Curren April 7,
Yan Ma Director Female 63 20,
t 2023
2011
Alex Director Curren April April 7,
Male 64
Cheng t 8, 2020 2023
Director Novem
Curren April 7,
Ma Weihua Male 55 ber 22,
t 2023
2021
Director Januar April 7,
Curren
FengJie Male 58 y 4, 2023
t
2017
April April 7,
Independent Curren
Lu Jiankai Male 44 20, 2023
Director t
2017
Tang Independent Curren April April 7,
Male 52
Changjiang Director t 8, 2020 2023
Zheng Independent Curren April April 7,
Female 59
Haiying Director t 8, 2020 2023
49
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
August Novemb
Resign
Xu Ming Director Male 47 31, er 4,
ed
2013 2021
Chairman of the Januar April 7,
Curren
Zhang Tao Supervisory Male 45 y 3, 2023
t
Committee 2019
April April 7,
Curren
ChenTao Supervisor Male 44 20, 2023
t
2011
Kang Curren April April 7,
Supervisor Female 35
Wenting t 8, 2020 2023
Vice General Novem Recognition of
Curren
Yu Xue Manager and Female 35 ber 4, 41,000 100 41,100 corporate
t
Board Secretary 2021 April 7, value
2023
Septem
Chief Financial Curren April 7,
Li Jian Male 44 ber 30,
Officer t 2023
2020
Vice General March Novemb
Resign 270,00
Xiong Wei Manager and Male 52 23, er 4, 270,000
ed 0
Board Secretary 2012 2021
197,941 1,600,4 196,34
Total -- -- -- -- -- -- 100 --
,546 00 1,246
During the reporting Period, did any Director or Supervisor leave office or were any senior executive dismissed?
√ Yes □ No
(1) On November 4, 2021, Mr. Xu Ming resigned from his position as a Director of the Company in order to focus on the development of
Hongchuang Packaging, a controlled subsidiary of the Company. After the resignation, he will continue to serve as the General Manager of
Hongchuang Packaging.
(2) On November 4, 2021, Mr. Xiong Wei resigned from the positions of Vice General Manager and Board Secretary of the Company for personal
reasons. After the resignation, he will no longer serve in any position of the Company.
Changes of Directors, Supervisors, and Senior Executives
50
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
√ Applicable □ N/A
Assumed
Name Type Date Reason
Position
November 4, Resigned from the positions of Vice General Manager and
Board Secretary
2021 Board Secretary of the Company for personal reasons. After
Xiong Wei and Vice General Dismissed
the resignation, he no longer serves in any position of the
Manager
Company.
Board Secretary November 4,
Yu Xue and Vice General Engaged 2021 Newly engaged
Manager
November 4, Xu Ming also serves as the General Manager of the
2021 Company’s holding subsidiary Hongchuang Packaging. He
resigned from his position as a Director of the Company in
Xu Ming Director Resigned
order to focus on the development of Hongchuang Packaging.
After the resignation, he continues to serve as the General
Manager of Hongchuang Packaging.
November 22,
Ma Weihua Director Elected Newly appointed
2021
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 Plastics, Chairman and General Manager of Dexin Paper, and Chairman of Chengdu Hongta Plastic (成都红
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
Plastics, the Vice Chairman of Dexin Paper, and the Vice Chairman and General Manager of Chengdu Hongta Plastic. Joined Innovative Color
Printing as the Vice Chairman and General Manager in 2006. Now, serves as the Vice Chairman and General Manager of the Company.
3. Yan Ma, Director of the Company, female, born in 1959, American nationality with the right of residence in foreign country, and junior
college education. Worked at Kunming Yan’an Hospital from 1981 to 1990, and since April 2011, served as the Director of the Company.
4. Alex Cheng, Director of the Company, male, born in 1958, American nationality with the right of residence in foreign country, master’s
degree in plastic engineering conferred by the University of Massachusetts, and doctor’s degree conferred by the Northeast Agricultural University.
Acted as the Technical Manager of Inteplast Corporation in the US from September 1993 to September 2011. Served as the General Manager of
Shanghai Energy. from February 2012 to June 2019. Now, serves as the Director of the Company.
5. Ma Weihua, Director of the Company, male, born in 1967, Chinese nationality, 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 Plastics, a wholly-owned subsidiary of the Company. He is now a Director of the Company and General Manager of Shanghai
Energy.
6. Feng Jie, Director of the Company, male, born in 1964, Chinese nationality, 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 Plastics Co., Ltd. from 1997 to 2005; served as the Director of
Chengdu Office of Yunnan Hongta Plastics Co., Ltd. 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 a Director of the Company as well as the Director of the Sales
Department and General Manager of Chengdu Hongta Plastic.
7. Lu Jiankai, Independent Director of the Company, male, born in 1978, Chinese nationality, master’s degree, Chinese Certified Public
Accountant, is now the Executive Director and General Manager of Shanghai Yangyue Investment Management Co., Ltd. He worked at Ernst &
Young Dahua Accounting Firm (Shanghai) as an auditor in 2001 to 2004. He worked at Deloitte Huayong Accounting Firm (Shanghai) as an auditor
in 2004 to 2008. He served as the Vice President of the Real Estate and Equity Investment Division of Zhejiang Longsheng Group Co., Ltd. in 2009
to 2011. He served as the Officer of the Investment and Financing Department of Jiangsu Changfa Group Co., Ltd. in 2011 to 2013. He served as the
Investment Officer of Shanghai Jingbang Equity Investment Management Co., Ltd. in 2013 to 2015. Now is an Independent Director of the Company.
8. Tang Changjiang, Independent Director of the Company, male, born in 1970, Chinese nationality, Executive Master of Business
Administration (EMBA) at Tsinghua University and Master of Business Administration (MBA) at the University of Victoria of Switzerland. Served as
the Vice General Manager of Kelin Side (Huizhou) Co., Ltd. from August 1994 to October 1996. Served as the Deputy Secretary-General of
Shenzhen Electronic Industry Association from March 1998 to May 2002. Served as the Managing Director of Shenzhen Tangshi Electronic Co., Ltd.
from January 2003 to June 2013. Served as the Director of Shenzhen Xinyuhuan Test Co., Ltd. from July 2013 to May 2019. Now is an Independent
51
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Director of the Company.
9. Zheng Haiying, Independent Director of the Company, female, born in 1963, Chinese nationality, Doctor, Master’s Tutor and Professor at the
Accounting School of the Central University of Finance and Economics, Chinese Certified Public Accountant and a senior member of the Association
of Chartered Certified Accountants (ACCA and FCCA). Taught at the Accounting Department of the Central Fiscal Management Cadres’ College
from July 1988 to April 1994 and worked on a part-time basis at the former Zhongzhou Certified Public Accountants in the same period. Engaged in
the audit work at M.B.LEE & CO LTD of Hong Kong from April 1994 to April 1996. Taught at the Accounting Department of the Central Fiscal
Management Cadres’ College from April 1996 to April 1999. Since April 1999, has taught at the Accounting School of the Central University of
Finance and Economics with the interest in financial accounting. Now is 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, 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 Plastics Co., Ltd. from August 2001 to August 2006; and since September 2006, has served as the
Manager of the Finance Department of Yunnan Dexin Paper Co., Ltd. Now serves as the Deputy Chief Financial Officer and Chairman of the
Supervisory Committee of the Company.
2. Chen Tao, Supervisor of the Company, male, born in 1978, Chinese nationality, junior college education. Served as the technician of Global
Color Printing from 1998 to 2003, joined Innovative Color Printing in 2004, and has successively acted as the technical supervisor, Deputy Director
and Director of the Technical Center. Now is the Vice General Manager of Yunnan Hongchuang Package Co., Ltd. and a Supervisor of the Company.
3. Kang Wenting, Supervisor of the Company, female, born in 1987, Chinese nationality, bachelor’s degree. Served as the Personnel Supervisor
of Kunming Xinghe Spa Resort & Hotel from 2013 to 2014, and since 2015, has successively served as the Personnel Supervisor of the Human
Resources Department and the Supervisor of the Human Resources Planning Department of the Company. Now, is the manager of the Operation
Support Department and Administrative Department and Supervisor of the Company.
(III) Senior Management
1. 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 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 Chairman and Vice General Manager of Hongta
Plastics, the Vice Chairman of Dexin Paper, and the Vice Chairman and General Manager of Chengdu Hongta Plastic. Joined Innovative Color
Printing as the Vice Chairman and General Manager in 2006. Now, serves as the Vice Chairman and General Manager of the Company.
2. Yu Xue, Vice General Manager of the Company, Secretary of the Board of Directors, female, born in 1987, Chinese nationality, master’s
degree. Served as the Company’s Securities Affairs Representative from March 2013 to November 2021. Now, serves as the 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, 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 □ N/A
Receiving
Position in remuneration
Name Shareholder’s Name Start date End date
shareholder and allowance
at shareholder
Paul Xiaoming Lee Heyi Investment Chairman November 3, 2010 April 11, 2022 No
Paul Xiaoming Lee Heli Investment Director December 8, 2010 April 11, 2022 No
Li Xiaohua Heyi Investment Director November 3, 2010 April 11, 2022 No
Li Xiaohua Heli Investment Chairman December 8, 2010 April 11, 2022 No
Li Xiaohua Shanghai Hengzou Executive Partner December 1, 2016 October 29, 2021 No
Description of positions held at the shareholder’s entity None
Positions held at other entities
52
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
√ Applicable □ N/A
Receiving
Positions in
remuneration and
Name Other Entity Names other Start date End date
allowance at
organizations
other entities
Vice
Paul Xiaoming Lee Yuxi Kunshasi May 1, 1996 April 11, 2022 No
Chairman
Shanghai Ruiji New Material Technology Co., January 20,
Paul Xiaoming Lee Director April 11, 2022 No
Ltd. 2020
Li Xiaohua Director and
Yuxi Kunshasi General May 1, 1996 April 11, 2022 No
Manager
Li Xiaohua Executive
Director and October 29,
Suzhou Jiesheng Technology Co., Ltd. April 11, 2022 No
General 2021
Manager
Li Xiaohua Shanghai Ruiji New Material Technology Co., January 20,
Chairman April 11, 2022 No
Ltd. 2020
Li Xiaohua Executive
Jiangsu Jiesheng Intelligent Equipment Director and November 26,
April 11, 2022 No
Technology Co., Ltd. General 2021
Manager
Shanghai Ruiji New Material Technology Co., January 20,
Alex Cheng Director April 11, 2022 No
Ltd. 2020
Lu Jiankai Executive
Anqiu Huahang Environmental Technology Director and October 13,
April 11, 2022 No
Co., Ltd. General 2021
Manager
Lu Jiankai October 30,
Dezhou Shayun Electronic Commerce Co., Ltd. Director April 11, 2022 No
2019
Lu Jiankai Qingdao Huahang Environmental Technology
Chairman June 19, 2017 April 11, 2022 No
Co., Ltd.
Lu Jiankai Executive
Qingdao Bopu Photoelectric Technology Co., Director and
August 3, 2016 April 11, 2022 No
Ltd. General
Manager
Lu Jiankai Shanghai Qikai Investment Management Co., Executive
May 18, 2012 May 17, 2021 No
Ltd. Director
Lu Jiankai Executive
Shanghai Yangyue Investment Partners
President and July 12, 2012 July 11, 2021 No
(Limited Partnership)
Partner
Lu Jiankai Shanghai Shengu Investment Management Co., Executive August 16,
August 15, 2021 No
Ltd. Director 2012
Lu Jiankai November 5, November 4,
Fuzhou Shanghe Electronics Co., Ltd. Director No
2015 2021
Lu Jiankai Executive
Shanghai Yangyue Investment Management Director and February 13, February 12,
Yes
Co., Ltd. General 2019 2022
Manager
Tang Changjiang Secretary-Ge
Guangdong Battery Association June 29, 2019 April 11, 2022 Yes
neral
Tang Changjiang Tianjin Guoan Mengguli New Materials Independent October 12,
April 11, 2022 Yes
Science & Technology Co., Ltd. Director 2021
53
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Tang Changjiang Shenzhen Nengyi Testing Co., Ltd. Director June 15, 2015 April 11, 2022 No
Tang Changjiang September 13,
Shenzhen AGC Standard Technology Co., Ltd. Director April 11, 2022 No
2013
Zheng Haiying Independent
Central China Media Co., Ltd. April 21, 2017 April 11, 2022 Yes
Director
Zheng Haiying Independent
Beijing Automic Technology Co., Ltd. March 9, 2018 April 11, 2022 Yes
Director
Zheng Haiying Independent
Shandong Keyuan Pharmaceutical Co., Ltd. April 23, 2019 April 11, 2022 Yes
Director
Zheng Haiying Independent
Arizon Radio Frequency Technology Co., Ltd. April 23, 2019 April 11, 2022 Yes
Director
Zheng Haiying Independent December 23,
Orient Group April 11, 2022 Yes
Director 2019
Zheng Haiying Beijing Borui Hongyuan Data Technology Co., Independent February 1,
January 21, 2021 Yes
Ltd. Director 2016
Independent
Zheng Haiying China Marine Bunker (PetroChina) Co. Ltd. July 15, 2007 July 9, 2021 No
Director
Explanation on positions in other entities None
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 √ N/A
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
2021 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
Total pre-tax Whether remuneration was
Name Title Gender Age Service status remunerations received received from related parties
from the Company of the Company
54
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Paul Xiaoming
Chairman Male 64 Incumbent 161.97 No
Lee
Vice Chairman
Li Xiaohua and General Male 60 Incumbent 139.97 No
Manager
Yan Ma Director Female 63 Incumbent 0 No
Alex Cheng Director Male 64 Incumbent 57.83 No
Ma Weihua Director Male 55 Incumbent 9.57 No
Feng Jie Director Male 58 Incumbent 32.44 No
Independent
Lu Jiankai Male 44 Incumbent 5 No
Director
Independent
Tang Changjiang Male 52 Incumbent 5 No
Director
Independent
Zheng Haiying Female 59 Incumbent 5 No
Director
Xu Ming Director Male 47 Resigned 28.77 No
Chairman of the
Zhang Tao Supervisory Male 45 Incumbent 26.73 No
Committee
Chen Tao Supervisor Male 44 Incumbent 31.2 No
Kang Wenting Supervisor Female 35 Incumbent 10.44 No
Vice General
Yu Xue Manager and Female 35 Incumbent 5.48 No
Board Secretary
Chief Financial
Li Jian Male 44 Incumbent 56.8 No
Officer
Vice General
Xiong Wei Manager and Male 52 Resigned 85.66 No
Board Secretary
Total -- -- -- -- 661.86 --
VI. Performance of Directors during the Reporting Period
1. Meetings of the Board of Directors during the Reporting Period
Meeting Date Convened Disclosure Date Meeting Resolution
The Proposal on Entry into the Agreement on the Investment in Projects of Changshou
st th Economic and Technological Development Zone between Shanghai Energy and the
21 meeting of the 4
January 8, 2021 January 8, 2021 Administrative Committee of Changshou Economic and Technological Development Zone
board of directors
and the Proposal on Holding the 2nd Extraordinary General Meeting of the Company in
2021 were deliberated and approved.
22nd meeting of the 4th January 26, The Proposal on Not Exercising the Early Redemption of Energy Convertible Bonds was
January 25, 2021
board of directors 2021 deliberated and approved.
The Proposal on Cooperation between Subsidiaries and Polypore and the Proposal on Entry
rd th into the Contract on Building the Dry-process Lithium Battery Separator Film Project and Its
23 meeting of the 4 February 1,
January 31, 2021 Supplementary Agreements between Jiangxi Mingyang New Material Technology Co., Ltd,
board of directors 2021
the Subsidiary and Gaoan Municipal People’s Government, Jiangxi Province were
deliberated and approved.
55
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
The Proposal on Work Report of Board of Directors for 2020 of the Company, the Proposal
24th meeting of the 4th
March 17, 2021 March 18, 2021 of the Final Accounts Report for 2020 of the Company and the Proposal on Profit
board of directors
Distribution Plan for 2020 were deliberated and approved.
The Proposal on the Implementation of Investment Project in Changshou Economic and
25th meeting of the 4th Technological Development Zone by Chongqing Energy, a Wholly-owned Subsidiary of
March 29, 2021 March 30, 2021
board of directors Shanghai Energy, and the Proposal on Holding the 3rd Extraordinary General Meeting of the
Company in 2021 were deliberated and approved.
26th meeting of the 4th The Proposal on Change of Accounting Policies and the Proposal on the Full Text and Body
April 26, 2021 April 27, 2021
board of directors of the 2021 Q1 Report of the Company were deliberated and approved.
The Proposal on Changing the Registered Capital and Amending the Articles of Association
27th meeting of the 4th
May 6, 2021 May 7, 2021 and Handling the Change of Industrial and Commercial Registration was deliberated and
board of directors
approved.
The Proposal on the Signing of the Investment Cooperation Agreement for Energy
Aluminum Laminated Film Project between Shanghai Energy and the Administrative
28th meeting of the 4th Committee of Jiangsu Jintan Economic Development Zone, and the Proposal on the Signing
June 18, 2021 June 19, 2021
board of directors of the Investment Cooperation Agreement for Energy Membrane Project between Shanghai
Energy and the Administrative Committee of Jiangsu Jintan Economic Development Zone
were deliberated and approved.
The Proposal on the Company Meeting the Conditions of Issuing Shares and Paying Cash to
Purchase Assets and Raising Supporting Funds, the Proposal on the Company Purchasing
Assets by Issuance of Shares and Payment of Cash and Raising Supporting Funds and the
29th meeting of the 4th
June 22, 2021 June 23, 2021 Related Party Transactions, and the Proposal on the Plan for Issuance of Shares and Cash
board of directors
Payment for Purchasing Assets and Raising Supporting Funds by Yunnan Energy New
Material Co., Ltd. and the Connected Transaction and Its Summary were deliberated and
approved.
The Proposal on the Plan to Set Up a Joint Venture with EVE to Construct a Wet-Processing
Lithium Battery Separator Film Project, the Proposal on the Plan to Sign the Framework
30th meeting of the 4th Agreement on Acquisition of Suzhou RS Technology Co., Ltd. and JOT Automation Ltd
August 2, 2021 August 3, 2021
board of directors with Family Members of Paul Xiaoming Lee, Victory Precision and Its Subsidiaries and the
Related Party Transaction, and the Proposal on Holding the 4th Extraordinary General
Meeting of the Company in 2021 were deliberated and approved.
The Proposal on the Signing of “Memorandum of Cooperation on Some Properties of the
31st meeting of the 4th August 19,
August 18, 2021 R&D Project of Jinqiao Guopei Plot in Pudong, Shanghai” between the holding subsidiary
board of directors 2021
Shanghai Energy and Shanghai Jinqiao (Group) Co., Ltd was deliberated and approved.
The Proposal on Semiannual Report for 2021 of the Company and Its Summary, and the
32nd meeting of the 4th August 27,
August 26, 2021 Proposal on Deposit and Actual Use of the Funds Raised in Half Year of 2021 were
board of directors 2021
deliberated and approved.
the Proposal on Signing the Equity Transfer Agreement with Family Members of Paul
33rd meeting of the 4th September 15, September 16,
Xiaoming Lee, Victory Precision and Its Subsidiaries and the Related Party Transaction, and
board of directors 2021 2021
the Proposal on Not Holding a General Meeting Temporarily were deliberated and approved.
56
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
34th meeting of the 4th October 26,
October 25, 2021 The Proposal on 2021 Q3 Report of the Company was deliberated and approved.
board of directors 2021
The Proposal on the Addition of Candidates for Independent Non-Executive Directors of the
35th meeting of the 4th November 5, Company, the Proposal on Appointment of the Vice General Manager and Secretary of the
November 4, 2021
board of directors 2021 Board of the Company, and the Proposal on Holding the 6th Extraordinary General Meeting
of the Company in 2021 were deliberated and approved.
36th meeting of the 4th November 10, November 11,
The Proposal on Cooperation with CATL was deliberated and approved.
board of directors 2021 2021
The Proposal on Increasing the Amount of Guarantee Provided by the Company for Its
37th meeting of the 4th November 15, November 16,
Subsidiaries, and the Proposal on Holding the 7th Extraordinary General Meeting of the
board of directors 2021 2021
Company in 2021 were deliberated and approved.
The Proposal on the Company Fulfilling the Conditions for Non-public Offering of Shares,
the Proposal on the Plan of the Non-public Offering of Shares by the Company, the Proposal
38th meeting of the 4th November 21, November 23, on the Plan of the Non-public Offering of Shares by the Company in 2021, the Proposal on
board of directors 2021 2021 the Termination of Purchasing Assets by Issuance of Shares and Payment of Cash and
Raising Supporting Funds and the Related Party Transactions were deliberated and
approved.
The Proposal on the Signing of the Investment Cooperation Agreement for Energy Liquid
th th Package Project between Hongchuang Packaging and the Administrative Committee of
39 meeting of the 4 December 20, December 21,
Jintan Economic Development Zone in Jiangsu Province, and the Proposal on Making
board of directors 2021 2021
Additional Investment in the Hungarian Wet-process Lithium Battery Isolation Membrane
Project were deliberated and approved.
40th meeting of the 4th December 30, December 31, The Proposal on Correcting the 2021 Q3 Report, and the Proposal on Holding the 1st
board of directors 2021 2021 Extraordinary General Meeting of the Company in 2022 were deliberated and approved.
2. Details of directors’ attendance at board meetings and shareholders’ general meetings
Details of directors’ attendance at board meetings and shareholders’ general meetings
Meetings Non-attendanc
Attendance by Attendance in
required to Entrusted e in person for
Attendance in way of Absence shareholders’
Name of director attend during presence two
person (times) telecommunic (times) general
the Reporting (times) consecutive
ation (times) meeting
Period (times) times or not
Paul Xiaoming
20 18 2 0 0 No 8
Lee
Li Xiaohua 20 19 1 0 0 No 8
Yan Ma 20 20 0 0 0 No 8
Alex Cheng 20 18 2 0 0 No 8
57
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Xu Ming 14 14 0 0 0 No 6
Ma Weihua 2 2 0 0 0 No 1
Feng Jie 20 20 0 0 0 No 8
Lu Jiankai 20 0 20 0 0 No 8
Tang Changjiang 20 0 20 0 0 No 8
Zheng Haiying 20 0 20 0 0 No 8
Explanations for non-attendance in person for two consecutive times
N/A
3. Details on directors’ objection to relevant events
Did directors object to relevant events of the Company
□ Yes √ No
During the Reporting Period, no directors objected to relevant events of the Company.
4. Other details about the performance of directors
Was 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.
58
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
VII. Details on Special Committees under the Board of Directors during the Reporting Period
Other
Number Duty Details on
Committee of Performa Objection to
Members Date Convened Meeting Content Important Opinions and Suggestions Proposed
Name Meetin nce Matters (If
gs Held Informati Any)
on
The Strategy Committee of the Board of Directors carried out its work in strict
Deliberated on the Proposal on Entry into the Agreement on
accordance with the Company Law, Code of Corporate Governance for Listed
the Investment in Projects of Changshou Economic and
Companies in China, Articles of Association, and Rules of Procedure for the Strategy
January 7, 2021 Technological Development Zone between Shanghai Energy None
Committee of the Board of Directors, put forward relevant opinions according to the
and the Administrative Committee of Changshou Economic
actual circumstances of the Company, and unanimously passed the proposal after
and Technological Development Zone
thorough communication and discussion.
Deliberated on the Proposal on Subsidiary Cooperating with The Strategy Committee of the Board of Directors carried out its work in strict
Polypore and Proposal on Subsidiary Jiangxi Mingyang New accordance with the Company Law, Code of Corporate Governance for Listed
January 30, Material Technology Co., Ltd Signing the Contract on Companies in China, Articles of Association, and Rules of Procedure for the Strategy
None
2021 Building the Dry-process Lithium Battery Separator Film Committee of the Board of Directors, put forward relevant opinions according to the
Project and Its Supplementary Agreements with Gao’an actual circumstances of the Company, and unanimously passed the proposals after
Municipal People’s Government, Jiangxi Province. thorough communication and discussion.
The Strategy Committee of the Board of Directors carried out its work in strict
Deliberated on the Proposal on Shanghai Energy’s accordance with the Company Law, Code of Corporate Governance for Listed
Wholly-Owned Subsidiary Chongqing Energy Implementing Companies in China, Articles of Association, and Rules of Procedure for the Strategy
March 28, 2021 None
Investment in Projects of Changshou Economic and Committee of the Board of Directors, put forward relevant opinions according to the
Technological Development Zone. actual circumstances of the Company, and unanimously passed the proposal after
Paul Xiaoming
thorough communication and discussion.
Strategy Lee, Li
Committee of Xiaohua, Feng Deliberated on the Proposal on Signing of the Investment
10
the 4th Board of Jie, Zheng Cooperation Agreement for “Energy Aluminum Laminated
The Strategy Committee of the Board of Directors carried out its work in strict
Directors Haiying, Tang Film Project” between Shanghai Energy and the
accordance with the Company Law, Code of Corporate Governance for Listed
Changjiang Administrative Committee of Jiangsu Jintan Economic
Companies in China, Articles of Association, and Rules of Procedure for the Strategy
June 17, 2021 Development Zone and Proposal on the Signing of the None
Committee of the Board of Directors, put forward relevant opinions according to the
Investment Cooperation Agreement for the “Energy Separator
actual circumstances of the Company, and unanimously passed the proposals after
Film Project” between Shanghai Energy and the
thorough communication and discussion.
Administrative Committee of Jiangsu Jintan Economic
Development Zone.
Deliberated on the Proposal on the Company Meeting the
Conditions for Issuing Shares and Paying Cash to Purchase
Assets and Raise Supporting Funds, Proposal on the Company
Issuing Shares and Paying Cash to Purchase Assets and Raise The Strategy Committee of the Board of Directors carried out its work in strict
Supporting Funds and Related Party Transactions, Proposal on accordance with the Company Law, Code of Corporate Governance for Listed
the Plan for Yunnan Energy New Material Co., Ltd. to Issue Companies in China, Articles of Association, and Rules of Procedure for the Strategy
June 21, 2021 None
Shares and Pay Cash to Purchase Assets and Raise Supporting Committee of the Board of Directors, put forward relevant opinions according to the
Funds and Related Party Transactions and Its Summary, and actual circumstances of the Company, and unanimously passed the proposals after
Proposal on Signing the Framework Agreement for Yunnan thorough communication and discussion.
Energy New Material Co., Ltd. to Issue Shares and Pay Cash
to Purchase Assets with Entry-into-Force Conditions
Attached.
59
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Deliberated on the Proposal on the Plan to Set Up a Joint
The Strategy Committee of the Board of Directors carried out its work in strict
Venture with EVE to Construct a Wet-Processing Lithium
accordance with the Company Law, Code of Corporate Governance for Listed
Battery Separator Film Project, and Proposal on the Plan to
Companies in China, Articles of Association, and Rules of Procedure for the Strategy
August 1, 2021 Sign the Framework Agreement on Acquisition of Suzhou RS None
Committee of the Board of Directors, put forward relevant opinions according to the
Technology Co., Ltd. and JOT Automation Ltd with Family
actual circumstances of the Company, and unanimously passed the proposals after
Members of Paul Xiaoming Lee, Victory Precision, and Its
thorough communication and discussion.
Subsidiary and Related Party Transactions.
The Strategy Committee of the Board of Directors carried out its work in strict
Deliberated on the Proposal on the Company Signing an accordance with the Company Law, Code of Corporate Governance for Listed
September 14, Equity Transfer Agreement with Family Members of Paul Companies in China, Articles of Association, and Rules of Procedure for the Strategy
None
2021 Xiaoming Lee, Victory Precision, and Its Subsidiary and Committee of the Board of Directors, put forward relevant opinions according to the
Related Transactions. actual circumstances of the Company, and unanimously passed the proposal after
thorough communication and discussion.
The Strategy Committee of the Board of Directors carried out its work in strict
accordance with the Company Law, Code of Corporate Governance for Listed
November 9, Companies in China, Articles of Association, and Rules of Procedure for the Strategy
Deliberated on the Proposal on Cooperating with CATL. None
2021 Committee of the Board of Directors, put forward relevant opinions according to the
actual circumstances of the Company, and unanimously passed the proposal after
thorough communication and discussion.
Deliberated on the Proposal on the Company Fulfilling the
Conditions for Non-public Offering of Shares, the Proposal on The Strategy Committee of the Board of Directors carried out its work in strict
the Plan of the Non-public Offering of Shares by the accordance with the Company Law, Code of Corporate Governance for Listed
November 20, Company, the Proposal on the Plan of the Non-public Companies in China, Articles of Association, and Rules of Procedure for the Strategy
None
2021 Offering of Shares by the Company in 2021, the Proposal on Committee of the Board of Directors, put forward relevant opinions according to the
the Termination of Purchasing Assets by Issuance of Shares actual circumstances of the Company, and unanimously passed the proposals after
and Payment of Cash and Raising Supporting Funds and the thorough communication and discussion.
Related Party Transactions.
Deliberated on the Proposal on the Signing of the Investment
Cooperation Agreement for Energy Liquid Package Project The Strategy Committee of the Board of Directors carried out its work in strict
between Hongchuang Packaging and the Administrative accordance with the Company Law, Code of Corporate Governance for Listed
December 19, Committee of Jintan Economic Development Zone in Jiangsu Companies in China, Articles of Association, and Rules of Procedure for the Strategy
Province, and the Proposal on Making Additional Investment None
2021 Committee of the Board of Directors, put forward relevant opinions according to the
in the Hungarian Wet-process Lithium Battery Isolation actual circumstances of the Company, and unanimously passed the proposals after
Membrane Project. thorough communication and discussion.
Nomination Lu Jiankai, Deliberate on the Proposal on the Addition of Candidates for
Committee of Tang November 3, Independent Non-Executive Directors of the Company, the The Nomination Committee reviewed the qualifications of the candidates and
1 None
the 4th Board of Changjiang, 2021 Proposal on Appointment of the Vice General Manager and unanimously passed the proposals.
Directors Feng Jie Secretary of the Board of the Company.
The Remuneration and Appraisal Committee of the Board of Directors carried out its
Remuneration Deliberated on the Proposal on 2020 Remunerations for the
Paul Xiaoming work in strict accordance with the Company Law, Code of Corporate Governance for
and Appraisal Company’s Directors, Proposal on 2020 Remunerations for
Lee, Tang Listed Companies in China, Articles of Association, and Rules of Procedure for the
Committee of 1 March 16, 2021 the Company’s Senior Management, and Proposal on None
Changjiang, Remuneration and Appraisal Committee of the Board of Directors, and according to
the 4th Board of Adjusting 2020 Remunerations for the Company’s Directors
Zheng Haiying the actual circumstances of the Company, unanimously passed the proposals after
Directors and Senior Management.
thorough communication and discussion.
60
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
The Audit Committee of the Board of Directors carried out its work in strict
Deliberated on the Proposal on the Company’s 2020 Annual accordance with the Company Law, Code of Corporate Governance for Listed
Audit Report and Proposal on Continued Engagement of Companies in China, Articles of Association, and Rules of Procedure for the Audit
March 16, 2021 None
Dahua CPAs (SGP) as the Company’s Financial Audit Committee of the Board of Directors, put forward relevant opinions according to the
Institution and Internal Control Audit Institution for 2021. actual circumstances of the Company, and unanimously passed the proposals after
thorough communication and discussion.
The Audit Committee of the Board of Directors carried out its work in strict
accordance with the Company Law, Code of Corporate Governance for Listed
Deliberated on the Proposal on the Full Text and Body of the
Companies in China, Articles of Association, and Rules of Procedure for the Audit
April 25, 2021 Company’s 2021 Q1 Report and the Proposal on Changes in None
Committee of the Board of Directors, put forward relevant opinions according to the
Accounting Policies.
actual circumstances of the Company, and unanimously passed the proposals after
thorough communication and discussion.
The Audit Committee of the Board of Directors carried out its work in strict
Audit accordance with the Company Law, Code of Corporate Governance for Listed
Li Xiaohua, Lu
Committee of August 25, Deliberated on the Proposal on the Company’s 2021 Companies in China, Articles of Association, and Rules of Procedure for the Audit
Jiankai, Zheng 5 None
the 4th Board of 2021 Semiannual Report and Its Summary. Committee of the Board of Directors, put forward relevant opinions according to the
Haiying
Directors actual circumstances of the Company, and unanimously passed the proposal after
thorough communication and discussion.
The Audit Committee of the Board of Directors carried out its work in strict
accordance with the Company Law, Code of Corporate Governance for Listed
October 24, Deliberated on the Proposal on the Company’s 2021 Q3 Companies in China, Articles of Association, and Rules of Procedure for the Audit
None
2021 Report. Committee of the Board of Directors, put forward relevant opinions according to the
actual circumstances of the Company, and unanimously passed the proposal after
thorough communication and discussion.
The Audit Committee of the Board of Directors carried out its work in strict
accordance with the Company Law, Code of Corporate Governance for Listed
December 29, Deliberated on the Proposal on Correcting the 2021 Q3 Companies in China, Articles of Association, and Rules of Procedure for the Audit
None
2021 Report. Committee of the Board of Directors, put forward relevant opinions according to the
actual circumstances of the Company, and unanimously passed the proposal after
thorough communication and discussion.
VIII. Details on the Work of the Supervisory Committee
Were 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.
61
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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
224
(person)
Incumbent staff of major subsidiary at the end of the Reporting Period
4,979
(person)
Total incumbent staff at the end of the Reporting Period (person) 5,954
Total staff receiving remunerations in current period (person) 8,679
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 4,816
Sales people 103
Technician 409
Financial staff 87
Administrative staff 539
Total 5,954
Educational level
Category of educational level Number (person)
Doctor’s degree and above 17
Master’s degree 89
Bachelor’s degree 602
Junior college 1,258
Technical secondary school and below 3,988
Total 5,954
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 2,476 training events,
62
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
including 2,400 internal training session and 76 external training sessions, and recorded a total of 75,403 class hours. These trainings have benefited a
total of 38,800 people. These trainings cover new employee training, job skill training, general management training, certification training and reserve
talent training.
4. Labor outsourcing
□ Applicable √ N/A
X. Profit Distribution and Conversion of Capital Reserve into Share Capital
Formulation, execution or adjustments of profit distribution policy, especially cash dividend policy, in the Reporting Period
√ Applicable □ N/A
(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
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%;
If the Company is in an unidentifiable stage and has any plan of significant expenditure, the above paragraphs shall apply.
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 income 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) The Company will disclose the profit distribution Plan in a timely manner in strict accordance with the relevant provisions of the China
Securities Regulatory Commission and Shenzhen Stock Exchange, and disclose the profit distribution Plan and the implementation of the profit
distribution Plan in the periodic report accordingly.
(III) During the Reporting Period, the Company implemented the 2020 equity distribution in compliance with the relevant provisions of the
Articles of Association, in full consideration of the reasonable demands of investors and with full protection of the legitimate rights and interests of
small and medium-sized investors. On March 18, 2021, the Company held the 24th meeting of the 4th Board of Directors to deliberate and approve
63
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
the Proposal on 2020 Profit Distribution Plan. The independent directors expressed their independent opinions to agree upon the Plan. The 2020
general meeting of the Company was held on April 8, 2021 where the Plan was deliberated and approved for implementation. For details, please refer
to the Announcement on 2020 Profit Distribution Plan published on the Juchao Information Network (www.cninfo.com.cn) (announcement No.:
2021-032).
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 Yes
general meeting of shareholders of the Company:
Whether or not the standard and proportion of dividends are clear and Yes
defined:
Whether or not the relevant decision-making process and mechanism Yes
are complete:
Whether or not the independent directors fully perform their duties and Yes
play their roles:
Whether or not minority shareholders have the opportunity to voice Yes
their opinions and 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 Yes
conditions and procedures are compliant and transparent:
1. The Company made a profit in 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 √ N/A
Profit distribution and conversion of capital reserve into share capital during the Reporting Period
√ Applicable □ N/A
Number of bonus shares distributed per 10 shares
0
held
Number of dividends per 10 shares (RMB)
3.03
(Inclusive of tax)
Equity base for the distribution scheme (shares) 890,821,385
Cash dividend amount (RMB) (tax inclusive) 270,000,000.00
Cash dividend amount by other means (such as share
204,444,302.78
repurchase) (RMB)
Total cash dividends (including that distributed
474,444,302.78
otherwise) (RMB)
Distributable Profit (RMB) 280,520,062.19
Proportion of total cash dividends (including those
100.00%
distributed by other others) in total profit distribution
Cash dividend for this time
If the development stage of the Company is in the growth stage and there are major capital expenditure arrangements, when making profit
distribution, the proportion of cash dividends in the profit distribution shall be at least 20%.
Particulars of profit distribution and conversion of capital reserves into share capital
A cash dividend of RMB 3.03 (tax inclusive) will be distributed for every 10 shares to all the shareholders, taking 890,821,385 shares, the
balance of the total share capital of the Company as of December 31, 2021 deducting the shares in securities account for share repurchase of the
Company, as the base, without converting the capital reserve into share capital. In total, a cash dividend of RMB 270,000,000.00 will be
distributed, and no bonus shares will be distributed. As of December 31, 2021, the total share capital of the Company was 892,406,822 shares,
including 1,585,437 shares in the securities account for share repurchase.
According to the Self-regulatory Guidelines for Listed Companies No. 9 of Shenzhen Stock Exchange - Share Repurchase, the share repurchase
amount of RMB 204,444,302.78 (excluding commission, transfer fee and other trading fees) paid by the Company in 2021 was deemed as cash
dividend amount.
If the total share capital of the Company is changed in the period from the disclosure of the distribution scheme to the implementation of
distribution scheme due to new share listing, equity incentive vesting, conversion of convertible bonds to equity, share repurchase and other
matters, the distribution proportion shall be adjusted correspondingly based on the principle that the total distribution amount remains unchanged.
64
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
XI. Implementation of any Equity Incentive Scheme, Employee Stock Ownership Scheme or
Other Incentive Measures for Employees
□ Applicable √ N/A
During the Reporting Period, there was no equity incentive scheme, employee stock ownership scheme or other incentive measures for employees, or
their implementation.
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
XIII. Company’s Management and Control of Subsidiaries during the Reporting Period
Newmi Tech was included in the consolidated statement of the Company in December 2020. During the reporting period, the Company
comprehensively integrated Newmi Tech from the aspects of supply chain, production equipment transformation, technology and process, production
and operation efficiency, and achieved remarkable integration effect. Newmi Tech made a turnaround 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 Self-Assessment Report or Internal Control Audit Report
1. Self-assessment report on internal control
Disclosure date of the assessment report on internal control April 12, 2022
Disclosure index of the assessment report on internal 2021 Assessment Report on Internal Control disclosed on
control http://www.cninfo.com.cn/ on April 12, 2022
Ratio of total assets of the unit included in the assessment
scope to the total assets on the Company’s consolidated 100.00%
financial statements
Ratio of operating income of the unit included in the
assessment scope to the operating income on the 100.00%
Company’s consolidated financial statements
Defect identification criteria
Type Financial report Non-financial report
General defects: There is little General defects: There is little
possibility that a failure to take any possibility that a failure to take any
action will result in potential action will result in potential
Qualitative criteria misstatement, economic loss or misstatement, economic loss or
unachieved business objectives. unachieved business objectives.
Material defects: There is some Material defects: There is some
possibility that a failure to take any possibility that a failure to take any
action will result in potential action will result in potential
65
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
misstatement, economic loss or misstatement, economic loss or
unachieved business objectives. Major unachieved business objectives. Major
defects: There is the possibility that a defects: There is the possibility that a
failure to take any action will result in failure to take any action will result in
potential misstatement, economic loss potential misstatement, economic loss
or unachieved business objectives. or unachieved business objectives.
General defects: < 0.25% of Total General defects: < 0.25% of Total
Assets, < 0.5% of Operating Income; Assets, < 0.5% of Operating Income;
material defects: ≥ 0.25% of Total material defects: ≥ 0.25% of Total
Assets and < 1% of Total Assets, ≥ Assets and <1% of Total Assets, ≥ 0.5%
Quantitative criteria
0.5% of Operating Income and < 1.5% of Operating Income and < 1.5% of
of Operating Income; major defects: ≥ Operating Income; major defects: ≥ 1%
1% of Total Assets, ≥ 1.5% of of Total Assets, ≥ 1.5% of Operating
Operating Income. Income.
Number of major defects in the financial report 0
Number of major defects in the non-financial report 0
Number of material defects in the financial report 0
Number of material defects in the non-financial report 0
2. Audit report on internal control
√ Applicable □ N/A
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 date of the audit report on
April 12, 2022
internal control
Disclosure index of the audit report The Authentication Report on Internal Control of Yunnan Energy New Material Co., Ltd. (Da Hua Nei
on internal control Zi [2022] No. 004077) disclosed by the Company on http://www.cninfo.com.cn/ on April 12, 2022
Type of opinion in the audit report on
Standard unqualified opinion
internal control
Whether there was any major defect
No
in the non-financial report
Did the accounting firm issue a qualified audit report on internal control
□ Yes √ No
Was the audit report on internal control issued by the accounting firm consistent with the self-assessment report from the Board of Directors
√ Yes □ No
XV. Rectification of Problems Found in Self-Inspection of the Special Operation on
Improving Corporate Governance of Listed Companies
According to the requirements of the Opinions on Further Improving the Quality of Listed Companies (Guo Fa (2020) No. 14) issued by the State
Council, the Announcement of Special Action on the Governance of Listed Companies of China Securities Regulatory Commission ((2020) No. 69)
and the Notice of Yunnan Securities Regulatory Bureau on Special Action of Listed Company Governance (Yun Zheng Jian Han (2021) No. 27)
issued by Yunnan Securities Regulatory Bureau of China Securities Regulatory Commission, as well as other requirements and the relevant laws,
regulations and rules, the Company carried out strict self-examination of corporate governance, internal control, information disclosure, code of
conduct of stakeholders and controlling shareholders, actual controller, directors, supervisors, senior managers and other “key minority” from 2018 to
2020, and checked the fund occupation, illegal guarantee and other aspects. Based on the self-examination, the Company does not have any major
violations affecting corporate governance, and it has established a complete and standardized corporate governance structure and internal control
system in accordance with the Company Law, Securities Law, Listed Company Governance Standards and other relevant laws, regulations and
normative documents. However, with the development of the Company and changes in the internal and external environment, the Company still needs
to constantly strengthen standardized operation and internal governance, constantly improve the level of corporate governance and business
management, and continuously improve the internal control system. The Company still needs to continuously strengthen the study and training of
66
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
controlling shareholders, directors, supervisors and senior managers in the relevant laws and regulations, and improve their standardization and
self-discipline, so as to continuously and practically improve the standard operation level of the Company and the effectiveness of corporate
governance, and promote the healthy and steady development of the Company.
67
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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
Numbe Total
Name of the Distribut Pollutant
Name of the r of Concentration Total Excess
Major Pollutants Discharge ion of Discharge Discharge
Company or Dischar of the Discharge Dischar
and Specific Method Discharg Standards Approved
Subsidiary ge Discharge (tons) ge
Pollutants e Outlets Implemented (tons/year)
Outlets
NOx 8 50mg/m3 8.47025 8.495300 None
Comprehensi
Boiler
Particulate matter 8 10mg/m3 ve Emission 0.12000 0.127700 None
room
Standard for
SO2 8 20mg/m3 0.440000 0.443700 None
Air Pollutant
Isopropanol 3 80mg/m3 DB31/933-20 -- No None
Dichloromethane 7 20mg/m3 15 -- requirement None
Shanghai
Organized Pollution
Energy
The Discharge
whole Standard for
plant Synthetic 4.218100
NMHC 8 70mg/m3 3.42 tons None
Resin tons/year
Industry
GB31572-20
15
Recyclin
Dichloromethane Organized 2 g area in 0.123mg/Nm3 Comprehensi 2.6678 49.845 None
the plant ve Emission
Standard for
Wuxi Energy NOx Organized 3 8.1mg/Nm3 2.123406 5.88 None
Air Pollutant
Worksho DB31/933-20
SO2 Organized 3 0mg/Nm3 0.235 3.36 None
p roof 15
Particulate matter Organized 3 2.65mg/Nm3 1.581096 2.5372 None
Spent bleaching
Transferre 123.6 200 None
clay National
d by
Sludge Catalogue of 40.76 100 None
Suzhou Green qualified
Hazardous
Power Spent activated third party
Wastes (2021 116.3 150 None
carbon particle disposal
Edition)
unit
Spent paraffin oil 9.61 436 None
68
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Newmi Tech Used mineral oil Transferre National -- No None
d by Catalogue of requirement
qualified Hazardous
third party Wastes (2021
disposal Edition)
unit
69
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Spent activated
-- None
carbon
Construction and Operation of Pollution Control Facilities
With great importance to the economical use of natural resources, the Company strictly complies with the laws and regulations on the prevention and
control of environmental pollution, including the Environmental Protection Law of the People’s Republic of China, Law of the People’s Republic of
China on Environmental Impact Assessment, Water Law of the People’s Republic of China, Law of the People’s Republic of China on Energy
Conservation, the Atmospheric Pollution Prevention and Control Law of the People’s Republic of China, Water Pollution Prevention and Control Law
of the People’s Republic of China, and Law of the People’s Republic of China on the Prevention and Control of Environment Pollution Caused by
Solid Wastes, to build a resource-saving and environmentally-friendly enterprise, and strive to achieve the coordinated sustainable development of
people, resources, and the environment. During the Reporting Period, Shanghai Energy and Wuxi Energy were listed as key pollutant discharge units
for atmospheric environment by the administrative department of ecological environment, and Suzhou Green Power and Newmi Tech were listed as
key pollutant discharge units for soil environment by the administrative department of ecological environment. These key pollutant discharge units
rigorously implemented the national and local pollutant discharge standards, with all waste gases emitted with compliance, all solid wastes utilized
comprehensively and disposed safely, and all hazardous wastes handed over to qualified entities for disposal and use. The Company formulated the
Responsibility System for the Prevention and Control of Environment Pollution Caused by Solid Waste and the Provisions on the Management of Solid
Waste, Exhaust Gas, Wastewater and Noise. In accordance with the standards of local environmental protection authorities, each company carried out
internal spot inspection and supervision on the discharge of exhaust gas, wastewater, and waste, while accepting external inspections from time to
time to ensure the discharge meets the standards.
1. Exhaust emissions
The exhaust emissions generated by the Company mainly include greenhouse gas emissions, VOCs (volatile organic compounds) emissions, and
ozone emissions. Specifically, VOCs, primarily generated from workshop exhaust gas, is discharged after being treated by exhaust gas recovery
equipment and low-nitrogen burners to meet the standards, and the Company keeps investing in exhaust gas recovery equipment to reduce emissions.
At the meantime, the Company set up monitoring instruments in the workshop to alert employees to evacuate once the emission level exceeds the
preset concentration. The VOCs online monitoring system has been running in Wuxi Energy, supervising the emission concentration in real time.
2. Wastewater discharge
Domestic sewage treatment equipment is placed in all factories of subsidiaries of the Company. For example, the factory of Shanghai Energy is
equipped with a sewage treatment station, which discharges wastewater to the municipal pipe network after primary and secondary sedimentation and
filtration treatment. The Company conducts strict and effective internal supervision on the compliance of wastewater discharge. Manual inspections
are carried out by the research institute on a daily basis, and third parties are hired to conduct inspections and issue reports every month. The
Company run spot inspections every quarter.
3. Waste discharge
During its production and research and development, the Company generates certain types and quantities of hazardous waste and non-hazardous
waste. Specifically, all hazardous waste is handed over to qualified third parties for disposal after being taken away from the factory. The Company
carefully confirm their qualifications when signing contracts with third-party treatment agencies. Hazardous waste is stored in separate warehouses
and disposed two to three times a year. Among the non-hazardous waste, paper and plastic bottles are recycled through the recycling bins placed in the
Company, and domestic waste is handed over to and disposed by the disposal agencies recognized by the environmental protection authorities.
Assessment of the environmental impact of construction projects and other administrative licenses of environmental protection
For all construction projects, the Company carries out environmental impact assessment and acceptance in strict accordance with the regulations on
environmental impact assessment, and obtain the approval of environmental impact assessment as well as the completion and environmental
protection acceptance opinion issued by the environmental protection authorities. The Company and its subsidiaries hold the Pollution Discharge
Permit in accordance with the laws and regulations, with complete environmental protection qualification procedures.
Environmental emergency response plan
In accordance with the Environmental Protection Law of the People’s Republic of China, Administrative Measures for Environmental Emergency
Response Plan, and National Environmental Emergency Response Plan, the Company prepared the Environmental Emergency Response Plan and
submitted it to the competent authorities for filing. The Company and its subsidiaries deploy persons in charge of emergency management and
regularly organize comprehensive emergency drills, with complete contingency rescue resources.
Environmental self-monitoring plan
The Company and its subsidiaries developed self-monitoring plans in accordance with the 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 the
discharged exhaust gas, wastewater, and noise.
Administrative penalties imposed for environmental issues during the Reporting Period: None.
Other environmental information to be disclosed
Measures taken to reduce carbon emissions during the Reporting Period and their effects
70
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
√Applicable □ Not applicable
The Company is committed to developing green products with low carbon and environmental protection, and integrates the concept of low carbon and
environmental protection into the process of product development, design and production.
In terms of new energy products, the Recycling and Energy Saving Research Institute is mainly responsible for the recycling and improvement of
white oil, dichloromethane, DMAC, acetone and white soil used in the production process of lithium battery diaphragm, as well as the research on the
recovery and treatment of waste water and waste gas. By designing effective solutions and using advanced separation and recovery equipment, we
ensured the recovery of white oil, dichloromethane, DMAC, acetone and white soil, and improved the recovery rate of waste water and waste gas,
making contribution to the energy conservation and consumption reduction and the environmental protection during the product R&D and design.
In terms of BOPP film products, to improve the rate of finished products, reduce waste film generation, and reduce environmental pollution, Chengdu
Hongta Plastic adopted various measures, such as enhancing the incentive for offcuts absorption, increasing the reward for the team with maximum
offcuts absorption, and improving the enthusiasm of the staff to absorb the offcuts, the film making workshop carrying out production in strict
accordance with the “film making task list” and the effective width of jumbo roll, the technical quality department shall strictly controlling the
sampling quantity of the jumbo roll according to the testing requirements, prohibiting excessive sampling and reducing cutting waste, in order to
reduce the waste during the production.
In terms of packaging products, we have in-depth cooperation with leading enterprises in the industry to promote the green and recyclable
development of the industrial chain. During the reporting period, Hongchuang Packaging signed strategic cooperation agreements with Grass Green
and New Hope Dairy, to explore the use of alternative biodegradable materials and more renewable energy, improve packaging to reduce food
residues and reduce packaging recycling and cleaning costs, and research on packaging lightweight, and make constant innovation in the
environmental protection, personalization and preservation capacity of the food packaging materials.
Other information related to environmental protection
Putting resource conservation in a key position in its development strategy and operation method, the Company strengthened the management system
of energy consumption and optimized the conservation measures to continuously monitor and improve the utilization efficiency of our energy and
resources. Electricity and natural gas are the primarily used energy in the Company’s production process. Specific targets are set for the consumption
of electricity and natural gas, and each production machine is equipped with a water meter, an electricity meter, and a natural gas meter. With an
order-based production, the Company reduces density of energy consumption by implementing scientific scheduling and time optimization, and
improving equipment production efficiency. In production, water resources are mainly consumed in the heat exchange inside the equipment, which
can be recycled directly without special treatment. Over the years, the Company has implemented management by objectives for energy consumption.
At the end of each year, energy consumption objectives for the follow year will be formulated based on the actual consumption of the year, the
forecast of the production in the next year, as well as the known plans for transformation of production equipment (e.g., boilers, refrigerators, and
fiber-adsorbed dichloromethane recycling and transformation), the establishment of distributed power stations (i.e. self-power generation), and the use
of equipment with lower energy consumption. In the future, the Company will try to establish medium and long-term management by objectives to
further promote energy conservation and consumption reduction.
In the meantime, the Company made efforts in technological innovations to reduce the discharge of hazardous waste, using alcohol-based inks to
replace lipid-based inks and planning to further replace lipid-based inks with water-based inks in feasible usage scenarios. The Company has invested
a rotary regenerative combustion furnace as a gas recovery device in the factory in Jiangxi. By recycling the organic solvent gas emitted by the
production equipment and conducting combustion oxidation treatment, the heat generated is returned to the production equipment for use, with the
VOCs treatment efficiency more than 99.5%, reducing emissions and energy consumption. Strictly following the regulations on waste classification
and disposal, each factory of the Company separates and empties the kitchen waste generated in the canteen. Meanwhile, waste classification
instructions are posted on workplace bulletin boards to help employees comprehend the waste classification method.
II. Social Responsibility
For details, please refer to the 2021 Environmental, Social and Governance Report (ESG report) disclosed by the Company on April 12, 2022 at
www.cninfo.com.cn.
III. Specifics of Consolidating and Extending the Achievements of Poverty Alleviation and Rural Revitalization
No actions were carried out during the Reporting Period.
71
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 in the Reporting Period or ongoing at the end of the Reporting Period
√ Applicable □ N/A
Perfor
manc
Commitment Type of Time of
Commitment Details of commitment Term of commitment e of
made by commitment commitment
comm
itment
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
Energy
commitments will not transfer the shares with interests in Energy Technology, and will submit the application for
Technology Commitment
suspending the transfer and share accounts to the Board of Directors of the Energy Technology within two trading days after Strictl
and all to submit
receiving the notice of the investigation, and the Board of Directors shall apply for lockup to the stock exchange and the June 13, y
directors, true, accurate Long term
registration and clearing company on behalf of those making the commitments; if the Board of Directors fails to submit the 2017 perfor
supervisors and complete
lockup application within two trading days, it will authorize the Board of Directors to directly submit the identity and med
and senior information
account information of those making the commitments to the stock exchange and the registration and clearing company
Commitments management
after verification and apply for lockup; if the Board of Directors fails to submit the identity and account information of those
made during making the commitments to the stock exchange and the registration and clearing company, those making the commitments
asset will authorize the stock exchange and the registration and clearing company to directly lock up the related shares. If the
restructuring 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. the Strictl
Commitment
Company and its controlling shareholders and actual controllers have not been publicly censured by the stock exchange and June 13, y
The Company on legal Long term
have no other major acts of dishonesty in the past 12 months; 3. The Company and its incumbent directors and senior 2017 perfor
compliance
management have not been investigated by judicial authorities for suspected crimes or investigated by the CSRC for med
suspected violations of laws and regulations.
Directors and Commitment 1. I hereby commit neither to tunnel to other units or individuals without compensation or under unfair conditions, nor to Strictl
May 25,
senior on dilution of damage the Company’s interests in other ways; 2. I hereby commit to restrict my position-related consumption activities; 3. Long term y
2017
management of current return I hereby commit not to use the Company’s assets for investment and consumption activities not related to execution of my perfor
72
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Energy and remedial duties; 4. I hereby commit to link the remuneration system formulated by the Board of Directors or the Remuneration med
Technology measures Committee or Assessment Committee of the Company with the execution of the return recovery measures; 5. I hereby
commit to link the vesting conditions with the implementation of the return recovery measures if 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 authenticity, accuracy and completeness of the information provided. In case of any false record, misleading statement or
Strictl
to submit major omission of the information provided, resulting in any loss to Energy Technology or investors, it shall be liable for
June 13, y
Counterparty true, accurate compensation according to law. In case of any false record, misleading statement or major omission in the information Long term
2017 perfor
and complete provided or disclosed in this material assets restructuring, which is put on file by the judicial organ for investigation or by
med
information 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 yuan on Gao Xiang; on January 5, 2017,
Shenzhen Stock Exchange made the Decision on Criticism to Shanghai Shunhao New Materials Technology Co., Ltd. and
Strictl
Commitment Related Parties through Circulating Notices, and circulated notification of criticism to Shunhao and related parties, including
June 13, y
Counterparties on legal Gao Xiang. In addition, other counterparties have not been subject to administrative or criminal penalties related to the Long term
2017 perfor
compliance securities market in the past five years, and have not involved in major civil litigation or arbitration related to economic
med
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. Paul Xiaoming Lee, Li Xiaohua, Wang Yuhua (dead), Sherry Lee and Shanghai Hengzou hereby commit that if their From August 15, 2018 to August
compensation obligations (if any) under the Profit Forecast and Compensation Agreement have been performed at the end of 14, 2021 for performances by Paul
36 months since the date of listing of their consideration shares, their consideration shares can be unlocked. Within 6 months Xiaoming Lee, Li Xiaohua, Wang
after the completion of this major asset restructuring, if the closing price of Energy Technology shares is lower than the Yuhua (dead), Sherry Lee and
issuing price for 20 consecutive trading days, or the closing price is lower than the issuing price at the end of 6 months after Shanghai Hengzou; the
the completion of the transaction, the lockup period of the consideration shares held by Paul Xiaoming Lee, Li Xiaohua, performance period for 75% of the
Wang Yuhua, Sherry Lee and Shanghai Hengzou will be automatically extended for at least 6 months. 2. As of the date when shares of Energy Technology
Commitment the consideration shares are registered in the name of the counterparties, except Paul Xiaoming Lee, Li Xiaohua, Wang acquired through the major asset
June 13, Perfor
Counterparties on stock Yuhua (dead), Sherry Lee and Shanghai Hengzou, if the shares of Shanghai Energy used by other counterparties to subscribe restructuring held by other
2017 med
lockup period for Energy Technology have been continuously owned for less than 12 months from the date of registration in their names, counterparties and Future Industry
the consideration shares obtained through this major asset reconstruction shall not be listed for trading or transferred within Investment Fund, which shall bear
36 months from the date of registration of the shares in their names. Except the consideration shares mentioned above, the their own profit forecast and
remaining consideration shares obtained by other counterparties through this major asset restructuring shall not be listed for compensation obligations and
trading or transferred within 12 months from the date of registration of the shares in their names; in order to ensure the account for 1.0563% equity of
performance of the performance commitment obligations in the Profit Forecast and Compensation Agreement, other Shanghai Energy, is from August
counterparties (except Paul Xiaoming Lee, Li Xiaohua, Wang Yuhua (dead), Sherry Lee, Shanghai Hengzou and Future 15, 2018 to August 14, 2019, and
Industry Investment Fund mentioned above) commit that at least 25% of the consideration shares held by each of them shall the performance period for the
73
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
not be listed for trading or transferred to external parties within 36 months from the date of registration of the relevant remaining 25% is from August 15,
shares of Energy Technology in their names until their compensation obligations under the Profit Forecast and 2018 to August 14, 2021; the
Compensation Agreement, if any, have been fully discharged before they can be listed for trading or transferred to external performance period for the shares
parties; Future Industry Investment Fund commits that at least 25% of the shares of Energy Technology acquired through of Energy Technology acquired
the major assets restructuring with the 1.0563% equity interest in Shanghai Energy held by it and subject to its own profit through the major asset
forecast compensation obligations shall not be listed for trading or transferred to external parties within 36 months from the restructuring held by the Future
date of registration of the relevant shares of Energy Technology in its name, until the compensation obligations of Future Industry Investment Fund, which
Industry Investment Fund under the Profit Forecast and Compensation Agreement, if any, have been fully performed. 3. shall not bear their own profit
After the completion of the implementation of the major assets restructuring, the additional shares of Energy Technology forecast and compensation
held by the counterparties as a result of bonus shares and conversion of share capital of Energy Technology shall also be obligations, is from August 15,
subject to the above commitments. 4. Upon the expiration of the lockup period, the transfer and trading of the shares of 2018 to August 15, 2019.
Energy Technology acquired by the counterparties through the major assets restructuring shall be conducted in accordance
with the laws and regulations and the rules of the Shenzhen Stock Exchange in force at the time.
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,
Commitment Strictl
withdrawal of capital and other acts in violation of its obligations and responsibilities as a shareholder, and there is no
on integrity June 13, y
Counterparties situation that may affect the legal survival of Shanghai Energy. 2. The equity of Shanghai Energy held by the counterparty is Long term
of asset 2017 perfor
actually legally owned. There is no ownership dispute, there is no trust, entrusted shareholding or similar arrangement, and
ownership med
there is no pledge, freezing, sealing, property preservation or other rights restrictions on the equity of Shanghai Energy held
by the counterparty.
Strictl
Commitment I/the enterprise and its main management do not leak any insider information of Energy Technology or leverage insider
June 13, y
Counterparties on no insider information to conduct insider trading. If the above commitments are violated, all losses caused to the listed company will Long term
2017 perfor
trading be borne.
med
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 with the principles of justice, fairness and
Commitment compensation for equal value, and shall, in accordance with the provisions of relevant laws, regulations, other normative Strictl
Heyi .Paul
to regulate documents and the Articles of Association of Yunnan Energy New Material Co., Ltd., perform relevant internal June 13, y
Xiaoming Lee Long term
related decision-making approval procedures in accordance with the law and timely perform information disclosure obligations, 2017 perfor
family
transactions guarantee not to trade with Energy Technology under unfair conditions compared with the market, guarantee not to illegally med
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 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
Heyi Commitment Strictl
Investment, to avoid with the main business same as or similar to that in Energy Technology or Shanghai Energy, or engage in any other June 13, y
competition with Energy Technology or Shanghai Energy. 2. The commitment maker guarantees that after the completion of Long term
Paul Xiaoming horizontal 2017 perfor
this major asset restructuring, it will not carry out or operate the same or similar business with the main business of Energy
Lee family competition med
Technology or Shanghai Energy in its own way, directly or indirectly through other business entities under its direct or
indirect control; do not hold any position or act as any kind of consultant in any operating entity with the same or similar
business with Energy Technology or Shanghai Energy; do not provide technical services for existing customers of Energy
74
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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.
Commitment Before this major asset restructuring, Energy Technology has been completely separated from other enterprises controlled
Heyi on ensuring by the commitment maker in terms of business, assets, institutions, personnel and finance. Energy Technology’s business, Strictl
Investment, the assets, institutions, personnel and finance are independent. After the completion of this major asset restructuring, the June 13, y
Long term
Paul Xiaoming independence commitment maker undertakes not to use the identity of the controlling shareholder or actual controller of Energy 2017 perfor
Lee family of the listed Technology to affect the independence of Energy Technology, and to ensure the independence of Energy Technology in med
company 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 Shanghai Energy to
Commitment
rectify the three dichloromethane storage tanks within a time limit. Shanghai Energy has completed the rectification, but has
on the Strictl
not completed the safety acceptance after the rectification. If the relevant competent departments in the local place where
Paul Xiaoming existence of May 25, y
Shanghai Energy and its subordinate companies are located in have made administrative punishment to Shanghai Energy Long term
Lee family previous 2017 perfor
and its subordinate companies for fire control, water service or the three dichloromethane tanks at any time, the commitment
administrativ med
maker promises to make cash compensation for all economic losses suffered by Shanghai Energy or its subsidiaries within
e penalty
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.
Commitment Strictl
Those making the commitments undertake that there are no other related parties and related transactions in Shanghai Energy
Paul Xiaoming on no other May 25, y
except for the related transactions that have been publicly disclosed in the restructuring report, legal opinion and audit Long term
Lee family related 2017 perfor
report.
transactions med
Letter of Within 36 months from the date of the registration of Energy Technology’s shares in the name of Shanghai Hengzou, I
All partners of
commitment promise that I will not require the shares of Energy Technology held by Shanghai Hengzou to be listed or transferred, and I June 13, Perfor
Shanghai June 13, 2017 to August 15, 2021
on stock promise not to transfer the property shares of Shanghai Hengzou until Shanghai Hengzou’s compensation obligations (if 2017 med
Hengzou
lockup period any) under the Profit Forecast and Compensation Agreement are performed, it can be traded or transferred externally.
Commitment
Strictl
on capital Although I hold the certificate of permanent residence right of the United States, I have not changed my nationality, I am
June 13, y
Li Xiaohua source of still a Chinese nationality; my own investment in Shanghai Energy is all China’s income, and does not involve the Long term
2017 perfor
Shanghai contribution of foreign exchange or foreign assets.
med
Energy
Commitment This enterprise is the employee stock ownership platform of Shanghai Energy, and the enterprise does not exist to raise
of the funds in a non-public way to qualified investors. There is no asset management by the fund manager or general partner, nor
enterprise not does it serve as the manager of any private equity fund. Therefore, the enterprise does not belong to the private investment Strictl
Shanghai belonging to fund or a private fund manager in the Interim Measures for the Supervision and Administration of Private Investment Funds June 13, y
Long term
Hengzou private and the Measures for the Registration and Filing of Private Investment Fund Managers (for Trial Implementation), and does 2017 perfor
investment not need to follow the Interim Measures for the Supervision and Administration of Private Investment Funds and the med
funds or a Measures for the Registration and Filing of Private Investment Fund Managers (for Trial Implementation) and other relevant
private fund laws and regulations to fulfill the registration and filing procedures.
75
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
manager
Commitment
The Company is not established by raising funds from qualified investors in a non-public way, or doesn’t have the assets
of the
managed by the fund manager or the general partner, or act as the manager of any private investment fund. Therefore, the
enterprise not
Company does not belong to the private investment funds or a private fund manager in the Interim Measures for the Strictl
belonging to
Huachen Supervision and Administration of Private Investment Funds and the Measures for the Registration and Filing of Private June 13, y
private Long term
Investment Investment Fund Managers (for Trial Implementation), and does not need to follow the Interim Measures for the 2017 perfor
investment
Supervision and Administration of Private Investment Funds and the Measures for the Registration and Filing of Private med
funds or a
Investment Fund Managers (for Trial Implementation) and other relevant laws and regulations to fulfill the registration and
private fund
filing procedures.
manager
Within 3 years from the closing date, he shall continue to serve in Shanghai Energy and fulfill his due diligence obligations.
If he voluntarily proposes to leave Shanghai Energy before the expiration of his term of office (except for the case with the
consent of Energy Technology), or causes serious losses to Energy Technology and Shanghai Energy due to dereliction of
duty, malpractice or other acts that damage the interests of Shanghai Energy and is dismissed by Shanghai Energy according
to law, he shall bear the liability for breach of contract to Energy Technology. Energy technology has the right to require the
Paul Xiaoming Commitment
defaulting party to pay the consideration it has obtained in this purchase of assets to Energy Technology as compensation, as Fulfill
Lee, Li of term of May 2, 2017 July 31, 2018 to July 30, 2021
follows: 1. If the term of office is less than 12 months since the closing date, the defaulting party shall pay 50% of the total ed
Xiaohua service
consideration obtained in this purchase of assets to the listed company in cash as compensation; 2. If the term of office has
expired from 12 months to 24 months since the closing date, the defaulting party shall pay 40% of the total consideration
obtained in this purchase of assets to the listed company in cash as compensation; 3. If he has worked for 24 months but less
than 36 months since the closing date, the defaulting party shall pay 30% of the total consideration obtained in this purchase
of assets to the listed company in cash as compensation.
Withi
n the
During the term of office of Shanghai Energy or within 2 years after the resignation of Shanghai Energy, it will not directly
perfor
or indirectly operate the same or similar business with Energy Technology or Shanghai Energy on its own or in the name of
manc
others, nor will it hold any post or provide any service in entities with the same or similar business with Energy Technology
Paul Xiaoming Non-competit e
or Shanghai Energy; if they violate the aforesaid non-competition commitment, they shall pay a penalty of RMB5 million Term of service and within two
Lee, Li ion May 2, 2017 period
yuan to Energy Technology, and shall turn over all the operating profits, wages, remuneration and other income earned by years after resignation
Xiaohua commitment ,
them due to the violation of the commitment to Energy Technology. The aforesaid compensation still cannot make up for
strictl
Energy Technology therefore, Energy Technology has the right to request the breach party to be liable for the loss suffered
y
by Energy Technology.
perfor
med
Withi
n the
perfor
manc
Commitment
Paul Xiaoming During the term of office at Shanghai Energy, without the consent of Energy Technology, it is not allowed to work part-time e
on no
Lee, Li (except for directors and supervisors) in other companies, and the income violating the prohibition of concurrent operation May 2, 2017 Term of service period
part-time
Xiaohua shall be owned by Innovation Co., Ltd. ,
work
strictl
y
perfor
med
76
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 Withi
capital of the Company. As one of the counterparties, Ms. Wang Yuhua directly holds the Company’s shares and purchases n the
the shares of Shanghai Energy through the Company’s issuance of shares. Therefore, with regard to the lock-in period of the perfor
Company’s shares directly held by me, I hereby commit as follows: I have obtained the new shares of the listed company manc
Commitment through this restructuring, and the shares shall not be traded or transferred externally within 36 months from the date of the e
October 25, October 25, 2018 to August 14,
Jerry Yang Li on the lockup end of this issue. Until the compensation obligation under the Profit Forecast and Compensation Agreement (if any) is period
2018 2021
period performed, the shares can be traded or transferred externally. At the same time, the shares of the listed company held by me ,
before the restructuring shall not be transferred within 12 months after the completion of this transaction; if the closing price strictl
of the shares of the listed company is lower than the issuing price for 20 consecutive trading days within 6 months after the y
completion of this transaction, or the closing price is lower than the issuing price at the end of 6 months after the completion perfor
of the transaction, the lock-in period of the shares of the Company held by me shall be automatically extended for at least 6 med
months. If the transaction is put on file by the judicial organ or the CSRC for investigation due to the false records,
misleading statements or major omissions of the information provided or disclosed, before the case investigation conclusion
is clear, the shares in the listed company owned by myself shall not be transferred.
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 New Material Technology Co., Ltd. through issuing shares of the Company, I Strictl
Commitment
hereby commit as follows: 1. I have not been subject to administrative or criminal penalties related to the securities market October 25, y
Jerry Yang Li to legal Long term
in the past five years, and have not involved in major civil litigation or arbitration related to economic disputes; 2. I am 2018 perfor
compliance
eligible to purchase shares not publicly offered by Energy Technology, and are not under any circumstances where they are med
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, I 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.
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
Commitment
and indirectly hold 54,655,167 shares of the Company through Heyi Investment, accounting for 11.53% of the total share Strictl
to ensure the
capital of the Company. My directly holding shares is acquired by Ms. Wang Yuhua as one of counterparties, through October 25, y
Jerry Yang Li independence Long term
purchasing the equity of Shanghai Energy through issuing shares of the Company. Therefore, with regard to the 2018 perfor
of listed
independence of listed companies involved in this restructuring, I hereby make the following confirmation and commitment: med
companies
before this restructuring, Shanghai Energy has been completely separated from other 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
77
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 reduce and standardize the
related transactions that may occur with the listed company, I hereby make the following commitments: after the completion
Commitment of this restructuring, the enterprises under my control will avoid and reduce the related transactions with the listed company Strictl
on regulating as much as possible. For the related transactions that cannot be avoided or have reasonable reasons, the enterprises under my October 25, y
Jerry Yang Li Long term
related control will follow the principles of justice, fairness, equal value and compensation with the listed company in accordance 2018 perfor
transactions with the law sign the agreement, perform the legal procedures, and in accordance with the provisions of relevant laws, med
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 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
Commitment same or similar business with the existing business of the listed company or Shanghai Energy through other business entities Strictl
on avoiding directly or indirectly controlled by me or in the name of natural persons, have not held any position or acted as any kind of October 25, y
Jerry Yang Li Long term
horizontal consultant in any business entity with the same or similar main business as the listed company or Shanghai Energy, or any 2018 perfor
competition other situation of horizontal competition with the listed company or Shanghai Energy. 2. I guarantee that after the med
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.
78
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
The 15,624,033 shares I inherited from Ms. Wang Yuhua were acquired by Ms. Wang Yuhua through this restructuring.
Therefore, the lock-in period of the Company’s shares directly held by me through this restructuring (including my Withi
11,596,884 shares and 15,624,033 shares inherited from Ms. Wang Yuhua), I hereby committed as follows: the newly n the
increased shares of the listed company obtained by me through this restructuring shall not be traded on the market or perfor
transferred externally within 36 months from the date of the end of this issuance until all the compensation obligations (if manc
Commitment
any) under the Profit Forecast and Compensation Agreement have been performed. At the same time, the shares of the listed e
on the October 25, October 25, 2018 to August 14,
Sherry Lee company held by me before this restructuring shall not be transferred within 12 months after the completion of this period
lockup 2018 2021
transaction. If the closing price of the listed company’s shares is lower than the issuing price for 20 consecutive trading days ,
period
within 6 months after the completion of this transaction, or the closing price is lower than the issuing price at the end of 6 strictl
months after the completion of the transaction, the lock-in period of the Company’s shares held by myself will be y
automatically extended for at least 6 months. If the transaction is put on file by the judicial organ or the CSRC for perfor
investigation due to the false records, misleading statements or major omissions of the information provided or disclosed, med
before the case investigation conclusion is clear, the shares in the listed company owned by myself shall not be transferred.
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 impact on the judgment of whether
the Company complies with the issuance conditions stipulated by the law, the Board of Directors of the Company shall
formulate the share repurchase plan and submit it to the General Meeting of Shareholders for deliberation and approval, and
after it is approved, reviewed or filed by the relevant competent department (if necessary), share repurchase measures will
be started, and all new shares of the initial public offering will be repurchased according to law; the repurchase price (in
case of ex-right and ex-dividend due to cash dividend, share distribution, conversion to share capital and new share
The Company, Commitment
issuance, the right shall be restored in accordance with the relevant provisions of Shenzhen Stock Exchange, the same
controlling on
below) shall be determined according to relevant laws and regulations, and shall not be lower than the issuance price of the
shareholders authenticity,
Commitments initial public offering shares. 4. If the prospectus of the Company’s initial public offering contains false records, misleading Strictl
and the actual accuracy and
made at the statements or major omissions, which causes investors to suffer losses in securities trading, the Company will compensate September y
controller, completeness Long term
time of IPO or investors for losses according to law. II. commitment of the controlling shareholder and actual controller of the Company: 1. 14, 2016 perfor
directors, of
refinancing there are no false records, misleading statements or major omissions in the prospectus of the Company’s initial public med
supervisors and documents
senior related to offering. 2. If any competent authority determines that there are false records, misleading statements or major omissions in
management IPO 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 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
79
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 expiration of the lock-up period, the total number of shares
Withi
held by Heyi Investment and the family shall not exceed 30% of the total shares held by Heyi Investment and the family
Controlling n the
directly or indirectly before the issuance. 4. Within two years after the expiration of the shareholding lock-in period of Heyi
shareholder, perfor
Investment and the family’s commitment, the price of shares of the Company reduced by Heyi Investment and the family
actual About manc
through the secondary market will be determined according to the market price at that time on the premise of meeting the
controller, and shareholding e
commitments made by Heyi Investment and the family, and the specific reduction plan will be formulated according to the September
Shanghai intention and Share holding period period
market situation at that time. 5. Heyi Investment and the family promise to make an announcement through the Company 14, 2016
Guohe, a reduction ,
three trading days in advance when carrying out the reduction, and complete the announcement within six months, and
shareholder intention strictl
fulfill the obligation of information disclosure accurately and completely in accordance with the rules of the stock exchange.
holding more y
II. Shanghai Guohe’s commitment to shareholding intention and reduction intention: 1. Within two years after the expiration
than 5% shares perfor
of the shareholding locking period promised by the Company, the Company intends to reduce its shareholding by means of,
med
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 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
Commitment accept the following binding measures: (1) the Company will publicly explain the specific reasons for not taking the above Strictl
on remedial measures in the General Meeting of Shareholders and the newspapers designated by the CSRC, and apologize to the
Energy September y
measures for shareholders of the Company and the public investors; (2) If the investor suffers losses in the securities trading due to the Long term
Technology 14, 2016 perfor
breaking failure to fulfill the commitments, the Company will compensate the investor for the losses according to law after being med
faith 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
80
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 controller until the controlling
shareholder and the actual controller fulfill their obligation to increase. 3. If a company director or senior manager fails to
fulfill his obligation to increase his or her holdings, the Company shall have the right to detain salaries and cash dividends
of directors and senior management until the directors and senior managers fulfill 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 years as the performance guarantee
of the above commitment, and if the controlling shareholder and the actual controller fails to fulfill the above-mentioned
obligation of acquisition or compensation, the shares of the Company held by the controlling shareholder and the actual
controller shall not be transferred before fulfilling the above-mentioned commitment. 3. The controlling shareholder and the
Commitment actual controller have signed the promise of controlling shareholder and actual controller’s shareholding intention and
Strictl
Controlling on remedial reduction intention. The controlling shareholder and the actual controller will strictly carry out the above commitments and
September y
shareholder, measures for promise to abide by the following restraint measures: (1) If the above commitments are not performed, the cash dividends to Long term
14, 2016 perfor
actual controller breaking be obtained by the controlling shareholder and the actual controller shall be withheld by the Company and owned by the
med
faith 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
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.
81
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 by holding the Company’s
Commitment
Directors, shares directly or indirectly and the salary received from the Company in the current year and the following years as the Strictl
on remedial
supervisors and performance guarantee of the above commitments. If the director, supervisor or senior manager fails to perform, has failed September y
measures for Long term
senior to perform or fails to perform on schedule due to objective reasons beyond the control of the director, supervisor or senior 14, 2016 perfor
breaking
managers manager such as changes in relevant laws and regulations, policies, natural disasters and other force majeure, the director, med
faith
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 office and personnel
(including but not limited to directors, general managers, etc.) and the controlling position of the undertaker in such
Paul Xiaoming
Commitment enterprises, to ensure that such enterprises perform the same obligations as the undertaker under this letter of commitment, Strictl
Lee family,
on avoiding to ensure that such enterprises do not compete with the Company and its holding subsidiaries in the same industry, and the November y
Heyi Long term
horizontal undertaker is willing to bear all compensation liabilities for the economic losses caused to the Company due to violation of 10, 2012 perfor
Investment and
competition the above commitments. 3. If the Company further expands its business scope on the basis of its existing business, and the med
Heli Investment
undertaker and the enterprise controlled by the undertaker have carried out 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.
1. The Company and its controlling shareholder and the actual controller make a commitment to the Company’s ability to
The
Company, fill in the return measures. It does not exceed the authority to interfere in the Company’s management activities and does not
commitment
controlling occupy the Company’s interests. 2. Directors and senior managers make a commitment to fulfill the Company’s return
that the
shareholder and measures: (1) Promise not to transfer interests to other units or individuals free of charge or under unfair conditions, and not Strictl
Company’s
actual to damage the interests of the Company in other ways; (2) Promise to restrict the post consumption behavior of directors and September y
compensatio Long term
controller, senior managers; (3) Promise not to use the Company’s assets to engage in investment and consumption activities unrelated 14, 2016 perfor
n measures
director and to the performance of its duties; (4) Commit that the remuneration system formulated by the board of directors or med
can be
senior remuneration committee is linked to the implementation of the Company’s measures to fill the return; (5) Promised that the
effectively
management exercise conditions of the Company’s equity incentive to be announced are linked to the implementation of the Company’s
performed
compensation measures.
Heyi The undertaker, close relative and the affiliated enterprise under control strictly restrict the funds of the Company and its
Investment, Commitment subsidiary companies in the operating capital transactions between the Company and its subsidiaries; the Company and its
family on avoiding subsidiaries shall not be required to pay wages, welfare, insurance, advertising and other expenses; the Company and its Strictl
members of occupation subsidiary funds are not directly or indirectly provided to the undertaker, close relatives and controlled affiliated enterprises, September y
Long term
Paul Xiaoming of the including: 1. to lend funds to the undertaker, close relatives and controlled affiliated enterprises for use with compensation 14, 2016 perfor
Lee, the actual Company’s or free of charge; 2. to provide entrusted loans without commercial substance to the undertaker, close relatives and med
controllers of funds controlled affiliated enterprises through banks or non-bank financial institutions; 3. Entrust the undertaker, close relatives
the Company and controlled affiliated enterprises to carry out investment activities without commercial substance; 4. To issue commercial
82
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
acceptance bills without real transaction background for the undertaker, close relatives and 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
Commitment
of the above commitment, and if the controlling shareholder and the actual controller fails to perform the above-mentioned Strictl
on remedial
acquisition or compensation obligations, the shares of the Company held by the controlling shareholder and the actual October 25, y
Jerry Yang Li measures for Long term
controller shall not be transferred before the above-mentioned commitments are performed; 3. The controlling shareholder 2018 perfor
breaking
and the actual controller have signed the commitment of the controlling shareholder and the actual controller’s shareholding med
faith
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.
1. The undertaker commits that he 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;
Commitment 2. For other enterprises directly or indirectly holding by the undertaker, the undertaker will adopt the representative offices
on avoiding and personnel (including but not limited to directors, general managers, etc.), as well as the controlling position of the Strictl
horizontal undertaker in such enterprises, to ensure that such enterprises carry out the same obligations as the undertaker in this October 25, y
Jerry Yang Li Long term
competition commitment letter, and ensure that such enterprises do not compete with the Company and its controlling subsidiaries in the 2018 perfor
with Energy med
same industry, the undertaker is willing to take full responsibility for the economic losses incurred by the Company in
Technology
violation of the above commitments; 3. If the Company further expands its business scope on the basis of its existing
business, and the undertaker and the enterprise controlled by the undertaker have carried out 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 purchase and operate under the same commercial conditions; 4. In addition to
83
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
the investment in the Company, the undertaker will not invest in or operate the products (or similar products, or products
with substitute function) developed, produced or operated by the Company and its holding subsidiaries in any way in any
place; 5. This letter of commitment is an effective commitment during the period when the undertaker and the company
controlled by the undertaker have an associated relationship with 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 Withi
Company, I will not reduce the shares of the Company I directly hold; upon expiry of three years after the listing of the n the
Company, I will transfer the shares of the Company I directly hold each year no more than 25% of the total shares of the perfor
Company I directly hold; 3. within two years after the locking period I committed, the Company’s shares will be reduced at manc
Commitment a price not lower than the initial public offering price of the Company. If the Company’s shares are subject to ex-right and e
October 25,
Jerry Yang Li on reduction ex-dividend during the period, such as dividend distribution, stock distribution, capital reserve converted to share capital, the Holding period period
2018
intention 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 strictl
made on the basis of the market price, and the specific reduction plan will be drawn up according to the market situation at y
that time; 5. I promise that I will announce the implementation of the reduction through the Company three trading days in perfor
advance, and complete the announcement within six months. At the same time, I will fulfill the obligation of information med
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.
(1) Except for the capital occupation disclosed in writing to the relevant intermediary institutions, there is no other capital
occupation that shall be disclosed but not disclosed in accordance with the laws and regulations and the relevant provisions
Commitment of the CSRC for the time being by the undertaker, close relatives, controlled affiliated enterprises and the Company and its
on avoiding subsidiaries; (2) The undertaker, close relatives and controlled affiliated enterprises will strictly limit the occupation of Strictl
capital funds of the Company and its subsidiaries in the operational capital transactions with the Company and its subsidiaries; (3) October 25, y
Jerry Yang Li Long term
occupation The undertaker, close relatives and controlled affiliated enterprises shall not require the Company and its subsidiaries to 2018 perfor
of Energy advance wages, welfare, insurance, advertising and other expenses, or require the Company and its subsidiaries to bear costs med
Technology 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
84
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 Withi
shares in strict accordance with the provisions of laws, regulations, normative documents and regulatory requirements, and n the
abide by the share locking period; after the expiration of the locking period, I shall reduce my holding of the Company’s perfor
shares in accordance with the requirements of relevant laws, regulations, normative documents and rules of the stock manc
Commitment exchange; 2. within three years after the listing of the Company, I will not reduce the shares of the Company I directly hold; e
October 25,
Sherry Lee on reduction upon expiry of three years after the listing of the Company, I will transfer the shares of the Company I directly hold each Share holding period period
2018
intention year no more than 25% of the total shares of 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. strictl
If the Company’s shares are subject to ex-right and ex-dividend during the period, such as dividend distribution, stock y
distribution, capital reserve converted to share capital, the issue price shall be ex-right and ex-dividend accordingly; 4. After perfor
two years after the expiration of my commitment to hold shares, I will, through the reduction of the price of the Company’s med
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
85
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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
Commitment
assets for investment and consumption activities not related to execution of my duties; 4. to link the remuneration system
on dilution
formulated by the Board of Directors or the Remuneration Committee or Assessment Committee of the Company with the
on current
execution of the return recovery measures; 5. to link the vesting conditions with the implementation of the return recovery
returns as a
measures if the Company will implement any share incentive scheme in the future; 6. since the date of this commitment up
result of the
Directors and to completion of this public offering of convertible corporate bonds, if the CSRC imposes other new regulatory Strictl
public
senior requirements in relation to the return recovery measures and its commitments and such commitments cannot meet such rules May 14, y
offering of Long term
management of of the CSRC, I commit to issue supplemental undertakings in accordance with the latest requirements of the CSRC. In order 2019 perfor
convertible med
the Company to ensure the proper implementation of the return recovery measures, I commit to strictly perform the above commitments.
corporate
If I breach or refuse to fulfill the above commitments, I will perform obligations of interpretation and apology as required
bonds, and
under the Guiding Opinions on Matters relating to the Dilution on Current Returns as a result of Initial Public Offering,
the return
Refinancing and Major Asset Restructuring (CSRC Announcement [2015] No. 31), and agree that relevant regulatory or
recovery
self-regulation measures shall be imposed or taken in accordance with the relevant provisions and rules specified or
measures
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.
Commitment
on dilution 1. Not interfere with the operation and management activities of the Company beyond the authority, and not encroach on the
on current interests of the Company; 2. since the date of this commitment up to completion of the convertible corporate bonds, if the
returns as a CSRC imposes other new regulatory requirements in relation to the return recovery measures and its commitments and such
result of the commitments cannot meet such rules of the CSRC, I commit to issue supplemental undertakings in accordance with the
Company’s Strictl
public latest requirements of the CSRC. In order to ensure the proper implementation of the return recovery measures, I commit to
actual controller May 14, y
offering of strictly perform the above commitments. If I breach or refuse to fulfill the above commitments, I will perform obligations of Long term
and controlling 2019 perfor
convertible interpretation and apology as required under the Guiding Opinions on Matters relating to the Dilution on Current Returns as med
shareholder
corporate a result of Initial Public Offering, Refinancing and Major Asset Restructuring (CSRC Announcement [2015] No. 31), and
bonds, and agree that relevant regulatory or self-regulation measures shall be imposed or taken in accordance with the relevant
the return provisions and rules specified or published by CSRC and Shenzhen Stock Exchange; if the Company or investors suffered
recovery losses as a result of my breach or refusal, I am willing to assume relevant liability for compensation.
measures
Commitment
on the
authenticity,
accuracy and
All directors of All directors of the Company commit that the report on this offering and the announcement on listing don’t contain false Strictl
completeness
September 3, y
Energy of records, misleading statements or major omissions, and they will jointly and severally liable for its authenticity, accuracy Long term
2020 perfor
Technology information and completeness. med
submitted in
connection
with the
non-public
86
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
offering of A
shares in
2020
Commitment
on dilution
on current 1. I promise not to interfere with the operation and management activities of the Company beyond the authority, and not
returns as a encroach on the interests of the Company; 2. I commit to properly implementation of the current return recovery measures
result of the formulated by the Company and fulfill any commitment I make in relation to the current return recovery measures, and Strictl
Controlling
non-public assume the liability for compensation to the Company or investors according to law if I violate such commitments and as a March 23, y
shareholder and Long term
offering of A result cause any loss to the Company or investors; 3. since the date of this commitment up to completion of this non-public 2020 perfor
actual controller
shares in offering of shares by Energy Technology, if the CSRC imposes other new regulatory requirements in relation to the return med
2020, and recovery measures and its commitments and such commitments cannot meet such rules of the CSRC, I commit to issue
the return supplemental undertakings in accordance with the latest requirements of the CSRC.
recovery
measures
Commitment
on dilution 1. I promise not to tunnel to other units or individuals without compensation or under unfair conditions, or to damage the
on current Company’s interests in other ways; 2. I commit to restrict my position-related consumption activities; 3. I commit to not use
returns as a the Company’s assets for investment and consumption activities not related to execution of my duties; 4. I commit to link
result of the the remuneration system formulated by the Board of Directors or the Remuneration Committee or Assessment Committee of Strictl
Directors and
non-public the Company with the execution of the return recovery measures; 5. I commit to link the vesting conditions with the March 23, y
senior Long term
offering of A implementation of the return recovery measures if the Company will implement any share incentive scheme in the future; 6. 2020 perfor
management
shares in since the date of this commitment up to completion of this non-public offering of shares, if the CSRC imposes other new med
2020, and regulatory requirements in relation to the return recovery measures and its commitments and such commitments cannot meet
the return such rules of the CSRC, I commit to issue supplemental undertakings in accordance with the latest requirements of the
recovery CSRC.
measures
1. The Company agrees to not transfer the subscribed shares for a period of six months from the date of completion of this
offering of shares of Energy Technology (meaning the date of listing of the shares in this offering) and entrusts the Board of
Directors of Energy Technology to apply to Shenzhen Branch of China Securities Depository and Clearing Company
22 shareholders
Limited for locking the above subscribed shares of the Company, so as to ensure that the above shares held by the Company
subscribing Commitment
will not be transferred for a period of six months from the date of completion of this offering. 2. Guarantee to compensate August 13, September 4, 2020 to March 3, Perfor
shares not on share
other shareholders for any losses suffered by them as a result of non-performance or incomplete performance of the above 2020 2021 med
publicly offered locking
commitment. If there is any sales transaction in violation of the commitment, the Company will authorize the Shenzhen
in 2020
Branch of China Securities Depository and Clearing Company Limited to transfer the proceeds from such transaction to the
account of the listed company for the benefit of all shareholders. 3. The Company declares that it will faithfully fulfill its
commitments and bear the corresponding legal responsibilities.
Commitment
on dilution 1. I promise not to tunnel to other units or individuals without compensation or under unfair conditions, or to damage the
on current Company’s interests in other ways; 2. I commit to restrict my position-related consumption activities; 3. I commit to not use
returns as a the Company’s assets for investment and consumption activities not related to execution of my duties; 4. I commit to link
result of the the remuneration system formulated by the Board of Directors or the Remuneration Committee or Assessment Committee of Strictl
Directors and
non-public the Company with the execution of the return recovery measures; 5. I commit to link the vesting conditions with the November y
senior Long term
offering of A implementation of the return recovery measures if the Company will implement any share incentive scheme in the future; 6. 21, 2021 perfor
management
shares in since the date of this commitment up to completion of this non-public offering of shares, if the CSRC imposes other new med
2021, and regulatory requirements in relation to the return recovery measures and its commitments and such commitments cannot meet
the return such rules of the CSRC, I commit to issue supplemental undertakings in accordance with the latest requirements of the
recovery CSRC.
measures
87
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Commitment
on dilution
on current I promise not to interfere with the operation and management activities of the Company beyond the authority, and not
returns as a encroach on the interests of the Company; I commit to properly implementation of the current return recovery measures
Controlling result of the formulated by the Company and fulfill any commitment I make in relation to the current return recovery measures, and Strictl
shareholders non-public assume the liability for compensation to the Company or investors according to law if I violate such commitments and as a November y
Long term
and actual offering of A result cause any loss to the Company or investors; since the date of this commitment up to completion of this non-public 21, 2021 perfor
controller shares in offering of shares by the Company, if the CSRC imposes other new regulatory requirements in relation to the return med
2021, and recovery measures and its commitments and such commitments cannot meet such rules of the CSRC, I commit to issue
the return supplemental undertakings in accordance with the latest requirements of the CSRC.
recovery
measures
Commitment
on stock
ownership
incentive
scheme
Withi
n the
The Company pays dividends in cash or by shares in a positive manner. Where the Company’s audited net profit is positive perfor
Other
and no significant investment plan or significant cash expenditure in a year, the Company shall include the cash distribution manc
commitments Shareholder
in its profit distribution scheme for that year. The annual cash dividend of the Company shall not be less than 20% of the e
to small and return plan May 14,
The Company distributable profit realized in the current year (excluding the undistributed profit at the beginning of the year). Where May 14, 2019 to May 14, 2021 period
medium for the next 2019
available, the Company may distribute interim cash dividends. If the Company’s revenue grows rapidly and the Board of ,
shareholders of three years
Directors considers that the stock price of the Company does not match the size of the Company’s share capital, it may make strictl
the Company
a plan for dividend distribution by stock while satisfying the requirement for cash dividend distribution. y
perfor
med
Whether the
commitment is
Yes
performed on
time
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 √ N/A
88
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
II. Occupation of the Listed Company’s Capital by the Controlling Shareholder or Its Related
Parties for Non-Operating Purposes
□ Applicable √ N/A
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 √ N/A
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 √ N/A
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 √ N/A
VI. Reason for Changes in Accounting Policies or Accounting Estimates and Correction of
Major Accounting Errors as Compared to the Financial Report for the Previous Fiscal Year
√ Applicable □ N/A
1. On April 26, 2021, the Company held the 26th meeting of the fourth Board of Directors and the 22nd meeting of the fourth Supervisory Committee
to review and approve the Proposal on the Change of Accounting Policy. Since January 1, 2021, the Company has implemented the Accounting
Standards for Business Enterprises No. 21 - Leasing revised by the Ministry of Finance in 2018. For details, please refer to the Announcement on
Change in Accounting Policy disclosed on cninfo.com.cn. by the Company on April 27, 2021.
On the first execution date, the Company chose not to reevaluate whether a pre-existing contract was a lease or included a lease, but applied this
method to all the contracts. Therefore, only the above-mentioned contracts identified as leases under the original lease standards shall be subject to the
convergence provisions of these standards. In addition, the Company chose to adopt a simplified retroactive adjustment method to link up accounting
treatment of the above lease contracts in accordance with the Accounting Standards for Enterprises No. 28 - Changes in Accounting Policies,
Accounting Estimates and Errors Correction, that is, to adjust the amount of retained earnings and other relevant items in the financial statements at
the beginning of the year in which the standards are first implemented, without adjusting the information of comparable periods, and to adopt the
right-of-assets measurement and the relevant simplified method for the operating leases based on each lease option, detailed as below:
Operating leases that will be executed within 12 months after the first execution date are treated as short-term leases. The accounting policy of the
Company for the leases of low value assets is not to recognize the right-of-use assets and lease liabilities. According to the convergence provisions of
the new lease standards, the Company conducted accounting treatment in accordance with the new lease standards since the first execution date for
the low-value asset leases existing before the first execution date, without retroactive adjustment of the low-value asset leases. The implementation of
the new leasing standards had no material impact on the financial statements for the reporting period.
2. On April 11, 2022, the 45th meeting of the fourth Board of Directors and the 39th meeting of the fourth Board of Directors of the Company was
held to review and approve the Proposal on the Change of Accounting Policy. the Company has implemented the Interpretation of Accounting
Standards for Business Enterprises No. 14 issued by the Ministry of Finance since February 2, 2021, and implemented the Interpretation of
Accounting Standards for Business Enterprises No. 15 issued by the Ministry of Finance since December 21, 2021. For details, please refer to the
Announcement on Accounting Policy Change published on cninfo.com.cn by the Company on April 12, 2022.
The implementation of the Interpretation of Accounting Standards for Business Enterprises No. 14 had no significant impact on the financial
statements during the reporting period. The Interpretation of Accounting Standards for Business Enterprises No. 15 has clarified the accounting
treatment of external sales of products or by-products produced before the fixed assets reach a predetermined usable state or in the research and
development process, the judgment of contract loss and the presentation of related issues concerning centralized management of funds. The provisions
on “the presentation of related issues concerning centralized management of funds” have taken effect since December 31, 2021; the provisions on “the
accounting treatment of external sales of products or by-products produced before the fixed assets reach a predetermined usable state or in the
research and development process” and “the judgment of contract loss” have taken effect since January 1, 2022. The Company began to implement
the provisions on “the presentation of related issues concerning centralized management of funds” in the Interpretation of Accounting Standards for
Business Enterprises No. 15 on December 31, 2021, which had no significant impact on the financial statements during the comparable periods.
89
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
VII. Reason for Changes in Scope of the Consolidated Financial Statements as Compared to
the Financial Report for the Previous Fiscal Year
√ Applicable □ N/A
The following additional 9 entities were included in the scope of consolidated financial statements in 2021 as compared to the prior year:
Name Reason for change
Ningbo Energy New Materials Co., Ltd. Established by investment
Chongqing Energy New Material Technology Co., Ltd. Established by investment
Jiangxi Enpo New Materials Co., Ltd. Established by investment
Jiangxi Energy New Material Technology Co., Ltd. Established by investment
Jiangsu Energy New Material Technology Co., Ltd. Established by investment
Jiangsu Ruijie New Material Technology Co., Ltd. Established by investment
Hunan Energy Advanced New Material Technology Co., Ltd. Established by investment
Hubei Energy New Material Technology Co., Ltd. Established by investment
Jiangsu Sanhe Battery Material Technology Co., Ltd. Established by investment
3 entities were reduced as follows:
Name Reason for change
Ningbo Energy New Materials Co., Ltd. Established by investment
Chongqing Energy New Material Technology Co., Ltd. Established by investment
Jiangxi Enpo New Materials Co., Ltd. Established by investment
VIII. Engagement and Disengagement of CPAs Firm
CPA firm engaged at present
Name of the domestic CPA firm Dahua CPAs (SGP)
Fee for domestic auditor (RMB0’000) 180
Consecutive years of audit services provided by the domestic auditor 10 years
Names of the certified public accountants from domestic accounting
Kang Wenjun, Yao Rui
firm
Consecutive years of audit services provided by the Certified Public Kang Wenjun and Yao Rui provide audit services for one year and two
Accountants from domestic accounting firm 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 □ N/A
Dahua CPAs (Special General Partnership), engaged by the Company as the accounting firm for the internal control and audit during the Reporting
Period, issued Authentication Report on the Internal Control of Yunnan Energy New Material Co., Ltd. (DHHZ [2022] No. 004077) for the internal
control of the Company.
IX. Possibility of Delisting after Disclosure of this Annual Report
□ Applicable √ N/A
X. Matters Related to Bankruptcy and Reorganization
□ Applicable √ N/A
The Company was not bankrupt and reorganized during the Reporting Period.
XI. Material Litigation and Arbitration
There was no material litigation or arbitration against the Company during the Reporting Period. During the Reporting Period, the total amount
involved in other lawsuits of the Company was RMB59.29 million, of which RMB44.76 had not been settled by the end of the Reporting Period,
90
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
which would not form estimated liabilities.
XII. Punishments and Rectifications
□ Applicable √ N/A
The Company made no punishment or rectification during the Reporting Period.
XIII. Credit Conditions of the Company as well as Its Controlling Shareholder and Actual
Controller
√ Applicable □ N/A
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.
XIV. Significant related transactions
1. Related transactions arising from routine operation
√ Applicable □ N/A
Proport Obtaina
Whethe
ion in ble
Approv r the Settlem
Pricing Relat Related the total market
ed transact ent
Type of Details of principl ed transact amount price
Related transact ion mode
Relatio related related e of the trans ion of for the Disclos
transactio ion exceede for Disclosure Index
n transacti transactio related actio amount transact transact ure date
n party limit d the related
on n transacti n (RMB0 ion of ion of
(RMB0 approve transact
on price ’000) the the
’000) d limit ion
same same
or not
type type
Purchase
of raw For details, please
Purchase RMB
materials 3,888.3 refer to the
from
of
6
59.85% 4,000 No 15.71/
additives Agreed Announcement on
related Bank kg the Expected
by both
Joint-st parties deposit
parties March Routine Related
ock or Transactions in
Kunshasi Sale of based 18,
Compa accepta 2021 (No.:
products on 2021
ny nce
and Sale of market RMB 2021-037)
1,182.3 draft
price disclosed on the
commod raw
2
64.87% 2,000 No 9.93/k
materials Cninfo website.
ities to g
related
parties
91
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Lease to Lease of
Bank
related worksho 2.4 2.11% 2.4 No
deposit
parties p
Heyi
Shareho Lease of
Investmen 0.33 0.29% 0.33 No
lder of Lease to office
t Bank
the related
Heli deposit
Compa parties Lease of
Investmen ny 0.24 0.21% 0.24 No
office
t
Market
pricing,
not
higher
than the
loan
benchm
ark
interest
rate for
Loan
the
with 106,791
Loan same 13.59% 400,000 No
related .91
period
bank
or the
market
interest
rate
level
under
the
same
conditio
The ns
spouse For details, please
Deposits Market
of Ms. refer to the
with pricing,
Zheng Announcement on
Industrial related not
Haiying the Expected
and bank higher
(indepe March Deposit, Loan and
Commerc (includin than the
ndent 18, Guarantee with
ial Bank g deposit
director 12,092. 2021 Related Bank in
of China demand Deposit benchm 6.60% 50,000 No
) is a 26 2021 (No.:
(ICBC) deposits, ark
non-exe 2021-040)
time interest
cutive disclosed on the
deposits, rate for
director Cninfo website.
call the
of the
deposits, same
ICBC etc.) period
Mutual
guarante
es
between
compani
es for
the
Agreed
purpose
by both
of the
parties
Compan Guarante
based 358,490 21.39% 400,000 No
y’s e
on
consolid
market
ated
price
financial
statemen
ts
through
the
related
bank
856,
488,447.
Total -- -- -- 002. -- -- -- -- -- Total -- --
82
97
Details of any sales return of a large amount No
Give the actual situation in the Reporting Period (if any) where
The actual routine transaction amount between the Company and the related parties did not exceed the total
a forecast had been made for the total amounts of routine related
amount of routine related transactions estimated by the Company by type.
transactions by type to occur in the current period
92
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Reason for any significant difference between the transaction
N/A
price and the market reference price (if applicable)
2. Related-party transactions relevant to acquisition and sales of assets or equities
□ Applicable √ N/A
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 √ N/A
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 □ N/A
Whether there were any credits or liabilities with related parties for non-operating purposes
□ Yes √ No
93
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
There were no credits or liabilities with related parties for non-operating purpose during the Reporting Period.
5. Dealing with related financial companies
□Applicable √N/A
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 √N/A
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 □N/A
1. “4. Credits and liabilities with related parties” mentioned above mainly refer to: On March 17, 2021, the 24th meeting of the fourth Board of
Directors of the Company deliberated and approved the Proposal on Deposit, Loan and Guarantee Business Expected to be Carried Out in Related
Banks in 2021, approving the Company and the subsidiaries within the scope of consolidated financial statements to carry out deposit and loan
businesses and mutual guarantee business between the companies within the scope of consolidated financial statements at Industrial and Commercial
Bank of China. The spouse of Ms. Zheng Haiying, the independent director of the Company, served as a non-executive director of ICBC. The deposit,
loan and guarantee businesses of the Company and ICBC constituted the related party transactions. This matter was approved by the annual general
meeting of the Company for 2020.
2. On June 22, 2020, the 29th meeting of the fourth Board of Directors of the Company deliberated and approved the Proposal on the Company
Meeting the Conditions of Issuing Shares and Paying Cash to Purchase Assets and Raising Funds and other proposals, approving the Company to
purchase 3.25% and 1.53% of the equity of Shanghai Energy held by Yan Ma and Alex Cheng by issuing shares and paying cash, and raise funds by
issuing shares to not more than 35 eligible specific investors. On November 21, 2021, the 38th meeting of the fourth Board of Directors of the
Company deliberated and approved the Proposal on the Termination of Purchasing Assets by Issuance of Shares and Payment of Cash and Raising
Funds and the Related Party Transactions. The Company intended to conduct a non-public share offering and use the proceeds for the lithium battery
separator film project. After friendly consultation with all parties concerned, it was agreed to terminate the restructuring.
3. On August 2, 2021, the 30th meeting of the fourth Board of Directors of the Company deliberated and approved the Proposal on Signing the
Framework Agreement for the Acquisition of Suzhou RS Technology Co., Ltd. (RS Tech.) and JOT Automation Ltd with Family Members of Paul
Xiaoming Lee, Victory Precision and Its Subsidiaries and the Related Party Transaction. The Company signed the Framework Agreement for the
Acquisition of RS Tech. and JOT Automation Ltd with Paul Xiaoming Lee (on behalf of Lee family), Victory Precision, RS Tech., Victory
Technology (Hong Kong) Limited and JOT Automation Ltd. This matter was approved by the fourth extraordinary general meeting of the Company
in 2021.
On September 15, 2021, the 33rd meeting of the fourth Board of Directors of the Company deliberated and approved the Proposal on Signing
the Equity Transfer Agreement with Family Members of Paul Xiaoming Lee, Victory Precision and Its Subsidiaries and the Related Party Transaction.
The Company, family members of Paul Xiaoming Lee, the actual controller of the Company, and his designated third party and Victory Precision
signed the Equity Transfer Agreement on the same date, agreeing to make joint investment to establish a joint venture. Based on the agreement, the
Company and Shanghai Energy will hold 10% of the equity in the joint venture, Sherry Lee or her designated person and Jerry Yang Li or his
designated person will in aggregate hold 37% of the equity in the joint venture, the third party designated by Lee family will hold 33.2% of the equity
in the joint venture, Victory precision will hold 19.80% of the equity in the joint venture; the joint venture will acquire 100% of the equity of RS Tech.,
and the Hong Kong subsidiary of the joint venture will acquire 100% of the equity of JOT Automation Ltd. This matter was approved by the fifth
extraordinary general meeting of the Company in 2021.
Enquiries on the online disclosure of interim report of significant related party transactions
Date of disclosure of Website on which interim
Name of interim announcement interim announcement is
announcement disclosed
Announcement on the Resolutions of the 24th Meeting of the Fourth Board of Directors March 18, 2021 cninfo.com.cn
Announcement on the Deposit, Loan and Guarantee Business Expected to Be Carried Out in
March 18, 2021 cninfo.com.cn
Related Banks in 2021
Announcement on the Resolutions of Annual General Meeting for 2020 April 9, 2021 cninfo.com.cn
Announcement on Purchase of Assets through Share Offering and Application for
June 16, 2021 cninfo.com.cn
Suspension
Announcement on Shareholding of Ten Top Shareholders on One Business Day Before
Suspension Due to Purchase of Assets through Share Offering and Payment of Cash and the June 22, 2021 cninfo.com.cn
Related Party Transactions
94
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Announcement on the Resolutions of the 29th Meeting of the Fourth Board of Directors June 23, 2021 cninfo.com.cn
Suggestive Announcement on the Disclosure of Plans for Purchase of Assets through Share
Offering and Payment of Cash, Raising Funds and the Related Party Transactions and the June 23, 2021 cninfo.com.cn
Resumption of Trading of the Shares and Convertible Bonds of the Company
Explanation on the Restructuring in Compliance with Article 4 of the Provisions on
June 23, 2021 cninfo.com.cn
Standardizing Some Issues Concerning Material Assets Reorganization of Listed Companies
Explanation on the Completeness and Compliance of the Legal Procedures and the Validity
June 23, 2021 cninfo.com.cn
of the Legal Documents Submitted for the Restructuring
Explanation on Whether the Parties Involved in the Restructuring Are Not Prohibited from
Participating in the Major Asset Restructuring of Any Listed Company according to Article
June 23, 2021 cninfo.com.cn
13 of the Interim Provisions on Strengthening the Supervision of Abnormal Stock Trading
Related to Material Assets Reorganization of Listed Companies
Explanation on Whether the Stock Price Fluctuation Before the Publication of the
Restructuring Information Reaches the Threshold Stipulated in Article 5 of the Notice on
June 23, 2021 cninfo.com.cn
Regulating the Information Disclosure of Listed Companies and the Behavior of Related
Parties
Plans for Purchase of Assets through Share Offering and Payment of Cash, Raising Funds
June 23, 2021 cninfo.com.cn
and the Related Party Transactions
Summary of Plans for Purchase of Assets through Share Offering and Payment of Cash,
June 23, 2021 cninfo.com.cn
Raising Funds and the Related Party Transactions
General Risk Warning Announcement on the Purchase of Assets through Share Offering and
June 23, 2021 cninfo.com.cn
Payment of Cash, Raising Funds and the Related Party Transactions
July 24, 2021 cninfo.com.cn
Announcement on Progress of Purchase of Assets through Share Offering and Payment of August 25, 2021 cninfo.com.cn
Cash, Raising Funds and the Related Party Transactions September 24, 2021 cninfo.com.cn
October 25, 2021 cninfo.com.cn
Announcement on the Resolutions of the 38th Meeting of the Fourth Board of Directors November 23, 2021 cninfo.com.cn
Announcement on the Termination of Purchase of Assets through Share Offering and
November 23, 2021 cninfo.com.cn
Payment of Cash, Raising Funds and the Related Party Transactions
Announcement on the Resolutions of the 30th Meeting of the Fourth Board of Directors August 3, 2021 cninfo.com.cn
Announcement on the Intention to Sign the Framework Agreement for the Acquisition of RS
Tech. and JOT Automation Ltd with Family Members of Paul Xiaoming Lee, Victory August 3, 2021 cninfo.com.cn
Precision and Its Subsidiaries and the Related Party Transaction
Announcement on Resolutions of the 4th Extraordinary General Meeting in 2021 August 20, 2021 cninfo.com.cn
Announcement on the Resolutions of the 33rd Meeting of the Fourth Board of Directors September 16, 2021 cninfo.com.cn
Announcement on the Signing of Equity Transfer Agreement Between the Company and
Family Members of Paul Xiaoming Lee, Victory Precision and Its Subsidiaries and the September 16, 2021 cninfo.com.cn
Related Party Transaction
Announcement on Resolutions of the 5th Extraordinary General Meeting in 2021 October 26, 2021 cninfo.com.cn
Announcement on the Progress of Signing of Equity Transfer Agreement Between the October 30, 2021 cninfo.com.cn
Company and Family Members of Paul Xiaoming Lee, Victory Precision and Its Subsidiaries
and the Related Party Transaction November 24, 2021 cninfo.com.cn
XV. Significant contracts and their execution
1. Trusteeships, Contracts, and Leases
(1) Trusteeships
□ Applicable √ N/A
There was no trusteeship during the Reporting Period.
(2) Contracts
□ Applicable √ N/A
No such cases in the Reporting Period.
95
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
(3) Leases
√ Applicable □ N/A
Statement on leases
Items with profits or losses accounting more than 10% of the total profit of the Company for the Reporting Period
□ Applicable √ N/A
The Company had no lease with profits or losses accounting more than 10% of the total profit of the Company during the Reporting Period
2. Significant guarantees
√ Applicable □ N/A
Unit: RMB0’000
External guarantees provided by the Company and its subsidiaries (excluding those for subsidiaries)
Guarantee Disclosure Guarantee Actual Actual Type of Collateral Count Period Perform Guarant
d party date of the line occurrence guarantee guarantee (if any) er of ed or not ee for a
guarantee date amount guaran guarante related
line tee (if e party or
announce any) not
ment
None
Guarantees provided by the Company for its subsidiaries
Guarantee Disclosure Guarantee Actual Actual Type of Collateral Count Period Perform Guarant
d party date of the line occurrence guarantee guarantee (if any) er of ed or not ee for a
guarantee date amount guaran guarante related
line tee (if e party or
announce any) not
ment
Hongta March 18, 4,400 April 25, 3,700.00 Joint 1 Year No No
Plastic 2021 2021 liability
guarantee
Hongta March 18, 4,000 August 27, 0.00 Joint 1 Year No No
Plastic 2021 2021 liability
guarantee
96
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Hongta March 18, 21,000 November 11,673.69 Joint 5 Years No No
Plastic 2021 10, 2020 liability
guarantee
Hongta March 18, 4,000 November 0.00 Joint 5 Years No No
Plastic 2021 9, 2020 liability
guarantee
Hongta March 18, 3,490 March 18, 3,490.00 Joint 2 Years No No
Plastic 2021 2021 liability
guarantee
Hongta March 18, 5,000 March 25, 2,170.00 Joint 1 Year No No
Plastic 2021 2021 liability
guarantee
Hongta March 18, 4,000 October 0.00 Joint 2 Years No No
Plastic 2021 29, 2021 liability
guarantee
Hongta March 18, 3,000 November 0.00 Joint 1 Year No No
Plastic 2021 22, 2021 liability
guarantee
Hongta March 18, 7,800 November 765.00 Joint 3 Years No No
Plastic 2021 29, 2021 liability
guarantee
Dexin March 18, 2,230 November 0.00 Joint 3 Years No No
Paper 2021 13, 2019 liability
guarantee
Dexin March 18, 800 March 30, 0.00 Joint 3 Years No No
Paper 2021 2021 liability
guarantee
Hongchua March 18, 2,000 March 10, 0.00 Joint 2 Years No No
ng 2021 2020 liability
Packaging guarantee
Hongchua March 18, 3,000 October 2,359.00 Joint 1 Year No No
ng 2021 23, 2020 liability
Packaging guarantee
Hongchua March 18, 6,600 April 25, 607.28 Joint 2 Years No No
ng 2021 2021 liability
Packaging guarantee
Hongchua March 18, 4,000 November 3,154.31 Joint 2 Years No No
ng 2021 30, 2020 liability
Packaging guarantee
97
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Hongchua March 18, 2,200 November 280.96 Joint 2 Years No No
ng 2021 29, 2021 liability
Packaging guarantee
Hongchua March 18, 6,500 November 0.00 Joint 1 Year No No
ng 2021 22, 2021 liability
Packaging guarantee
Chengdu March 18, 7,500 April 13, 720.00 Joint 1 Year No No
Hongta 2021 2021 liability
Plastic guarantee
Chengdu March 18, 1,800 July 27, 0.00 Joint 1 Year No No
Hongta 2021 2021 liability
Plastic guarantee
Shanghai March 18, 10,000 July 25, 3,100.00 Joint 6 Years No No
Energy 2021 2019 liability
guarantee
Shanghai March 18, 11,000 November 7,000.00 Joint 1 Year No No
Energy 2021 30, 2020 liability
guarantee
Shanghai March 18, 55,000 December 30,000.00 Joint 3 Years No No
Energy 2021 17, 2019 liability
guarantee
Shanghai March 18, 85,600 September 73,600.00 Joint 7 Years No No
Energy 2021 30, 2020 liability
guarantee
Shanghai March 18, 8,000 September 0.00 Joint 2 Years No No
Energy 2021 27, 2020 liability
guarantee
Shanghai March 18, 30,000 October 8,033.38 Joint 3 Years No No
Energy 2021 23, 2020 liability
guarantee
Shanghai March 18, 36,000 March 1, 21,659.10 Joint 1 Year No No
Energy 2021 2021 liability
guarantee
Shanghai March 18, 28,000 March 5, 19,854.18 Joint 3 Years No No
Energy 2021 2021 liability
guarantee
Shanghai March 18, 48,900 March 16, 48,800.00 Joint 5 Years No No
Energy 2021 2021 liability
guarantee
98
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Shanghai March 18, 10,000 March 1, 3,953.16 Joint 1 Year No No
Energy 2021 2021 liability
guarantee
Shanghai March 18, 19,600 April 15, 0.00 Joint 1 Year No No
Energy 2021 2021 liability
guarantee
Shanghai March 18, 10,000 May 27, 0.00 Joint 1 Year No No
Energy 2021 2021 liability
guarantee
Shanghai March 18, 25,000 June 2, 25,000.00 Joint 1 Year No No
Energy 2021 2021 liability
guarantee
Shanghai March 18, 22,300.8 June 28, 14,078.42 Joint 6 Years No No
Energy 2021 2021 liability
guarantee
Shanghai March 18, 51,000 July 14, 44,000.00 Joint 5 Years No No
Energy 2021 2021 liability
guarantee
Shanghai March 18, 10,000 September 4,918.54 Joint 1 Year No No
Energy 2021 8, 2021 liability
guarantee
Shanghai March 18, 11,000 September 0.00 Joint 2 Years No No
Energy 2021 15, 2021 liability
guarantee
Shanghai March 18, 50,000 September 49,500.00 Joint 4 Years No No
Energy 2021 10, 2021 liability
guarantee
Shanghai March 18, 15,000 August 20, 25,000.00 Joint 1 Year No No
Energy 2021 2021 liability
guarantee
Shanghai March 18, 7,080 December 63.38 Joint 1 Year No No
Energy 2021 12, 201 liability
guarantee
Shanghai March 18, 10,000 January 1, 10.00 Joint 3 Years No No
Energy 2021 2022 liability
guarantee
Zhuhai March 18, 5,000 December 0.00 Joint 5 Years No No
Energy 2021 11, 2019 liability
guarantee
Zhuhai March 18, 20,000 May 8, 6,539.40 Joint 5 Years No No
Energy 2021 2020 liability
guarantee
99
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Zhuhai March 18, 15,000 December 3,000.00 Joint 1 Year No No
Energy 2021 22, 2020 liability
guarantee
Zhuhai March 18, 5,000 May 21, 0.00 Joint 1 Year No No
Energy 2021 2021 liability
guarantee
Zhuhai March 18, 10,000 May 18, 10,000.00 Joint 1 Year No No
Energy 2021 2021 liability
guarantee
Zhuhai March 18, 3,000 June 24, 3,000.00 Joint 3 Years No No
Energy 2021 2021 liability
guarantee
Zhuhai March 18, 11,285 September 0.00 Joint 4 Years No No
Energy 2021 1, 2021 liability
guarantee
Zhuhai March 18, 20,000 August 18, 20,000.00 Joint 1 Year No No
Energy 2021 2021 liability
guarantee
Zhuhai March 18, 20,000 August 25, 11,568.68 Joint 1 Year No No
Energy 2021 2021 liability
guarantee
Zhuhai March 18, 8,000 September 0.00 Joint 1 Year No No
Energy 2021 18, 2021 liability
guarantee
Zhuhai March 18, 40,000 September 0.00 Joint 1 Year No No
Energy 2021 26, 2021 liability
guarantee
Zhuhai March 18, 22,000 September 15,800 Joint 2 Years No No
Energy 2021 1, 2021 liability
guarantee
Wuxi March 18, 150,000 April 9, Joint 2 Years No No
Energy, 2021 2021 liability
Jiangxi guarantee
Tonry,
Chongqing 1,008.35
Energy
and
Jiangxi
Enpo
Wuxi March 18, 20,000 June 10, Joint 1 Year No No
Energy 2021 2021 2,318.88 liability
guarantee
Wuxi March 18, 10,000 August 7, Joint 3 Years No No
4628.0338
Energy 2021 2021 liability
39
guarantee
100
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Wuxi March 18, 10,000 September Joint 1 Year No No
Energy 2021 10, 2021 13.00604 liability
guarantee
Wuxi March 18, 8,000 September Joint 1 Year No No
Energy 2021 2, 2021 0.00 liability
guarantee
Jiangxi March 18, 10,000 December Joint 1 Year No No
Tonry 2021 11, 2020 10000 liability
guarantee
Jiangxi March 18, 5,000 October Joint 2 Years No No
Tonry 2021 28, 2020 0.00 liability
guarantee
Jiangxi March 18, 13,500 January Joint 3 Years No No
Tonry 2021 22, 2021 2,000.00 liability
guarantee
Jiangxi March 18, 80,000 May 1, Joint 2 Years No No
Tonry, 2021 2021 liability
Wuxi guarantee
Energy,
Chongqing
1,536.00
Energy,
Jiangxi
Enpo and
Jiangxi
Ruijie
Jiangxi March 18, 25,000 September Joint 1 Year No No
5024.6244
Tonry 2021 17, 2021 liability
16
guarantee
Suzhou March 18, 15,000 July 1, Joint 3 Years No No
Green 2021 2020 266.52 liability
Power guarantee
Suzhou March 18, 10,000 April 8, Joint 2 Years No No
3758.2226
Green 2021 2020 liability
71
Power guarantee
Suzhou March 18, 10,000 November Joint 5 Years No No
Green 2021 30, 2021 123.764 liability
Power guarantee
Chongqing November 130,000 November Joint 2 Years No No
Energy, 16, 2021 1, 2021 liability
Jiangsu guarantee
Energy 0.00
and
Jiangsu
Ruijie
Jiangxi March 18, 20,000 June 10, Joint 2 Years No No
Ruijie 2021 2021 18368.38 liability
guarantee
101
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
SEMCOR March 18, 14,867.2 June 28, Joint 6 Years No No
P Hungary 2021 2021 0.00 liability
KFT guarantee
SEMCOR March 18, 100,000 July 14, Joint 5 Years No No
P Hungary 2021 2021 18,671.34 liability
KFT guarantee
SEMCOR March 18, 45,000 December Joint 4 Years No No
P Hungary 2021 27, 2021 7,918.46 liability
KFT guarantee
Zhuhai March 18, 100,000 August 14, Joint 6 Years No No
Energy 2021 2017 2,219.65 liability
guarantee
Zhuhai March 18, 75,000 August 1, Joint 6 Years No No
Energy 2021 2019 42,000.00 liability
guarantee
Zhuhai March 18, 20,000 May 8, Joint 3 Years No No
Energy 2021 2020 0.00 liability
guarantee
Zhuhai March 18, 20,000 March 10, 71,727.61 Joint 1 Year No No
Energy 2021 2021 liability
guarantee
Wuxi March 18, 130,000 May 17, 19,800.00 Joint 7 Years No No
Energy 2021 2019 liability
guarantee
Wuxi March 18, 116,000 December 3,700.00 Joint 9 Years No No
Energy 2021 1, 2020 liability
guarantee
Jiangxi March 18, 150,000 September 0.00 Joint 5 Years No No
Tonry 2021 17, 2019 liability
guarantee
Total guarantee quota Total actual amount of
approved for subsidiaries guarantees for
3,314,900 734,131.99
during the reporting subsidiaries during the
period (B1) reporting period (B2)
Total guarantee quota Total actual guarantee
approved for the balance for subsidiaries
3,314,900 734,131.99
subsidiaries at the end of at the end of the
the reporting period (B3) reporting period (B4)
102
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Guarantees provided by subsidiaries for subsidiaries
Guarantee Disclosure Guarantee Actual Actual Type of Collateral Count Period Perform Guarant
d party date of the line occurrence guarantee guarantee (if any) er of ed or not ee for a
guarantee date amount guaran guarante related
line tee (if e party or
announce any) not
ment
Shanghai March 18, 25,500 May 20, Joint 1 Year No Yes
Energy 2021 2021 liability
guarantee
Shanghai March 18, 20,000 September 2421.2 Joint 2 Years No Yes
Energy, 2021 10, 2021 liability
Zhuhai guarantee
Energy,
Wuxi
Energy
and
Jiangxi
Tonry
Jiangxi March 18, 5,000 September Joint 1 Year No Yes
Tonry 2021 23, 2021 liability
guarantee
Total guarantee quota Total actual amount of
approved for subsidiaries guarantees for
110,500 2,421.2
during the reporting subsidiaries during the
period (C1) reporting period (C2)
Total guarantee quota Total actual guarantee
approved for the balance for subsidiaries
110,500 2,421.2
subsidiaries at the end of at the end of the
the reporting period (C3) reporting period (C4)
Total guarantee amount provided by the Company (sum of the aforesaid three categories)
Total guarantee quota 3,425,400 Total actual amount of 736,553.19
approved during the guarantee during the
reporting period reporting period
(A1+B1+C1) (A2+B2+C2)
Total guarantee quota 3,425,400 Total actual guarantee 736,553.19
approved at the end of balance at the end of the
the reporting period reporting period
(A3+B3+C3) (A4+B4+C4)
Total guarantee amount (A4+B4+C4) to net assets of 53.25%
the Company
Including:
Balance of guarantee provided to shareholders, 0
beneficial owners and their related parties (D)
Amount of debt guarantee provided for guaranteed 574,700.10
party whose asset-liability ratio is not less than 70%
directly or indirectly (E)
Amount of total guarantee over 50% of net assets (F) 2,733,806.65
Total amount of the above three guarantees (D+E+F) 3,308,506.75
103
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Explanation of warranty liability or possible joint No
liquidation (if any)
Explanation of provision of guarantees for external N/A
parties in violation of the prescribed procedure (if any)
Explanation on guarantees provided by combined mode
Not applicable
3. Entrusted cash assets management
(1) Entrusted wealth management
√ Applicable □ N/A
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
management Self-owned fund 82,035.98 50,975.98 0 0
products
Bank wealth
management Funds raised 120,000.00 - 0 0
products
Total 202,035.98 50,975.98 0 0
Particulars of high-risk entrusted wealth management with significant single amount or low security and low liquidity
□ Applicable √ N/A
Whether there is the case where the principal cannot be recovered at maturity or other case where impairment may occur
□ Applicable √ N/A
(2) Entrusted loans
□ Applicable √ N/A
There was no entrusted loan of the Company during the Reporting Period.
4. Other major contracts
√Applicable □N/A
Name of
Name of Relate
the
party Prici Transactio d
compan Date of
involved Contract ng n price party Performance as of the end of
y signatur Disclosure date Disclosure index
in subject princ (RMB 10 transa the reporting period
entering e
the iple thousand) ction
into or not
contract
contract
Announcement on Signing of
Mark Major Contract by the
Lithium et In normal performance, with Holding Subsidiary Shanghai
Shangha battery April 4, prici sales income of RMB 1.128 Energy New Material
LG ES 234,220 No May 20, 2019
i Energy separato 2019 ng billion recognized as of the end Technology Co., Ltd.
r film princ of the reporting period published on cninfo.com.cn
iple (Announcement No.:
2019-061)
104
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Announcement on Signing of
Mark Major Contract by the
Lithium et Holding Subsidiary Shanghai
Ultium Ultium Cells, LLC is under
Shangha battery June 9, prici Energy New Material
Cells, 167,700 No construction, no sales have June 11, 2021
i Energy separato 2021 ng Technology Co., Ltd.
LLC been realized.
r film princ published on cninfo.com.cn
iple (Announcement No.:
2021-096)
Announcement on Signing of
Mark
Prepayment Agreement
Lithium et
Decemb between the Holding
Shangha battery prici December 24,
CATL er 22, 517,800 No Implemented since 2022 Subsidiary and CATL
i Energy separato ng 2021
2021 published on cninfo.com.cn
r film princ
(Announcement No.:
iple
2021-210)
XVI. Explanation for Other Significant Events
√Applicable □N/A
1. On May 6, 2021, the 27th meeting of the fourth Board of Directors of the Company deliberated and approved the Proposal on Changing the
Registered Capital and Amending the Articles of Association and Handling the Change of Industrial and Commercial Registration. Because the
convertible corporate bonds of the Company (bond abbreviation: Energy Convertible Bond, bond code: 128095) entered the conversion period on
August 17, 2020, Energy Convertible Bonds have been converted to 13,368,542 shares as of April 29, 2021, increasing the total number of shares of
the Company from 874,792,094 shares to 888,160,636 shares, and increasing the registered capital of the Company from RMB874,792,094.00 to
RMB888,160,636.00. On May 8, 2021, the Company completed the procedures for filing and change of industrial and commercial registration and
obtained a new business license. For details, please refer to the Announcement on Changing the Registered Capital and Amending the Articles of
Association and Handling the Change of Industrial and Commercial Registration (Announcement No.: 2021-083) and Announcement on Completion
of Filing and Change of Industrial and Commercial Registration (Announcement No.: 2021-085) published by the Company on cninfo.com.cn.
2. During the reporting period, due to the change of managing partners of Shanghai Hengzou, change of voting terms of Heli Investment, conversion
of convertible bonds and Heli Investment and Paul Xiaoming Lee’s reduction of his shareholding in the Company, the shares of the Company
controlled by Lee Family, the actual controller of the Company, decreased from 49.83% to 46.48%. For details, please refer to the Announcement on
Change in Shareholding Ratio of Controlling Shareholders and Persons Acting in Concert Exceeding 1% (Announcement No.: 2021-002),
Announcement on Equity Change of Actual Controller Exceeding 1% (Announcement No.: 2021-159), and Announcement on Equity Change of
Actual Controller Exceeding 1% (Announcement No.: 2021-172) published by the Company on cninfo.com.cn.
XVII. Significant Events of the Company and Its Subsidiaries
√Applicable □N/A
1. On January 8, 2021, the 21st meeting of the 4th Board of Directors of the Company deliberated and approved the Proposal on Entry into the
Agreement on the Investment in Projects of Changshou Economic and Technological Development Zone between Shanghai Energy and the
Administrative Committee of Changshou Economic and Technological Development Zone, approving Shanghai Energy to invest in the 16
high-performance lithium-ion battery micropore separator film production lines and 39 coating lines in Changshou Economic and Technological
Development Zone, Chongqing, with the total project investment of RMB5.8 billion. On March 29, 2021, the 25th meeting of the fourth Board of
Directors of the Company deliberated and approved the Proposal on the Implementation of Investment Project in Changshou Economic and
Technological Development Zone by Chongqing Energy, a Wholly-owned Subsidiary of Shanghai Energy. Due to business development needs,
Chongqing Energy will implement the Changshou Economic and Technological Development Zone Project. The total investment and production line
quantity of the project will not be changed, but the investment and construction schedule of the first and second phases will be adjusted. For details,
please refer to the Announcement on Entry into the Agreement on the Investment in Projects of Changshou Economic and Technological
Development Zone between Shanghai Energy and the Administrative Committee of Changshou Economic and Technological Development Zone
(Announcement No.: 2021-004), the Announcement on the Implementation of Investment Project in Changshou Economic and Technological
Development Zone by Chongqing Energy, a Wholly-owned Subsidiary of Shanghai Energy (Announcement No.: 2021-056) and the Announcement
on the Progress of the High-Performance Lithium-Ion Battery Micropore Separator Film Project of Chongqing Energy (Announcement No.: 2021-073
and 2021-203) published by the Company on cninfo.com.cn.
2. On January 31, 2021, the 23rd meeting of the fourth Board of Directors of the Company deliberated and approved the Proposal on Cooperation
between Subsidiaries and Polypore. Shanghai Energy and Jiangxi Mingyang New Material Technology Co., Ltd. (“Jiangxi Mingyang”), its
wholly-owned subsidiary, signed the Agreement on Subscription For Capital Increase with Polypore Hong Kong Limited (“Polypore Hong Kong”), a
subsidiary of Polypore International, LP (“Polypore”), approving Shanghai Energy and Polypore Hong Kong to sign the Joint Venture Agreement and
they will increase the capital of Jiangxi Mingyang within the specified period. Upon the completion of the capital increase, Jiangxi Mingyang will
become a joint venture, in which Shanghai Energy holds 51% of the equity, and Polypore Hong Kong holds 49% of the equity. On February 24, 2021,
due to the operation needs of Polypore, the counterparty was changed from Polypore Hong Kong to PPO Energy Storage Materials HK, Ltd.. In July
2021, the transaction was through the anti-monopoly review of
105
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
concentration of business operators. In September 2021, both parties completed the first capital increase. The joint venture was renamed from Jiangxi
Mingyang to Jiangxi Enpo. In January 2022, both parties completed the second capital increase. For details, please refer to the Announcement on
Cooperation between Subsidiaries and Polypore (Announcement No.: 2021-017, 2021-025, 2021-122 and 2022-020) and the Announcement on
Completion of Change and Filing of Industrial and Commercial Registration of Subsidiaries (Announcement No.: 2021-149) published by the
Company on cninfo.com.cn.
3. On January 31, 2021, the 23rd meeting of the 4th Fourth Board of Directors of the Company deliberated and approved the Proposal on Entry into
the Contract on Building the Dry-process Lithium Battery Separator Film Project and Its Supplementary Agreements between Jiangxi Mingyang New
Material Technology Co., Ltd., the Subsidiary and Gaoan Municipal People’s Government, Jiangxi Province, based on which, Jiangxi Mingyang
would invest in the building of dry-process lithium battery separator film project in Jiangxi Gaoan Hi-tech Industrial Park, totaling RMB2 billion. The
project will be constructed in two phases, with RMB1 billion invested for phase 1 and RMB1 billion invested for phase 2. For details, please refer to
the Announcement on Entry into the Contract on Building the Lithium Battery Separator Film Dry-process Project and Its Supplementary Agreements
between Jiangxi Mingyang New Material Technology Co., Ltd., the Subsidiary and Gaoan Municipal People’s Government, Jiangxi Province
(Announcement No.: 2021-018) published by the Company on cninfo.com.cn.
4. On April 19, 2021, NEEQ issued the Confirmation Letter on the Application for the Agreement Transfer of Specific Matters of Newmi Tech
(NEEQ Letter [2021] No. 1128), and completed the review of the transfer of Newmi Tech. On May 7, 2021, China Securities Depository and Clearing
Co., Ltd. (“CSDCC”) issued the Confirmation of Securities Transfer Registration (No.: 2104290003, 2104290004), stating that the relevant
transaction participants completed the relevant procedures for the agreement transfer of the above specific matters in CSDCC. In July 2021, Newmi
Tech changed the company name and legal representative according to the relevant agreements signed and business needs, and completed the relevant
industrial and commercial registration change and filing procedures. For details, please refer to the Announcement on Progress of Acquisition of
76.3574% of the Equity of Newmi Tech by Shanghai Energy New Material Technology Co., Ltd., a Holding Subsidiary (Announcement No.:
2021-027 and 2021-086) and the Announcement on Completion of Change and Filing of Industrial and Commercial Registration of Subsidiaries
(Announcement No.: 2021-113) published by the Company on cninfo.com.cn.
5. On April 23, 2021, the Management Committee of Yuxi High-tech Zone, the Company and Yunnan Hongta Plastic Co., Ltd. signed the
Supplementary Agreement for BOPP Film Reconstruction and Expansion Project with Annual Output of 70,000 Tons, which further clarified the
relevant provisions of the Investment Agreement for BOPP Film Reconstruction and Expansion Project with Annual Output of 70,000 Tons. For
details, please refer to the Announcement on Progress of the BOPP Film Reconstruction and Expansion Project of Hongta Plastic, a wholly-owned
Subsidiary (Announcement no.: 2021-070) published by the Company on cninfo.com.cn.
6. During the reporting period, Suzhou Green Power, Dexin Paper, Chongqing Energy, Jiangxi Tonry and Jiangxi Ruijie changed the industrial and
commercial registration due to business needs. For details, please refer to the Announcement on Completion of Change and Filing of Industrial and
Commercial Registration of Subsidiaries (Announcement No.: 2021-024, 2021-090, 2021-093 and 2021-119) published by the Company
cninfo.com.cn.
7. On August 2, 2021, the 30th meeting of the fourth Board of Directors of the Company deliberated and approved the Proposal on Establishing a
Joint Venture with EVE to Construct Wet-process Lithium Battery Separator Film Project. The Company has signed the Joint Venture Agreement and
Supplementary Agreement with EVE Energy Co., Ltd. (“EVE”), based on which the two parties will establish a joint venture in Jingmen to build
wet-process lithium-ion battery separator film and coating film project with an annual production capacity of 1.6 billion square meters, which will be
provided to EVE and its subsidiaries in priority. It is expected that the registered capital of the joint venture will be RMB1,600 million, of which the
designated investor of the Company subscribes to contribute RMB880 million and holds 55% equity in the joint venture, EVE subscribes to
contribute RMB720 million and holds 45% equity in the joint venture. On September 18, 2021, Shanghai Energy, EVE and Jingmen High-tech
Industrial Development Zone Management Committee signed the Contract for the establishment of the joint venture by Shanghai Energy and EVE in
Jingmen High-tech Development Zone and the investment and construction of high-performance lithium battery separator film project by the joint
venture. With a total investment of RMB5.2 billion, 16 production lines for lithium battery separator film will be constructed in the project. In January
2022, Hubei Energy New Material Technology Co., Ltd. completed the procedures for industrial and commercial registration and obtained a business
license. For details, please refer to the Announcement on Establishing a Joint Venture with EVE to Construct Wet-process Lithium Battery Separator
Film Project (announcement No.: 2021-128) and the Announcement on Progress of Establishment of a Joint Venture with EVE to Construct
Wet-process Lithium Battery Separator Film Project (announcement no.: 2021-155 and 2022-003) published by the Company cninfo.com.cn.
8. On December 20, 2021, the 39th meeting of the fourth Board of Directors of the Company deliberated and approved the Proposal on the Signing of
the Investment Cooperation Agreement for Energy Liquid Package Project between Hongchuang Packaging and the Management Committee of
Jintan Economic Development Zone in Jiangsu Province, based on which Hongchuang Packaging will establish a project company to invest in the
construction of aseptic liquid packaging box project, with a total investment of RMB2 billion. In January 2022, Hongchuang Packaging (Jiangsu) Co.,
Ltd., the project company, completed the procedures for industrial and commercial registration and obtained a business license. For details, please
refer to the Announcement on the Signing of the Investment Cooperation Agreement for Energy Liquid Package Project between Hongchuang
Packaging and the Management Committee of Jintan Economic Development Zone in Jiangsu Province (announcement No.: 2021-207) and the
Announcement on the Progress of the Signing of the Investment Cooperation Agreement for Energy Liquid Package Project between Hongchuang
Packaging and the Management Committee of Jintan Economic Development Zone in Jiangsu Province (announcement No.: 2022-007) published by
the Company on cninfo.com.cn.
106
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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
New Convers
share Bonus ion of
Number of Proportion s issuan reserve Others Subtotal Number of Proporti
shares shares on
issue ce into
d share
I. Shares subject to 350,103,161 39.49% -199,716,053 -199,716,053 150,387,108 16.85%
restrictions on sale
1. Shares held by 0 0.00% 0 0 0.00%
state
2. Shares held by
state-owned legal 7,113,896 0.80% -7,113,896 -7,113,896 0 0.00%
persons
3. Shares held by
other domestic 122,263,815 13.79% -67,721,200 -67,721,200 54,542,615 6.11%
investors
Including: Shares held
by domestic legal 34,342,499 3.87% -34,342,499 -34,342,499 0 0.00%
persons
Shares held by domestic 87,921,316 9.92% -33,378,701 -33,378,701 54,542,615 6.11%
natural persons
4. Shares held by 180,336,565 20.34% -84,492,072 -84,492,072 95,844,493 10.74%
overseas investors
Including: Shares held
by overseas legal 13,608,330 1.53% -13,608,330 -13,608,330 0 0.00%
persons
Shares held by overseas 166,728,235 18.81% -70,883,742 -70,883,742 95,844,493 10.74%
natural persons
5. Fund and wealth 40,388,885 4.56% -40,388,885 -40,388,885 0 0.00%
management products
II. Shares not subject to 536,462,990 60.51% 205,556,724 205,556,724 742,019,714 83.15%
restrictions on Sale
1. Renminbi
denominated common 536,462,990 60.51% 205,556,724 205,556,724 742,019,714 83.15%
shares
2.
Domestically-listed 0.00% 0 0.00%
foreign shares
3. Foreign shares 0.00% 0 0.00%
listed overseas
4. Others 0.00% 0 0.00%
III. Total shares 886,566,151 100.00% 5,840,671 5,840,671 892,406,822 100.00%
Reason for changes in shares
√ Applicable □ N/A
(1) Certain restricted shares under the issuance of shares for assets acquisition were listed and traded
On August 18, 2021, certain restricted shares under the issuance of shares for assets acquisition under the major assets restructuring in 2018
were released from restriction on sales and traded. 246,432,142 shares were released from restriction on sales in total, involving 21 shareholders, such
as the overseas natural person Paul Xiaoming Lee, overseas natural person Sherry Lee, overseas natural person JERRY YANG LI, domestic legal
persons Huachen Investment, Advanced Manufacturing Fund, Shanghai Hengzou, as well as domestic natural persons Li Xiaohua, 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.
(2) Private offering of A shares in 2020
Under the approval granted by China Securities Regulatory Commission under the Approval of Private Share Offering by Yunnan Energy New
Material Co., Ltd. (CSRC License [2020] No. 1476), the Company made a private offering of 69,444,444 shares (A shares) to 22 specific investors,
107
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
and completed the registration procedure for these new shares with China Clear Shenzhen Branch on August 21, 2020. These shares started trading
with a lockup period of 6 months as of the listing date at Shenzhen Stock Exchange on September 4, 2020. As of March 3, 2021, the lockup period of
108
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
private offering of 69,444,444 Renminbi-dominated ordinary shares in 2020 has expired, and those shares have been released from selling restrictions
and have been eligible for trading since March 4,2021.
(3) Conversion of convertible corporate bonds into shares
Under the approval granted by China Securities Regulatory Commission under the Approval of Convertible Corporate Bonds by Yunnan Energy
New Material Co., Ltd. (CSRC License [2019] No. 2701), the Company made a public offering of 16 million convertible corporate bonds (bonds
abbreviation: Energy Convertible Bond, bonds code: 128095) with a face value of RMB100.00 each bond, a total amount of RMB1.6 billion and a
term of 6 years on February 11, 2020. Under the approval of Shenzhen Stock Exchange in the document “Shenzhen Stock Exchange Listing [2020]
No. 109), the convertible corporate bonds of the Company worth RMB1.6 billion 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 5,840,671 shares were
converted from the bonds, and by the end of the Reporting Period, a total of 17,614,728 shares were converted from the bonds.
(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, the Guide of Shenzhen Stock Exchange to Compliant Operation of Listed Companies (Revised in 2020), 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 □ N/A
(1) Release from selling restrictions on private offering of A shares in 2020
Under the approval granted by China Securities Regulatory Commission under the Approval of Private Share Offering by Yunnan Energy New
Material Co., Ltd. (CSRC License [2020] No. 1476), the Company made a private offering of 69,444,444 shares (A shares) to 22 specific investors,
and completed the registration procedure for these new shares with China Clear Shenzhen Branch on August 21, 2020. These shares started trading
with a lock-up period of 6 months as of the listing date at Shenzhen Stock Exchange on September 4, 2020. As of March 3, 2021, the lockup period of
private offering of 69,444,444 Renminbi-dominated ordinary shares in 2020 has expired, and those shares have been released from selling restrictions
and have been eligible for trading since March 4, 2021.
(2) Conversion of convertible corporate bonds into shares
Under the approval granted by China Securities Regulatory Commission under the Approval of Convertible Corporate Bonds by Yunnan Energy
New Material Co., Ltd. (CSRC License [2019] No. 2701), the Company made a public offering of 16 million convertible corporate bonds (bonds
abbreviation: Energy Convertible Bond, bonds code: 128095) with a face value of RMB100.00 each bond, a total amount of RMB1.6 billion and a
term of 6 years on February 11, 2020. Under the approval of Shenzhen Stock Exchange in the document “Shenzhen Stock Exchange Listing [2020]
No. 109”, the convertible corporate bonds of the Company worth RMB1.6 billion started trading at Shenzhen Stock Exchange on February 28, 2020.
The conversion period of “Energy Convertible Bonds” started on August 17, 2020.
Transfer of share ownership
√ Applicable □ N/A
(1) Conversion of convertible corporate bonds into shares
A total of 5,840,671 shares were converted from “Energy Convertible Bonds” during the Reporting Period, and a total of 17,614,728 shares were
converted by the end of the Reporting Period
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 □ N/A
During the Reporting Period, the conversion of 5,840,671 shares from the “Energy Convertible Bonds” has affected the basic earnings per share by
RMB0.01/share, affected the diluted earnings per share by RMB0.01/share and affected the net assets per share by RMB0.05/share.
Other contents that the Company considers are necessary, or are required by the securities regulatory authorities, to disclose
□ Applicable √ N/A
2. Changes in restricted shares
√ Applicable □ N/A
109
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Unit: Shares
Number of
Number of Increase of
restricted Number of
restricted restricted
Name of shares restricted
shares at the shares in the Reason for restriction Date of relief
shareholder unlocked in shares at the
beginning of current
the current end of period
period period
period
(1) Locked shares held by
(1) The restricted shares obtained
senior executives; (2) By the
from the material asset restructuring
Paul Xiaoming Lee 102,745,439 63,594,073 70,495,019 95,844,493 end of the Reporting Period,
in 2018 were unlocked on August
the shares obtained from the
18, 2021; (2) A director can unlock
material asset restructuring
25% of total shares he or she holds
in 2018 have been released
every year.
Li Xiaohua 69,833,759 52,378,417 69,833,759 52,378,417 from restrictions
By the end of the Reporting
Sherry Lee 46,275,559 46,275,559 0 Period, the shares obtained The restricted shares obtained from
from the material asset the material asset restructuring in
restructuring in 2018 have 2018 were unlocked on August 18,
JERRY YANG LI 17,707,237 17,707,237 0 been released from 2021
restrictions
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 expiration of the
Locked shares held by senior
Xu Ming 1,376,905 238,968 1,615,873 term, 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
Chief Financial Officer in
September 2020, and during the
term determined when he held the
position and within six months after
Locked shares held by senior the expiration of the term, he shall
Pang Qizhi 330,000 82,500 247,500
executives not transfer the 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
Board Secretary in November 2021,
and during the term determined
when he held the position and
within six months after the
Locked shares held by senior expiration of the term, he shall not
Xiong Wei 269,250 750 270,000
executives transfer the 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.
As a Board Secretary, she may have
Locked shares held by senior 25% of the total shares of the
Yu Xue 0 30,825 30,825
executives Company she holds unlocked every
year.
Total of the other
By the end of the Reporting
original
Period, the shares obtained The shares obtained from the
shareholders of
from the material asset material asset restructuring in 2018
Shanghai Energy 42,120,568 42,120,568 0
restructuring in 2018 have were released from restrictions on
before material
been released from August 18, 2021
asset restructuring
restrictions
(17 shareholders)
Total of By the end of the Reporting The shares obtained from the private
shareholders Period, the shares obtained offering of A shares of the Company
participating in 69,444,444 69,444,444 0 from the private offering of in 2020 were unlocked on March 4,
private offering of A shares of the Company in 2021.
A shares in 2020 2020 have been released
110
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
(22 investors) from restrictions
Total 350,103,161 116,243,033 315,959,086 150,387,108 -- --
II. Issuance and Listing of Securities
1. Issuance of securities (excluding preferred shares) during the Reporting Period
□ Applicable √ N/A
2. Statement on changes in total shares and shareholder structure of the Company, and changes in assets
and liabilities of the Company
√ Applicable □ N/A
At the beginning of period, the Company recorded the total share capital of 886,566,151 shares and the asset-liability ratio of 43.63%. During the
Reporting Period, the “Energy Convertible Bonds” were converted into 5,840,671 shares, which has increased the total share capital of the Company
by 5,840,671 shares. As at the end of the Reporting Period, the Company recorded the total share capital of 892,406,822 shares and the asset-liability
ratio of 44.35%.
3. Existing shares held by internal employees of the Company
□ Applicable √ N/A
III. Details of Shareholders and Actual Controllers
1. Number of shareholders and their shareholdings
Unit: shares
Total ordinary Total preferred Total preferred
Total common shareholders at shareholders shareholders resuming
shareholders at the end of the resuming voting voting right at the end
the end of the 46,438 previous month 43,546 right at end of the 0 of the previous month 0
Reporting before annual Reporting Period before annual report
Period report disclosure (if any) (see Note disclosure date (if any)
date 8) (see Note 8)
Shareholders holding more than 5% of shares or shareholdings of the top 10 shareholders
Number of Increase or Pledged, tagged or
Sharehol shares held at decrease of Number of Number of frozen
Name of Nature of
ding the end of the shares during restricted unrestricted Status
shareholder shareholder Number of
ratio Reporting the Reporting shares held shares held of
Period Period shares
shares
Overseas natural
Paul Xiaoming Lee 14.14% 126,192,257 -1,600,400 95,844,493 30,347,764 Pledged 2,800,000
person
Domestic
13,690,00
Heyi Investment non-state-owned 13.39% 119,449,535 119,449,535 Pledged
0
legal person
Hong Kong
Overseas legal
Securities Clearing 10.91% 97,318,305 20,085,167 97,318,305
person
Company Limited
111
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Overseas natural
Sherry Lee 8.23% 73,470,459 73,470,459
person
Domestic natural 26,600,00
Li Xiaohua 7.83% 69,837,889 52,378,417 17,459,472 Pledged
person 0
Kunming Huachen Domestic
Investment Co., non-state-owned 2.06% 18,364,462 -5,019,313 18,364,462
Ltd. legal person
Overseas natural
JERRY YANG LI 1.98% 17,707,237 17,707,237
person
Domestic natural
Zhang Yong 1.81% 16,164,007 -168,10 16,164,007
person
Domestic
Shanghai Hengzou non-state-owned 1.74% 15,526,817 15,526,817
legal person
Domestic
Heli Investment non-state-owned 1.07% 9,558,686 9,558,686 Pledged 1,100,000
legal person
Strategic investors or general legal
persons who have become top 10
None
shareholders due to new share allotment
(if any) (see Note 3)
Paul Xiaoming Lee, Sherry Lee, Li Xiaohua and JERRY YANG LI are all the family members of the
Statement on related party relationship or Company’s actual controller Paul Xiaoming Lee and represent the persons acting in concert. Heyi Investment
concerted action between is the enterprise under control by the family of the actual controller Paul Xiaoming Lee. Heli Investment is a
above-mentioned shareholders related party of the Company. The other shareholders are not known as to whether they have the related party
relationships between them or constitute the persons acting in concert.
Mr. Paul Xiaoming Lee and Ms. Sherry Lee signed the Power of Attorney for Shareholding on January 14,
Explanation of delegation/acceptance of
2020, by which Ms. Sherry Lee fully delegated the shareholders’ rights, such as rights to question, proposal
voting right and waiver of voting right
and vote, in connection with 73,470,459 shares she held in the Company, to her father Mr. Paul Xiaoming
involving the above shareholders
Lee, for a period of three years from the date of the Power of Attorney.
Special explanation on the existence of
special repurchase account among the
N/A
top 10 shareholders (if any) (see Note
10)
Top 10 shareholders holding unrestricted shares
Type of shares
Number of unrestricted shares held at the
Name of shareholder Number of
end of the Reporting Period Type of shares
shares
119,449,5
Heyi Investment 119,449,535 Renminbi denominated common shares
35
Hong Kong Securities Clearing 97,318,30
97,318,305 Renminbi denominated common shares
Company Limited 5
73,470,45
Sherry Lee 73,470,459 Renminbi denominated common shares
9
30,347,76
Paul Xiaoming Lee 30,347,764 Renminbi denominated common shares
4
18,364,46
Kunming Huachen Investment Co., Ltd. 18,364,462 Renminbi denominated common shares
2
17,707,23
JERRY YANG LI 17,707,237 Renminbi denominated common shares
7
17,459,47
Li Xiaohua 17,459,472 Renminbi denominated common shares
2
16,164,00
Zhang Yong 16,164,007 Renminbi denominated common shares
7
112
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
15,526,81
Shanghai Hengzou 15,526,817 Renminbi denominated common shares
7
Heli Investment 9,558,686 Renminbi denominated common shares 9,558,686
Statement on related party relationships
Paul Xiaoming Lee, Sherry Lee, Li Xiaohua and JERRY YANG LI are all the family members of the
or concerted action between top 10
Company’s actual controller Paul Xiaoming Lee and represent the persons acting in concert. Heyi Investment
circulating shareholders without sales
is the enterprise under control by the family of the actual controller Paul Xiaoming Lee. Heli Investment is a
restriction and between top 10 circulating
related party of the Company. The other shareholders are not known as to whether they have the related party
shareholders without sales restriction and
relationships between them or constitute the persons acting in concert.
top 10 shareholders
Statement on top 10 ordinary Among the top ten ordinary shareholders, Heyi Investment held 7,900,000 shares through the client account
shareholders’ participation in securities of collateral securities for margin trading of China Merchants Securities Co., Ltd.; and Heli Investment held
margin trading business (if any) (see 1,500,000 shares through the client account of collateral securities for margin trading of Guotai Junan
Note 4) Securities Co.,Ltd..
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 countries or
Controlling shareholder’s name Nationality
regions
Paul Xiaoming Lee American Yes
Yan Ma American Yes
Sherry Lee American Yes
Li Xiaohua Chinese 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
Chairman and General Manager of the Company. Yan Ma serves as the Director of the
Major Occupation and Position
Company. 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 participation None
during the Reporting Period
Change of controlling shareholder during the Reporting Period
□ Applicable √ N/A
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
Name of actual controller Relationship with actual controller Nationality residence in other countries
or regions
Act in concert (including agreement, kinship
Paul Xiaoming Lee American Yes
and common control)
113
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Act in concert (including agreement, kinship
Yan Ma American Yes
and common control)
Act in concert (including agreement, kinship
Sherry Lee American Yes
and common control)
Act in concert (including agreement, kinship
Li Xiaohua Chinese Yes
and common control)
Act in concert (including agreement, kinship
Yanyang Hui American Yes
and common control)
Act in concert (including agreement, kinship
Jerry Yang Li American Yes
and common control)
Paul Xiaoming Lee serves as the Chairman of the Company. Li Xiaohua serves as the Vice Chairman
Major Occupation and Position and General Manager of the Company. Yan Ma serves as the Director of the Company. Yanyang Hui,
Sherry Lee and JERRY YANG LI take no positions at the Company.
Control over domestic and overseas
None
listed companies over past 10 years
Change of actual controller during the Reporting Period
□ Applicable √ N/A
The actual controller of the Company has not changed during the Reporting Period.
A block diagram of the property rights and control relationship between the Company and the actual controller
The actual controller controls the Company through trust or other asset management methods
□ Applicable √ N/A
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 √ N/A
5. Other corporate shareholders holding more than 10% of the shares
√ Applicable □ N/A
114
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Name of
Legal
legal
Representative/Princi Date of Incorporation Registered Capital Major operating activities or management activities
person
pal of Organization
shareholder
Conduct venture capital activities with free capital; make project
Heyi investment and manage investment project; investment
Paul Xiaoming Lee November 10, 2010 RMB30 million
Investment management, 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 √ N/A
IV. Information on implementation of share repurchase during the Reporting Period
Progress in implementation of share repurchase
√ Applicable □ N/A
Ratio of shares
Number of Percentag
Intended Number of repurchased to the
Scheme shares e of the Amount intended to Repurchase
repurchase shares underlying shares under
disclosure date intended to be general be repurchased purpose
period repurchased the stock incentive plan (if
repurchased capital
any)
Used for
implementatio
Not less than
1,111,111 n of the stock
RMB200 million March 17,
March 18, shares to 0.12% to incentive or
(inclusive) and not 2021 to March 1,585,437 100.00%
2021 2,222,222 0.25% employee
more than RMB400 16, 2022
shares stock
million (inclusive)
ownership
plan
Progress of centralized bidding for reduction of shares repurchased
□ Applicable √ N/A
115
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Section 8 Details about Preferred Shares
□ Applicable √ N/A
During the Reporting Period, there were no preferred shares in the Company.
116
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Section 9 Details about bonds
√ Applicable □ N/A
I. Corporate bonds
□ Applicable √ N/A
During the Reporting Period, there were no corporate bonds of the Company.
II. Debentures
□ Applicable √ N/A
During the Reporting Period, there were no debentures of the Company.
III. Debt financing instruments of non-financial enterprises
□ Applicable √ N/A
During the Reporting Period, there were no non-financial enterprise debt financing tool of the Company.
IV. Convertible corporate bonds
√ Applicable □ N/A
1. All Previous Adjustments to the Conversion Price
The initial conversion price of “Energy Convertible Bonds” was RMB64.61 per 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. (CSRC License [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 participants 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.
117
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
2. Cumulative Share Conversion
√ Applicable □ N/A
Ratio of the
number of
Ratio of
shares
amount of
Total volume Cumulative converted to Amount of
Abbreviation Cumulative shares not
Start and end of bond number of the total shares not
for Total amount conversion yet
date of share issuance shares issued shares yet
convertible of issuance amount converted to
conversion (number of converted of the converted
bond (RMB) the total
bonds) (shares) Company (RMB)
amount of
before the
issuance
start of the
conversion
August 17,
Energy
2020 to 1,600,000,00 1,145,914,00 454,086,000.
Convertible 16,000,000 17,614,728 2.19% 28.38%
February 11, 0.00 0.00 00
Bonds
2026
3. Top Ten Holders of Convertible Bonds
Unit: shares
Number of
convertible Amount of
Percentage of
Nature of bonds held at the convertible
convertible bonds
holder of end of the bonds held at the
SN Name of holder of convertible bonds held at the end of
convertibl Reporting end of the
the Reporting
e bonds Period (number Reporting Period
Period
of convertible (RMB)
bonds)
Industrial and Commercial Bank of China Limited - Guangfa
1 Other 389,230 38,923,000.00 8.57%
Convertible Bond Initiated Securities Investment Fund
Agricultural Bank of China Limited - Penghua Convertible
2 Other 386,706 38,670,600.00 8.52%
Bond Securities Investment Fund
Agricultural Bank of China Limited - Southern Xiyuan
3 Other 228,110 22,811,000.00 5.02%
Convertible Bond Securities Investment Fund
Dajia Asset - China Minsheng Bank - Dajia Asset - Value
4 Other 219,441 21,944,100.00 4.83%
Selected No. 1 Collective Asset Management Product
Dajia Asset - China Minsheng Bank - Dajia Asset - Shengshi
5 Other 213,110 21,311,000.00 4.69%
Selected No. 2 Collective Asset Management Product
China Minsheng Banking Corporation Limited - Everbright
6 Other 197,790 19,779,000.00 4.36%
Pramerica Credit Tianyi Bond Securities Investment Fund
7 National Social Security Fund Portfolio 203 Other 163,820 16,382,000.00 3.61%
8 Basic Pension Insurance Fund - Portfolio 106 Other 139,008 13,900,800.00 3.06%
9 National Social Security Fund Portfolio 1008 Other 118,730 11,873,000.00 2.61%
Fullgoal Fuyi Jinqu Fixed Income Pension Product -
10 Other 111,044 11,104,400.00 2.45%
Industrial and Commercial Bank of China Limited
118
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
4. Significant Changes in the Guarantor’s Profitability, Asset Status, and Credit Status
□ Applicable √ N/A
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) 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/.
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 (2021) 100043) 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 “convertible corporate bonds of Yunnan
Energy New Material Co., Ltd.” 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 √ N/A
VI. Overdue repayment of interest-bearing debt other than bonds as at the end of the
Reporting Period
□ Applicable √ N/A
VII. Violation of rules and regulations during the Reporting Period
□ Yes √ No
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
Increase or decrease at the end of
At the end of the Reporting the current Reporting Period
Item At the end of the prior year
Period compared with the end of prior
year
Current Ratio 1.3647 2.03 -32.77%
Asset-Liability Ratio 44.35% 43.63% 0.72%
Quick ratio 1.0308 1.5937 -35.32%
Increase or decrease of the
The corresponding period of Reporting Period compared with
The reporting period
prior year the corresponding period of prior
year
Net profit after deduction of 256,705.45 99,050.72 159.17%
119
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
non-recurring gains and losses
Debt-to-EBITDA ratio 36.66% 23.16% 13.50%
120
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Interest coverage ratio 14.24 5.13 177.58%
Cash interest coverage ratio 8.16 4.98 63.86%
EBITDA interest coverage ratio 17.58 7.03 150.07%
Loan repayment rate 100.00% 100.00% 0.00%
Interest coverage rate 100.00% 100.00% 0.00%
121
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Section 10 Financial Report
I. Audit Report
Type of audit opinion Standard unqualified opinion
Audit report signing date April 11, 2022
Audit organization name Dahua CPAs (SGP)
Audit report No. Da Hua Shen Zi [2022] No. 005769
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., (“the Company”), including the consolidated and the parent
company’s balance sheets as of December 31, 2021, 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 2021, 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 Company’s consolidated and the parent company’s financial positions as of December 31, 2020 as well as the
consolidated and the parent company’s operation results and cash flow for 2021.
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 the Company 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
1. Description of matters
Please refer to Note IV-(35) and Note VI-43 of the consolidated financial statements for the accounting policies and book amount information of the
revenue recognition of the Company in this year.
The operating income of the Company in 2021 amounted to RMB7,982,426,800, which was the main source of its profit and affects its key
performance indicators. In addition, according to the industry practice, after signing the sales order with customer, the Company 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
122
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 the Company is in line with the relevant provisions of the enterprise accounting standards;
(3) 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;
(4) 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;
(5) 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;
(6) 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 the Company 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
receivables of the Company in this year.
On December 31, 2021, the original book value of accounts receivable of the Company was RMB4,541,764,000, the bad debt provision was
RMB136,327,900, and the net value was RMB4,405,436,100, accounting for 16.86% 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, all 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) The adequacy of the management’s provision for bad debt is evaluated 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 the Company are fully reasonable.
IV. Other Information
The Company’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.
123
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
V. Responsibilities of Management and Those Charged with Governance for Financial
Statements
The Company’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 Company’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 the
Company or to cease operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’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 the Company’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 the Company 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 the Company to
express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the Company audit. We 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,
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
124
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
1. Consolidated balance sheet
Prepared by: Yunnan Energy New Material Co., Ltd.
December 31, 2021
Unit: RMB
Item December 31, 2021 December 31, 2020
Current assets:
Monetary funds 1,833,450,205.69 2,374,743,862.70
Settlement reserves
Loans to banks and other financial institutions
Held-for-trading financial assets 5,137,194.34 1,340,551,914.18
Derivative financial assets
Notes receivable 368,575,191.23 379,739,323.94
Accounts receivable 4,405,436,085.52 2,328,215,706.27
Receivable financing 526,473,335.53 399,552,829.70
Prepayments 226,474,516.69 180,532,055.58
Premiums receivable
Reinsurance premium receivable
Reinsurance contract provision receivable
Other receivables 8,119,316.74 10,861,029.53
Including: Interest receivable
Dividends receivable
Financial assets held under resale agreements
Inventories 1,681,448,170.29 1,157,030,660.71
Contractual assets
Held-for-sales assets
Non-current assets due within one year 2,956,802.29
Other current assets 407,556,013.80 533,769,875.20
Total current assets 9,462,670,029.83 8,707,954,060.10
Non-current assets:
Loans and advances to customers
Debt investment
Other debt investment
Long-term receivables 0.00
Long-term equity investments 3,545,984.21 3,375,208.87
Investments in other equity instruments 110,000,000.00
Other non-current financial assets
125
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Investment properties 8,933,531.66 9,467,762.78
Fixed assets 10,877,888,212.91 8,420,764,216.20
Construction in progress 1,752,915,718.82 1,639,803,967.92
Productive biological assets
Oil and gas assets
Right-of-use assets
Intangible assets 560,863,178.11 461,898,594.16
Development expenditures
Goodwill 520,230,679.65 520,230,679.65
Long-term unamortized expenses 3,559,617.17 6,645,427.28
Deferred income tax assets 252,854,470.86 202,903,996.37
Other non-current assets 2,568,723,421.32 599,190,933.07
Total non-current assets 16,659,514,814.71 11,864,280,786.30
Total assets 26,122,184,844.54 20,572,234,846.40
Current liabilities:
Short-term borrowings 4,116,148,340.30 1,795,679,528.91
Borrowings from the central bank
Placements from banks and other financial institutions
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 487,407,828.53 695,426,539.69
Accounts payable 650,545,657.28 471,076,518.22
Advances from customers
Contractual liabilities 761,923,312.38 7,677,129.87
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 33,329,916.78 28,144,817.99
Taxes payable 190,156,537.78 178,984,075.44
Other payables 70,277,422.63 585,382,427.63
Including: Interest payable
Dividends payable 9,778,239.09 7,871,573.20
Fees and commissions payable
126
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Reinsurance amounts payable
Hold-for-sale liabilities
Non-current liabilities due within one year 383,397,992.10 526,281,063.88
Other current liabilities 240,737,724.26 1,021,339.34
Total current liabilities 6,933,924,732.04 4,289,673,440.97
Non-current liabilities:
Insurance contract reserves
Long-term borrowings 2,803,108,832.30 2,666,911,132.37
Bonds payable 413,239,181.29 755,725,620.04
Including: preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term payroll payable
Estimated liabilities
Deferred income 754,958,659.55 708,255,614.66
Deferred income tax liabilities 141,144,032.72 100,406,057.96
Other non-current liabilities 538,517,694.55 455,517,694.55
Total non-current liabilities 4,650,968,400.41 4,686,816,119.58
Total liabilities 11,584,893,132.45 8,976,489,560.55
Owners’ equity:
Share capital 892,406,822.00 886,566,151.00
Other equity instruments 50,352,323.80 92,433,139.11
Including: preferred shares
Perpetual bonds
Capital reserve 7,635,639,929.52 7,229,135,825.83
Less: treasury stock 204,444,302.78
Other comprehensive income -3,746,198.57
Special reserve
Surplus reserve 173,392,922.26 147,950,664.58
General risk provision
Undistributed profits 5,288,265,431.08 2,746,794,868.15
Total owners’ equity attributable to parent company 13,831,866,927.31 11,102,880,648.67
Minority interests 705,424,784.78 492,864,637.18
127
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Total owners’ equity 14,537,291,712.09 11,595,745,285.85
Total liabilities and owners’ equity 26,122,184,844.54 20,572,234,846.40
Legal representative: Paul Xiaoming Lee Financial Controller: Li Jian Financial Manager: Deng Jinhuan
2. Balance sheet of the parent company
Unit: RMB
Item December 31, 2021 December 31, 2020
Current assets:
Monetary funds 227,525,602.97 1,356,011,083.93
Held-for-trading financial assets 1,210,015,416.66
Derivative financial assets
Notes receivable 3,800,000.00 439,422,816.05
Accounts receivable 11,098,038.20 13,500,863.18
Receivable financing
Prepayments 178,525.89 424,285.77
Other receivables 6,692,163,939.27 4,145,526,029.74
Including: Interest receivable
Dividends receivable 241,040,000.00 241,040,000.00
Inventories 23,374,673.75 11,921,375.85
Contractual assets
Held-for-sales assets
Non-current assets due within one year
Other current assets 7,931,629.01 571,205.74
Total current assets 6,966,072,409.09 7,177,393,076.92
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term equity investments 4,658,382,761.62 4,662,093,871.62
Investments in other equity instruments 110,000,000.00
Other non-current financial assets
Investment properties
Fixed assets 68,543,765.10 72,475,302.27
Construction in progress
128
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Productive biological assets
Oil and gas assets
Right-of-use assets
Intangible assets 11,017,155.74 11,586,803.18
Development expenditures
Goodwill
Long-term unamortized expenses
Deferred income tax assets 37,462.01 35,786,244.88
Other non-current assets 29,841,986.94 7,703,156.51
Total non-current assets 4,877,823,131.41 4,789,645,378.46
Total assets 11,843,895,540.50 11,967,038,455.38
Current liabilities:
Short-term borrowings 88,118,518.90 23,027,741.64
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 200,000.00 111,564,400.00
Accounts payable 22,796,504.02 32,501,970.95
Advances from customers
Contractual liabilities 217,893.81 306,389.38
Employee benefits payable
Taxes payable 919,028.71 3,921,261.63
Other payables 195,116,109.42 98,408,526.81
Including: Interest payable
Dividends payable
Hold-for-sale liabilities
Non-current liabilities due within one year 89,570,152.48 2,806,004.27
Other current liabilities 3,828,326.19 39,830.62
Total current liabilities 400,766,533.53 272,576,125.30
Non-current liabilities:
Long-term borrowings 116,000,000.00 290,000,000.00
Bonds payable 413,239,181.29 755,725,620.04
Including: preferred shares
Perpetual bonds
Lease liabilities
129
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Long-term payables
Long-term payroll payable
Estimated liabilities
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 529,239,181.29 1,045,725,620.04
Total liabilities 930,005,714.82 1,318,301,745.34
Owners’ equity:
Share capital 892,406,822.00 886,566,151.00
Other equity instruments 50,352,323.80 92,433,139.11
Including: preferred shares
Perpetual bonds
Capital reserve 9,749,414,509.20 9,347,283,545.82
Less: treasury stock 204,444,302.78
Other comprehensive income
Special reserve
Surplus reserve 145,640,411.27 120,198,153.59
Undistributed profits 280,520,062.19 202,255,720.52
Total owners’ equity 10,913,889,825.68 10,648,736,710.04
Total liabilities and owners’ equity 11,843,895,540.50 11,967,038,455.38
3.Consolidated income statement
Unit: RMB
Item 2021 2020
I. Total operating income 7,982,426,810.59 4,283,007,589.11
Including: Operating income 7,982,426,810.59 4,283,007,589.11
Interest income
Earned premium
Fee and commission incomes
II. Total operating cost 4, 891,681,674.54 3,068,774,846.93
Including: operating cost 4,002,023,714.23 2,456,998,310.23
Interest expense
Fee and commissions expenses
130
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Cash surrender amount
Net payments for insurance claims
Net provision for insurance liability contract reserves
Policy dividend expenses
Reinsurance expenses
Taxes and surcharges 37,128,232.84 32,491,020.28
Selling expenses 74,035,002.36 56,365,549.96
Administrative expenses 216,333,939.36 155,800,391.65
R&D expenses 409,178,730.28 178,243,333.28
Financial expenses 152,982,055.47 188,876,241.53
Including: Interest expense 221,206,595.88 203,597,658.74
Interest income 20,299,433.23 34,077,648.03
Add: Other income 134,079,448.78 139,662,812.37
Investment income (loss is indicated with “-”) 27,109,413.02 8,627,395.44
Including: Income from investment in associates and
1,687,090.23 1,516,305.77
joint ventures
Derecognized financial assets measured by amortized
-9,956,624.13
cost
Exchange gain (loss is indicated with “-”)
Net exposure hedging income (loss is indicated with
“-”)
Income from changes in fair value (loss is indicated
137,194.34 10,951,914.18
with “-”)
Credit impairment losses (loss is indicated with “-”) -24,846,360.74 -38,744,542.00
Asset impairment losses (loss is indicated with “-”) -10,663,472.55 -17,810,098.57
Income from disposal of assets (loss is indicated with
308,957.41 -144,872.28
“-”)
III. Operating profit (loss is indicated with “-”) 3,216,870,316.31 1,316,775,351.32
Add: Non-operating income 5,349,575.50 1,696,155.05
Less: Non-operating expenses 2,645,030.21 5,224,424.09
IV. Total profit (total loss is indicated with “-”) 3,219,574,861.60 1,313,247,082.28
131
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Less: Income tax expense 332,720,824.45 137,597,621.36
V. Net profit (net loss is indicated with “-”) 2,886,854,037.15 1,175,649,460.92
(I) Classified according to operating continuity
1. Net profit from continuing operations (net loss is
2,886,854,037.15 1,175,649,460.92
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
2,717,628,798.01 1,115,604,020.47
company
2. Profit or loss of minority interest 169,225,239.14 60,045,440.45
VI. Other comprehensive income, net of tax -3,934,256.01
Other comprehensive income attributable to owners
-3,746,198.57
of parent company, net of tax
(I) Other comprehensive income that cannot be
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
investments
4. Changes in fair value of the enterprise’s credit risk
5. Others
(II) Other comprehensive income that will be -3,746,198.57
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
-4,502,767.45
statements denominated in foreign currencies
7.Provision for credit impairment of receivables
756,568.88
financing
132
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Other comprehensive income attributable to minority
-188,057.44
interests, net of tax
VII. Total comprehensive income 2,882,919,781.14 1,175,649,460.92
Total comprehensive income attributable to owners
2,713,882,599.44 1,115,604,020.47
of parent company
Total comprehensive income attributable to minority
169,037,181.70 60,045,440.45
interests
VIII. Earnings per share:
(I) Basic earnings per share 3.06 1.34
(II) Diluted earnings per share 3.05 1.34
Legal representative: Paul Xiaoming Lee Financial Controller: Li Jian Financial Manager: Deng Jinhuan
4. Income statement of parent company
Unit: RMB
Item 2021 2020
I. Operating income 157,499,622.94 234,623,935.16
Less: Operating cost 103,455,015.75 168,222,882.65
Taxes and surcharges 2,141,286.64 2,880,451.60
Selling expenses 819,867.31 448,512.10
Administrative expenses 18,055,936.74 19,514,060.89
R&D expenses 7,542,189.37 7,495,274.77
Financial expenses -195,072,440.78 -4,489,911.90
Including: Interest expense 47,201,667.42 103,063,984.02
Interest income 242,290,969.91 107,278,598.69
Add: Other income 2,643,407.78 852,455.62
Investment income (loss is indicated with “-”) 60,270,487.08 58,000,000.00
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 “-”)
133
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Income from changes in fair value (loss is indicated with “-”) 10,015,416.66
Credit impairment losses (loss is indicated with “-”) 7,031,935.64 -7,013,346.63
Asset impairment losses (loss is indicated with “-”)
Income from disposal of assets (loss is indicated with “-”)
6,430.44 -11,416.29
II. Operating profit (loss is indicated with “-”) 290,510,028.85 102,395,774.41
Add: Non-operating income 22,407.40 305,202.78
Less: Non-operating expenses 130,596.96 601,273.52
III. Total profit (total loss is indicated with “-”) 290,401,839.29 102,099,703.67
Less: Income tax expense 35,979,262.54 -25,870,566.29
IV. Net profit (net loss is indicated with “-”) 254,422,576.75 127,970,269.96
(I) Net profit from continuing operations (net loss is indicated
254,422,576.75 127,970,269.96
with “-”)
(II) Net profit from discontinuing operations (net loss is
indicated with “-”)
V. Other comprehensive income, net of tax
(I) Other comprehensive income that cannot be 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 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
134
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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
254,422,576.75 127,970,269.96
VII. Earnings per share:
(I) Basic earnings per share
(II) Diluted earnings per share
5. Consolidated cash flow statement
Unit: RMB
Item 2021 2020
I. Cash flows from operating activities:
Cash received from the sale of goods or rendering of services 6,192,723,975.82 3,191,214,990.25
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 357,117,868.83 245,563,708.07
Other cash receipts related to operating activities 296,201,968.18 343,505,512.60
135
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Subtotal of cash inflows from operating activities 6,846,043,812.83 3,780,284,210.92
Cash payments for goods purchased and services received 3,844,341,884.47 1,980,955,396.48
Net increase in loans and advances
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 653,147,819.25 375,257,883.44
Payments of all types of taxes 705,344,941.58 256,970,205.27
Other cash payments relating to operating activities 224,563,789.71 111,920,712.54
Subtotal of cash outflows due to operating activities 5,427,398,435.01 2,725,104,197.73
Net cash flows from operating activities 1,418,645,377.82 1,055,180,013.19
II. Cash flows from investment activities:
Cash received from disposal of investments 1,770,600,000.00 860,750,000.00
Cash received from procuring investment income 39,541,818.23 9,784,553.45
Net amount of cash received from disposal of fixed assets,
intangible assets and other long-term assets 4,743,027.47 1,981,312.22
Net cash received from disposals of subsidiaries and other
business units
Other cash received relating to investment activities 1,098,067.46
Subtotal of cash inflows from investment activities 1,814,884,845.70 873,613,933.13
Cash paid for acquisition of fixed assets, intangible assets and
3,995,963,251.24 2,668,276,730.82
other long-term assets
Cash paid for acquisition of investments 1,059,810,518.38 2,190,350,000.00
Net increase in pledge loans
Net cash payments for acquisitions of subsidiaries and other
business units 768,910,958.56
Other cash paid relating to investment activities 474,586,405.90 521,580,488.33
136
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Subtotal of cash outflows due to investment activities 5,530,360,175.52 6,149,118,177.71
Net cash flows from investment activities -3,715,475,329.82 -5,275,504,244.58
III. Cash flows from financing activities:
Cash received from absorbing investment 41,323,782.65 5,182,504,554.49
Including: Cash received from subsidiaries’ absorbing minority
41,323,782.65 200,000,000.00
shareholder investment
Cash received from borrowings 6,075,195,864.97 6,453,328,220.70
Cash received from bond issuance 1,586,122,641.51
Other cash received relating to financing activities
Subtotal of cash inflows from financing activities 6,116,519,647.62 13,221,955,416.70
Cash paid for debt repayment 3,759,907,508.21 6,828,400,619.55
Cash paid for distributing dividends and profits or paying
387,731,899.73 337,184,434.87
interests
Including: Dividends and profits paid to minority shareholders
by subsidiaries
Cash payments relating to other financing activities 355,820,208.65 496,786,261.12
Subtotal of cash outflows from financing activities 4,503,459,616.59 7,662,371,315.54
Net cash flows from financing activities 1,613,060,031.03 5,559,584,101.16
IV. Effect of changes in exchange rate on cash and cash
equivalents -1,846,294.98
V. Net increase in cash and cash equivalents -685,616,215.95 1,339,259,869.77
Add: Opening balance of cash and cash equivalents 2,054,915,784.55 715,655,914.78
VI. Closing balance of cash and cash
equivalents 1,369,299,568.60 2,054,915,784.55
6. Cash flow statement of parent company
Unit: RMB
Item 2021 2020
I. Cash flows from operating activities:
Cash received from the sale of goods or
148,332,356.97 195,880,806.69
rendering of services
Receipts of tax refunds 2,400,340.22 1,492,265.95
Other cash receipts related to operating activities 38,811,850.08 83,978,889.93
137
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Subtotal of cash inflows from operating activities 189,544,547.27 281,351,962.57
Cash payments for goods purchased and services
57,469,797.54 58,371,825.94
received
Cash paid to and on behalf of employees 23,671,850.65 22,027,502.06
Payments of all types of taxes 24,606,426.06 11,770,532.86
Other cash payments relating to operating
64,565,222.66 16,850,138.72
activities
Subtotal of cash outflows due to operating
170,313,296.91 109,019,999.58
activities
Net cash flows from operating activities 19,231,250.36 172,331,962.99
II. Cash flows from investment activities:
Cash received from disposal of investments 1,203,711,110.00 739,219,511.67
Cash received from procuring investment income 70,285,903.74 89,500,000.00
Net amount of cash received from disposal of
fixed assets, intangible assets and other long-term 2,717,733.88 322,000.00
assets
Net cash received from disposals of subsidiaries
and other business units
Other cash received relating to investment
activities 1,318,235,358.19 1,764,000,000.00
Subtotal of cash inflows from investment
activities 2,594,950,105.81 2,593,041,511.67
Cash paid for acquisition of fixed assets,
intangible assets and other long-term assets 35,192,771.85 1,261,033.67
Cash paid for acquisition of investments
110,000,000.00 2,433,478,760.67
Net cash payments for acquisitions of
subsidiaries and other business units
Other cash paid relating to investment activities 3,410,258,479.43 6,928,358,826.63
Subtotal of cash outflows due to investment
3,555,451,251.28 9,363,098,620.97
activities
Net cash flows from investment activities -960,501,145.47 -6,770,057,109.30
III. Cash flows from financing activities:
Cash received from absorbing investment
4,982,504,554.49
Cash received from borrowings
108,000,000.00 1,416,500,000.00
Cash received from bond issuance 1,586,122,641.51
Other cash received relating to financing
activities 918,990,595.87 2,207,533,096.38
Subtotal of cash inflows from financing activities
1,026,990,595.87 10,192,660,292.38
138
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Cash paid for debt repayment
130,000,000.00 1,284,486,222.89
Cash paid for distributing dividends and profits
or paying interests 166,972,238.46 124,393,256.17
Cash payments relating to other financing
activities 891,825,843.08 982,525,785.13
Subtotal of cash outflows from financing
1,188,798,081.54 2,391,405,264.19
activities
Net cash flows from financing activities -161,807,485.67 7,801,255,028.19
IV. Effect of changes in exchange rate on cash
and cash equivalents
V. Net increase in cash and cash equivalents -1,103,077,380.78 1,203,529,881.88
Add: Opening balance of cash and cash
equivalents 1,329,918,428.70 126,388,546.82
VI. Closing balance of cash and cash equivalents
226,841,047.92 1,329,918,428.70
139
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
7. Consolidated statement of changes in owners’ equity
Amount of current period
Unit: RMB
2021
Owner’s equity attributable to parent company Minority Total owners’
Item Other equity instruments Capital Less: Other Spec Surplus Gene Undistribute Oth Subtotal interests equity
Share Prefe Perp Other reserve treasury comprehen ial reserve ral d profits er
capital rred etual stock sive reser risk
stock bond income ve provi
s sion
I. Closing balance of 886,56
the previous year 92,433,1 7,229,135,8 147,950,664. 2,746,794,8 11,102,880,6 492,864,63 11,595,745,2
6,151.0
39.11 25.83 58 68.15 48.67 7.18 85.85
0
Add: Accounting
policy changes
Correction of errors in
the prior period
Merger of enterprises
under common
control
Other
II. Opening balance of 886,56
the current year 92,433,1 7,229,135,8 147,950,664. 2,746,794,8 11,102,880,6 492,864,63 11,595,745,2
6,151.0
39.11 25.83 58 68.15 48.67 7.18 85.85
0
III. Increase/decrease
for the period 5,840,6 -42,080, 406,504,103 204,444,30 -3,746,198 25,442,257.6 2,541,470,5 2,728,986,27 212,560,14 2,941,546,42
(decrease is indicated 71.00 815.31 .69 2.78 .57 8 62.93 8.64 7.60 6.24
with “-”)
(I) Total
comprehensive -3,746,198 2,717,628,7 2,713,882,59 169,037,18 2,882,919,78
income .57 98.01 9.44 1.70 1.14
(II) Contribution and
withdrawal of capital 5,840,6 -42,080, 406,504,103 204,444,30 165,819,656. 45,429,631 211,249,288.
by owners 71.00 815.31 .69 2.78 60 .79 39
140
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
1. Common shares
invested by owner -13,222,553. -13,222,553.4 44,546,336 31,323,782.6
45 5 .10 5
2. Capital invested by
other equity 5,840,6 -42,080, 402,130,963 365,890,819. 365,890,819.
instrument holders 71.00 815.31 .38 07 07
3. Amount of share
17,595,693. 204,444,30 -186,848,609. -185,965,313.
payment credited to 883,295.69
76 2.78 02 33
owner’s equity
4. Other
(III) Profit distribution 25,442,257.6 -176,158,23 -150,715,977. -1,906,665. -152,622,643.
8 5.08 40 89 29
1. Withdrawal of
surplus reserve 25,442,257.6 -25,442,257.
8 68
2. Provision for
general risk
3. Distribution to
owners (or -150,715,97 -150,715,977. -1,906,665. -152,622,643.
shareholders) 7.40 40 89 29
4. Other
(IV) Transfers within
the owners’ equity
1. Conversion of
capital reserve to
capital (or share
capital)
2. Conversion of
surplus reserve to
capital (or share
capital)
3. Covering loss with
surplus reserve
4. Change of defined
benefit plan carried
forward to retained
earning
141
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
5. Other
comprehensive
income carried
forward to retained
earning
6. Other
(V) Special reserve
1. Provision for the
period
2. Utilization for the
period
IV. Other
IV. Closing balance 892,40
for the period 50,352,3 7,635,639,9 204,444,30 -3,746,198 173,392,922. 5,288,265,4 13,831,866,9 705,424,78 14,537,291,7
6,822.0
23.80 29.52 2.78 .57 26 31.08 27.31 4.78 12.09
0
Amount of previous period
Unit RMB
2020
Minority Total
Owner’s equity attributable to parent company interests owners’’
Item equity
Shar Other equity instruments Capital Less: Other Spec Surplus Gener Undistribute Oth Subtotal
e Prefe Perp Other reserve treasury comprehen ial reserve al risk d profits er
capit rred etual stock sive reser provisi
al stock bond income ve on
s
I. Closing balance of the 805,
previous year 370, 1,894,027,13 28,137,312 135,153,63 1,744,638,64 4,551,052,87 330,073,00 4,881,125,88
770. 2.14 .00 7.58 8.71 6.43 8.95 5.38
00
Add: Accounting policy
changes
Correction of errors in
the prior period
142
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Merger of enterprises
under common control
Other
II. Opening balance of 805,
the current year 370, 1,894,027,13 28,137,312 135,153,63 1,744,638,64 4,551,052,87 330,073,00 4,881,125,88
770. 2.14 .00 7.58 8.71 6.43 8.95 5.38
00
III. Increase/decrease 81,1
for the period (decrease 95,3 92,433, 5,335,108,69 -28,137,31 12,797,027 1,002,156,21 6,551,827,77 162,791,62 6,714,619,40
is indicated with “-”) 81.0 139.11 3.69 2.00 .00 9.44 2.24 8.23 0.47
0
(I) Total comprehensive
income 1,115,604,02 1,115,604,02 60,045,440 1,175,649,46
0.47 0.47 .45 0.92
(II) Contribution and 81,1
withdrawal of capital by 95,3 92,433, 5,335,108,69 -28,137,31 5,536,874,52 105,657,76 5,642,532,28
owners 81.0 139.11 3.69 2.00 5.80 0.98 6.78
0
1. Common shares 69,4
invested by owner 44,4 4,592,771,40 4,662,215,84 81,080,000 4,743,295,84
44.0 3.98 7.98 .00 7.98
0
2. Capital invested by 11,7
other equity instrument 74,0 92,433, 779,622,447. 883,829,643. 883,829,643.
holders 57.0 139.11 50 61 61
0
3. Amount of share
21,332,629.0 21,332,629.0 22,215,924.7
payment credited to 883,295.70
4 4 4
owner’s equity
4. Other -23,1
-58,617,786. -28,137,31 -30,503,594.8 23,694,465
20.0 -6,809,129.55
83 2.00 3 .28
0
143
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
(III) Profit distribution 12,797,027 -113,447,80 -100,650,774. -2,911,573. -103,562,347.
.00 1.03 03 20 23
1. Withdrawal of surplus
reserve 12,797,027 -12,797,027.
.00 00
2. Provision for general
risk
3. Distribution to
owners (or shareholders) -100,650,77 -100,650,774. -2,911,573. -103,562,347.
4.03 03 20 23
4. Other
(IV) Transfers within
the owners’ equity
1. Conversion of capital
reserve to capital (or
share capital)
2. Conversion of surplus
reserve to capital (or
share capital)
3. Covering loss with
surplus reserve
4. Change of defined
benefit plan carried
forward to retained
earning
5. Other comprehensive
income carried forward
to retained earning
6. Other
(V) Special reserve
1. Provision for the
period
2. Utilization for the
period
IV. Other
144
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
IV. Closing balance for 886,
the period 566, 92,433, 7,229,135,82 147,950,66 2,746,794,86 11,102,880,6 492,864,63 11,595,745,2
151. 139.11 5.83 4.58 8.15 48.67 7.18 85.85
00
8. Statement of changes in owners’ equity of parent company
Amount of current period
Unit: RMB
2021
Item Share capital Other equity instruments Capital reserve Less: treasury Other Specia Surplus reserve Undistributed Othe Total owners’
Preferre Perpetua Other stock comprehensiv l profits r equity
d stock l bonds e income reserve
I. Closing balance of the 886,566,151.0 9,347,283,545.8 120,198,153.5 10,648,736,71
92,433,139.11 202,255,720.52
previous year 0 2 9 0.04
Add: Accounting policy
changes
Correction of errors in
the prior period
Other
II. Opening balance of 886,566,151.0 9,347,283,545.8 120,198,153.5 10,648,736,71
92,433,139.11 202,255,720.52
the current year 0 2 9 0.04
III. Increase/decrease
-42,080,815.3 204,444,302.7 265,153,115.6
for the period (decrease 5,840,671.00 402,130,963.38 25,442,257.68 78,264,341.67
1 8 4
is indicated with “-”)
(I) Total comprehensive 254,422,576.7
254,422,576.75
income 5
(II) Contribution and
-42,080,815.3 204,444,302.7 161,446,516.2
withdrawal of capital by 5,840,671.00 402,130,963.38
1 8 9
owners
1. Common shares
invested by owner
2. Capital invested by
other equity instrument -42,080,815.3 365,890,819.0
holders 5,840,671.00 402,130,963.38
1 7
145
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
3. Amount of share
payment credited to 204,444,302.7
owner’s equity 8
4. Other
(III) Profit distribution -176,158,235.0 -150,715,977.
25,442,257.68
8 40
1. Withdrawal of surplus
reserve 25,442,257.68 -25,442,257.68
2. Distribution to
owners (or shareholders) -150,715,977.4 -150,715,977.
0 40
3. Other
(IV)
Transfers
within the
owners’
equity
1. Conversion of capital
reserve to capital (or
share capital)
2. Conversion of surplus
reserve to capital (or
share capital)
3. Covering loss with
surplus reserve
4. Change of defined
benefit plan carried
forward to retained
earning
5. Other comprehensive
income carried forward
to retained earning
6. Other
(V) Special reserve
1. Provision for the
period
2. Utilization for the
period
(VI) Others
IV. Closing balance for 892,406,822.0 9,749,414,509.2 204,444,302.7 145,640,411.2 10,913,889,82
the period 50,352,323.80 280,520,062.19
0 0 8 7 5.68
146
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Amount of previous period
Unit: RMB
2020
Item Share Other equity instruments Capital reserve Less: treasury Other Special Surplus reserve Undistributed Other Total owners’
capital Preferred Perpetual Other stock comprehensiv reserve profits equity
stock bonds e income
I. Closing balance of the
previous year 805,370,77 3,651,035,741.6 107,401,126.5
28,137,312.00 187,733,251.59 4,723,403,577.87
0.00 9 9
Add: Accounting policy
changes
Correction of errors in
the prior period
Other
II. Opening balance of
the current year 805,370,77 3,651,035,741.6 107,401,126.5
28,137,312.00 187,733,251.59 4,723,403,577.87
0.00 9 9
III. Increase/decrease
81,195,381. 92,433,1 5,696,247,804.1 -28,137,312.0
for the period (decrease 12,797,027.00 14,522,468.93 5,925,333,132.17
00 39.11 3 0
is indicated with “-”)
(I) Total comprehensive
income 127,970,269.96 127,970,269.96
(II) Contribution and
withdrawal of capital by 81,195,381. 92,433,1 5,696,247,804.1 -28,137,312.0
owners 5,898,013,636.24
00 39.11 3 0
1. Common shares
invested by owner 69,444,444.
4,913,060,110.49 4,982,504,554.49
00
2. Capital invested by
other equity instrument 11,774,057. 92,433,1
holders 779,622,447.50 883,829,643.61
00 39.11
3. Amount of share
payment credited to
owner’s equity 3,736,935.26 3,736,935.26
147
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
4. Other -28,137,312.0
-23,120.00 -171,689.12 27,942,502.88
0
(III) Profit distribution
12,797,027.00 -113,447,801.03 -100,650,774.03
1. Withdrawal of surplus
reserve 12,797,027.00 -12,797,027.00
2. Distribution to
owners (or shareholders) -100,650,774.0
-100,650,774.03
3
3. Other
(IV)
Transfers
within the
owners’
equity
1. Conversion of capital
reserve to capital (or
share capital)
2.
Conversion
of surplus
reserve to
capital (or
share capital)
3. Covering loss with
surplus reserve
4. Change of defined
benefit plan carried
forward to retained
earning
5. Other comprehensive
income carried forward
to retained earning
6. Other
(V) Special reserve
1. Provision for the
period
2. Utilization for the
period
(VI) Others
IV. Closing balance for 886,566,15 92,433,1 9,347,283,545.8 120,198,153.5 10,648,736,710.0
the period 202,255,720.52
1.00 39.11 2 9 4
148
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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. (ZJXK [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 (DHYZ [2016] No. 000897).
According to the Notice on the Listing of RMB-denominated Ordinary Shares of Yunnan Innovative New Materials Co., Ltd. (SZS (2016)
No.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 Proposal on Granting
Restricted Shares to Participants 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 (DHYZ [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”) ZJXK [2018] No. 671 and
Ministry of Commerce of the People’s Republic of China (hereinafter referred to as “Ministry of Commerce”) SZCH [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 (DHYZ [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 (DHYZ [2018] 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 participants, and repurchased the shares
149
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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
(DHYZ [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.” (ZJXK [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. 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 (DHYZ [2020] No. 000460).
Approved by the Reply on Approval of Yunnan Energy New Materials Co., Ltd. to Issue Convertible Corporate Bonds Publicly (ZJXK [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, 2021, a total of
17,614,728.00 shares of convertible corporate bonds were converted 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 (DHYZ [2020] No. 000561) issued by Dahua
CPAs (SGP).
After years of distribution of bonus shares, allotment of new shares, conversion of share capital and issuance of new shares, as of December 31,
2021, the Company has issued a total of 892,406,822.00 shares of share capital, with a registered capital of RMB892,406,822.00.
(ii)Business nature and main business activities of the Company
The business scope 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 film, BOPP film and special paper. Lithium-ion separator film 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 aluminium, transfer film and other products.
Special paper products include laser transfer anti-counterfeiting paper, direct plating paper and coated paper.
(iii) Authorization of financial statements for issue
These financial statements were authorized for issue by the Company’s Board of Directors on April 11, 2022.
(iv) Scope of the Consolidated Financial Statements
There are 27 subsidiaries included in the consolidated financial statements in this period, including:
Name of subsidiaries Type of subsidiary Tier Shareholding ratio (%) Voting ratio (%)
150
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Yunnan Dexin Paper Co., Ltd. Wholly-owned subsidiary Tier 2 100.00 100.00
Yunnan Hongchuang Packaging Co., Ltd. Holding subsidiary Tier 2 59.46 59.46
Yunnan Hongta Plastic Co., Ltd. Wholly-owned subsidiary Tier 2 100.00 100.00
Hongta Plastic (Chengdu) Co., Ltd. Wholly-owned subsidiary Tier 3 100.00 100.00
Yuxi Feiermu Trading Co., Ltd. Wholly-owned subsidiary Tier 3 100.00 100.00
Shanghai Energy New Material Technology Co., Ltd. Holding subsidiary Tier 2 95.22 95.22
Zhuhai Energy New Material Technology Co., Ltd. Wholly-owned subsidiary Tier 3 100.00 100.00
Guangdong Energy New Material Institute Co., Ltd. Wholly-owned subsidiary Tier 4 100.00 100.00
Wuxi Energy New Material Technology Co., Ltd. Wholly-owned subsidiary Tier 3 100.00 100.00
Jiangxi Tonry New Energy Technology Development Wholly-owned subsidiary Tier 3 100.00 100.00
Co., Ltd.
Jiangsu Ruijie New Material Technology Co., Ltd. Wholly-owned subsidiary Tier 3 100.00 100.00
Jiangxi Ruijie New Material Technology Co., Ltd. Holding subsidiary Tier 4 82.00 82.00
Suzhou Green Power New Energy Material Co., Ltd. Wholly-owned subsidiary Tier 3 100.00 100.00
Foshan Donghang Photoelectric Technology Co., Ltd. Wholly-owned subsidiary Tier 3 100.00 100.00
Chongqing Energy Newmi Technological Co., Ltd. Holding subsidiary Tier 3 76.3574 76.3574
Jiangxi Enpo New Materials Co., Ltd. Holding subsidiary Tier 3 51.00 51.00
Jiangxi Energy New Material Technology Co., Ltd. Wholly-owned subsidiary Tier 3 100.00 100.00
Jiangsu Energy New Material Technology Co., Ltd. Wholly-owned subsidiary Tier 3 100.00 100.00
Hunan Energy Advanced New Material Technology Holding subsidiary Tier 3 65.00 65.00
Co., Ltd.
Ningbo Energy New Material Technology Co., Ltd. Wholly-owned subsidiary Tier 2 100.00 100.00
Chongqing Energy New Material Technology Co., Wholly-owned subsidiary Tier 3 100.00 100.00
Ltd.
Hainan Energy Investment Co., Ltd. Wholly-owned subsidiary Tier 3 100.00 100.00
Chuangxin New Material (Hong Kong) Co., Ltd. Wholly-owned subsidiary Tier 4 100.00 100.00
SEMCORP Global Holdings Kft. Wholly-owned subsidiary Tier 5 100.00 100.00
SEMCORP Hungary Kft. Wholly-owned subsidiary Tier 6 100.00 100.00
Hubei Energy New Material Technology Co., Ltd. Wholly-owned subsidiary Tier 3 100.00 100.00
Jiangsu Sanhe Battery Material Technology Co., Ltd. Holding subsidiary Tier 3 67.1053 67.1053
For the reason why the proportion of shareholding of the subsidiary is different from the proportion of the voting rights, and holding half or
below the voting right but still controlling the invested unit, please refer to “1. Interests in Subsidiaries” of “IX. Interests in Other Entities” in this
section.
Compared with the last year, 9 new entities were included in and 3 entities were removed from the consolidated financial statements this year:
1. New subsidiaries included in the consolidated financial statements this year
Name Reason for change
Jiangsu Ruijie New Material Technology Co., Ltd. Newly established
Jiangxi Enpo New Material Co., Ltd. Newly established
Jiangsu Energy New Material Technology Co., Ltd. Newly established
Hunan Energy Advanced New Material Technology Newly established
Co., Ltd.
Ningbo Energy New Material Co., Ltd. Newly established
Jiangxi Energy New Material Technology Co., Ltd. Newly established
151
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Chongqing Energy New Material Technology Co., Newly established
Ltd.
Hubei Energy New Material Technology Co., Ltd. Newly established
Jiangsu Sanhe Battery Material Technology Co., Newly established
Ltd.
2. Subsidiaries removed from the consolidated financial statements this year
Name Reason for change
Shenzhen Qingsong Jinze Technology Development Canceled
Co., Ltd.
Hunan Qingsong Jingze Technology Development Canceled
Co., Ltd.
Wuxi Energy Trading Co., Ltd. Canceled
See “VIII change of consolidation scope” for details of the subject in the scope of consolidated financial statements.
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 2014)
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:
According to the characteristics of actual production and operation, the Company has formulated specific accounting policies and accounting
estimates for such transactions or events as the provision for bad debts of accounts receivables, depreciation of fixed assets, amortization of intangible
assets and revenue recognition.
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.
152
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
2. Accounting period
The Company’s accounting year starts on 1 January and ends on 31 December.
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).
5. Accounting treatments for merger of enterprises 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 examined 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 merger 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.
153
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 that the cost of combination is less than the fair value of the identifiable net assets of the acquiree
gained in the combination, the difference is included in the current profit and loss by the Company after review.
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
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.
6. Methods for preparation of the consolidated financial statements
(1) 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 as the parent) are included in the consolidated financial statements.
(2) 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 merger 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
154
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 merger, shall be covered by writing down the opening retained earnings or current profit and loss of the
comparison period.
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 merger) 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
merger 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.
155
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
7. 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.
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.
8. 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.
9. 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.
156
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 spot exchange rate on the date of transaction. 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 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.
10. 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 and whose changes are included in the current 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 and whose changes are included in the current 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.
1) 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:
157
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
① 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.
② 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.
2) 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.
3) Financial assets designated as measured at fair value and whose changes are included in other comprehensive income
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 and whose changes are included in the current 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).
4) Financial assets classified as measured at fair value and whose changes are included in the current 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 and whose changes are included in the current 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.
5) Financial assets designated as measured at fair value and whose changes are included in the current profit and loss
At the time of initial recognition, the Company may irrevocably designate financial assets as measured at fair value and whose changes are included
in the current 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 and whose changes are included in the current profit
and loss. Except under the following circumstances:
① Embedded derivatives do not significantly change the cash flow of mixed contracts.
② 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.
158
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 and whose changes are included in the current 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:
① Such financial liabilities can eliminate or significantly reduce accounting mismatches.
② 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 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:
① Financial liabilities measured at fair value and whose changes are included in the current profit and loss.
② 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.
③ 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 asset are derecognized, i.e. written off from its account and balance sheet if:
① The contractual right to receive cash flow from the financial asset is terminated; or
② 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.
159
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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:
① 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; or
② 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:
① The carrying amount of the transferred financial asset on the date of derecognition.
② 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:
① The carrying amount of the derecognized portion on the derecognition date.
② 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.
160
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
(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, financial
assets classified as measured at fair value and whose changes are included in other comprehensive income, lease receivables, contractual assets and
financial guarantee contracts 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 receivables, contractual assets and lease receivables arising from transactions regulated by the income criteria, the Company uses the simplified
measurement method to measure 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.
1) Significant increase of credit risk
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
① Whether the actual or expected operating results of the debtor have changed significantly;
② Whether the regulatory, economic or technological environment of the debtor has undergone significant adverse changes;
③ 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;
④ Whether the debtor’s expected performance and repayment behavior have changed significantly;
⑤ 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
161
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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.
2) Financial assets with depreciation of credit
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:
① The issuer or debtor is in serious financial difficulties;
② The debtor breaches the contract, such as default or overdue payment of interest or principal, etc.;
③ 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;
④ There is a great possibility of bankruptcy or other financial restructuring of the debtor;
⑤ The financial difficulties of the issuer or debtor cause the disappearance of the active market for the financial asset;
⑥ 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.
3) 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: financial instrument type, aging combination, contract settlement cycle, 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:
① 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.
② 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.
③ 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.
④ 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;
2) The Company plans to settle on a net basis, or realize the financial assets and settle the financial liabilities at the same time.
11. Notes receivable
For the determination method and accounting treatment method of the Company for the expected credit losses on notes receivable, please refer to
“V-10-(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.
162
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 portfolio Method
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 acceptance Type of bill Refer to the experience of historical credit loss, combine the current situation and
bill portfolio judgment on future economic situation to measure the expected credit loss
12. Accounts receivable
For the determination method and accounting treatment method of the Company for the expected credit losses on accounts receivable, please refer to
“V-10-(6) Impairment of financial instruments” in this section.
The Company separately determines credit losses for accounts receivable that have sufficient evidence to assess expected credit losses 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
accounts receivable into several combinations according to the credit risk characteristics, and calculate the expected credit loss on the basis of the
combinations (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
Related party within Accounts receivable between companies No provision for expected credit loss shall be made with reference to historical
the consolidation included in the consolidation scope credit loss experience
scope
Aging portfolio Accounts receivable with similar credit Referring to historical credit loss experience, combined with the current situation
risk characteristics by aging, except for the and the forecast of future economic situation, according to the expected credit loss
portfolio of related parties within the during the entire duration, a comparative table of age and expected credit loss rate
consolidation scope is worked out, based on which the expected credit loss is calculated.
13. Receivables financing
For the determination method and accounting treatment method of the Company for the expected credit losses on receivables financing, please refer
to “V-10-(6) Impairment of financial instruments” in this section.
14. Other receivables
Determination method and accounting treatment method of expected credit loss of other receivables
For the determination method and accounting treatment method of the Company’s expected credit loss on other receivables, please refer to “V-10-(6)
Impairment of financial instruments” in this section.
The Company separately determines credit losses for other receivables that have sufficient evidence to assess expected credit losses 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 other
receivables into several combinations according to the credit risk characteristics, and calculate the expected credit loss on the basis of the
combinations (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:
163
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Item Basis for determining portfolio Method
Related party within Other receivables between companies included No provision for expected credit loss shall be made with
the consolidation in the consolidation scope reference to historical credit loss experience
scope
Aging portfolio Other receivables with similar credit risk With reference to historical credit loss experience, combined
characteristics by aging, except for the with current conditions and forecasts of future economic
portfolio of the related parties within the conditions, the expected credit loss is calculated through the
consolidation scope default risk exposure and the credit loss rate in the next 12
months or the entire duration
15. Inventories
(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, entrusted processing materials, work-in-process products, self-made semi-finished
products, finished products (inventory goods), issued goods, etc.
(2) Valuation method of inventories
When the inventories is 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) Basis for the determination of the net realizable value of inventories and method for the provision of 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.
(4)Inventory system
A perpetual inventory system is adopted.
(5)Amortization method of low-value consumables and packages
1) Low-value consumables are amortized by the one-off writing-off method;
2) Packages are amortized by the one-off writing-off method.
3) Other turnover materials are amortized by the one-off writing-off method.
16. Contractual assets
Where the Company has transferred goods to customers and has the right to receive consideration, and the right depends on factors other than the
passage of time, it shall be recognized as contract assets. The Company’s unconditional (that is, depending only on the passage of time) right to
164
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
collect consideration from customers is separately listed as receivables.
For the determination method and accounting treatment method of the Company’s expected credit loss on contractual assets, please refer to “V-10-(6)
Impairment of financial instruments” in this section.
17. Contract costs
18. Held-for-sales assets
(1) Classified as held-for-sale recognition criteria
The Company recognizes non-current assets or disposal groups that meet the following conditions as held-for-sale components:
1) According to the practice of selling such assets or disposal groups in similar transactions, they can be sold immediately in the current situation;
2) The sale is highly likely to occur, that is, the Company has made a resolution on a sale plan, obtained regulatory approval (if applicable), and
obtained a certain purchase commitment, and it is expected that the sale will be completed within one year.
The confirmed purchase commitment refers to the legally binding purchase agreement signed by the Company and other parties. The agreement
includes important terms such as transaction price, time and sufficiently severe penalty for breach of contract, which makes the possibility of
significant adjustment or cancellation of the agreement extremely small.
(2) Accounting method of held for sale
The Company does not accrue depreciation or amortization for non-current assets or disposal groups held for sale. If the book value is higher than the
net amount of fair value minus selling expenses, the book value shall be written down to the net amount of fair value minus selling expenses. The
amount written down shall be recognized as asset impairment loss and included in the current profit and loss, and the assets held for sale impairment
reserves shall be accrued at the same time.
For the non-current assets or disposal groups classified as held for sale on the acquisition date, the initial measurement amount and the net amount of
the fair value less the selling expenses under the condition that they are not classified as held for sale are comparatively assumed in the initial
measurement, whichever is lower.
The above principles apply to all non-current assets, but do not include investment properties that are subsequently measured using the fair value
model, biological assets that are measured using the net amount of fair value less selling expenses, assets formed by employee compensation, deferred
tax assets, financial assets regulated by accounting standards related to financial instruments, and rights generated by insurance contracts regulated by
accounting standards related to insurance contracts.
19. Debt investments
20. Other debt investments
For the determination method and accounting treatment method of the Company’s expected credit loss on other debt investments, please refer to
“V-10-(6) Impairment of financial instruments” in this section.
21. Long-term receivables
For the determination method and accounting treatment method of the Company’s expected credit loss on long-term receivables, please refer to
“V-10-(6) Impairment of financial instruments” in this section.
The Company separately determines credit losses for long-term receivables that have sufficient evidence to assess expected credit losses 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
long-term receivables into several combinations according to the credit risk characteristics, and calculate the expected credit loss on the basis of the
combinations (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:
165
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Item Basis for determining portfolio Method
Overdue Overdue long-term receivables Provision in accordance with the comparison table of the number of
portfolio overdue days and the expected credit loss rate of the entire duration
Unexpired Long-term receivables other than those in Refer to the experience of historical credit loss, combine the current
portfolio the portfolio above situation and judgment on future economic situation to measure the
expected credit loss
22. Long-term equity investment
(1) Recognition of initial investment cost
1) For the long-term equity investment formed by the merger of enterprises, the specific accounting policies are detailed in “V-5 Accounting
treatments for merger of enterprises 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 enterprises / 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
166
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 income 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 instruments, or the long-term equity originally held
by the Company for joint ventures 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 accounting 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;
167
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 merger 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:
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 criteria 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’s investment property means the property held for the purpose of earning rent or capital appreciation, or both, including the land use
rights that have been leased, the land use rights that are held for transfer upon appreciation, and the leased buildings. In addition, for the vacant
buildings held by the Company for the purpose of leases, if the Board of Directors makes a written resolution that expressly indicates that the
buildings will be used for leases and the intention of holding will not change in a short term, the building will also be reported as investment property.
168
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
The Company’s investment properties are recorded at their cost. The cost of outsourcing investment properties includes the purchase price, relevant
taxes and other expenses that can be directly attributable to the asset. The cost of self-construction investment properties is composed of the necessary
expenses incurred before the construction of the asset reaches the expected usable state.
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 The estimated net residual value Annual depreciation
(Year) 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
When the purpose of investment properties is changed to self-use, from the date of change, the Company will convert the investment properties to
fixed assets or intangible assets. When the purpose of self-use properties is changed to earn rent or capital appreciation, the Company will convert
fixed assets or intangible assets to investment properties from the date of change. In case of conversion, the book value before conversion shall be
taken as the entry value after conversion.
When the investment properties are disposed, or permanently withdrawn from use, and no economic benefits are expected to be obtained from the
disposal, the confirmation of the investment properties shall be terminated. The amount of disposal income from sale, transfer, scrap or damage of
investment properties after deducting its book value and relevant taxes shall be included in the current profit and loss.
The Company’s investment property means the property held for the purpose of earning rent or capital appreciation, or both, including the land use
rights that have been leased, the land use rights that are held for transfer upon appreciation, and the leased buildings. In addition, for the vacant
buildings held by the Company for the purpose of leases, if the Board of Directors makes a written resolution that expressly indicates that the
buildings will be used for leases and the intention of holding will not change in a short term, the building will also be reported as investment property.
The Company’s investment properties are recorded at their cost. The cost of outsourcing investment properties includes the purchase price, relevant
taxes and other expenses that can be directly attributable to the asset. The cost of self-construction investment properties is composed of the necessary
expenses incurred before the construction of the asset reaches the expected usable state.
The Company adopts the fair value model for the subsequent measurement of investment properties. The Company does not accrue depreciation or
amortize the investment properties. The Company adjusts its book value based on the fair value of the investment properties on the balance sheet date,
and the difference between the fair value and the original book value is included in the current profit and loss.
The basis for subsequent measurement of investment property at the fair value is: ① there is an active property trading market where the investment
property is located; ② The Company can obtain the information of the market price or other relevant information of same or similar properties from
the trading market, so as to measure the investment properties at the fair value properly.
The Company measures the fair value of investment property according to the current market price of the property in the same type or similar one in
the active market; If the current price of the same or similar properties cannot be obtained, the fair value of the investment property shall be properly
estimated in terms of the recent trading price of the same or similar properties in the active market, the asset status, location, transaction situation,
transaction date and other factors; Or the fair value is measured based on the expected future rental income and the present value of relevant cash
flows.
When there is conclusive evidence that the use of the property has converted into self-use, the fair value on the date of conversion shall be taken as
the book value of the self-used property, and the difference between the fair value and the original book value shall be included in the current profit
and loss. When the self-used property or inventory is converted into the investment property measured by the fair value model, the investment
property is measured at the fair value on the date of conversion. If the fair value on the date of conversion is less than the original book value, the
difference is included in the current profit and loss; if the fair value on the date of conversion is greater than the original book value, the difference is
included in other comprehensive income.
When the investment properties are disposed, or permanently withdrawn from use, and no economic benefits are expected to be obtained from the
disposal, the confirmation of the investment properties shall be terminated. The amount of disposal income from sale, transfer, scrap or damage of
investment properties after deducting its book value and relevant taxes shall be included in the current profit and loss.
169
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
24. Fixed assets
(1) Recognition criteria
1) Recognition criteria of fixed assets
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:
The economic benefits associated with the fixed assets are likely to flow into the enterprise;
The cost of the fixed asset can be measured in a reliable way
2) Initial measurement of fixed assets
The Company’s fixed assets shall be initially measured according to cost.
① The cost of purchased fixed assets includes the purchase price, import duties and other related taxes, as well as other expenses directly attributable
to the fixed assets incurred before they reach the predetermined usable state.
② The cost of self-constructed fixed assets consists of the necessary expenditures incurred before the asset is constructed to a predetermined usable
state.
③ The fixed assets invested by the investor shall be recorded at the value agreed upon in the investment contract or agreement, but if the value
agreed upon in the contract or agreement is not fair, it shall be recorded at the fair value.
④ If payments for the purchase of fixed assets are extended beyond the normal credit terms with financing nature, the costs of fixed assets are
determined on the basis of present values of the purchase prices. The difference between the actual price paid and the present value of the purchase
price, except for those that should be capitalized, shall be included in the current profit and loss during the credit period.
3) Subsequent measurement and disposal of fixed assets
① Depreciation of fixed assets
Depreciation of fixed assets shall be accrued within the estimated service life after deducting the estimated net residual value from its recorded value.
For fixed assets with provision for impairment, the amount of depreciation shall be determined in the future periods based on the book value after
deduction of the impairment provision and based on the remaining service life; and fixed assets that have been fully depreciated and are still in use
shall not be depreciated.
The Company shall determine the service life and estimated net residual value of the fixed assets according to their nature and usage. At the end of the
year, the service life, estimated net residual value and depreciation method of the fixed assets shall be reviewed, and if there is any difference from the
original estimate, corresponding adjustments shall be made.
② Subsequent expenditures on fixed assets
Subsequent expenditures related to fixed assets that meet the conditions for the recognition of fixed assets shall be included into the cost of fixed
assets; and those do not meet the conditions for the recognition of fixed assets shall be recorded into the current profit and loss at the time of
occurrence.
③ Disposal of fixed assets
When a fixed asset is disposed of or is not expected to generate economic benefits through use or disposal, the recognition of the fixed asset shall be
terminated. The amount of disposal income from sale, transfer, scrap or damage of fixed assets after deducting its book value and relevant taxes shall
be included in the current profit and loss.
(2) Depreciation method
Type Depreciation method Depreciation life 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 10-13 5-10% 6.92-9.50%
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%
170
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
(3) Recognition basis, valuation and depreciation method of fixed assets acquired under financing leases
When the fixed assets leased by the company meet one or more of the conditions as follows, the lease will be recognized as fixed assets under finance
lease:
1) The ownership of the leasing asset belongs to the Company at the expiration of the lease.
2) The Company has the option to buy the leased asset at a price to be far lower than the fair value of the leased asset at the date when the option
becomes exercisable; and therefore it is reasonable to be certain that the Company will exercise the option at the inception of lease.
3) The lease term covers the major part of the service life of the leased asset even if the ownership of the asset is not transferred.
4) The present value of the minimum lease payments on the lease beginning date does not have too large differences with the fair value of the leased
asset.
5) The nature of the leased assets is special. Only the Company can use the leased assets without major transformation.
For the fixed assets under finance lease, on the date of the lease starts, the Company recognizes the fair value of the leased asset or the present value
of the minimum lease payment as the book value of the leased asset, whichever is lower. The minimum lease payment shall be recorded as the value
of the long-term payables and the difference shall be recorded as an unrecognized financing expense. The initial direct expenses incurred during the
lease negotiation and signing of the lease contract, such as handling fee, lawyer’s fee, travel expense and stamp duty, which can be attributed to the
lease project, shall be included in the value of the leased asset. Unrecognized financing expenses are apportioned over the lease term by the effective
interest method.
The Company adopts the depreciation policy consistent with its own fixed assets to accrue the depreciation of fixed assets under financing lease. If
the ownership of the leased asset can be reasonably determined at the end of the lease term, depreciation shall be accrued within the service life of the
leased asset. If the ownership of the leased asset cannot be reasonably determined at the end of the lease term, depreciation shall be accrued within the
shorter of the lease term and the service life of the leased asset.
25. Construction in progress
(1) Initial measurement of construction in progress
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.
(2) Standards and time points for carrying forward construction in progress to fixed assets
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.
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.
171
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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. Biological assets
28. Oil and gas assets
29. 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;
(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.
30. Intangible assets
(1) Measurement method, service life, and impairment test
Intangible assets are non-monetary assets with no physical form that can be identified and owned or controlled by the Company, including land use
right, computer software, patent right, non-proprietary technology, etc.
1) Initial measurement of intangible assets
Costs of purchased intangible assets include purchase prices, relevant taxes, and other expenditures that are directly attributable to the intangible
assets before they reach working conditions for their intended use. If payments for the purchase of intangible assets are extended beyond the normal
172
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
credit terms with financing nature, the costs of intangible assets are determined on the basis of present values of the purchase prices.
For intangible assets obtained from debtors in settlement of their liabilities in case of debt restructuring, the book value is determined based on the fair
value of the intangible assets, and the difference between the book values of debt restructuring and the fair values of the intangible assets used to pay
the debt shall be included in the current profits or losses.
If the exchange of non-monetary assets has commercial substance, and the fair values of the assets received or surrendered can be measured reliably,
the book values of intangible assets received from the exchange of non-monetary assets shall be determined based on the fair values of the assets
surrendered unless there is any conclusive evidence that the fair values of the assets traded in are more reliable. If the exchange of non-monetary
assets does not meet the above criteria, the costs of the intangible assets received shall be the book values of the assets surrendered and relevant taxes
paid, and no profits or losses shall be recognized.
For intangible assets obtained through business absorption or combination under common control, the book value is determined by the carrying
amounts of the combined party. For intangible assets obtained through business absorption or combination not under common control, the book value
is determined by the fair value of the intangible assets.
The costs of internally developed intangible assets include: the materials consumed during the development, labor costs, registration fees,
amortization of other patents and licenses applied during the development, interest expense eligible for capitalization, as well as other direct costs
incurred for the intangible assets to reach working condition for their intended use.
2) Subsequent measurement of intangible assets
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. If it differs
from its previous estimate, adjustment will be made accordingly.
After review, the service life and amortization method of the intangible assets at the end of the period this year are not different from that estimated
previously.
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 not amortized during the holding period, but are reviewed for remaining useful lives at each year end. If the
useful lives are still uncertain after another review at the end of the year, the impairment tests will continue to be conducted during each accounting
period.
After review, the useful lives for such intangible assets are still uncertain.
173
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
(2) Accounting policies on internal research and development expenditures
1) Criteria for classification of research phase and development phase of internal research and development 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 research and development projects incurred during research phase is recognized in profit or loss when incurred.
2) Criteria expenditures during the development phase qualifying for capitalization
Expenditures arising from development phase on internal research and development projects must be capitalized if the Company can satisfy all of the
following criteria:
(1) There is technical feasibility of completing the intangible assets (so that they will be available for use or sale);
(2) There is an intention to complete and use or sell the assets;
(3) 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;
(4) There are adequate technical, financial and other resources to complete the development and the ability to use or sell the intangible assets;
(5) The expenditure attributable to the development phase of intangible assets can be reliably measured.
If the expenditure at the development phase does not meet the above condition, it shall be charged to current profits or losses when occurring. The
development expenditures which have been included in the profit or loss in the previous periods will not be recognised as an asset in the future period.
The capitalised expenditures in the development phase are shown in the balance sheet as development expenditures and are converted into intangible
assets from the date of the project’s intended use.
31. Impairment of long-term assets
On the balance sheet date, the Company judges whether there is any sign of possible impairment of long-term assets. 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 writedown 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 an enterprise merger. 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 recognise 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 recognise 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
174
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Type Amortization period Notes
Leasehold improvement Expected service life or lease term,
whichever is lower
Renovation costs 3 years
Filling machine Based on contract
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 benefits
Short term compensation refers to the employee compensation that shall be paid by the Company within 12 months after the end of the annual report
period when employees provide relevant services, except for post-employment welfare and dismissal welfare. 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.
(2) Accounting treatment for post-employment benefits
Post-employment benefits refer to various forms of remuneration and benefits provided by the Company after employees retire or terminate labor
relations with the enterprise in order to obtain the services provided by employees, except short-term remuneration and dismissal benefits.
All post-employment benefit plans of the Company are defined contribution 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.
The Company shall have no other payment obligations after regularly making the above-mentioned payments in accordance with the standards and
annuity plans stipulated by the State.
(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
175
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 for other long-term employee benefits
35. Lease liabilities
The Company initially measures the lease liabilities according to the present value of the unpaid lease payments at the beginning of the lease term.
When calculating the present value of lease payments, the Company takes the interest rate implicit in lease as the discount rate; If the interest rate
implicit in lease cannot be determined, the incremental borrowing rate of interest of the Company shall be used as the discount rate. Lease payments
include:
(1) The fixed payment amount and actual fixed payment amount after deducting the relevant amount of lease incentive;
(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 option;
(4) When the lease term reflects that the Company will exercise the option of terminating the lease, the lease payment includes the payment required
to exercise the option of terminating the lease;
(5) The amount expected to be paid in the light of the guarantee residual value provided by the Company.
The Company determines the expense of the interest of lease liability in each period of the lease term in the light of the fixed discount rate, and
includes it in the current profit and loss or the cost of relevant assets.
The amount of variable lease payments not included in the lease liabilities shall be included in the current profits and losses or relevant asset costs
when actually incurred.
36. Estimated Liabilities
(1) Recognition criteria of estimated liabilities
When an obligation related to the contingent events satisfies all the following conditions, it is recognized by the Company as estimated liabilities:
The obligation is the current obligation of the Company;
The performance of obligation is likely to result in the outflow of economic benefits from the Company;
The cost of the obligation can be measured in a reliable way.
(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.
37. Share-based payments
(1) Categories of share-based payments
176
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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
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 recognised in profit or loss.
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
The Company classifies the financial instruments and their components at initial recognition into either financial liabilities or equity instruments,
in accordance with the “Financial Instruments Standards”, on the basis of the contract terms of and the economic substances but not only the legal
forms reflected by the preferred stock, perpetual bonds and other financial instruments issued, together with the definitions of financial liabilities and
equity instruments:
(1) If one of the following conditions is met, the financial instrument issued shall be classified as a financial liability:
1) a contractual obligation to deliver cash or other financial assets to another entity;
2) a contractual obligation to exchange with another entity a financial asset or financial liability under potential unfavorable conditions;
3) a non-derivative contract, which shall be or may be settled by the Company’s own equity instruments in the future, and that the Company would
deliver a variable number of its own equity instruments;
4) a derivative contract, which shall be or may be settled by the Company’s own equity instruments in the future, but except for which the Company
would deliver a fixed quantity of its own equity instruments in exchange for a fixed quantity of cash or other financial assets.
(2) If all of the following conditions are met, the financial instrument issued shall be classified as an equity instrument:
1) The financial instrument does not include those delivering cash or other financial assets to another entity, or contractual obligations under potential
unfavorable conditions to exchange financial assets or financial liabilities with another entity;
177
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
2) For a financial instrument that shall be or may be settled by the Company’s own equity instruments, if the financial instrument is a non-derivative
instrument, it must not include a contractual obligation to deliver a variable quantity of the Company’s own equity instruments for settlement; if the
financial instrument is a derivative instrument, it can only be settled by the fixed quantity of its own equity instruments in exchange for a fixed
number of cash or other financial assets.
(3) Accounting treatment
For the financial instrument classified as an equity instrument, any interest expense or dividend distribution is recognized as profit distribution of the
issuer, the buy-backs and write-offs are recognized as changes in equity, and transaction costs such as handling charges, commissions are deducted
from equity;
For the financial instrument classified as a financial liability, any interest expense or dividend distribution is dealt with as borrowing costs, and any
gain or loss on the buy-backs or redemptions are recognized through profit or loss, and transaction costs such as handling charges, commissions are
included into the initial measurement of the financial instrument issued.
39. Revenue
Accounting policies for recognition and measurement of revenue
(1) General principles of revenue recognition
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.
(2) Specific method of income recognition
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 separator films, 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 designated locations by the
customers, the delivery is completed and the evidence of conforming requirements from customers is obtained.
Differences in accounting policies for revenue recognition due to the adoption of different business models for similar businesses
40. 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 the government subsidies whose subsidy object is not specified in the government documents, the Company divides them into asset-related
government subsidies or income-related government subsidies according to the actual subsidy object. For the description of relevant judgment basis,
Please read “51. Deferred income” and “67. Other income” in “VII. Notes to items of consolidated financial statements” of this section
178
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 income 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.
41. Deferred income tax assets/Deferred income tax liabilities
Deferred tax assets and deferred tax liabilities are calculated and recognised 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.
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.
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.
179
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
(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.
42. Leases
(1) Accounting treatment for operating leases
In each period of the lease term, the company adopts the straight-line method or other systematic and reasonable methods to recognize the lease
collection amount of operating lease as rental income; The initial direct expenses incurred in connection with the operating lease shall be capitalized,
and amortized on the same basis as the recognition of rental income during the lease term, and included in the current profits and losses by stages; The
amount of variable lease payments obtained related to operating leases that are not included in the lease receipts shall be included in the current
profits and losses when actually incurred.
(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:
1) The amount of fixed payment and actual fixed payment amount after deducting the relevant amount of lease incentive;
2) Variable lease payments depending on index or ratio;
3) When it is reasonably determined that the lessee will exercise the options, the received amount of lease includes the exercise price of the options;
4) 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;
5) 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.
43. Other critical accounting policies and accounting estimates
(1) Contractual cost
1) Contractual performance cost
The cost incurred by the Company for the performance of the contract, which is outside the scope of other accounting standards for business
enterprises other than the income standard, and meets the following conditions at the same time, is recognized as the contractual performance cost as
an asset:
① The cost is directly related to a current or expected contract, including direct labor cost, direct materials, manufacturing expenses (or similar
expenses), costs clearly borne by the customer and other costs incurred only due to the contract;
② This cost increases the resources that the enterprise will use to fulfill its performance obligations in the future.
③ The cost is expected to be recovered.
The asset is presented in inventory or other non-current assets according to whether the amortization period at the time of initial recognition exceeds a
normal business cycle.
180
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
2) Contractual acquisition cost
If the incremental cost incurred by the Company to obtain the contract is expected to be recovered, it shall be recognized as an asset. Incremental cost
refers to the cost that will not occur if the Company does not obtain the contract, such as sales commission. If the amortization period does not exceed
one year, it shall be included in the current profit and loss when it occurs.
3) Amortization of contractual cost
The above assets related to the contract cost shall be amortized on the same basis as the recognition of the income from goods or services related to
the assets at the time of performance of the performance obligations or according to the performance progress of the performance obligations, and
shall be included in the current profits and losses.
4) Contractual cost impairment
If the book value of the above assets related to the contractual 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 relevant
goods, the excess part shall be withdrawn for impairment provision and recognized as asset impairment loss.
After the provision for impairment is made, if the factors of impairment in previous periods change, so that the difference between the above two
items is higher than the book value of the asset, the original provision for asset impairment shall be reversed and included in the current profit and loss,
but the book value of the asset after reversal shall not exceed the book value of the asset on the reversal date assuming that the provision for
impairment is not made.
(2) Termination of operation
The Company recognizes the items that meet one of the following conditions and have been disposed of or classified as held for sale and can be
separately distinguished as discontinued items:
1) This item represents an independent main business or a separate main business area.
2) This item is part of an associated plan to dispose of an independent main business or a separate main business area.
3) This item is a subsidiary acquired exclusively for resale.
The operating profit and loss as well as the disposal profit and loss such as impairment loss and reversal amount of discontinued operation is listed in
the income statement as discontinued operation profit and loss.
(3) 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:
① 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.
② 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.
③ 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
181
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 recognised 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.
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 a), 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;
and
②The 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:
the hedging relationship no longer meets the risk management objective due to changes in risk management objective.
the hedging instrument or instruments have been expired, sold or contract terminated or executed.
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.
④The 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.
182
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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’); and
(2) the seniority of the financial instrument matches that of the instruments that can be delivered in accordance with the credit derivative.
(4) Repurchase of shares of the Company
The consideration and transaction expenses paid by the Company for repurchasing its own equity instruments reduce the owner’s equity. If the
Company adopts the method of purchasing the Company’s shares to reduce its capital in accordance with legal procedures, the capital stock shall be
reduced according to the total par value of the cancelled shares, and the owner’s equity shall be adjusted according to the difference between the price
paid for the repurchase of shares (including transaction expenses) and the par value of the shares. The part exceeding the total par value shall be offset
against the capital reserve (capital stock premium), surplus reserve and undistributed profits in turn; If it is lower than the total face value, the part
lower than the total face value will increase the capital reserve (capital stock premium). The Company issues, repurchases, sells or cancels its own
equity instruments without recognizing any gains or losses.
The shares repurchased by the Company shall be managed as treasury shares before cancellation or transfer, and all expenses for repurchasing shares
shall be transferred to the cost of treasury shares.
When treasury shares are transferred, the part of transfer income higher than the cost of treasury shares will increase the capital reserve (capital stock
premium); The part lower than the cost of treasury shares shall be offset against the capital reserve (capital stock premium), surplus reserve and
undistributed profit in turn.
The treasury shares formed by the Company’s repurchase of its common shares are not included in the Company’s profit distribution, and the
Company lists them as an allowance item of owner’s equity in the balance sheet.
44. Changes in critical accounting policies and accounting estimates
(1) Changes in critical accounting policies
√ Applicable □ N/A
Content and reason of accounting policy change Procedures for approval Notes
The Company will implement the Accounting Standards for Business Enterprises No. 21 - Approval of the board of
See note ①
Leasing revised by the Ministry of Finance in 2018 as of January 1, 2021. directors
The Company will implement the Interpretation of Accounting Standards for Business Approval of the board of
See note ②
Enterprises No. 14 issued by the Ministry of Finance in 2021 as of February 2, 2021. directors
The Company will implement the Interpretation of Accounting Standards for Business Approval of the board of
See note ③
Enterprises No. 15 issued by the Ministry of Finance in 2021 as of December 31, 2021 directors
Note ① Impact of the implementation of the new leasing standards on the Company
The Company has implemented the Accounting Standards for Business Enterprises No. 21 - Leasing revised by the Ministry of Finance in 2018 as of
January 1, 2021. The accounting policies after the change are detailed in Section V, Important accounting policies and accounting estimates.
On the first execution date, the Company decided not to reevaluate whether the existing contracts were leases or included leases, and applied this
method to all contracts consistently. Therefore, the convergence provisions of this standard are only applied to the above contracts identified as leases
under the original leasing standards.
In addition, the Company chooses to adopt the simplified retroactive adjustment method for the above lease contracts in accordance with the
Accounting Standards for Business Enterprises No. 28 - Changes in Accounting Policies, Accounting Estimates and Error Correction, that is, adjust
the amount of retained income and other relevant items in the financial statements at the beginning of the year in which the standards are first
implemented, and do not adjust the information of comparable periods. For the operating leases, the right-of-use asset measurement method and
related simplified treatment are selected according to each lease, as follows:
The Company’s accounting policy for low value asset leasing is not to recognize the right to use assets and lease liabilities. According to the
convergence provisions of the new lease standards, the Company’s low value asset leases before the first execution date shall be accounted for in
accordance with the new lease standards from the first execution date, and no retroactive adjustment shall be made to the low value asset leases.
The implementation of the new leasing standards has no impact on the relevant items of the financial statements on January 1, 2021.
183
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Note ② Impact of the implementation of interpretation of accounting standards for business Enterprises No. 14 on the Company
As of February 2, 2021, the Ministry of Finance issued the Interpretation of Accounting Standards for Business Enterprises No. 14 (CAI Kuai [2021]
No. 1, hereinafter referred to as “Interpretation No. 14”), which will come into force on February 2, 2021 (hereinafter referred to as “implementation
date”).
The Company has implemented Interpretation No. 14 since the implementation date, and the implementation of Interpretation No. 14 has no
significant impact on the financial statements during the reporting period.
Note ③ impact of the implementation of accounting standards for business enterprises Interpretation No. 15 on the company
As at December 31, 2021, the Ministry of Finance issued the Interpretation of Accounting Standards for Business Enterprises No. 15 (CAI Kuai [2021]
No. 35, hereinafter referred to as “Interpretation No. 15”), which clarified the accounting treatment of the external sales of products or by-products
produced before the fixed assets reach the expected serviceable state or in the process of research and development, the judgment of loss contracts and
the presentation of relevant issues on centralized fund management. The contents of “accounting treatment for the external sales of products or
by-products produced before the fixed assets reach the expected usable state or in the process of R & D” and “judgment on loss contracts” shall be
implemented as of January 1, 2022, and the contents of “relevant presentation on centralized fund management” shall be implemented as of the date
of promulgation.
Since December 31, 2021, the Company has implemented the content of “relevant presentation of centralized fund management” in Interpretation No.
15, and the implementation of Interpretation No. 15 has no significant impact on the financial statements of comparable periods.
(2) Changes in critical accounting estimates
□ Applicable √ N/A
(3) First implementation of the new lease standards since 2021 to adjust the first implementation of relevant items of financial statements at
the beginning of the year
□ Applicable √ N/A
Adjustment of items of the balance sheet at the beginning of the year
√ Yes □ No
Explanation of the reason why it is not necessary to adjust the balance sheet items at the beginning of the year
Operating leases that the Company will complete within 12 months after the first execution date will be treated as short-term leases. The Company’s
accounting policy for low value asset leasing is not to recognize the right to use assets and lease liabilities. According to the convergence provisions
of the new lease standards, the Company’s low value asset leases before the first execution date shall be accounted for in accordance with the new
lease standards from the first execution date, and no retroactive adjustment shall be made to the low value asset leases.
(4) Description of comparative data in the previous period retroactively adjusted by the first implementation of the lease standards since
2021
□ Applicable √ N/A
45. Others
VI. Taxation
1. Main Tax Types and Tax Rates
Tax type Taxation basis Tax rate
Value added tax
Sales of goods, taxable sales service income, intangible assets
(“VAT”) 13%、9%、6%
or real estate
184
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
City maintenance and
Amount of VAT paid
construction tax 7%、5%、1%
Explanation of disclosure for taxpayers with different corporate income tax rates
Taxpayer Income tax rate
The Company 15%
Yunnan Dexin Paper Co., Ltd. 15%
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%
Jiangsu Ruijie New Material Technology Co., Ltd. 20%
Jiangxi Ruijie New Material Technology Co., Ltd. 25%
Suzhou Green Power New Energy Materials Co., Ltd 15%
Foshan Donghang Photoelectric Technology Co., Ltd. 15%
Chongqing Yuntianhua 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.
20%
Hunan Energy Advanced New Material Technology Co., Ltd
25%
Ningbo Energy New Material Co., Ltd.
25%
Chongqing Energy New Material Technology Co., Ltd.
25%
Hainan Energy Investment Co., Ltd.
25%
Hubei Energy New Material Technology Co., Ltd.
25%
Jiangsu Sanhe Battery Material Technology Co., Ltd.
25%
The Hungarian corporate income tax is applicable, and the statutory
SEMCORP Global Holdings Kft.
rate is 9%
The Hungarian corporate income tax is applicable, and the statutory
SEMCORP Hungary Kft.
rate is 9%
Chuangxin New Material (Hong Kong) Co., Ltd Profits tax of the Hong Kong Special Administrative Region is
applicable, and the statutory rate is 16.5%
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 Company and its subsidiaries Yunnan Hongchuang Packaging Co., Ltd.,
185
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Yunnan Hongta Plastic Co., Ltd., Yunnan Dexin Paper Co., Ltd. and its sub-subsidiary Hongta Plastic (Chengdu) Co., Ltd. continue to enjoy the
preferential tax policies for the western development this year. 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 (GKFH [2016] No. 32), its subsidiary Shanghai Energy New Material Technology Co., Ltd.,
sub-subsidiaries Zhuhai Energy New Material Technology Co., Ltd., Jiangxi Tonry New Energy Technology Development Co., Ltd., Wuxi Energy
New Material Technology Co., Ltd., Suzhou Green Power New Energy Material Co. Ltd., Newmi Tech, and Foshan Donghang Photoelectric
Technology Co., Ltd. are recognized as high-tech enterprises upon application, and the preferential tax rate for high-tech enterprises shall be 15%.
In accordance to the Notice of the Ministry of Finance and the State Administration of Taxation on the Implementation of Preferential Tax Reduction
and Exemption Policies for Small and Micro-Enterprises (CS [2019] No. 13) and the Announcement of the Ministry of Finance and the State
Administration of Taxation on the Implementation of Preferential Income Tax Policies for Small and Micro Enterprises and Individual Industrial and
Commercial Households (CS [2021] No. 12), the sub-subsidiary companies Jiangsu Ruijie New Material Technology Co., Ltd. and Jiangsu Energy
New Material Technology Co., Ltd. meet the criteria for small and low profit enterprises. The portion of taxable income not exceeding RMB1 million
this year shall be included in the taxable income at a reduced rate of 12.5%, and the enterprise income tax shall be paid at a tax rate of 20%.
3. Others
VII. Notes to Items in Consolidated Financial Statements
1. Monetary funds
Unit: RMB
Item Closing balance Opening balance
Cash
141,604.43 144,778.56
Cash at bank
1,369,157,964.17 2,054,771,005.99
Other currency fund
462,772,214.04 319,032,411.48
Undue interest receivable 1,378,423.05 795,666.67
Total 1,833,450,205.69 2,374,743,862.70
Including: total amount of funds deposited 96,002,990.00 1,838,836.77
abroad
Other explanations
The details of restricted monetary funds are as follows:
Item Closing balance Opening balance
Bank acceptance guarantee deposit 245,346,224.26 291,920,509.32
L/C deposit 214,219,149.78 24,511,902.16
L/G deposit 3,206,840.00 2,600,000.00
Total 462,772,214.04 319,032,411.48
2. Trading financial assets
Unit: RMB
Item Closing balance Opening balance
186
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Financial assets that are measured at fair value and whose
changes are included in the current profit and loss 5,137,194.34 1,340,551,914.18
Including: Structured deposits
5,137,194.34 1,340,551,914.18
3. Derivative financial assets: None
4. Notes receivable
(1) Notes receivable by type
Unit: RMB
Item Closing balance Opening balance
Bank acceptance
209,990,660.63 115,702,598.65
Commercial acceptance
167,950,328.02 271,293,369.17
Less: Provision for bad debts
9,365,797.42 7,256,643.88
Total
368,575,191.23 379,739,323.94
Unit: RMB
Closing balance Opening balance
Book balance Provision for bad Book Book balance Provision for bad debts Book
Type debts value value
Amount Proporti Amount Provisio Amount Proporti Amount Provisio
on n on n
proporti proporti
on on
Including:
Notes receivable with
bad debt reserve
377,940 100.00 9,365,7 368,575, 386,995, 7,256,643. 379,739,
withdrawn as per the 2.48% 100.00% 1.88%
,988.65 % 97.42 191.23 967.82 88 323.94
portfolio of credit risk
characteristics
Including:
Bank acceptance note
portfolio 209,990 209,990, 115,702, 115,702,
55.56% 29.90%
,660.63 660.63 598.65 598.65
Commercial
acceptance bill 167,950 9,365,7 158,584, 271,293, 7,256,643. 264,036,
portfolio 44.44% 5.58% 70.10% 2.67%
,328.02 97.42 530.60 369.17 88 725.29
Total 377,940 100.00 9,365,7 368,575, 386,995, 7,256,643. 379,739,
2.48% 100.00% 1.88%
,988.65 % 97.42 191.23 967.82 88 323.94
Provision for bad debts by portfolio:
Unit: RMB
Name Closing balance
Book balance Provision for bad debts Provision proportion
187
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Bank acceptance note portfolio 209,990,660.63
Commercial acceptance bill
portfolio 167,950,328.02 9,365,797.42 5.58%
Total
377,940,988.65 9,365,797.42 --
If provision was made for bad debts of notes receivable in accordance with the general expected credit loss model, please disclose relevant
information of provision for bad debts referring to the disclosure of other receivables:
□ Applicable √ N/A
(2) 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 Provision Recovery or Write Other balance
reverse -offs
Notes receivable subject to individual impairment
assessment
Notes receivable subject to impairment assessment
by portfolio 7,256,643.88 9,260,484.75 7,151,331.21 9,365,797.42
Including: Commercial acceptance bill portfolio 7,256,643.88 9,260,484.75 7,151,331.21 9,365,797.42
Total
7,256,643.88 9,260,484.75 7,151,331.21 9,365,797.42
Among them, the important amount of recovery or reverse of bad debt provision for the period:
□ Applicable √ N/A
(3) 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
17,141,467.20
Total
17,141,467.20
(4) 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
137,944,952.00
Commercial acceptance
634,570.35
Total
138,579,522.35
188
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
(5) Notes receivable that were converted to accounts receivable due to the drawer’s failure to perform the contract: None
(6) Actual write-off of notes receivable for the period: None
5. Accounts receivable
(1) Disclosure of accounts receivable by type
Unit: RMB
Closing balance Opening balance
Book balance Provision for bad Book Book balance Provision for bad Book
Type debts value debts value
Amount Proporti Amount Provisio Amount Proporti Amount Provisio
on n on n
proporti proporti
on on
Accounts receivable
with significant single
94,128, 94,128, 100.00 81,012,6 81,012,6
amount and having 2.07% 3.32% 100.00%
007.83 007.83 % 93.96 93.96
bad debt reserve
independently
Accounts receivable
with bad debt reserve
withdrawn as per the 4,447,6
42,199, 4,405,43 2,359,77 31,560,9 2,328,215,
portfolio of credit risk 36,014. 97.93% 0.95% 96.68% 1.34%
928.94 6,085.52 6,648.05 41.78 706.27
characteristics 46
Including:
Aging portfolio 4,447,6
42,199, 4,405,43 2,359,77 31,560,9 2,328,215,
36,014. 97.93% 0.95% 96.68% 1.34%
928.94 6,085.52 6,648.05 41.78 706.27
46
Total 4,541,7
100.00 136,327 4,405,43 2,440,78 112,573, 2,328,215,
64,022. 3.00% 100.00% 4.61%
% ,936.77 6,085.52 9,342.01 635.74 706.27
29
Provision for bad debts by individual:
Unit: RMB
Name Closing balance
Book balance Provision for Provision Provision reason
bad debts proportion
OptimumNano Energy Co., Ltd. Estimated to be
32,249,003.26 32,249,003.26 100.00%
uncollectible
Estimated to be
eTrust Power Group Ltd. 18,596,288.66 18,596,288.66 100.00%
uncollectible
Shaanxi OptimumNano New Energy Co., Ltd. Estimated to be
14,847,098.36 14,847,098.36 100.00%
uncollectible
Yunnan Zhongyun Li’ao Package Printing Co., Ltd. Estimated to be
6,062,972.00 6,062,972.00 100.00%
uncollectible
Heilongjiang Longdan Dairy Technology Co., Ltd. Estimated to be
5,075,381.00 5,075,381.00 100.00%
uncollectible
Estimated to be
Jiangxi Far East Battery Co., Ltd. 3,779,397.05 3,779,397.05 100.00%
uncollectible
Zhongshan Yuankangyuan Food Co., Ltd. Estimated to be
3,555,052.60 3,555,052.60 100.00%
uncollectible
Chengdu Henglide Food Co., Ltd. Estimated to be
2,780,677.50 2,780,677.50 100.00%
uncollectible
Estimated to be
Chengdu Longtengsifang Food Co., Ltd. 1,638,001.20 1,638,001.20 100.00%
uncollectible
Shenzhen Teamgiant New Energy Technology Co., Ltd. 1,470,081.04 1,470,081.04 100.00% Estimated to be
189
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
uncollectible
Jingzhou Wotema Battery Co., Ltd. Estimated to be
1,175,130.00 1,175,130.00 100.00%
uncollectible
Shenzhen Lukewan Technology Co., Ltd. Estimated to be
1,000,000.00 1,000,000.00 100.00%
uncollectible
Hubei Hummer Technology Co., Ltd. Estimated to be
773,544.78 773,544.78 100.00%
uncollectible
Zhongci (Qingdao) New Energy Automobile Manufacturing
Co., Ltd. Estimated to be
335,596.70 335,596.70 100.00%
uncollectible
Shandong Wina Green Power Technology Co., Ltd. Estimated to be
285,251.12 285,251.12 100.00%
uncollectible
Wuhu ETC Battery Limited Estimated to be
187,400.01 187,400.01 100.00%
uncollectible
Shandong Hengyu New Energy Co., Ltd Estimated to be
161,302.38 161,302.38 100.00%
uncollectible
Estimated to be
Shenzhen Ruilong New Energy Technology Co., Ltd. 78,213.84 78,213.84 100.00%
uncollectible
Guangdong Ruitong New Energy Co., Ltd. Estimated to be
60,481.98 60,481.98 100.00%
uncollectible
Estimated to be
Soundon New Energy Technology Co., Ltd. 6,284.25 6,284.25 100.00%
uncollectible
Estimated to be
Guangxi Zhuoneng New Energy Technology Co., Ltd. 5,000.10 5,000.10 100.00%
uncollectible
Estimated to be
Sichuan Yuanming Food Co., Ltd. 4,650.00 4,650.00 100.00%
uncollectible
Estimated to be
Zhengzhou BAK Power Co., Ltd. 1,200.00 1,200.00 100.00%
uncollectible
Total 94,128,007.83 94,128,007.83 -- --
Provision for bad debts by portfolio:
Unit: RMB
Closing balance
Name
Book balance Provision for bad debts Provision proportion
Less than 1 year 4,249,029,685.94 14,238,324.34 0.34%
1-2 years 132,245,222.50 4,641,250.19 3.51%
2-3 years 31,613,395.62 3,132,356.68 9.91%
3-4 years 19,820,237.50 7,772,272.59 39.21%
4-5 years 13,621,125.36 11,109,377.60 81.56%
Over 5 years 1,306,347.54 1,306,347.54 100.00%
Total 4,447,636,014.46 42,199,928.94 --
If provision was made for bad debts of accounts receivable in accordance with the general expected credit loss model, please disclose relevant
information of provision for bad debts referring to the disclosure of other receivables:
□ Applicable √ N/A
Disclosure by aging
Unit: RMB
Aging Book balance
Less than 1 year (inclusive)
4,248,786,943.91
1-2 years 133,032,472.71
2-3 years 42,564,744.64
190
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Over 3 years 117,379,861.03
3-4 years 32,152,241.84
4-5 years 77,703,959.82
Over 5 years
7,523,659.37
Total 4,541,764,022.29
(2) Provision for bad debts accrued, recovered or reversed during the Reporting Period
Provision for bad debts during the Reporting Period:
Unit: RMB
Type Opening balance Changes in amount for the period Closing balance
Provision Recovery or Write-offs Other
reverse
Accounts receivable
subject to individual
81,012,693.96 23,135,184.23 11,749,733.34 637,267.60 2,367,130.58 91,760,877.25
impairment
assessment
Accounts receivable
subject to impairment
assessment by 31,560,941.78 13,232,870.64 226,752.90 -2,367,130.58 44,567,059.52
portfolio
Total
112,573,635.74 36,368,054.87 11,749,733.34 864,020.50 0.00 136,327,936.77
Including the significant amount of provision for bad debts recovered or reversed in the current period:
Unit: RMB
Name of unit The amount recovered or reversed via
Shenzhen Heda New Material Technology
Co., Ltd. 7,129,136.06 Collection of payment
Wuhu ETC Battery Limited
4,591,121.68 Collection of payment
Total 11,720,257.74 --
(3) Actual write-off of accounts receivable for the period
Unit: RMB
Item Amount of write-off
Actual write-off of accounts receivable 864,020.50
Write-off of important accounts receivable:
Unit: RMB
Company name Nature of accounts Amount of Reason for Write-off Whether the
receivable write-off write-off procedures payment is
performed generated by
related party
transactions
Payment for goods Not to be Board None
Langfang Beifang Jiake Printing Co., Ltd. 500,000.00 recovered resolution
Payment for goods Not to be Board None
Shenzhen Anfeng Technology Co., Ltd. 194,777.97
recovered resolution
Payment for goods Not to be Board None
Henan Haibo Printing Co., Ltd. 137,267.60
recovered resolution
Total -- 832,045.57 -- -- --
191
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
(4) Top five customers with closing balance of accounts receivable collected by arrear party
Unit: RMB
Company name Closing balance of Percentage of total of closing balance of Closing balance of bad debt
accounts receivable accounts receivable provision
Company 1 1,517,920,242.34 33.42% 4,459,431.62
Company 2 468,124,688.27 10.31% 2,201,625.47
Company 3 164,010,466.17 3.61% 492,031.40
Company 4 145,253,223.90 3.20% 5,168,711.71
Company 5 129,180,119.34 2.84% 387,540.36
Total 2,424,488,740.02 53.38%
(5) Amount of assets and liabilities generated by transferring accounts receivable and continuing to be involved: None
(6) Accounts receivable derecognized due to the transfer of financial assets: None
6. Accounts receivable financing
Unit: RMB
Item Closing balance Opening balance
Bank acceptance 412,477,885.83 22,174,829.70
Accounts receivable factoring 113,995,449.70 377,378,000.00
Total 526,473,335.53 399,552,829.70
Changes in accounts receivable financing and changes in fair value
√ Applicable □ N/A
The Company believes that for the financing of receivables measured at fair value and whose changes are included in other comprehensive income, as
the remaining maturity is not long and the difference between the actual interest rate and the market interest rate is very small, the fair value and the
book value are similar.
If provision was made for accounts receivable financing in accordance with the general expected credit loss model, please disclose relevant
information of provision for impairment referring to the disclosure of other receivables:
□ Applicable √ N/A
Other explanations:
Provision for bad debts
Type Opening balance Changes in amount for the year Closing balance
Provision Recovery or Write-offs Other
reverse
accounts receivable 2,622,000.00 934,762.69 2,622,000.00 934,762.69
factoring
Explanation of provision for bad debts:
The Company believes that the acceptance bank of the bank acceptance bill it holds has a high credit rating and there is no significant credit risk, so it
has not made provision for impairment; For the accounts receivable held, due to certain recovery risk, the impairment provision is withdrawn. The
impairment provision is recognized in other comprehensive income, and the impairment loss or gain is included in the current profit and loss, without
reducing the book value of financial assets listed in the balance sheet.
192
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
7. Prepayments
(1) Prepayments by aging
Unit: RMB
Aging Closing balance Opening balance
Amount Proportion Amount Proportion
Less than 1 year 224,732,462.69 99.23% 176,145,847.86 97.57%
1-2 years
839,484.85 0.37% 3,362,801.79 1.86%
2-3 years
130,917.56 0.06% 826,963.83 0.46%
Over 3 years
771,651.59 0.34% 196,442.10 0.11%
Total
226,474,516.69 -- 180,532,055.58 --
Explanation on why prepayments with aging of more than 1 year and an important amount not settled in time:
Company name Closing balance Aging Reason
Shanghai Xinglong Enterprise 760,000.00 1-2 years Services not completed
Management Consulting Co., Ltd.
(2) Top five suppliers with closing balance of prepayment collected by prepaid entity
Company name Closing balance Proportion (%) Time Reason
Company 1 21,272,497.01 9.39 Less than 1 year Contract not been performed
Company 2 18,936,661.74 8.36 Less than 1 year Contract not been performed
Company 3 15,648,133.56 6.91 Less than 1 year Contract not been performed
Company 4 13,625,080.88 6.02 Less than 1 year Contract not been performed
Company 5 11,683,068.59 5.16 Less than 1 year Contract not been performed
Total 81,165,441.78 35.84
Other explanations:
The main reason for the larger increase in the ending balance of the Company’s prepayments over the opening balance is: the production line of
lithium battery separator film has been put into production, and the prepayment for materials has increased accordingly.
193
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
8. Other receivables
Unit: RMB
Item Closing balance Opening balance
Other receivables 8,119,316.74 10,861,029.53
Total 8,119,316.74 10,861,029.53
(1) Interest receivable: None
(2) Dividends receivable: None
(3) Other receivables
1) Other receivables by nature
Unit: RMB
Nature of amount Book balance at the end of the Reporting Book balance at the beginning of the
Period Reporting Period
Guarantees and deposits 4,575,537.97 6,396,495.59
Reserve fund 2,119,295.60 1,487,785.97
Substitute advance 1,845,584.33 1,683,603.50
Other 803,662.68 2,763,105.25
Total 9,344,080.58 12,330,990.31
2) Provision for bad debts
Unit: RMB
Provision for bad debts Stage I Stage II Stage III Total
12-month ECL Lifetime ECL (not Lifetime ECL
credit-impaired) (credit-impaired)
Balance of January 1,
405,364.08 506,104.76 558,491.94 1,469,960.78
2021
Balance of January 1,
2021 for the period —— —— —— ——
--
Transferred to the second -1,305.00 1,305.00
stage
Provision for the period -53,565.27 -88,331.67 -51,980.09 -193,877.03
Recovery
for the period
Reversal for the period
Write-offs for the period 300.00 51,019.91 51,319.91
Balance of December 31,
350,193.81 419,078.09 455,491.94 1,224,763.84
2021
194
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Changes in book balance with significant changes in loss reserves in the current period
□ Applicable √ N/A
Disclosure by aging
Unit: RMB
Aging Book balance
Less than 1 year (inclusive) 5,355,894.71
1-2 years 1,774,000.76
2-3 years 351,980.00
Over 3 years 1,862,205.11
3-4 years 680,713.17
4-5 years 182,000.00
Over 5 years 999,491.94
Total 9,344,080.58
3) Provision for bad debts accrued, recovered or reversed during the Reporting Period:
□ Applicable √ N/A
4) Actual write-off of other receivables for the period:
Unit: RMB
Item Amount of Write-offs
Actual write-off of other receivables 51,319.91
Write-off of important other receivables:
Unit: RMB
Nature of other Amount of write-off Reason for write-off Write-off procedures Whether the payment
receivables performed is generated by
Name of company
related party
transactions
Jiang Yuancheng Reserve fund 50,000.00 Not to be recovered Board resolution None
Zhou Gongmin Reserve fund 1,019.91 Not to be recovered Board resolution None
Total -- 51,019.91 -- -- --
Explanation of write-off of other receivables:
5) Top five customers with closing balance of other receivables collected by arrear party
Unit: RMB
Aging Percentage of total of Closing balance of
Nature of other
Name of company Closing balance closing balance of bad debt provision
receivable
other receivables
195
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Yunnan Shijian Chucheng Juice Co., Guarantees and Less than 1
750,000.00 8.03% 32,625.00
Ltd. deposits year
Substitute Less than 1
housing fund 725,486.90 7.76% 31,558.68
advance year
Substitute Less than 1
endowment insurance 693,523.95 7.42% 30,168.29
advance year
Chongqing Zhongyan Industry Co., Guarantees and 2-3 years
550,000.00 5.89% 23,925.00
Ltd. deposits
Suzhou Wujiang Building Installation Guarantees and
Over 5
and Management Office (苏州市吴江 deposits 544,000.00 5.82% 272,000.00
years
区建筑安装管理处)
Total -- 3,263,010.85 -- 34.92% 390,276.97
6) Accounts receivable related to government grants: None
7) Other receivables derecognized due to the transfer of financial assets: None
8) Amount of assets and liabilities generated by transferring other receivables and continuing to be involved: None
9. Inventories
Did the Company need to comply with the disclosure requirements of the real estate industry
None
(1) Classification of Inventories
Unit: RMB
Closing balance Opening balance
Book balance Inventory Book value Book balance Inventory Book value
provision reserve provision reserve
Item or contract or contract
performance cost performance cost
depreciation depreciation
reserve reserve
Raw material 379,923,303.9
2,359,919.46 377,563,384.53 181,857,690.10 944,622.50 180,913,067.60
9
Goods in process 14,457,100.95 415,535.78 14,041,565.17 24,480,339.87 436,222.88 24,044,116.99
Finished goods 1,222,739,498.
77,728,040.78 1,145,011,458.06 1,024,022,804.36 150,081,339.35 873,941,465.01
84
Turnover material
44,421,966.91 44,421,966.91 33,714,499.63 33,714,499.63
Expendable
biological assets
Contract
performance cost
Goods in transit
63,419,904.52 60,939.65 63,358,964.87 34,110,894.27 183,334.00 33,927,560.27
Consigned
processing material 1,285,888.79 1,285,888.79 164,506.20 164,506.20
Semi-finished goods
36,296,317.09 531,375.13 35,764,941.96 10,325,445.01 10,325,445.01
Total 1,762,543,981.
81,095,810.80 1,681,448,170.29 1,308,676,179.44 151,645,518.73 1,157,030,660.71
09
196
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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.
(2) Inventory provision reserve and contract performance cost depreciation reserve
Unit: RMB
Item Opening balance Increase for the period Decrease for the period Closing balance
Provision Others Recovery or Others
reversal
Raw material 944,622.50 1,579,950.45 164,653.49 2,359,919.46
Goods in process 436,222.88 20,687.10 415,535.78
Finished goods
150,081,339.35 27,214,238.04 99,567,536.61 77,728,040.78
Turnover
material
Expendable
biological assets
Contract
performance cost
Goods in transit 183,334.00 122,394.35 60,939.65
Semi-finished
goods 531,375.13 531,375.13
Total
151,645,518.73 29,325,563.62 99,875,271.55 81,095,810.80
Description of inventory provision reserve: Resales for the period are due to the sale of the inventory of the inventory provision reserve already
accrued.
(3) Capitalization amount of borrowing costs in the closing inventories balance: None
(4) Description of the current amortization amount of contract performance cost: None
10. Contractual assets: None
11. Held-for-sales assets: None
12. Non-current assets due within one year
Unit: RMB
Item Closing balance Opening balance
Long-term receivables due within one year
2,956,802.29
13. Other current assets
Unit: RMB
Item Closing balance Opening balance
197
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
prepayment of income tax 9,161,159.79
VAT credit
347,827,840.12 533,769,875.20
Time deposit 50,567,013.89
Total 407,556,013.80 533,769,875.20
14. Debt investments: None
15. Other debt investments: None
16. Long-term receivables
(1) Long-term receivables
Unit: RMB
Item Closing balance Opening balance Discount
Book balance Provision Book value Book balance Provision for Book value rate
for bad bad debts range
debts
Financial lease proceeds 2,956,802.29 2,956,802.29
Including: unrealized
43,197.71 43,197.71
financing income
Long-term receivables
-2,956,802.29 -2,956,802.29
due within one year
Total 0.00 0.00 --
(2) Long-term receivables derecognized due to the transfer of financial assets: None
(3) Amount of assets and liabilities generated by transferring long-term receivable and continuing to be involved：None
17. Long-term equity investment
Unit: RMB
Opening Increase/Decrease for the period Closing Closing
balance Increase Decreas Investm Adjustm Other Cash Provisio Other balance balance
(book in e in ent ents to changes dividend n for (book of
Name of
value) investme investme profit or other in equity s or impairm value) provisio
investee
nt nt loss compreh profit ent n for
s
recogniz ensive declared impairm
ed under income ent
equity
method
I. Joint ventures
II. Associates
Yuxi
3,375,20 1,687,09 -1,516,3 3,545,98
Kunshas
8.87 0.23 14.89 4.21
i Plastic
198
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Color
Masterb
atch
3,375,20 1,687,09 -1,516,3 3,545,98
Subtotal
8.87 0.23 14.89 4.21
3,375,20 1,687,09 -1,516,3 3,545,98
Total
8.87 0.23 14.89 4.21
18. Other equity instrument investment
Unit: RMB
Item Closing balance Opening balance
Suzhou Jiesheng Technology Co., Ltd 110,000,000.00
Other instructions:
The Company plans to hold it for a long time for strategic purposes, so it is designated as a financial asset measured at fair value and its changes are
included in other comprehensive income.
19. Other non-current financial assets: None
20. Investment properties
(1) Adoption of the cost measurement mode for investment properties
√ Applicable □ N/A
Unit: RMB
Item Property and plant Land use rights Construction in progress Total
I. Original book value
1. Opening balance
11,871,802.82 11,871,802.82
2. Increase for the period
(1) External purchase
(2) Inventory/Fixed
assets/Transfer in of
construction in progress
(3) Increase in business
combination
3. Decrease for the period
(1) Disposal
(2) Other transfer-out
4. Closing balance 11,871,802.82 11,871,802.82
II. Accumulative
depreciation and
amortization
199
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
1. Opening balance 2,404,040.04 2,404,040.04
2. Increase for the period 534,231.12 534,231.12
200
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
(1) Provision or
amortization 534,231.12 534,231.12
3. Decrease for the period
(1) Disposal
(2) Other transfer-out
4. Closing balance 2,938,271.16 2,938,271.16
III. Provision for
impairment
1. Opening balance
2. Increase for the period
(1) Provision
3. Decrease for the period
(1) Disposal
(2) Other transfer-out
4. Closing balance
IV. Book value
1. Closing book value
8,933,531.66 8,933,531.66
2. Opening book value
9,467,762.78 9,467,762.78
(2) Adoption of the fair value measurement mode for investment properties
□ Applicable √ N/A
(3) Investment properties not having obtained the title certificate
Unit: RMB
Item Book value Reason for not having obtained the title
certificate
Property and plant 8,933,531.66 Being processed
21. Fixed assets
Unit: RMB
Item Closing balance Opening balance
Fixed assets 10,877,888,212.91 8,420,764,216.20
(1) Fixed assets
Unit: RMB
Item Property and plant Machinery and Transportation Electronic equipment Total
equipment equipment and Other
201
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
I. Original book value
1. Opening balance
1,789,818,645.74 9,333,235,658.64 28,650,659.46 102,849,692.08 11,254,554,655.92
2. Increase for the period
658,649,512.50 2,032,437,391.59 6,138,568.13 547,735,103.43 3,244,960,575.65
(1) External purchase 2,407,782.97 65,458,291.09 3,960,860.98 5,623,582.32 100,258,275.90
(2) Transfer of construction
in progress 656,241,729.53 1,966,979,100.50 2,177,707.15 542,111,521.11 3,144,702,299.75
(3) Increase in business
combination
3. Increase in business
combination 2,071,586.56 3,262,300.01 2,708,077.28 773,990.56 8,815,954.41
(1) Disposal or scrapping 2,071,586.56 3,262,300.01 2,708,077.28 451,299.15 8,493,263.00
Converted difference in
322,691.41 322,691.41
Foreign Currency Statements
4. Closing balance 2,446,396,571.68 11,362,410,750.22 32,081,150.31 649,810,804.95 14,490,699,277.16
II. Accumulative depreciation
1. Opening balance 278,207,522.77 2,197,759,764.33 17,699,003.08 48,266,291.36 2,541,932,581.54
2. Increase for the period
89,500,352.70 678,042,027.59 2,830,857.36 14,524,149.42 784,897,387.07
(1) Provision 89,500,352.70 678,042,027.59 2,830,857.36 14,524,149.42 784,897,387.07
3. Decrease for the period
917,777.59 2,084,063.94 2,443,645.08 411,191.63 5,856,678.24
(1) Disposal or scrapping
917,777.59 2,084,063.94 2,443,645.08 411,191.63 5,856,678.24
4. Closing balance 366,790,097.88 2,873,717,727.98 18,086,215.36 62,379,249.15 3,320,973,290.37
III. Provision for impairment
1. Opening balance 291,833,076.92 15,759.89 9,021.37 291,857,858.18
2. Increase for the period
(1) Provision
3. Decrease for the period 20,084.30 20,084.30
(1) Disposal or scrapping
20,084.30 20,084.30
4. Closing balance
291,812,992.62 15,759.89 9,021.37 291,837,773.88
IV. Book value
1. Closing book value 2,079,606,473.80 8,196,880,029.62 13,979,175.06 587,422,534.43 10,877,888,212.91
2. Opening book value 1,511,611,122.97 6,843,642,817.39 10,935,896.49 54,574,379.35 8,420,764,216.20
(2) Fixed assets in temporary idle
Unit: RMB
Item Original book Accumulative Provision Book value Notes
value depreciation for
impairment
202
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
As of December 31, 2021, the recoverable amount was
Property estimated based on the selling prices of similar houses and
and plant 2,105,695.50 873,704.02 1,231,991.48 buildings in the same lot. The recoverable amount was
higher than the book value, so no provision for impairment
of fixed assets was made.
As of December 31, 2021, the recoverable amount was
Machiner
estimated based on the selling price of similar machinery
y and
and equipment. The recoverable amount was higher than
equipme 9,135,247.28 5,691,960.72 3,443,286.56
the book value, so no provision for impairment of fixed
nt
assets was made.
(3) Fixed assets leased through operating lease: None
(4) Fixed assets not obtaining the title certificate
Unit: RMB
Item Book value Reason
Property and plant 1,639,016,452.31 Being processed
Other explanations:
(1) The main reason for the larger increase in the ending balance of the Company’s fixed assets over the opening balance is: the subsidiary Shanghai
Energy New Material Technology Co., Ltd. and its subsidiaries are in the growth stage, the Company intensifies the construction of production lines,
and the number of assembly lines completed in this year increases accordingly.
(2) Please refer to “81. Assets with restricted ownership or use right” in “VII. Notes to items in consolidated financial statements” of this section for
details of the limited ownership of fixed assets of the Company.
(5) Liquidation of fixed assets: None
22. Construction in progress
Unit: RMB
Item Closing balance Opening balance
Construction in progress 1,728,042,052.38 1,628,157,358.74
Engineering materials 24,873,666.44 11,646,609.18
Total 1,752,915,718.82 1,639,803,967.92
(1) Construction in progress
Unit: RMB
Item Closing balance Opening balance
Book balance Provision for Book value Book balance Provision for Book value
impairment impairment
Lithium battery separator film
project of Jiangxi Tonry 501,329,749.43 501,329,749.43 139,404,996.71 139,404,996.71
(expansion of phase I)
5-7 line base film project of
354,914,748.53 9,319,496.94 345,595,251.59 353,206,733.42 9,319,496.94 343,887,236.48
Newmi Tech
Microporous membrane
project of high performance 150,222,596.38 150,222,596.38
lithium ion battery of
203
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Chongqing Energy (phase I)
204
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Hongta Plastic BOPP film
with an annual output of 127,669,517.48 127,669,517.48 2,733,126.44 2,733,126.44
70,000 tons
Jiangxi Energy SRS project 102,140,666.17 102,140,666.17
Microporous membrane
project of high performance
88,458,440.15 88,458,440.15
lithium ion battery of
Chongqing Energy (phase II)
Hungarian factory 80,981,499.95 80,981,499.95
Lithium battery separator film
project of Jiangxi Tonry
(phase I) 77,669,375.53 77,669,375.53 258,431,515.43 258,431,515.43
Jiangxi Enpo New Material
Co., Ltd. lithium ion battery
53,280,407.11 53,280,407.11
dry process separator film
construction project（phase I）
Jiangxi Ruijie No. 1
aluminum laminated film
project 51,326,164.11 51,326,164.11 37,331,842.72 37,331,842.72
Hongchuang Packaging
Project of 1 billion packaging 31,533,066.15 31,533,066.15 15,195,257.16 15,195,257.16
boxes of liquid beverage
Wuxi Energy battery
separator film production
base phase II Project 83,637,399.09 83,637,399.09 716,878,985.42 716,878,985.42
Zhuhai Energy battery
separator film production
base phase II Project 11,207,414.81 11,207,414.81 23,235,129.81 23,235,129.81
Microporous membrane
project of high performance
1,041,549.37 1,041,549.37
lithium ion battery of
Chongqing Energy (phase III)
Jiangxi Ruijie Utilities
513,625.00 513,625.00 9,419,783.70 9,419,783.70
Suzhou Green Power Project
with an annual output of 200
million square meters of 2,050,087.72 2,050,087.72
lithium ion battery coated
separator film
Wuxi Energy battery
separator film production
base phase I Project 70,022,103.63 70,022,103.63
Building of Jiangxi Ruijie
plant 1,279,253.81 1,279,253.81
Other projects
19,385,242.34 19,385,242.34 10,338,127.43 10,338,127.43
Total 1,737,361,549.32 9,319,496.94 1,728,042,052.38 1,637,476,855.68 9,319,496.94 1,628,157,358.74
(2) Changes in important projects in progress for the period
Unit: RMB
Item Budget Openin Increas Transfe Decreas Closing Proport Progres Capitali Includi Capitali Source
g e for r to e in balance ion of s of the zed ng: zation of
balance the fixed other total project accumu Capitali rate of capital
period assets amount project lated zed interest
205
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
for the s for investm amount amount for the
period the ent in of of period
period budget interest interest
for the
period
Lithium battery Other
separator film
project of Jiangxi 1,441,4 1,079,5
175,000 139,404 501,329 5,395,6 5,395,6
Tonry (expansion 44,233. 19,480. 93.84% 71.35% 4.25%
.00 ,996.71 ,749.43 11.11 11.11
of phase I) 53 81
5-7 line base film Other
project of Newmi 75,023. 353,206 1,708,0 354,914 15,938,
Tech 47.61% 65.00%
00 ,733.42 15.11 ,748.53 122.29
Microporous Other
membrane project
of high
150,000 150,222 150,222
performance 10.54% 10.54%
.00 ,596.38 ,596.38
lithium ion battery
of Chongqing
Energy （Phase I）
Hongta Plastic Other
reconstruction and
expansion project
of BOPP film with 36,000. 2,733,1 124,936 127,669 600,559 598,870
68.50% 75.00% 3.80%
an annual output 00 26.44 ,391.04 ,517.48 .36 .47
of 70,000 tons
Jiangxi Energy 50,000. 102,140 102,140 Other
40.14% 40.00%
SRS project 00 ,666.17 ,666.17
Microporous Other
membrane project
of high
300,000 88,458, 88,458,
performance 2.95% 2.95%
.00 440.15 440.15
lithium ion battery
of Chongqing
Energy（phase II）
99,692. 80,981, 80,981, Other
Hungarian factory 8.12% 8.12%
28 499.95 499.95
Lithium battery Other
separator film
project of Jiangxi 175,000 258,431 31,890, 212,652 77,669, 100.00 10,275,
96.65%
Tonry (phase I) .00 ,515.43 753.86 ,893.76 375.53 % 378.94
Jiangxi Enpo new Other
materials Co., Ltd.
lithium ion battery
200,000 53,280, 53,280,
dry process 23.17% 4.63%
.00 407.11 407.11
separator film
construction
project (phase I)
Jiangxi Ruijie No. Other
1 aluminum
laminated film 14,250. 37,331, 24,923, 10,929, 51,326,
80.56% 85.36%
project 00 842.72 571.23 249.84 164.11
Hongchuang Other
Packaging Project
of 1 billion 7,500.0 15,195, 17,890, 1,553,0 31,533,
packaging boxes 42.04% 62.19%
0 257.16 812.64 03.65 066.15
of liquid beverage
206
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Wuxi Energy Other
battery separator
film production 1,440,9
280,000 716,878 807,659 83,637, 14,171, 14,171,
base phase II 01,519. 77.06% 80.98% 3.22%
.00 ,985.42 ,933.57 399.09 759.52 759.52
Project 90
Zhuhai Energy Other
battery separator
film production 140,000 23,235, 133,438 145,466 11,207, 30,172, 251,042
base phase II 90.00% 99.00% 0.09%
.00 129.81 ,580.66 ,295.66 414.81 038.88 .04
Project
Microporous Other
membrane project
of high
performance 300,000 1,041,5 1,041,5
0.03% 0.03%
lithium ion battery .00 49.37 49.37
of Chongqing
Energy （ phase
III）
Jiangxi Ruijie Other
Utilities 3,000.0 9,419,7 7,745,2 16,651, 513,625
98.85% 96.20%
0 83.70 62.39 421.09 .00
Suzhou Green Other
Power Project
with an annual
output of 200 100,000 2,050,0 2,050,0
0.21% 0.21%
million square .00 87.72 87.72
meters of lithium
ion battery coated
separator film
Wuxi Energy Other
battery separator
220,000 70,022, 134,728 204,750 100.00 100.00 68,435,
film production
.00 103.63 ,052.30 ,155.93 % % 716.63
base phase I
Project
Building of Other
Jiangxi Ruijie 10,000. 1,279,2 1,279,2 100.00
plant 99.00%
00 53.81 53.81 %
Other projects 10,338, 40,046, 30,999, 19,385, Other
—
127.43 140.21 025.30 242.34
Other
Total 1,637,4 3,244,5 3,144,7 1,737,3
2,335,4 144,989 20,417,
76,855. 86,993. 02,299. 61,549. -- -- --
65.28 ,186.73 283.14
68 39 75 32
(3) Provision for impairment of construction in progress: None
Other explanations:
The main reason for the larger increase in the ending balance of the Company’s projects under construction over the opening balance is: the subsidiary
Shanghai Energy New Material Technology Co., Ltd and its subsidiaries are in the growth stage, and the Company has increased the construction of
production lines, resulting in the increase of new production lines in the year.
(4) Project materials
Unit: RMB
Closing balance Opening balance
Item
Book balance Provision for Book value Book balance Provision Book value
impairment for
207
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
impairment
Engineering materials 8,384,509.61 8,384,509.61 4,352,742.79 4,352,742.79
Equipment not installed
16,489,156.83 16,489,156.83 7,293,866.39 7,293,866.39
Total 24,873,666.44 24,873,666.44 11,646,609.18 11,646,609.18
23. Productive biological assets: None
24. Oil and gas assets: None
25. Right-of-use assets: None
26. Intangible assets
(1) Intangible assets
Unit: RMB
Item Land use rights Patent rights Non-patent Software Total
technology
I. Original book value
1. Opening balance
473,734,900.83 26,000,000.00 23,338,200.00 14,280,518.68 537,353,619.51
2. Increase for the period
100,410,680.41 15,362,789.71 115,773,470.12
(1) Purchase 100,410,680.41 15,362,789.71 115,773,470.12
(2) Internal R&D
(3) Increase in business
combination
3. Decrease for the period
(1) Disposal
4. Closing balance
574,145,581.24 26,000,000.00 23,338,200.00 29,643,308.39 653,127,089.63
II. Accumulative amortization
1. Opening balance
50,959,309.00 2,166,666.67 17,171,971.78 3,953,579.45 74,251,526.90
2. Increase for the period
10,507,048.71 2,600,000.04 1,972,689.86 1,729,147.56 16,808,886.17
10,507,048.71 2,600,000.04 1,972,689.86 1,729,147.56 16,808,886.17
(1) Provision
3. Decrease for the period
(1) Disposal
4. Closing balance 61,466,357.71 4,766,666.71 19,144,661.64 5,682,727.01 91,060,413.07
III. Provision for impairment
1. Opening balance 1,203,498.45 1,203,498.45
208
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
2. Increase for the period
(1) Provision
3. Decrease for the period
209
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
(1) Disposal
4. Closing balance 1,203,498.45 1,203,498.45
IV. Book value
1. Closing book value 512,679,223.53 21,233,333.29 2,990,039.91 23,960,581.38 560,863,178.11
2. Opening book value 422,775,591.83 23,833,333.33 4,962,729.77 10,326,939.23 461,898,594.16
.
(2) Land usage rights not obtaining the title certificate: None
27. Development expenditures: None
28. Goodwill
(1) Original book value of goodwill
Unit: RMB
Events that may Opening balance Increase for the period Decrease for the period Closing balance
generate goodwill Generated by Others Disposal Others
through investee business
names combination
Jiangxi Tonry 34,483,188.64 34,483,188.64
Newmi Tech 15,589,757.32 15,589,757.32
Suzhou Green
470,157,733.69 470,157,733.69
Power
Shenzhen
Qingsong Jinze
Technology 9,671,444.70 9,671,444.70
Development
Co., Ltd.
Total 529,902,124.35 9,671,444.70 520,230,679.65
(2) Provision for impairment of goodwill
Unit: RMB
Events that may Opening balance Increase for the period Decrease for the period Closing balance
generate goodwill Provision Disposal
through investee
names
Shenzhen
Qingsong Jinze
Technology 9,671,444.70 9,671,444.70
Development
Co., Ltd.
Total 9,671,444.70 9,671,444.70
Related information on asset groups or combination of asset groups containing goodwill
Explanation on goodwill impairment test process, key parameters (such as the forecast period growth rate when the present value of future cash flows
are expected, the stable period growth rate, profit rate, discount rate, forecast period, etc.) and the confirmation method of goodwill impairment loss:
210
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
(1) Goodwill related to Jiangxi Tonry New Energy Technology Development Co., Ltd.
Goodwill calculation process of Jiangxi Tonry New Energy Technology Development Co., Ltd. (hereinafter referred to as “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 2022 to 2026. After 2026, it will be a perpetual period. It is estimated
that the annual growth rate of cash flow will be 2.1%, and the recoverable value of the asset group will be calculated according to the discount rate of
7.35%. 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 Shenzhen Qingsong Jinze Technology Development Co., Ltd.
Goodwill calculation process of Shenzhen Qingsong Jinze Technology Development Co., Ltd. (hereinafter referred to as “Shenzhen Qingsong”)
merged by enterprises not under common control:
The acquisition cost minus the fair value of the book identifiable net assets of Shenzhen Qingsong on the acquisition date multiplied by the proportion
of acquired equity equals to goodwill, that is, 20,000,000.00 minus 10,328,555.30 multiplied by 100% equals to RMB9,671,444.70.
The Company recognized Shenzhen Qingsong Jinze Technology Development Co., Ltd. as an asset group for goodwill impairment test. As the
production of Shenzhen Qingsong Jinze Technology Development Co., Ltd. is currently suspended in the second half of 2020, the recoverable amount
of goodwill is calculated based on the fair value of the assets minus the net amount of disposal expenses. Upon confirmation by the appraisal report
(Zhi Zheng Ping Bao Zi [2021] No. 0202) issued by Yunnan Zhizheng Asset Appraisal Co., Ltd., the recoverable value is lower than the book value of
the asset group including the goodwill of all shareholders, and full provision for impairment is made for the goodwill.
The Company has cancelled Shenzhen Qingsong Jinze Technology Development Co., Ltd.
(3) Goodwill related to Suzhou Green Power New Energy Material Co., Ltd.
Goodwill calculation process of Suzhou Green Power New Energy Material Co., Ltd. (hereinafter referred to as “Suzhou Green Power”) merged by
enterprises not under common control:
The acquisition cost minus the fair value of the book identifiable net assets of Suzhou Green Power 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 Green Power 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 2022 to 2026. After 2026, it will be a perpetual period. It is estimated
that the annual growth rate of cash flow will be 1.64%, and the recoverable value of the asset group will be calculated according to the discount rate
of 7.35%. The recoverable value exceeds the book value of the asset group including all shareholders goodwill, and there is no goodwill impairment.
(4) Goodwill related to Chongqing Energy Newmi Technological Co., Ltd.
Goodwill calculation process of 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 Newmi Tech 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 2022 to 2026. After 2026, 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 7.35%. The recoverable value exceeds the book value of the
asset group including all shareholders goodwill, and there is no goodwill impairment.
29. Long-term unamortized expenses
Unit: RMB
Item Opening balance Increase for the Amortized amount Decrease in other Closing balance
period for the period amounts
Leasehold
improvement 277,302.66 277,302.66
Renovation cost
411,640.79 203,440.48 208,200.31
Filling machine
2,232,804.33 1,814,159.26 2,542,275.50 1,504,688.09
Power grid access
59,710.00 11,259.84 48,450.16
fee
Workshop lease cost
300,000.00 300,000.00
211
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Software
1,542,276.64 481,091.76 1,061,184.88
implementation fee
Repair and
maintenance fee 1,821,692.86 1,084,599.13 737,093.73
Total
6,645,427.28 1,814,159.26 4,899,969.37
30. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets before offset
Unit：RMB
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference assets difference assets
Asset impairment
530,474,872.66 80,159,045.71 274,894,329.74 41,234,513.77
provision
Unrealized profit of
201,315,638.27 30,197,345.73 73,315,371.84 10,997,305.77
internal transaction
Deductible losses 171,941,875.70 31,092,748.22 276,479,581.49 42,424,284.31
Government subsidy 742,702,208.05 111,405,331.20 721,652,616.93 108,247,892.52
Total 1,646,434,594.68 252,854,470.86 1,346,341,900.00 202,903,996.37
(2) Deferred income tax liabilities before offset
Unit: RMB
Item Closing balance Opening balance
Taxable temporary Deferred income tax Taxable temporary Deferred income tax
difference liabilities difference liabilities
Appraisal and
appreciation of assets in
mergers of companies not 82,490,043.84 12,373,506.58 113,080,406.56 16,962,060.99
under common control
Pre-tax deduction of
equipment and 831,888,785.84 127,083,424.85 555,199,732.99 83,443,996.97
instruments at one time
Provision for credit
impairment of receivables 934,762.69 140,214.40
financing
Fixed assets for intra
10,312,579.27 1,546,886.89
group transactions
Total
925,626,171.64 141,144,032.72 668,280,139.55 100,406,057.96
（3）Net amount of offset deferred income tax assets or liabilities
Unit: RMB
Offsetting amount of Closing balance of Offsetting amount of Opening balance of
deferred income tax assets deferred income tax assets deferred income tax assets deferred income tax assets
Item and deferred income tax or liabilities after offset and deferred income tax or liabilities after offset
liabilities at the end of the liabilities at the beginning
Reporting Period of the Reporting Period
Deferred income tax
assets 252,832,125.66 202,903,996.37
Deferred income tax 141,144,032.72 100,406,057.96
212
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
liabilities
（4）Details of unrecognized deferred income tax assets:
Unit: RMB
Item Closing balance Opening balance
Deductible loss 52,353,965.57 236,262,758.82
Provision for asset impairment 972.45 301,996,604.14
total 52,354,938.02 538,259,362.96
(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
2023 40,626,538.08
2024 19,937,896.63 103,095,455.11
2025 32,416,068.94 92,540,765.63
Total 52,353,965.57 236,262,758.82 --
Other explanations:
Description of one-time pre-tax deduction of equipment and instruments in the deferred income tax liabilities before offset: 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 deduct 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.
31. Other non-current assets
Unit: RMB
Item Closing balance Opening balance
Book balance Provision Book value Book balance Provision for Book value
for impairment
impairmen
t
Advance payment for equipment 1,421,784,008.1
1,421,784,008.16 515,786,722.70 515,786,722.70
6
Advance payment for project
420,103,967.69 420,103,967.69 59,073,039.82 59,073,039.82
Quality guarantee (Note 1)
1,350,000.00 1,350,000.00 1,350,000.00 1,350,000.00
Installment for sale of equipment
(Note 2) 8,083,352.22 8,083,352.22 8,083,352.09 8,083,352.09
Deductible input tax
14,897,818.46 14,897,818.46
Advance payment for land 251,500,000.00 251,500,000.00
Prepayment for house 4,353,231.00 4,353,231.00
Time deposits 461,548,862.25 461,548,862.25
213
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
2,568,723,421.3
Total 2,568,723,421.32 599,190,933.07 599,190,933.07
2
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: (1) Wuxi Energy
New Material Technology Co., Ltd. and Jiangxi Tonry New Energy Technology Development Co., Ltd. are in the growth stage, the Company
intensifies the construction of production lines, and the advance payment for equipment increases accordingly. (2) Shanghai Energy New Material
Technology Co., Ltd. and Zhuhai Energy purchase time deposits and certificates of 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.
32. Short-term loans
(1) Classification of short-term borrowings
Unit: RMB
Item Closing balance Opening balance
Pledged loan
545,992,000.27 528,484,649.10
Guaranteed loan
3,487,366,352.00 1,012,102,530.77
Credit loan
78,000,000.00 254,000,000.00
Undue interest payables
4,789,988.03 1,092,349.04
Total
4,116,148,340.30 1,795,679,528.91
(2) Overdue and outstanding short-term borrowings: None
Other explanations:
The main reason for the larger increase in the ending balance of the Company’s short-term loans over the opening balance is: The increase of business
volume of the Company leads to the increase of capital demand for daily business activities and the increase of bank loans.
Notes on pledged loans: the Company obtained a loan of RMB48,900,000.00 by pledging 76.3574% equity of Newmi Tech; Zhuhai Energy obtained
a loan of USD22,041,228.85 by pledging its own large deposit certificate of RMB151,964,000.00; Zhuhai Energy pledged its own accounts
receivable debt of RMB113,995,449.70 to obtain a loan of USD16,048,000.00; Shanghai Energy obtained a loan of USD7,215,224.00 by pledging its
own certificate of deposit of RMB51,060,648.00; Shanghai Energy obtained a loan of RMB6,769,341.65 by pledging its own supply chain bills of
RMB6,769,341.65; Wuxi Energy obtained a loan of RMB7,012,418.40 by pledging its own notes receivable of RMB7,012,418.40; Shanghai Energy
obtained a loan of RMB180,000,000.00 by pledging its own large deposit certificate of RMB184,832,152.77; Hongchuang Packaging pledged its own
deposit of RMB15,185,772.19 to obtain a loan of USD2,268,400.36. See “81. Assets with restricted ownership or use right” in “VII. Notes to items in
consolidated financial statements” of this section for details of pledge.
214
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
33. Trading financial liabilities: None
34. Derivative financial liabilities: None
35. Notes payable
Unit: RMB
Type Closing balance Opening balance
Commercial acceptance 4,205,536.14 14,547,851.27
Bank acceptance 483,202,292.39 680,878,688.42
Total 487,407,828.53 695,426,539.69
36. Accounts payable
(1) Accounts payable
Unit: RMB
Item Closing balance Opening balance
Materials payable 337,706,658.17 277,833,591.11
Engineering equipment payable
222,569,060.60 125,081,160.84
Accessories and spare parts payable
20,393,593.67 11,543,629.05
Transportation fee payable
42,078,568.47 23,477,922.68
Other payable
27,797,776.37 33,140,214.54
Total
650,545,657.28 471,076,518.22
(2) Major accounts payable aged over one year
Unit: RMB
Item Closing balance Reasons for outstanding or carry-over
Shanghai Suray Information Technology Co., Not mature
14,882,101.79
Ltd.
Chengdu Huicheng Technology Co., Ltd. 4,560,000.00 Not mature
Shanghai Youbang International Logistics Not mature
3,001,327.10
Co., Ltd.
MYUNG SUNG TNS CO.,LTD 1,270,056.06 Not mature
H-VISIONS 1,197,667.94 Not mature
total 24,911,152.89 --
The main reason for the larger increase in the ending balance of the Company’s accounts payable over the opening balance is: The Company’s
business grew rapidly this year. Shanghai Energy and its subsidiaries were in the growth stage. The Company strengthened the construction of
production line, and the relevant accounts payable increased accordingly.
215
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
37. Receipts in advance: None
38. Contractual liabilities
Unit: RMB
Item Closing balance Opening balance
Advance receivable for goods
761,923,312.38 7,677,129.87
Amount and reasons for significant changes in book value during the reporting period
Unit: RMB
Item Amount of changes Reason for changes
Advance receivable for goods It is mainly due to Shanghai Energy’s receipt of advance payment from
754,246,182.51
the customer at the end of the reporting period
Total 754,246,182.51 ——
39. Employee benefits payable
(1) Employee benefits payable
Unit: RMB
Item Opening balance Increase for the Decrease for the Closing balance
period period
I. Short-term remuneration
28,144,817.99 650,854,103.88 646,699,665.60 32,299,256.27
II. Retirement pension program-defined contribution
plan 52,041,060.45 51,010,399.94 1,030,660.51
III. dismissal benefits 368,381.49 368,381.49
Total 28,144,817.99 703,263,545.82 698,078,447.03 33,329,916.78
（2）Short-term benefits
Unit: RMB
Item Opening balance Increase for the Decrease for the Closing balance
period period
1. Wage, bonus, allowance and subsidies
26,045,081.72 559,049,457.99 554,400,001.80 30,694,537.91
2. Employee welfare
37,054,102.91 37,054,102.91
3. Social insurance 690,337.24 28,091,790.45 28,116,259.15 665,868.54
Including: medical insurance
621,304.69 25,322,849.86 25,288,280.30 655,874.25
Labor injury insurance 1,601,406.66 1,591,412.37 9,994.29
Maternity insurance premium 69,032.55 691,596.01 760,628.56
Supplementary medical insurance 339,034.06 339,034.06
4. Housing fund 334,780.00 22,993,896.84 22,911,703.83 416,973.01
5. Labor union budget and staff education fund 1,074,619.03 3,664,855.69 4,217,597.91 521,876.81
Total
28,144,817.99 650,854,103.88 646,699,665.60 32,299,256.27
216
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
（3）Defined contribution plans
Unit: RMB
Item Opening balance Increase for the period Decrease for the period Closing balance
1. Basic pension
50,442,356.44 49,442,928.06 999,428.38
2.Unemployment
insurance 1,598,704.01 1,567,471.88 31,232.13
Total
52,041,060.45 51,010,399.94 1,030,660.51
Other explanations:
40.Taxes payable
Unit: RMB
Item Closing balance Opening balance
VAT 21,727,333.15 58,372,023.20
Corporate income tax 160,861,569.98 112,955,783.69
Personal income tax 996,764.35 756,962.07
City maintenance and construction tax 1,335,086.63 1,517,261.49
Property tax 2,908,801.04 1,204,000.74
Land using tax 620,797.95 577,940.85
Education surtax 1,221,998.41 3,245,319.76
Other 484,186.27 354,783.64
Total 190,156,537.78 178,984,075.44
41. Other payables
Unit: RMB
Item Closing balance Opening balance
Dividends payable 9,778,239.09 7,871,573.20
Other payables 60,499,183.54 577,510,854.43
Total 70,277,422.63 585,382,427.63
(1) Interest payables: None
(2) Dividends payable
Unit: RMB
Item Closing balance Opening balance
Common share dividends
9,778,239.09 7,871,573.20
217
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 Shanghai Energy to minority shareholders.
(3) Other payables
1) Other payables listed by nature of payment
Unit: RMB
Item Closing balance Opening balance
Equity acquisition
42,736,010.00 44,736,010.00
Loans from non-financial institutions
470,118,553.75
Withholding and remitting employee
incentive and dividend personal income tax 46,031,316.80
Deposits and guarantees
12,209,228.71 10,498,912.12
Withholding employees’ social insurance
1,861,074.86 2,392,968.63
Reimbursement
997,002.15 2,550,636.39
Other
2,695,867.82 1,182,456.74
Total
60,499,183.54 577,510,854.43
2) Major other payables aged over one year
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 --
42. Hold-for-sales liabilities: None
43. Non-current liabilities due within one year
Unit: RMB
Item Closing balance Opening balance
Long-term loans due within 1 year
377,299,907.20 514,980,422.77
Long-term payables due within 1 year
4,988,932.48
Undue interest payables 6,098,084.90 6,311,708.63
218
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Total 383,397,992.10 526,281,063.88
44. Other current liabilities
Unit: RMB
Item Closing balance Opening balance
Undue interest payable
Output value-added tax payable 99,032,756.22 1,021,339.34
Endorsement or discount of unconfirmed
130,932,533.60
bank acceptance bill
Endorsement or discount of unconfirmed
634,570.35
commercial acceptance bill
Endorsement for transfer of unconfirmed
10,137,864.09
supply chain voucher
Total 240,737,724.26 1,021,339.34
45. Long-term borrowings
(1) Long-term borrowings by type
Unit: RMB
Item Closing balance Opening balance
Pledged loan
1,206,100,000.00 864,400,000.00
Mortgaged loan
949,296,159.46 708,177,982.72
Guaranteed loan
822,012,580.04 1,319,313,572.42
Credit loan
203,000,000.00 290,000,000.00
Long-term loans due within 1 year
-377,299,907.20 -514,980,422.77
Total
2,803,108,832.30 2,666,911,132.37
Description for long-term borrowings by type:
The main reason for the larger increase in the ending balance of the Company’s long-term borrowings over the opening balance is: Shanghai Energy
and its subsidiaries were in the growth stage this year. The Company strengthened the construction of production line with added pledged and
mortgaged long-term loans.
Pledged loans: Shanghai Energy New Material Technology Co., Ltd. will pledge its 100% equity in Suzhou Green Power New Energy Material Co.,
Ltd., 100% equity in Jiangxi Tonry New Energy Technology Development Co., Ltd. and 76.3574% equity in Newmi Tech to obtain a loan of
RMB1,206,100,000.00.
Mortgaged loan: Hongta Plastic, Zhuhai Energy, Wuxi Energy and Jiangxi Tonry obtained a loan of RMB949,296,159.46 by pledging their own fixed
assets. See “81. Assets with restricted ownership or use right” in “VII. Notes to items in consolidated financial statements” of 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 “(4) Related party guarantees” under “5. Related party transactions” in “XII. Related Parties and Related Party Transactions”.
219
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
46. Bonds payable
(1) Bonds payable
Unit: RMB
Item Closing balance Opening balance
Convertible corporate bonds
413,239,181.29 755,725,620.04
（2）Changes in bonds payable: (excluding preferred shares classified as financial liabilities, perpetual bonds and other financial
instruments)
Unit: RMB
Name of Par Issue Term Issue Opening Issued in Interest Amortiz Paid in Shares Closing
bond value date size balance current provisio ation of the converte balance
period ned by discount current d in the
par s and period current
value premium period
s
Converti
ble
corporat
e bonds
of
Yunnan 1,600,00 February 1,600,00 755,725, 37,005,6 -379,492 413,239,
6 years
Energy 0,000.00 11, 2020 0,000.00 620.04 61.25 ,100.00 181.29
New
Material
Co., Ltd.
(3) Explanation on conversion conditions and conversion time of 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.
(4) Explanation on other financial instruments classified as financial liabilities: None
220
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
47. Lease liabilities: None
48. Long-term payables
Unit: RMB
Item Closing balance Opening balance
Long-term payables 0.00 0.00
Special payables 0.00 0.00
Total 0.00 0.00
(1) Long-term payables listed by nature of payment
Unit: RMB
Item Closing balance Opening balance
Financial lease proceeds payable
4,988,932.48
Less: Long-term payables due within one year
4,988,932.48
Total 0.00
(2) Special payables: None
49. Long-term payroll payable: None
50. Estimated liabilities: None
51. Deferred income
Unit: RMB
Increase for the Decrease for the
Item Opening balance Closing balance Reason
period period
Government subsidies For details, see the
708,255,614.66 107,516,701.35 60,813,656.46 754,958,659.55
related to assets table below.
Items involving government grants:
Unit: RMB
Amount
that
Non-operatin Other offsets
Grants Other
Opening g income income costs and Related to
Item related to liabilities increased for chang Closing balance
balance recorded in recorded in expenses assets/income
the period es
the period the period in the
current
period
Equipment subsidies of the
Related to
Gao’an Municipal People’s 295,497,971.96 25,125,178.56 270,372,793.40
assets
Government (Note 1)
Support and incentive
payment of the Xishan
Related to
Economic and 114,447,109.80 77,656,573.35 11,802,389.66 180,301,293.49
assets
Technological Development
Zone (Note 2)
Item subsidy for the Related to
176,795,630.42 14,308,295.40 162,487,335.02
development of advanced assets
221
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
equipment manufacturing
industry (Note 3)
Special funds for the
development of provincial Related to
30,000,000.00 1,153,846.14 28,846,153.86
strategic emerging assets
industries (Note 4)
Subsidies for infrastructure Related to
25,471,400.08 1,340,599.92 24,130,800.16
construction (Note 5) assets
Enterprise support funds
allocated by Gao’an New Related to
2,698,600.00 18,744,800.00 44,976.68 21,398,423.32
World Industrial City assets
Finance Office (Note 6)
222
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
High-performance lithium
ion battery separator film
Related to
project with an annual 16,231,909.02 2,696,405.76 13,535,503.26
assets
output of 90 million square
meters (Note 7)
Municipal technological
transformation project for Related to
11,156,250.00 1,125,000.00 10,031,250.00
high-quality development assets
(Note 8)
Technological
transformation project of the
Related to
production line of 10,163,582.68 1,080,781.56 9,082,801.12
assets
lithium-ion battery separator
film (Note 9)
Technological
transformation project of the
Related to
second batch of industrial 8,250,000.00 900,000.00 7,350,000.00
assets
transformation in 2020
(Note 10)
Enterprise development Related to
6,315,328.00 6,315,328.00
support funds (Note 11) assets
Special funds for 70,000-ton Related to
5,300,000.00 5,300,000.00
BOPP projects (Note 12) assets
Special funds for basic Related to
3,698,717.95 307,692.48 3,391,025.47
projects assets
Land subsidies granted by
the Administrative
Committee of Yuxi
Related to
High-tech Industrial 3,000,000.00 5,128.21 2,994,871.79
assets
Development Zone for the
annual production of 1
billion liquid packing boxes
Related to
Cable trench subsidy 2,861,667.09 339,999.96 2,521,667.13
assets
Boiler upgrading and Related to
2,558,800.00 196,830.72 2,361,969.28
reconstruction projects assets
Low-nitrogen
transformation project of the Related to
1,000,000.00 1,000,000.00
Finance Bureau of assets
Changshou
Special funds for basic Related to
923,076.92 76,922.88 846,154.04
projects assets
Technical transformation Related to
800,000.00 30,769.23 769,230.77
guidance funds assets
Subsidies of the Yuxi
Municipal Bureau of Related to
641,509.52 113,207.52 528,302.00
Finance for the first major assets
technical equipment
Special funds for the
construction of the Yuxi Related to
539,237.60 34,977.60 504,260.00
municipal industrial park in assets
2017
Reward for Suzhou to build
an intelligent demonstration Related to
461,538.46 65,934.10 395,604.36
workshop of advanced assets
manufacturing base in 2020
Funds for the preparation of
touring inspection activities
in Yichun and centralized
commencement and
Related to
completion activities of 291,946.67 14,720.04 277,226.63
assets
major projects in Yichun,
allocated by Gao’an New
World Industrial City
Finance Office
223
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Subsidies for the renovation
of power supporting
projects outside the plants in
Related to
the Jiulong district of the 266,666.49 50,000.04 216,666.45
assets
Yuxi High-Tech
Development Zone
Management Committee
Other explanations:
Note 1: As described in “52. Other non-current liabilities” in “VII. Notes to items in consolidated financial statements” of this section, Jiangxi
Tonry, the 3 level subsidiary of the Company, has built an item production base of lithium ion separator film 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 Gao’an Municipal
Government advances the payment for equipment in the form of government loan. When each production line of lithium-ion separator film is put into
use, the advance payment shall be recognized as equipment subsidy in batches based on the proportion specific to the value of the imported
equipment of the production line that has been put into operation. This government subsidy is related to the production line put into use by Jiangxi
Tonry. This government subsidy related to assets is recognized as deferred income, and apportioned and recognized as the current profit and loss
according to the depreciation life of related assets. As of December 31, 2021, 8 production lines of lithium-ion separator film have been put into use
and submitted for review. The government subsidy related to this asset has been accumulatively included in the current profit and loss of
RMB56,254,524.05, including: RMB6,528,749.69 apportioned in 2019, RMB24,600,595.80 apportioned in 2020, and RMB25,125,178.56
apportioned in 2021.
Note 2: According to the Supplementary Agreement of the Investment Agreement signed between the Administrative Committee of Xishan
Economic and Technological Development Zone and Shanghai Energy, a subsidiary of the Company, the Administrative Committee of Xishan
Economic and Technological Development Zone granted a subsidy (RMB120,000,000.00 received in 2020 and RMB77,656,573.35 received in 2021)
for the payment for equipment to Wuxi Energy (a level 3 subsidiary of the Company) regarding the projects mentioned in the Investment Agreement.
This government subsidy is related to the construction of lithium battery separator film projects of Wuxi Energy. This government subsidy is also
related to assets and recognized as deferred income, and apportioned and recognized as the current profit and loss based on the depreciation life of
related assets. As of December 31, 2021, the construction of the project-related assets has been completed and carried forward to the fixed assets, and
the asset-related government subsidy has been accumulatively included in the current profit and loss of RMB17,355,279.86, with the apportion in
2020 of RMB5,552,890.20 and the apportion in 2021 of RMB11,802,389.66.
Note 3: Zhuhai Energy, a level 3 subsidiary of the Company, received a subsidy of RMB194,681,000.00 for the development projects of
advanced equipment manufacturing issued by the Economic & Information Commission of Guangdong Province in September 2019. This
government subsidy is related to the construction of lithium battery separator film projects of Zhuhai Energy. This government subsidy is also related
to assets and recognized as deferred income, and apportioned and recognized as the current profit and loss based on the depreciation life of related
assets. As of December 31, 2021, the construction of the subsidy-related assets has been completed and carried forward to the fixed assets, and the
asset-related government subsidy has been accumulatively included in the current profit and loss of RMB32,193,664.98, including:
RMB3,577,074.05 apportioned in 2019, RMB14,308,295.53 apportioned in 2020, and RMB14,308,295.40 apportioned in 2021.
Note 4: According to the Notice on Forwarding the Special Funds for the Development of Provincial Strategic Emerging Industries and Project
Investment Plans for 2020 Issued by the Provincial Development and Reform Commission and the Provincial Department of Finance, the Wuxi
Development and Reform Commission appropriates special funds of RMB30,000,000.00 to Wuxi Energy (a level 3 subsidiary of the Company) for
the construction of the phase II expansion project of Wuxi Enjie’s new material industrial base. This government subsidy is related to the production
line put into use by Wuxi Energy. This government subsidy related to assets is recognized as deferred income, and apportioned and recognized as the
current profit and loss based on the depreciation life of related assets. As of December 31, 2021, the construction of the subsidy-related assets has
been completed and carried forward to the fixed assets, with the apportion in 2021 of RMB1,153,846.14.
Note 5: For supporting the polymer nanomaterial project of Jiangxi Tonry New Energy Technology Development Co., Ltd., a level 3 subsidiary
of the Company, the Gao’an Municipal Government signs an Investment Cooperation Agreement and a Supplementary Agreement with Jiangxi Tonry
New Energy Technology Development Co., Ltd. According to the relevant provisions of the Investment Cooperation Agreement, the Gao’an
Municipal Government grants a subsidy of RMB2,681,200.00 for infrastructure development to Jiangxi Tonry New Energy Technology Development
Co., Ltd., while the latter will use the subsidy for subsequent plant development. This government subsidy is related to the construction of the Jiangxi
Tonry plant. It is also related to assets and recognized as deferred income. It is apportioned and recognized as the current profit and loss based on the
depreciation life of related assets. As of December 31, 2021, the construction of the subsidy-related assets has been completed and carried forward to
the fixed assets, and the asset-related government subsidy has been accumulatively included in the current profit and loss of RMB26,812,000.00,
including: RMB1,340,600.00 apportioned in 2020 and RMB1,340,600.00 apportioned in 2021.
Note 6: Jiangxi Tonry, a level 3 subsidiary of the Company, got the support for its polymer nanomaterial project from Gao’an Municipal
Government with an investment cooperation agreement and a supplementary agreement. According to the relevant provisions of the investment
agreement, Jiangxi Tonry got RMB21,443,400.00 infrastructure subsidies from Gao’an Municipal Government. Jiangxi Tonry will use it for
subsequent construction of infrastructure according to the agreement. This government subsidy is related to the construction and equipment of the
plant of Jiangxi Tonry, and the government subsidy is also related to assets and recognized as deferred income. It is apportioned and recognized as the
current profit and loss based on the depreciation life of related assets. As of December 31, 2021, the construction of the subsidy-related assets has
been completed and carried forward to the fixed assets, with the apportion in 2021 of RMB44,976.68.
Note 7: In July 2011, the National Development and Reform Commission and the Ministry of Industry and Information Technology issued the
Notice on Issuing the First Batch of Investment Plans within the Central Budget for the Revitalization and Technological Transformation Projects of
the Electronic Information Industry in 2011 (Fa Gai Tou Zi (2011) No. 1387); Shanghai Energy, a subsidiary of the Company, received a subsidy of
RMB12,000,000.00 for the high-performance lithium ion battery separator film project with an annual output of 90 million square meters.
224
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
In June 2011, the Shanghai Municipal Commission of Economy and Informatization issued the Official Reply Concerning the Report on the
Application for Special Funds for Key Industrial Revitalization and Technological Transformation of the New 90 Million Square Meter
High-Performance Lithium Ion Battery Separator Film Projects of Shanghai Energy New Material Technology Co., Ltd. in 2011 [Hu Jing Xin Tou
(2011) No. 298]; Shanghai Energy, a subsidiary of the Company, received a subsidy of RMB12,000,000.00 for the high-performance lithium ion
battery separator film project with an annual output of 90 million square meters.
In March 2013, pursuant to the relevant provisions of the Measures for the Use and Management of Special Development Funds of the
Shanghai Zhangjiang National Innovation Demonstration Zone [Hu Cai Yu (2012) No. 141] and the Notice of the Use of Special Development Funds
of the Shanghai Zhangjiang National Innovation Demonstration Zone for Subsidizing Jinqiaoyuan’s First Batch of Projects in 2012 [Hu Gao Xin
Guan Wei (2013) No. 5], the Shanghai Pudong Science and Technology Commission and Shanghai Energy (a subsidiary of the Company) signed a
Contract on the Management of Special Development Funds of the Shanghai Zhangjiang National Innovation Demonstration Zone. Pursuant to the
provisions of the Contract, Shanghai Energy (a subsidiary of the Company) received a subsidy of RMB7,000,000.00 for the high-performance lithium
ion battery separator film projects with an annual output of 90 million square meters during the year. In April 2017, it received a subsidy of
RMB3,000,000.00 for the high-performance lithium ion battery separator film projects with an annual output of 90 million square meters.
The above subsidies, related to the high-performance lithium ion battery separator film project with an annual output of 90 million square
meters, total RMB34,000,000.00. The high-performance lithium ion battery separator film project with an annual output of 90 million square meters
has three production lines. The deferred income is apportioned and recognized as the current profit and loss based on the time point when the three
production lines are carried forward to the fixed assets successively and depreciation life of the fixed assets of 13 years. As of December 31, 2021, the
construction of the high-performance lithium ion battery separator film project with an annual output of 90 million square meters has been completed
and carried forward to the fixed assets, and the asset-related government subsidy has been accumulatively included in the current profit and loss of
RMB20,464,496.74, including: RMB1,454,615.38 apportioned in 2013, RMB1,454,615.38 apportioned in 2014, RMB1,804,358.98 apportioned in
2015, RMB2,350,833.31 apportioned in 2016, RMB2,618,458.17 apportioned in 2017, RMB2,692,398.30 apportioned in 2018, RMB2,696,405.76
apportioned in 2019, RMB2,696,405.70 apportioned in 2020, and RMB2,696,405.76 apportioned in 2021.
Note 8: According to the Several Policies and Measures of the Pudong New Area for Promoting the High-quality Development of Key
Advantageous Industries (Implementation), the Operating Standards of the Several Policies and Measures of the Pudong New Area for Promoting the
High-quality Development of Key Advantageous Industries (Trial), and relevant project support and management requirements, the Shanghai Pudong
Science and Technology and Economy Commission grants a subsidy of RMB11,250,000.00 to Shanghai Energy (a level 2 subsidiary of the Company)
for related technological upgrading projects without compensation. The subsidy is related to assets and recognized as deferred income. It is
apportioned and recognized as the current profit and loss based on the remaining depreciation life of related assets. As of December 31, 2021, the
construction of the subsidy-related assets has been completed and carried forward to the fixed assets, and the asset-related government subsidy has
been accumulatively included in the current profit and loss of RMB1,218,750.00, including: RMB93,750.00 apportioned in 2020 and
RMB1,125,000.00 apportioned in 2021.
Note 9: In 2017, the Company and its subsidiary Shanghai Energy signed the 2017 (the second batch of key technological transformation) job
specification on special funds for industrial transformation, upgrading and development, requiring to grant a subsidy of RMB22,500,000.00 for the
technological transformation project of Shanghai Energy’s production line of lithium ion battery separator film without compensation. The subsidy is
related to assets and recognized as deferred income. It is apportioned and recognized as the current profit and loss based on the remaining
depreciation life of related assets. In December 2017, the Company received a subsidy of RMB13,500,000.00 for the technological transformation
project of Shanghai Energy’s production line of lithium ion battery separator film. As of December 31, 2020, the construction of the technological
transformation project of the production line of lithium ion battery separator film has been completed and carried forward to the fixed assets, and the
asset-related government subsidy has been accumulatively included in the current profit and loss of RMB4,417,198.88, including: RMB90,065.13
apportioned in 2017, RMB1,059,621.55 apportioned in 2018, RMB1,080,781.56 apportioned in 2019, RMB1,105,949.08 apportioned in 2020, and
RMB1,080,781.56 apportioned in 2021.
Note 10: In 2017, the Company and its subsidiary Shanghai Energy signed the 2017 (the second batch of key technological transformation) job
specification on special funds for industrial transformation, upgrading and development, requiring to grant a subsidy of RMB22,500,000.00 for the
technological transformation project of Shanghai Energy’s production line of lithium ion battery separator film without compensation. The subsidy is
related to assets and recognized as deferred income. It is apportioned and recognized as the current profit and loss based on the remaining
depreciation life of related assets. In December 2017, the Company received the subsidy of RMB13,500,000.00 for the technological transformation
project of the production line of lithium-ion battery separator film of Shanghai Energy, and the balance of RMB9,000,000.00 was received on March
26, 2020. As of December 31, 2021, the technological transformation project of Shanghai Energy’s production line of lithium ion battery separator
film has been completed and carried forward to the fixed assets, and the asset-related government subsidy has been accumulatively included in the
current profit and loss of RMB1,650,000.00, including: RMB750,000.00 apportioned in 2020 and RMB900,000.00 apportioned in 2021.
Note 11: According to the Supplementary Agreement of the Contract on Building the Lithium Battery Separator Film Dry Project of Jiangxi
Mingyang New Material Technology Co., Ltd., which was signed between Jiangxi Enpo New Materials Co., Ltd. (formerly named Jiangxi Mingyang
New Material Technology Co., Ltd.), a level-3 subsidiary of the Company, and Gao’an Municipal People’s Government, Gao’an Municipal People’s
Government granted land subsidies to the level-3 subsidiary Jiangxi Enpo for the project involved in the investment agreement. This government
subsidy is related to the construction of Jiangxi Enpo’s lithium ion battery separator film project and is related to assets and recognized as deferred
income. It is apportioned and recognized as the current profit and loss based on the depreciation life of related assets. As of December 31, 2021, the
construction of the subsidy-related assets has not been completed, and the subsidy has not been apportioned.
Note 12: Yunnan Hongta Plastic Co., Ltd., a level 2 subsidiary of the Company, received the government grant for the construction of
70,000-tonne BOPP film project according to the file named “2020 Yunnan Plan on Special Fund (1st batch) for Provincial-level Industrial and
Informatization Development. This government subsidy was related to the project construction. It belonged to the assets-related government subsidy
so it shall be recognized as deferred income. The current profit and loss shall be confirmed according to the depreciation life of related assets. As of
December 31, 2021, the construction of the subsidy-related assets has not been completed, and the subsidy has not been apportioned.
225
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
52. Other non-current liabilities
Unit: RMB
Item Closing balance Opening balance
Government support for lithium battery
455,517,694.55 455,517,694.55
separation film project
Investment in lithium battery separation film
83,000,000.00
project
Total 538,517,694.55 455,517,694.55
Other explanations:
(1) Jiangxi Tonry has built an item production base of lithium ion separator film 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.
(2) Chongqing Enjie has built a production line base of high-performance lithium-ion battery micropore separator film 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.
53. Share capital
Unit: RMB
Increase or decrease (＋,－)
Opening Closing
Conversion of
Bonus balance
balance New issues reserve into Others Subtotal
issuance
share
Total amount 886,566,151.0 892,406,822.0
5,840,671.00 5,840,671.00
of shares 0 0
Other explanations:
See “III. Basic information of the Company” in this section. The convertible bonds publicly issued by the Company entered the share transfer
period on August 17, 2020. As of December 31, 2021, the Company’s share capital increased by RMB5,840,671.00 due to the share transfer.
54. 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.
(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 Increase for the period
Outstanding Decrease for the period At the end of the period
period
financial
instruments Number of Number of Number of Number of
Book value Book value Book value Book value
shares shares shares shares
226
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Equity
instrument of
92,433,139.1 42,080,815.3 50,352,323.8
convertible
1 1 0
corporate
bonds
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 2021, the Company’s “Energy Convertible Bond” decreased by RMB379,492,100.00 (3,794,921.00 bonds) due to the transfer of 5,840,671.00
shares and reduced the other equity instrument by RMB42,080,815.31.
Other explanations:
55. Capital reserve
Unit: RMB
Item Opening balance Increase for the period Decrease for the period Closing balance
Capital premium (capital
7,174,689,305.95 474,191,487.92 13,240,864.35 7,635,639,929.52
stock premium)
Other capital reserve 54,446,519.88 17,595,693.76 72,042,213.64
Total 7,229,135,825.83 491,787,181.68 85,283,077.99 7,635,639,929.52
Other explanations, including changes and reasons thereof as at the end of the Reporting Period:
(1) The capital premium (capital stock) increased by RMB474,191,487.92 this year, 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 RMB402,130,963.38 due to the share transfer.
2) The service period of equity incentive of the employees is expired this year due to share-based payments of the subsidiary Shanghai Energy, and
consequently, the other capital reserve resulting from the share-based payment is transferred to the capital reserve (capital stock premium), amounting
to RMB72,042,213.64.
3) The merger of Innovative New Materials (Hong Kong) Co., Ltd. by enterprises under common control of the holding subsidiary of the Company
Shanghai Energy leads to changes in minority shareholders’ equity. The capital reserve increased by RMB18,310.9.
(2) The capital premium (capital stock) decreased by RMB13,240,864.35 this year, mainly because the subsidiary Shanghai Energy purchased the
minority shareholders’ equity of the sub-subsidiary Donghang Photoelectric at a premium this year.
(3) The other capital reserve increased by RMB17,595,693.76 this year, due to the related expense of share-based payments confirmed by the
subsidiary Shanghai Energy.
56. Treasury stock
Unit: RMB
Item Opening balance Increase for the period Decrease for the period Closing balance
Equity incentive
204,444,302.78 204,444,302.78
repurchase
Other explanations, including changes and reasons thereof as at the end of the Reporting Period:
On March 17, 2021, the Company held the 24 th meeting of the fourth Board of Directors to deliberate and approve the Proposal on
Repurchasing the Company’s Shares, and agree that the Company can use its own funds to repurchase its public shares by centralized bidding
transaction through the transaction system of Shenzhen Stock Exchange. The total amount of the repurchase fund shall be no less than RMB200
million (included) and no more than RMB400 million (included), and the repurchase price shall be no more than RMB180.00/share (included). The
227
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
repurchased shares will be used to implement the equity incentive or the employee stock ownership scheme. The Company has repurchased 1,585,437
shares through the centralized bidding transaction by the special security account for repurchase, and the transaction amount is RMB204,444,302.78.
57. Other comprehensive income
Unit: RMB
Amount for the current period
Less:
Amount
Less:
included
Amount
into other
included
comprehe
Amount into other
nsive After-tax
incurred comprehensi After-tax
income in amount
Opening before ve income in Less: amount Closing
Item the prior attributab
balance the the prior Income attributab balance
period le to
income period and tax le to the
and minority
tax in the transferred expense parent
transferre sharehold
current into the company
d into the ers
period profit and
retained
loss in the
earnings
current
in the
period
current
period
I. Other comprehensive income that
cannot be reclassified to profit or
loss
II. Other comprehensive income
-3,794,04 140,214. -3,746,19 -188,057. -3,746,
that will be reclassified
1.61 40 8.57 44 198.57
subsequently to profit or loss
Exchange differences from
-4,728,80 -4,502,76 -226,036. -4,502,
translation of statements
4.30 7.45 85 767.45
denominated in foreign currencies
Provision for credit 934,762. 140,214. 756,568. 37,979.4 756,56
impairment of receivable financing 69 40 88 1 8.88
-3,794,04 140,214. -3,746,19 -188,057. -3,746,
Total other comprehensive income
1.61 40 8.57 44 198.57
58. Special reserve: None
59. Surplus reserve
Unit: RMB
Item Opening balance Increase for the period Decrease for the period Closing balance
Statutory surplus reserve 125,380,302.21 25,442,257.68 150,822,559.89
Reserve fund 21,153,681.64 21,153,681.64
Enterprise development
1,416,680.73 1,416,680.73
fund
Total 147,950,664.58 25,442,257.68 173,392,922.26
Explanations on surplus reserve, including explanation about the reason of the change: The increase of surplus reserve in this year is due to the
withdrawal of 10% of the net profit of the parent company.
228
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
60. Undistributed profit
Unit: RMB
Item Current period Previous period
Undistributed profit before adjustments at the end of
2,746,794,868.15 1,744,638,648.71
the prior period
Undistributed profit adjusted at the beginning of the
2,746,794,868.15 1,744,638,648.71
period
Add: Net profit attributable to owners of parent
2,717,628,798.01 1,115,604,020.47
company in the current period
Less: Withdrawal of statutory surplus reserve 25,442,257.68 12,797,027.00
Common share dividends payable 150,715,977.40 100,650,774.03
Undistributed profits at the end of the period 5,288,265,431.08 2,746,794,868.15
61. Operating income and operating cost
Unit: RMB
Amount for current period Amount for previous period
Item
Income Cost Income Cost
Main businesses 7,866,428,440.28 3,978,342,250.24 4,205,724,684.56 2,431,374,588.76
Other businesses 115,998,370.31 23,681,463.99 77,282,904.55 25,623,721.47
Total 7,982,426,810.59 4,002,023,714.23 4,283,007,589.11 2,456,998,310.23
Whether the lower of the audited net profit before and after deduction of non-recurring gains or losses is negative
□ Yes √ No
62. Taxes and surcharges
Unit: RMB
Item Amount for current period Amount for previous period
City maintenance and construction tax 6,203,284.99 5,629,419.35
Education surcharge 7,160,112.90 8,499,476.81
Property tax 15,622,433.54 6,958,921.14
Land using tax 4,370,191.44 3,653,135.48
Vehicle and vessel usage tax 31,362.50 24,092.50
Stamp duty 3,464,406.34 2,974,343.13
Land value-added tax 4,459,864.19
Other 276,441.13 291,767.68
Total 37,128,232.84 32,491,020.28
229
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
63. Selling expenses
Unit: RMB
Item Amount for current period Amount for previous period
Sales commission 22,865,150.56 21,570,707.19
Labor costs 25,226,747.02 16,094,980.44
Sales agency expense 8,068,800.98 4,335,824.29
Depreciation and amortization 5,493,116.99 3,743,322.45
Entertainment expense 3,773,186.15 3,790,466.62
Travel expense 3,023,032.85 2,476,652.84
Other 5,584,967.81 4,353,596.13
Total 74,035,002.36 56,365,549.96
64. Administrative expenses
Unit: RMB
Item Amount for the current period Amount for previous period
Employee compensation 100,006,459.81 63,919,851.38
Share-based expense 18,478,989.45 22,215,924.74
Depreciation and amortization 33,225,957.56 26,684,666.04
Agencies 23,458,610.93 12,011,876.97
Maintenance costs 4,454,582.50 5,229,480.24
Office expense 5,151,563.26 3,417,237.08
Travel expense 3,727,757.41 3,424,879.55
Entertainment expense 3,624,674.68 2,886,409.51
Others 24,205,343.76 16,010,066.14
Total 216,333,939.36 155,800,391.65
65. R&D expenses
Unit: RMB
Item Amount for the current period Amount for previous period
Material costs 214,385,356.23 79,004,042.46
Employee compensation 117,133,689.98 65,572,611.56
Depreciation and amortization 30,124,498.48 13,672,934.31
Utility costs 20,022,169.55 8,386,265.87
230
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Others 27,513,016.04 11,607,479.08
Total 409,178,730.28 178,243,333.28
Other explanations: the significant increase of the R&D expenses of the Company over that of the previous year was due to the increase of R&D
investment.
66. Financial Expenses
Unit: RMB
Item Amount for the current period Amount for previous period
Interest expenses 221,206,595.88 203,597,658.74
Less: interest income 20,299,433.23 34,077,648.03
Exchange gain/loss -56,196,216.05 13,994,768.25
Bank charges and other 8,271,108.87 5,361,462.57
Total 152,982,055.47 188,876,241.53
Other explanations: The negative exchange gain and loss of the Company was due to the depreciation of exchange rates of Euro, US dollar and
Japanese yen under the influence of the appreciation of RMB, resulting in exchange gains from foreign currency borrowings.
67. Other Income
Unit: RMB
Other sources of income Amount for the current period Amount for previous period
Government subsidy 133,733,928.01 139,305,009.71
Return of individual income tax service
345,520.77 357,802.66
charge
Total 134,079,448.78 139,662,812.37
68. Investment income
Unit: RMB
Item Amount for the current period Amount for previous period
Gain on long-term equity investments subject to
1,687,090.23 1,516,305.77
accounting with equity method
Proceeds from wealth management products 35,378,946.92 7,111,089.67
Investment income from derecognition of
-9,956,624.13
financial assets at amortized cost
Total 27,109,413.02 8,627,395.44
Other explanations:
The increase of investment income of the Company over that of the previous year was due to the increase in purchase of wealth management
products by the Company.
231
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
69. Net exposure hedge income: None
70. 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 137,194.34 10,951,914.18
71. Credit Impairment Losses
Unit: RMB
Item Amount for the current period Amount for previous period
Bad debt losses on other receivables 193,877.02 -339,477.94
Impairment losses on accounts receivable -24,618,321.53 -28,526,420.18
Impairment loss on notes receivable -2,109,153.54 -7,256,643.88
Impairment losses on accounts receivable
1,687,237.31 -2,622,000.00
financing
Total -24,846,360.74 -38,744,542.00
72. Asset Impairment Losses
Unit: RMB
Item Amount for the current period Amount for previous period
Inventory falling price losses and contract
-10,663,472.55 -8,138,653.87
performance cost depreciation losses
Goodwill impairment loss -9,671,444.70
Total -10,663,472.55 -17,810,098.57
73. Gains on disposal of assets
Unit: RMB
Source Amount for the current period Amount for previous period
Disposal of fixed assets 308,957.41 -144,872.28
74. 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 33,001.00 112,000.00 33,001.00
Compensation received 293,393.82 48,990.09 293,393.82
232
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Amount of combination cost less
than the fair value share of 673,727.72
identifiable net assets obtained
Payments that do not need to be
4,015,457.76 4,015,457.76
made upon approval
Others 1,007,722.92 861,437.24 1,007,722.92
Total 5,349,575.50 1,696,155.05 5,349,575.50
75. 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
Loss from exchange of
1.57
non-monetary assets
Donation 345,894.96 3,095,889.50 345,894.96
Abandonment losses of
1,612,201.57 9,015.27 1,612,201.57
non-current assets
Others 686,933.68 2,119,519.32 686,933.68
Total 2,645,030.21 5,224,424.09 2,645,030.21
76. Income Tax Expense
(1) Table of income tax expenses
Unit: RMB
Item Amount for the current period Amount for previous period
Current income tax 342,073,538.57 175,442,968.27
Deferred income tax -9,352,714.12 -37,845,346.91
Total 332,720,824.45 137,597,621.36
(2) Adjustment process of accounting profit and income tax expense
Unit: RMB
Item Amount for the current period
Total profit 3,219,574,861.60
Income tax expenses calculated based on the statutory (or applicable)
482,936,461.47
tax rates
Impact of different tax rates applied to subsidiaries -4,945,058.03
Impact of adjusting income tax in previous periods -9,206,108.21
Impact of non-taxable income -253,063.53
Impact of non-deductible costs, expenses, and losses 770,089.48
233
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Impact of deductible losses not recognized as deferred income tax
-71,459,080.98
assets before utilization
Impact of deductible temporary differences or deductible losses not
7,740,002.81
recognized as deferred income tax assets for the period
Impact of R&D expenses plus deduction -58,487,764.30
Impact of income tax credit for investment in special equipment -13,040,633.26
Others -1,334,021.00
Income tax expenses 332,720,824.45
77. Other comprehensive income
For details, please refer to the notes.
78. Cash flow statement
(1) Cash received relating to other operating activities
Unit: RMB
Item Amount for the current period Amount for previous period
Interest Income 19,716,676.85 33,281,981.36
Subsidy income 263,436,972.90 248,848,818.36
Recovered deposit 8,148,685.49 13,224,154.33
Other receivables received 3,219,994.43
Collecting employee incentive and dividend
46,031,316.80
personal income tax
Others 1,679,638.51 2,119,241.75
Total 296,201,968.18 343,505,512.60
(2) Cash payments relating to other operating activities
Unit: RMB
Item Amount for the current period Amount for previous period
Deposit payment 9,001,100.64 1,767,280.81
Other payable paid 737,289.34 888,605.40
Paying employee incentive and dividend
46,031,316.80
personal income tax
Administrative expenses and R&D expenses 115,193,779.54 63,899,169.60
Operating expenses 42,407,495.96 33,557,836.05
Service charge 8,271,108.87 5,361,462.57
Donation expenditure 345,894.96 3,095,889.50
Reserve fund paid 1,888,869.92 1,230,949.29
234
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Others 686,933.68 2,119,519.32
Total 224,563,789.71 111,920,712.54
(3) Cash received relating to other investing activities
Unit: RMB
Item Amount for the current period Amount for previous period
Net cash payments received from acquisitions
1,098,067.46
of subsidiaries
(4) Cash payments relating to other investing activities
Unit: RMB
Item Amount for the current period Amount for previous period
Payment for debt as an agent for acquisitions
473,586,405.90 521,580,488.33
of subsidiaries
Payment for acquisition of minority equity 1,000,000.00
Total 474,586,405.90 521,580,488.33
(5) Cash received relating to other financing activities: None
(6) Cash payments relating to other financing activities
Unit: RMB
Item Amount for the current period Amount for previous period
Payment for equity of minority shareholder 10,000,000.00 490,557,252.00
Repayment of loans from non-financial
6,034,200.00
institutions
Payment for share repurchase 204,444,302.78 194,809.12
Forfaiting Business Deposit 139,356,113.20
Financing lease payment 2,019,792.67
Total 355,820,208.65 496,786,261.12
Explanations on cash payments relating to other financing activities:
79. Supplementary information of cash flow statement
(1) Supplementary information of cash flow statement
Unit: RMB
Amount for the current Amount for the
Supplementary information
period previous period
1. Reconciliation of net profit to cash flows from operating activities -- --
Net profit 2,886,854,037.15 1,175,649,460.92
235
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Plus: impairment provision for assets 10,663,472.55 17,810,098.57
Credit impairment losses 24,846,360.74 38,744,542.00
Depreciation of fixed assets, depreciation of oil and gas assets, and depreciation
781,727,096.08 546,285,462.75
of productive biological assets
Depreciation of right-of-use assets
Amortization of intangible assets 14,814,730.11 12,101,138.12
Amortization of long-term unamortized expenses 4,899,969.37 3,740,895.56
Losses from disposal of fixed assets, intangible assets, and other long-term assets
-308,957.41 144,872.28
(gain is indicated with “-”)
Losses from scrapping of fixed assets (gain is indicated with “-”) 1,612,201.57 9,015.27
Losses from change of fair value (gain is indicated with “-”) -137,194.34 -10,951,914.18
Financial expenses (gain is indicated with “-”) 221,206,595.88 203,597,658.74
Investment losses (gain is indicated with “-”) -27,109,413.02 -8,627,395.44
Decrease in deferred income tax assets (increase is indicated with”-”) -49,950,474.49 -60,253,611.03
Increase in deferred income tax liabilities (decrease is indicated with”-”) 40,737,974.76 22,408,264.12
Decrease in inventory (increase is indicated with”-”) -535,080,982.13 -221,512,160.66
Decrease in operating receivables (increase is indicated with”-”) -3,462,031,254.35 -1,333,445,763.86
Increase in operating payables (decrease is indicated with”-”) 1,487,422,225.90 647,263,525.29
Others 18,478,989.45 22,215,924.74
Net cash flows from operating activities 1,418,645,377.82 1,055,180,013.19
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: -- --
Closing balance of cash 1,369,299,568.60 2,054,915,784.55
Less: opening balance of cash 2,054,915,784.55 715,655,914.78
Plus: closing balance of cash equivalents
Less: opening balance of cash equivalents
Net increase in cash and cash equivalents -685,616,215.95 1,339,259,869.77
236
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
(2) Net cash paid for acquisitions of subsidiaries for the period: None
(3) Net cash received from disposal of subsidiaries for the period: None
(4) Composition of cash and cash equivalents
Unit: RMB
Item Closing balance Opening balance
I. Cash 1,369,299,568.60 2,054,915,784.55
Including: Cash on hand 141,604.43 144,778.56
Cash at bank that can be readily drawn
1,369,157,964.17 2,054,771,005.99
on demand
II. Cash equivalents
III. Cash and cash equivalents at the end of the
1,369,299,568.60 2,054,915,784.55
Reporting Period
80. Notes to statement of changes in equity: None
81. Assets with Restricted Ownership or Use Rights
Unit: RMB
Item Closing book value Reason of restriction
Bank draft margin, letter of credit margin, letter of guarantee
Monetary capital 462,772,214.04
margin
Notes receivable 17,141,467.20 Bank loans through pledge
Fixed assets 2,488,699,031.50 Comprehensive bank credit and loan through mortgage
Intangible assets 224,635,117.58 Comprehensive bank credit and loan through mortgage
Accounts receivable financing 154,912,704.68 Bank loans and bank acceptance through pledge
Accounts receivable 6,769,341.65 Bank loans through pledge
Other non-current assets 387,856,800.77 Bank loans through pledge
Total 3,742,786,677.42 --
82. Monetary items denominated in foreign currencies
(1) Monetary items denominated in foreign currencies
Unit: RMB
Ending balance of foreign Ending balance converted into
Item Exchange rate
currency RMB
Monetary capital -- -- 78,962,304.28
Including: USD 10,838,538.07 6.3757 69,103,267.14
Euro 1,313,437.14 7.2197 9,482,622.09
237
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
HKD 679.23 0.8176 555.34
JPY 289,597.00 0.0554 16,048.04
HUF 18,383,138.19 0.0196 359,811.67
Accounts receivable -- -- 164,128,711.00
Including: USD 15,095,666.74 6.3757 96,245,442.43
Euro
HKD
JPY 1,224,998,080.13 0.0554 67,883,268.61
Long-term borrowings -- --
Including: USD
Euro
HKD
Accounts receivable financing 17,879,675.91 -- 113,995,449.70
Including: USD 17,879,675.91 6.3757 113,995,449.70
Short-term borrowings 176,552,853.21 -- 1,190,636,026.22
Including: USD 99,552,853.21 6.3757 634,719,126.22
Euro 77,000,000.00 7.2197 555,916,900.00
Accounts payable 27,279,128.54 -- 116,071,902.15
Including: USD 18,125,798.54 6.3757 115,564,670.37
JPY 9,153,330.00 0.0554 507,231.78
Other payables 281,069.93 -- 1,792,017.55
Including: USD 281,069.93 6.3757 1,792,017.55
Long-term borrowings (including
2,853,538,462.00 -- 158,128,833.85
those due within 1 year)
Including: JPY 2,853,538,462.00 0.0554 158,128,833.85
(2) Description of overseas business entities; for material overseas business entities, disclose their major business places overseas, functional
currency and the selection criterion thereof; should there be any change in the functional currency, disclose the reason for such change
□Applicable √N/A
83. Hedging: None
84. Government grant
(1) Details of government grants
Unit: RMB
238
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Amount included in current profit
Type Amount Presented items
and loss
Government subsidies recorded
107,516,701.35 60,813,656.46
in deferred income
Government subsidies recorded
72,920,271.55 72,920,271.55
in other income
Government subsidies offset
7,154,200.00 7,154,200.00
against costs and expenses
Total 187,591,172.90 141,888,128.01
(2) Return of government grants
□Applicable √N/A
Other explanations:
Details of government subsidies offset against costs and expenses
Grant item Classification Recognized in the Recognized in the Item to be offset
current year prior year against
Interest subsidy of government subsidies 7,154,200.00 Financial expenses
“Ten-Hundred-Thousand” related to income
Project from Industry and
Information Technology
Bureau
85. Others: None
VIII. Changes in the Consolidation Scope
1. Merger of enterprises not under common control: None
2. Merger of enterprises under common control: None
3. Reverse purchase: None
4. Disposal of subsidiaries: None
5. Changes in the consolidation scope due to other reasons
During the year, 9 new subsidiaries were included into the consolidation scope and 3 subsidiaries were removed from the consolidation scope.
For details, please refer to “The scope of the consolidated financial statements” under “III. Corporate Information” of this section.
239
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
6. Others: None
IX. Interests in Other Entities
1. Interests in subsidiaries
(1) Constitution of the enterprise group
Name of Principal place of Place of Nature of Shareholding proportion Method of
subsidiaries business registration business
Direct Indirect acquisition
Yunnan Dexin Paper production Newly
Yuxi, Yunnan Yuxi, Yunnan 100.00%
Paper Co., Ltd. and sales established
Yunnan
Production and
Hongchuang Newly
Yuxi, Yunnan Yuxi, Yunnan sales of aseptic 59.46%
Packaging Co., established
packing box
Ltd.
Bopp film
Yunnan Hongta Newly
Yuxi, Yunnan Yuxi, Yunnan production and 100.00%
Plastic Co., Ltd. established
sales
Hongta Plastic Bopp film
Chengdu, Chengdu, Newly
(Chengdu) Co., production and 100.00%
Sichuan Sichuan established
Ltd. sales
Yuxi Feiermu Newly
Yuxi, Yunnan Yuxi, Yunnan Trading 100.00%
Trading Co., Ltd. established
Shanghai Energy Production and
Merger of
New Material sales of lithium
Shanghai Shanghai 95.22% enterprises under
Technology Co., battery separator
common control
Ltd. film
Zhuhai Energy Production and
New Material Zhuhai, Zhuhai, sales of lithium Newly
100.00%
Technology Co., Guangdong Guangdong battery separator established
Ltd. film
Guangdong
Energy New Zhuhai, Zhuhai, Technical Newly
100.00%
Material Institute Guangdong Guangdong services established
Co., Ltd.
Wuxi Energy Production and
New Material sales of lithium Newly
Wuxi, Jiangsu Wuxi, Jiangsu 100.00%
Technology Co., battery separator established
Ltd. film
Jiangxi Tonry
Production and Business
New Energy
sales of lithium combination not
Technology Yichun, Jiangxi Yichun, Jiangxi 100.00%
battery separator under the
Development
film common control
Co., Ltd.
Jiangxi Ruijie Production and Business
New Material sales of combination not
Yichun, Jiangxi Yichun, Jiangxi 82.00%
Technology Co., packaging under the
Ltd. materials common control
Suzhou Green Production and Business
Power New sales of lithium combination not
Suzhou, Jiangsu Suzhou, Jiangsu 100.00%
Energy Materials battery separator under the
Co., Ltd. film common control
Foshan
Production and Business
Donghang
Foshan, Foshan, sales of lithium combination not
Photoelectric 100.00%
Guangdong Guangdong battery separator under the
Technology Co.,
film common control
Ltd.
240
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Chongqing Production and Business
Energy Newmi sales of lithium combination not
Chongqing Chongqing 76.36%
Technological battery separator under the
Co., Ltd. film common control
Production and
Jiangxi Enbo
sales of lithium Newly
New Material Yichun, Jiangxi Yichun, Jiangxi 51.00%
battery separator established
Co., Ltd.
film
Jiangxi Energy Production and
New Material sales of lithium Newly
Yichun, Jiangxi Yichun, Jiangxi 100.00%
Technology Co., battery separator established
Ltd. film
Chongqing
Production and
Energy New
sales of lithium Newly
Material Chongqing Chongqing 100.00%
battery separator established
Technology Co.,
film
Ltd.
Hainan Energy Chengmai Chengmai Investment and
Newly
Investment Co., County, Hainan County, Hainan technology 100.00%
established
Ltd. Province Province services
241
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Chuangxin New
Newly
Material (Hong Hong Kong Hong Kong Trading 100.00%
established
Kong) Co., Ltd.
Production and
Jiangsu Energy sales of lithium
New Material Changzhou, Changzhou, Newly
battery separator 100.00%
Technology Co., Jiangsu Jiangsu film established
Ltd.
Jiangsu Ruijie Production and
New Material Changzhou, Changzhou, sales of Newly
100.00%
Technology Co., Jiangsu Jiangsu packaging established
Ltd. materials
Hainan Energy
Frontier New Production and
Newly
Material Changsha, Hunan Changsha, Hunan sales of new 65.00%
established
Technology Co., materials
Ltd.
Hubei Energy
Production and
New Material Newly
Jingmen, Hubei Jingmen, Hubei sales of new 100.00%
Technology Co., established
materials
Ltd.
Jiangsu Sanhe
Production and
Battery Material Newly
Liyang, Jiangsu Liyang, Jiangsu sales of new 67.11%
Technology Co., established
materials
Ltd.
Production and
Ningbo Energy sales of new Newly
New Material Ningbo, Zhejiang Ningbo, Zhejiang 100.00%
materials established
Co., Ltd.
Investment and
SEMCORP technology Newly
Global Holdings Hungary Hungary 100.00%
services established
KFT
Production and
sales of lithium
SEMCORP battery separator Newly
Hungary Hungary 100.00%
Hungary KFT established
film
(2) Key non-wholly owned subsidiaries
Unit: RMB
Name of subsidiaries Percentage of shares held Profit or loss attributable Dividends declared to Ending balance of
by minority shareholders to minority shareholders minority shareholders in minority interests
in the current period the current period
Shanghai Energy New
Material Technology 4.78% 123,086,797.58 1,906,665.89 323,708,042.65
Co., Ltd.
(3) Main financial information of key non-wholly owned subsidiaries
Unit: RMB
Closing balance Opening balance
Name of Curren Non-c Total Curren Non-c Total Curren Non-c Total Curren Non-c Total
t assets urrent assets t urrent liabiliti t assets urrent assets t urrent liabiliti
subsidiaries assets liabiliti liabiliti es assets liabiliti liabiliti es
es es es es
242
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Shanghai
Energy New 8,002, 15,706 23,709 12,800 4,052, 16,852 5,020, 11,164, 16,184 8,303, 3,630, 11,934,
Material 933,29 ,203,8 ,137,0 ,539,3 008,56 ,547,9 256,24 066,30 ,322,5 525,64 981,41 507,06
Technology 4.88 02.06 96.94 83.27 0.95 44.22 7.60 8.05 55.65 3.52 8.84 2.36
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
6,437,042,49 2,601,194,88 2,597,260,62 973,247,465. 2,647,651,88 961,572,206. 961,572,206. 220,246,091.
Material
9.54 2.51 6.50 44 0.53 27 27 98
Technology
Co., Ltd.
(4) Major restrictions on the use of assets and settlement of debts of the corporate group: None
(5) Financial support or other support provided for structured entity included in the scope of the consolidated financial statements: None
2. Transaction in which the share of owner’s equity in the subsidiary changes while control over the
subsidiary remains unchanged: None
3. Interests in joint arrangement or associates
(1) Important joint ventures or associates
Name of joint Principal place of Place of Shareholding proportion Accounting treatment for
ventures or business registration Nature of
Direct Indirect investments in joint
associates business
ventures or associates
Additive
Kunshasi Yuxi, Yunnan Yuxi, Yunnan 40.00% Equity
production
(2) Main financial information of important joint ventures: None
(3) Main financial information of important associates
Unit: RMB
Closing balance/Amount for the current Opening balance/Amount for the previous
period period
Yuxi Kunshasi Plastic Color Masterbatch Co., Yuxi Kunshasi Plastic Color Masterbatch Co.,
Ltd. Ltd.
Current assets 10,570,401.00 9,558,003.37
Non-current assets 156,715.06 195,918.55
Total assets 10,727,116.06 9,753,921.92
Current liabilities 1,862,155.53 1,315,899.74
Total liabilities 1,862,155.53 1,315,899.74
Shareholders’ equity attributable to the parent
8,864,960.53 8,438,022.18
company
Pro rata shares of the net assets calculated 3,545,984.21 3,375,208.87
243
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Book value of equity investments in
3,545,984.21 3,375,208.87
associates
Operating income 34,410,276.56 32,405,011.05
Net profit 4,217,725.58 3,790,787.22
Total comprehensive income 4,217,725.58 3,790,787.22
Dividends received from associates during the
1,516,314.89 1,484,562.91
year
(4) Combined financial information of insignificant joint ventures and associates: None
(5) Explanation on significant restrictions on the ability of joint ventures or associates to transfer funds to the Company: None
(6) Excess loss generated from joint ventures or associates: None
(7) Unrecognised commitment related to investments in joint ventures
(8) Contingent liabilities related to investments in joint ventures or associates
4. Significant joint operation: None
5. Interests in structured entities not included in the scope of consolidated financial statements: None
6. Others: None
X. Risks Related to Financial Instruments
The Company’s primary financial instruments include cash and cash equivalents, 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 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
244
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 other receivables, other current assets, other non-current assets, 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.
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 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, 2021, the book balance and expected credit impairment loss of related assets are as follows:
Item Book balance Provision for impairment
Notes receivable 377,940,988.65 9,365,797.42
Accounts receivable 4,541,764,022.29 136,327,936.77
Other receivables 9,344,080.58 1,224,763.84
Other non-current assets 461,548,862.25
Receivable financing 113,995,449.70 934,762.69
Other current assets 50,567,013.89
Total 5,555,160,417.36 147,853,260.72
As at December 31, 2021, the Company did not provide any external financial guarantee.
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.
(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, 2021, the Company has had a bank credit
line of RMB16,067,674,500 billion granted by several domestic banks, RMB8,196,319,700 billion of which has been used.
As of December 31, 2021, 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 Over 5 years Total
Short-term borrowings 4,116,148,340.30 4,116,148,340.30
Notes payable 487,407,828.53 487,407,828.53
Accounts payable 650,545,657.28 650,545,657.28
Other payables 70,277,422.63 70,277,422.63
245
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Long-term borrowings 377,299,907.20 2,803,108,832.30 3,180,408,739.50
Bonds payable 2,315,838.60 413,239,181.29 415,555,019.89
Total 5,703,994,994.54 3,216,348,013.59 8,920,343,008.13
(III) 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) In the current year, the Company did not sign any forward exchange contracts or currency swap contracts.
(2) As of December 31, 2021, 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 deno
minated
in foreign currencies:
Monetary capital 69,103,267.14 16,048.04 9,482,622.09 555.34 359,811.67 78,962,304.28
Accounts receivable 96,245,442.43 67,883,268.61 164,128,711.04
Receivables 113,995,449.70 113,995,449.70
financing
Subtotal 279,344,159.27 67,899,316.65 9,482,622.09 555.34 359,811.67 357,086,465.02
Financial liabilities
denominated
in foreign currencies:
:
Short-term 634,719,126.22 555,916,900.00 1,190,636,026.22
borrowings
Accounts payable 115,564,670.37 507,231.78 116,071,902.15
Other payables 1,792,017.55 1,792,017.55
Long-term 158,128,833.85 158,128,833.85
borrowings
(including those
maturing within one
year)
Sub-total 752,075,814.14 158,636,065.63 555,916,900.00 1,466,628,779.77
(3) Sensitivity analysis:
As of December 31, 2021, for all kinds of USD, EUR, JPY and HKD financial assets and USD, EUR, JPY and HKD financial liabilities of the
Company, if RMB appreciates or depreciates 10% against USD, EUR, JPY and HKD, and other factors remain unchanged, the Company will reduce
or increase its net profit by about RMB94.3111 million (about RMB4.3223 million in 2020).
2. Interest rate risk
The interest rate risk of the Company mainly derives from bank loans, etc. Financial liabilities at floating interest rate expose 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
246
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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.
247
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
(1) The Company had no significant interest rate swap arrangements this year.
(2) As of December 31, 2021, the Company’s long-term interest-bearing liabilities were the floating rate contract denominated in RMB,
amounting to RMB3,180,408,700, as set out in “45. Long-term loans” in “VII. Notes to consolidated financial statement items” of this section.
(3) Sensitivity analysis:
As of December 31, 2021, 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 RMB2,242,400 (approximately RMB2,100 in 2020).
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.
XI. 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 Fair value measured at the Fair value measured at the
Total
the first level second level third level
I. Continuous fair value
-- -- -- --
measurement
(1) Financial assets held for
5,137,194.34 5,137,194.34
trading
(2) Receivables financing 526,473,335.53 526,473,335.53
(3) Other equity instrument
110,000,000.00 110,000,000.00
investment
Total assets measured at
fair value on a continuous 5,137,194.34 636,473,335.53 641,610,529.87
basis
2. Determination basis of the market price of the item measured using the first-level continuous and
noncontinuous fair value measurement
3. Valuation techniques and qualitative and quantitative information on important parameters adopted for
the second-level continuous and noncontinuous fair value measurement
The Company’s financial assets held for trading were structural deposits, whose estimated yield rate was the determination basis for the market
price.
4. Valuation techniques and qualitative and quantitative information on important parameters adopted for
the third-level continuous and noncontinuous 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 and factored accounts receivable held by the Company, whose
remaining life is short and book value is close to their fair value.
248
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
5. Continuous third-level fair value measurement items, adjustment information between the opening and
closing book values and sensitivity analysis of unobservable parameters
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
7. Changes in valuation techniques and the cause of changes in the current period
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.
9. Others
XII. Related Parties and Related Party Transactions
1. Information about Parent Company of the Company
The ultimate controller of the Company was the Paul Xiaoming Lee family.
As of December 31, 2021, the actual controller of the Company was the Paul Xiaoming Lee family. The Paul Xiaoming Lee family held
46.4800% 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 14.1407% of the shares directly, his family member Li Xiaohua holds 7.8258% of the shares
directly, his family member Sherry Lee holds 8.2328% of the shares directly, and his family member Jerry Yang Li holds 1.9842% of the shares
directly. Paul Xiaoming Lee’s family members indirectly hold 14.2965% equity of the Company through Yuxi Heyi Investment Co., Ltd, Yuxi Heli
Investment Co., Ltd and Shanghai Hengzou.
2. Information about subsidiaries of the Company
Please refer to Note “1. Interest in Subsidiaries” of “IX. Interests in Other Entities” for details of the subsidiaries of the Company.
3. Information about joint ventures and associates of the Company
Please refer to Note “3.Equity in Joint Ventures or Associates Enterprises” of “IX. Interests in Other Entities” 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 Color Masterbatch Co., Ltd. An associate of the Company
3. Information about Other Related Parties
Name of other related party Relationship with the Company
Yuxi Heli Investment Co., Ltd. Shareholder
249
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Yuxi Heyi Investment Co., Ltd. Shareholder
250
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
PAUL XIAOMING LEE Main member of the ultimate controller family
Li Xiaohua Main member of the ultimate controller family
YAN MA Main member of the ultimate controller family
YANYANG HUI 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
The spouse of the independent director of the Company serves as its
Industrial and Commercial Bank of China Limited
non-executive director
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
Amount for the Approved transaction Whether exceeding the Amount for the
Related party related party
current period limit transaction limit previous period
transaction
Yuxi Kunshasi
Plastic Color Purchase of
34,410,276.56 40,000,000.00 No 32,405,011.05
Masterbatch Co., additives
Ltd.
Statement of sales of goods/rendering of services
Unit: RMB
Particulars of related party
Related party Amount for the current period Amount for the previous period
transaction
Yuxi Kunshasi Plastic Color
Sales of raw materials 10,463,008.84 12,510,578.39
Masterbatch Co., Ltd.
Description of related-party transactions on purchase and sales of goods and rendering and receiving of services
(2) Trusteeship/contracting and entrusted management/outsourcing: None
(3) Leases with related parties
The Company as the lessor:
Unit: RMB
Rental income recognized for the Rental income recognized in the
Lessee’s name Type of leased assets
period previous period
Yuxi Heli Investment Co., Ltd. Office 2,285.72 2,285.72
Yuxi Heyi Investment Co., Ltd. Office 3,142.84 2,357.13
Yuxi Kunshasi Plastic Color
Workshop 22,857.14 22,857.15
Masterbatch Co., Ltd.
Total 28,285.70 27,500.00
The Company as the lessee: None
(4) Related party guarantees
The Company as the guarantor
251
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Unit: RMB
Commencement date of Whether the guarantee
Secured party Guarantee amount Expiry date of guarantee
guarantee has been fully fulfilled
Hongta Plastic 44,000,000.00 April 25, 2021 April 08, 2022 No
Hongta Plastic 40,000,000.00 August 27, 2021 August 08, 2022 No
Hongta Plastic 210,000,000.00 November 10, 2020 December 31, 2025 No
Hongta Plastic 40,000,000.00 November 09, 2020 October 23, 2025 No
Hongta Plastic 34,900,000.00 March 18, 2021 March 18, 2023 No
Hongta Plastic 50,000,000.00 March 25, 2021 March 24, 2022 No
Hongta Plastic 40,000,000.00 October 29, 2021 October 29, 2023 No
Hongta Plastic 30,000,000.00 November 22, 2021 November 21, 2022 No
Hongta Plastic 78,000,000.00 November 29, 2021 November 29, 2024 No
Dexin Paper 22,300,000.00 November 13, 2019 November 13, 2022 No
Dexin Paper 8,000,000.00 March 30, 2021 December 31, 2024 No
Hongchuang Packaging 20,000,000.00 March 10, 2020 February 28, 2022 No
Hongchuang Packaging 30,000,000.00 October 23, 2020 September 28, 2021 No
Hongchuang Packaging 66,000,000.00 April 25, 2021 April 08, 2022 No
Hongchuang Packaging 40,000,000.00 November 30, 2020 November 29, 2022 No
Hongchuang Packaging 22,000,000.00 November 29, 2021 April 14, 2022 No
Hongchuang Packaging 65,000,000.00 November 22, 2021 November 21, 2022 No
Chengdu Hongta Plastic 75,000,000.00 April 13, 2021 April 12, 2022 No
Chengdu Hongta Plastic 18,000,000.00 July 27, 2021 July 27, 2022 No
Shanghai Energy 100,000,000.00 July 25, 2019 July 24, 2025 No
Shanghai Energy 110,000,000.00 November 30, 2020 November 30, 2021 No
Shanghai Energy 550,000,000.00 December 17, 2019 December 17, 2022 No
Shanghai Energy 856,000,000.00 September 30, 2020 September 27, 2027 No
Shanghai Energy 80,000,000.00 September 27, 2020 March 26, 2022 No
Shanghai Energy 300,000,000.00 October 23, 2020 October 23, 2023 No
Shanghai Energy 360,000,000.00 March 01, 2021 December 07, 2021 No
Shanghai Energy 280,000,000.00 March 05, 2021 March 05, 2024 No
Shanghai Energy 489,000,000.00 March 16, 2021 March 15, 2026 No
Shanghai Energy 100,000,000.00 March 01, 2021 December 03, 2021 No
Shanghai Energy 196,000,000.00 April 15, 2021 March 23, 2022 No
Shanghai Energy 100,000,000.00 May 27, 2021 February 26, 2022 No
Shanghai Energy 250,000,000.00 June 02, 2021 May 26, 2022 No
252
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Shanghai Energy 223,008,000.00 June 28, 2021 June 27, 2027 No
Shanghai Energy 510,000,000.00 July 14, 2021 July 13, 2026 No
Shanghai Energy 100,000,000.00 September 08, 2021 September 07, 2022 No
Shanghai Energy 110,000,000.00 September 15, 2021 September 15, 2023 No
Shanghai Energy 500,000,000.00 September 10, 2021 September 09, 2025 No
Shanghai Energy 150,000,000.00 August 20, 2021 August 20, 2022 No
Shanghai Energy 70,800,000.00 December 12, 2021 December 01, 2022 No
Shanghai Energy 100,000,000.00 January 01, 2022 December 31, 2024 No
Zhuhai Energy 100,000,000.00 December 11, 2019 December 11, 2024 No
Zhuhai Energy 200,000,000.00 May 08, 2020 May 08, 2025 No
Zhuhai Energy 150,000,000.00 December 22, 2020 December 22, 2021 No
Zhuhai Energy 50,000,000.00 May 21, 2021 December 03, 2021 No
Zhuhai Energy 100,000,000.00 May 18, 2021 May 18, 2022 No
Zhuhai Energy 30,000,000.00 June 24, 2021 June 24, 2024 No
Zhuhai Energy 112,850,000.00 September 01, 2021 August 31, 2025 No
Zhuhai Energy 400,000,000.00 August 18, 2021 August 17, 2022 No
Zhuhai Energy 200,000,000.00 August 25, 2021 July 23, 2022 No
Zhuhai Energy 500,000,000.00 September 18, 2021 September 18, 2022 No
Zhuhai Energy 400,000,000.00 September 26, 2021 September 25, 2022 No
Zhuhai Energy 220,000,000.00 September 21, 2020 January 31, 2024 No
Wuxi Energy, Jiangxi
Tonry, Chongqing Energy, 1,500,000,000.00 April 09, 2021 April 09, 2023 No
Jiangxi Enbo
Wuxi Energy 200,000,000.00 June 10, 2021 May 23, 2022 No
Wuxi Energy 100,000,000.00 August 07, 2021 August 07, 2024 No
Wuxi Energy 100,000,000.00 September 10, 2021 August 30, 2022 No
Wuxi Energy 80,000,000.00 September 02, 2021 September 01, 2022 No
Jiangxi Tonry 100,000,000.00 December 11, 2020 December 10, 2021 No
Jiangxi Tonry 50,000,000.00 October 28, 2020 October 27, 2022 No
Jiangxi Tonry 135,000,000.00 January 22, 2021 January 21, 2024 No
Jiangxi Tonry, Wuxi
Energy, Chongqing
800,000,000.00 May 01, 2021 May 01, 2023 No
Energy, Jiangxi Enbo,
Jiangxi Ruijie
Jiangxi Tonry 250,000,000.00 September 17, 2021 September 17, 2022 No
Suzhou Green Power 150,000,000.00 July 01, 2020 July 01, 2023 No
253
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Suzhou Green Power 100,000,000.00 April 08, 2020 April 07, 2022 No
Suzhou Green Power 100,000,000.00 November 30, 2021 November 30, 2026 No
Chongqing Energy,
Jiangsu Energy, Jiangsu 1,300,000,000.00 November 01, 2021 December 31, 2022 No
Ruijie
Jiangxi Ruijie 200,000,000.00 June 10, 2021 April 09, 2023 No
SEMCORP Hungary KFT 148,672,000.00 June 28, 2021 June 27, 2027 No
SEMCORP Hungary KFT 1,000,000,000.00 July 14, 2021 July 13, 2026 No
SEMCORP Hungary KFT 450,000,000.00 December 27, 2021 December 26, 2025 No
Jiangxi Energy 1,500,000,000.00 April 09, 2021 April 09, 2023 No
Zhuhai Energy 1,000,000,000.00 August 14, 2017 August 13, 2023 No
Zhuhai Energy 750,000,000.00 August 01, 2019 August 01, 2025 No
Zhuhai Energy 200,000,000.00 May 08, 2020 August 23, 2023 No
Zhuhai Energy 220,000,000.00 September 21, 2020 January 31, 2024 No
Zhuhai Energy 200,000,000.00 March 10, 2021 March 10, 2022 No
Wuxi Energy 1,300,000,000.00 May 17, 2019 June 21, 2026 No
Wuxi Energy 1,160,000,000.00 December 01, 2020 December 01, 2029 No
Jiangxi Tonry 1,500,000,000.00 September 17, 2019 December 31, 2024 No
The Company as the secured party
Unit: RMB
Commencement date of Whether the guarantee
Guarantor Guarantee amount Expiry date of guarantee
guarantee has been fully fulfilled
Dexin Paper 16,000,000.00 April 14, 2020 April 14, 2023 No
Dexin Paper 30,000,000.00 May 11, 2021 April 08, 2022 No
Shanghai Energy 60,000,000.00 April 21, 2021 April 21, 2024 No
Shanghai Energy 20,000,000.00 November 22, 2021 November 21, 2022 No
Description of related guarantees
As of December 31, 2021, the related guarantees provided by or for the Company are as follows:
(1) Guarantees provided for related parties
The Company provided the guarantees for the comprehensive line of credit for its subsidiary Hongta Plastic, the total amount of which
amounted to RMB566,900,000.00;
The Company provided the guarantees for the comprehensive line of credit for its subsidiary Dexin Paper, the total amount of which amounted
to RMB22,300,000.00;
The Company provided the guarantee for the debts incurred by its subsidiary Dexin Paper in the business process, the total amount of which
amounted to RMB8,000,000.00;
The Company provided the guarantees for the comprehensive line of credit for its subsidiary Hongchuang Packaging, the total amount of which
amounted to RMB193,000,000.00.
The Company provided the guarantee for the debts incurred by its subsidiary Hongchuang Packaging in the business process, the total amount
of which amounted to RMB20,000,000.00;
The Company provided the guarantees for the comprehensive line of credit for its second-tier subsidiary Chengdu Hongta Plastic, the total
amount of which amounted to RMB93,000,000.00;
The Company provided the guarantees for the comprehensive line of credit for its subsidiary Shanghai Energy, the total amount of which
amounted to RMB4,964,808,000.00;
The Company provided the guarantees for the comprehensive line of credit for its second-tier subsidiary Zhuhai Energy, the total amount of
which amounted to RMB1,592,850,000.00;
254
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
The Company provided the guarantees for the comprehensive line of credit for its second-tier subsidiary Wuxi Energy, the total amount of
which amounted to RMB480,000,000.00;
The Company provided the guarantees for the comprehensive line of credit for its second-tier subsidiary Jiangxi Tonry, the total amount of
which amounted to RMB435,000,000.00.
The Company provided the guarantees for the comprehensive line of credit for its second-tier subsidiary Suzhou Green Power, the total amount
of which amounted to RMB350,000,000.00;
The Company provided the guarantees for the comprehensive line of credit for its second-tier subsidiary SEMCORP Hungary KFT, the total
amount of which amounted to RMB1,450,000,000.00;
The Company provided the guarantees for the comprehensive line of credit for its second-tier subsidiary SEMCORP Hungary KFT, the total
amount of which amounted to RMB148,672,000.00;
The Company provided the guarantees for the debts incurred by its second-tier subsidiaries Wuxi Energy, Jiangxi Enbo, Jiangxi Tonry,
Chongqing Energy and Jiangxi Ruijie in the process of the import of production equipment by the agents they entrusted, the total amount of which
amounted to RMB1,700,000,000.00;
The Company provided the guarantees for the debts incurred by its second-tier subsidiaries Chongqing Energy, Jiangsu Ruijie and Jiangsu
Energy in the process of the import of production equipment by the agents they entrusted, the total amount of which amounted to
RMB1,300,000,000.00;
The Company provided the guarantees for the debts incurred by its second-tier subsidiaries Wuxi Energy, Jiangxi Tonry, Chongqing Energy,
Jiangxi Enbo and Jiangxi Ruijie in the process of the import of production equipment by the agents they entrusted, the total amount of which
amounted to RMB800,000,000.00;
The subsidiary Dexin Paper provided the guarantees for the comprehensive line of credit for the Company, the total amount of which amounted to
RMB46,000,000.00;
The Company’s subsidiary Shanghai Energy provided the guarantees for the comprehensive line of credit for the Company, the total amount of
which amounted to RMB80,000,000.00;
The Company’s second-tier subsidiary Zhuhai Energy provided the guarantees for the comprehensive line of credit for the Company’s
subsidiary Shanghai Energy, the total amount of which amounted to RMB255,000,000.00;
The Company’s second-tier subsidiaries Zhuhai Energy, Wuxi Energy, Jiangxi Tonry and the Company’s subsidiary Shanghai Energy provided
guarantees for the comprehensive line of credit for each other, the total amount of which amounted to RMB200,000,000.00;
The Company’s second-tier subsidiary Jiangxi Tonry provided the guarantees for the comprehensive line of credit for the Company’s subsidiary
Shanghai Energy, the total amount of which amounted to RMB50,000,000.00;
The Company and its subsidiary Shanghai Energy jointly provided guarantees for the comprehensive line of credit for Zhuhai Energy, the total
amount of which amounted to RMB2,150,000,000.00;
The Company and its subsidiary Shanghai Energy jointly provided guarantees for the comprehensive line of credit for Wuxi Energy, the total
amount of which amounted to RMB2,460,000,000.00;
The Company and its subsidiary Shanghai Energy jointly provided guarantees for the comprehensive line of credit for Jiangxi Tonry, the total
amount of which amounted to RMB1,500,000,000.00.
(2) Acceptance of related party guarantees
The Company, Paul Xiaoming Lee, Li Xiaohua and the subsidiary Shanghai Energy jointly provided guarantees for the comprehensive line of
credit for the second-tier subsidiary Wuxi Energy, the total amount of which amounted to RMB1,300,000,000.00;
The Company, Paul Xiaoming Lee, Li Xiaohua and the subsidiary Shanghai Energy jointly provided guarantees for the comprehensive line of credit
for the second-tier subsidiary Zhuhai Energy, the total amount of which amounted to RMB1,000,000,000.00;
(5) Lending to/borrowing from related parties: None
(6) Asset transfer and debt restructuring of related parties: None
(7) Remuneration for key management
Unit: RMB
Item Amount for current period Amount for previous period
Remuneration for Key Management
6,618,620.68 4,579,104.65
Personnel
(8) Other related party transactions
Type of transaction Name of related party Amount for the Amount for the Pricing method and
255
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
current period previous period procedure for
decision-making
Loans with related banks (including application Industrial and 1,067,919,127.56 1,440,000,000.00 Market price / as approved at
for comprehensive facility, acceptance draft, Commercial Bank of
letter of credit, bank guarantee, etc.) China Limited the General Meeting of
Shareholders
Deposits with related banks (including demand Industrial and 120,922,571.29 56,116,390.66 Market price / as approved at
deposits, time deposits, call deposits, etc.) Commercial Bank of the General Meeting of
China Limited Shareholders
Mutual guarantees between companies within Industrial and 3,644,900,000.00 3,560,000,000.00 Market price / as approved at
Commercial Bank of the General Meeting of
the scope of the company’s consolidated China Limited Shareholders
financial statements through the related banks
6. Amounts due to and due from related parties
(1) Receivable: None
(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 Color
Accounts payable 7,744,805.24 2,204,149.24
Masterbatch Co., Ltd.
7. Commitments in relation to related parties
8. Others
XIII. Share-based Payment
1. General information about share-based payment
□ Applicable √ N/A
2. Information on equity-settled share-based payment
□ Applicable √ N/A
3. Information on cash-settled share-based payment
□ Applicable √ N/A
4. Modification and termination of share-based payment
5. Others
The share-based payment of Shanghai Energy, a subsidiary of the Company, is as follows:
(I) General information about share-based payment
Item 2021 2020 2019 2018 2017
The total amount of equity 1,002.00
instruments granted by the
Company during this period
256
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
(10,000 shares)
(II) Information on equity-settled share-based payment
Item 2021 2020 2019 2018 2017
Determination method of fair value of Confirmed Confirmed Confirmed Confirmed Confirmed
according to the according to the according to the according to the
equity instruments on the date of grant according to the evaluation value evaluation value evaluation value evaluation value
evaluation value
Equity-settled share-based payments 87,775,200.00 69,296,210.55 50,817,221.07 32,338,231.59 13,859,242.11
included in the cumulative amount of
capital reserve
Total costs of equity-settled 18,478,989.45 18,478,989.48 18,478,989.48 18,478,989.48 13,859,242.11
share-based settlement recognized
Other explanations:
On April 14, 2017, the 2016 annual general meeting of shareholders of Shanghai Energy, a subsidiary of the Company, deliberated and passed
the proposal on confirming the equity incentive plan and the list of equity incentive objects, and agreed that a total of 40 employees from Shanghai
Hengzou could indirectly hold the Company at the price of RMB5.50/ share, 10.02 million shares in exchange for services provided by employees.
According to the relevant provisions of “accounting standards for Enterprises No. eleventh - share payment”, the equity incentive is a share settlement
based on equity settlement. According to the appraisal report (2017) No. 3233 issued by Beijing Zhongqihua Appraisal Co., Ltd., the transaction price
of the Company’s purchase of the corresponding equity of Shanghai Energy is RMB5.180 billion, RMB14.26/share as the fair value of the share
based payment. Therefore, according to the difference between the number of shares subscribed by employees multiplied by the fair value of
RMB14.26/share and the subscription value of RMB5.50/share, the Company recognized it as general and administrative expenses and capital reserve,
RMB87,775,200.00 in total. Meanwhile, the terms and conditions of the contract and the exit mechanism should be signed with the object being
encouraged: 5 years from the effective date of the labor contract (to December 31, 2021). It is not allowed to resign unilaterally or leave the Company
in other ways or use the existing technology and newly created technology for any third party. Otherwise, it will not have the right to enjoy the partner
rights and interests obtained in Shanghai Hengzou. All partner rights and interests will be owned by Shanghai Hengzou, which is deemed as the
agreed service period. Therefore, the above equity incentive will be confirmed by stages from April 2017 to December 2021. To sum up, the Company
confirmed the share-based payment fees of RMB13,859,242.11, RMB18,478,989.48, RMB18,478,989.48, RMB18,478,989.48 and
RMB18,478,989.48 in the period from January to December 2017 and in 2018, 2019, 2020 and 2021, respectively.
XIV. Commitments and Contingencies
1. Significant commitments
Significant commitments on the balance sheet date
(1) Mortgage of assets
As of December 31, 2021, the Company has obtained the bank’s comprehensive credit line with the mortgage of property and plant in fixed assets,
machinery and equipment and land use right in intangible assets of RMB2,713,334,100. See “81. Assets with restricted ownership or use right” in “VII.
Notes to items of consolidated financial statements” of this section for more.
(2) Pledge of assets
As of December 31, 2021, the Company obtained bank loans of RMB1,752,092,000 by pledging certificate of deposit, accounts receivable, notes
receivable, 76.3574% equity in its second-tier subsidiary Newmi Tech, 100% equity interest in its second-tier subsidiary Suzhou Green Power New
Energy Materials Co., Ltd. and 100% equity interest in its second-tier subsidiary Jiangxi Tonry New Energy Technology Development Co., Ltd. For
details, see “32. Short-term borrowings”, “45. Long-term borrowings” and “81. Assets with restricted ownership or use right” in “VII. Notes to items of
consolidated financial statements” of this section.
As at December 31, 2021, except for the disclosures above, there were no other important commitments that are required to be disclosed.
2. Contingencies
(1) Significant contingencies on the balance sheet date
Contingencies arising from external debt guarantee and their financial implications
See “(4) Related party guarantees” under “5. Related party transactions” in “XII. Related Parties and Related Party Transactions” for the
257
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
guarantee provided by the related party
Letter of guarantee and letter of credit
As of December 31, 2021, the balance of letters of credit issued by financial institutions for the Company was EUR7,634,881.55,
JPY9,102,145,000.00, GBP1,083,750.00, USD2,126,024.50 and RMB85,799,000.00, and the amount of the L/G was RMB16,200,000.00.
As at 31 December 2021, except for the disclosures above, there were no other major contingencies that are required to be disclosed.
(2) Where the Company has no discloseable significant contingencies, relevant explanations should be made:
The Company has no significant contingencies to disclose.
(3) Other information
XV. Events Subsequent to 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.
XVI. Other Significant Events
1. Correction of previous accounting errors: None
2. Debt restructuring: None
3. Assets exchange: None
4. Annuity plan: None
5. Discontinuation of operation: None
6. 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;
258
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
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 all segments;
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 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.
Factors considered by the Company 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 film business segment and the BOPP film business segment. The lithium
battery separator film business segment is responsible for the production of lithium battery separator film, 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.
(2) Financial information of reporting segments
Unit: RMB
Lithium battery
BOPP film Inter-segment
Item separation film Others Total
business segment elimination
business segment
987,034,477.3 7,982,426,810.5
I. Operating income 6,437,042,499.54 639,347,828.04 -80,997,994.29
0 9
Including: Income from 906,057,155.5 7,982,426,810.5
6,437,021,826.97 639,347,828.04
external trade 8 9
Income from inter-segment
20,672.57 80,977,321.72 -80,997,994.29 0.00
trade
692,281,488. 4,927,191,507
II. Operating cost 3,660,722,113.83 564,283,356.10 9,904,549.77
13 .83
Including: Depreciation and 33,184,471.9 803,265,281.2
745,983,088.52 19,969,501.46 4,128,219.39
amortization costs 0 7
III. Income from investment
in joint ventures and 1,687,090.23 0.00 1,687,090.23
associates
IV. Credit impairment losses 26,550,013.28 -1,058,843.53 -644,809.01 24,846,360.74
V. Asset impairment losses 7,714,805.51 687,205.35 2,261,461.69 10,663,472.55
366,646,575. -128,902,544. 3,219,574,861
VI. Total profit 2,902,530,370.29 79,300,460.00
37 06 .60
40,639,764.7 -13,635,381.6 332,720,824.4
VII. Income tax expense 301,335,487.78 4,380,953.53
5 1 5
326,006,810. -115,267,162. 2,886,854,037
VIII. Net profit 2,601,194,882.51 74,919,506.47
62 45 .15
13,203,069,7 -11,639,073,0 26,122,184,84
IX. Total assets 23,709,137,096.94 849,051,050.27
84.51 87.18 4.54
259
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
1,353,507,35 -6,922,779,01 11,584,893,13
X. Total liabilities 16,852,547,944.22 301,616,845.92
5.08 2.77 2.45
7. Significant transactions and matters that have an impact on investors’ decision-making
8. Others
XVII. Notes to Major Items of Financial Statements of the Parent Company
1. Accounts receivable
(1) Disclosure of accounts receivable by type
Unit: RMB
Closing balance Opening balance
Provision for bad Provision for bad
Book balance Book balance
Type debts Book debts Book
Proporti Proporti value Proporti Proporti value
Amount Amount Amount Amount
on on on on
Including:
Accounts receivable
subject to provision 11,098, 100.00 11,098,0 14,082,4 581,605. 13,500,86
542.76 0.005% 100.00% 4.13%
for bad debts made 580.96 % 38.20 69.16 98 3.18
on a portfolio basis
Including:
2,087,8 2,087,34 14,082,4 581,605. 13,500,86
Aging portfolio 18.81% 542.76 0.03% 100.00% 4.13%
89.08 6.32 69.16 98 3.18
Portfolio of related
parties within the 9,010,6 9,010,69
81.19%
scope of 91.88 1.88
consolidation
11,098, 100.00 11,098,0 14,082,4 581,605. 13,500,86
Total 542.76 0.005% 100.00% 4.13%
580.96 % 38.20 69.16 98 3.18
Provision for bad debts made on a portfolio basis: Aging portfolio
Unit: RMB
Closing balance
Name
Book balance Provision for bad debts Proportion of provision
Less than 1 year 2,081,961.71
1-2 years 5,927.37 542.76 9.16%
2-3 years
3-4 years
4-5 years
Over 5 years
260
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Total 2,087,889.08 542.76 --
Provision for bad debts made on a portfolio basis: Portfolio of related parties within the scope of consolidation
Unit: RMB
Closing balance
Name
Book balance Provision for bad debts Proportion of provision
Less than 1 year 9,010,691.88
Total 9,010,691.88 --
Disclosure by aging
Unit: RMB
Aging Book balance
Less than 1 year (inclusive) 11,092,653.59
1 to 2 years 5,927.37
Over 3 years
Over 5 years
Total 11,098,580.96
(2) Provision for bad debts accrued, recovered or reversed during the Reporting Period
Provision for bad debts during the current period:
Unit: RMB
Changes in amount for the period
Type Opening balance Recovery or Closing balance
Provision Write-offs Others
reverse
Accounts receivable
subject to provision for
credit loss made on an
individual basis
Accounts receivable
subject to provision for
581,605.98 581,063.22 542.76
expected credit loss
made on a portfolio basis
Total 581,605.98 581,063.22 542.76
(3) Actual write-off of accounts receivable in the current period: None
(4) Top five accounts receivable by closing balance of debtors
Unit: RMB
Closing balance of accounts Percentage in total closing Closing balance of provision for
Company name
receivable balance of accounts receivable bad debts
Company 1 9,010,691.88 81.19%
Company 2 915,408.00 8.25%
261
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Company 3 602,595.00 5.43%
Company 4 232,445.40 2.09%
Company 5 162,246.96 1.46%
Total 10,923,387.24 98.42% --
(5) Amount of assets and liabilities generated by transfer of accounts receivable and continued involvement: None
(6) Accounts receivable derecognized due to the transfer of financial assets: None
2. Other receivables
Unit: RMB
Item Closing balance Opening balance
Dividends receivable 241,040,000.00 241,040,000.00
Other receivables 6,451,123,939.27 3,904,486,029.74
Total 6,692,163,939.27 4,145,526,029.74
(1) Interest receivable: None
(2) Dividends receivable
1) Dividends receivable by type
Unit: RMB
Item (or investee) Closing balance Opening balance
Dexin Paper 100,000,000.00 137,500,000.00
Shanghai Energy 141,040,000.00 103,040,000.00
Hongta Plastic 500,000.00
2) Major dividend receivable aged over one year: None
3) Provision for bad debts
□ Applicable √ N/A
(3) Other receivables
1) Other receivables by nature
Unit: RMB
262
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Nature of amount Book balance at the end of the period Book balance at the beginning of the period
Security deposit and guarantee deposit 91,639.90 1,406,560.77
Petty cash 850,872.89 229,241.50
Advance money 25,276.80
Others 457,829.48 28,428.80
Capital lending 6,449,947,524.21 3,903,081,382.31
Total 6,451,373,143.28 3,904,745,613.38
2) Provision for bad debts
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 on January 1,
63,467.14 9,100.00 187,016.50 259,583.64
2021
Balance on January 1,
2021 for the current —— —— —— ——
period
Provision for the period -10,379.63 -10,379.63
Balance on December 31,
53,087.51 9,100.00 187,016.50 249,204.01
2021
Changes in book balance with significant changes in loss reserves in the current period
□ Applicable √ N/A
Disclosure by aging
Unit: RMB
Aging Book balance
Less than 1 year (inclusive) 5,021,299,154.08
1 to 2 years 1,429,798,772.70
2 to 3 years 68,200.00
Over 3 years 207,016.50
3 to 4 years 20,000.00
Over 5 years 187,016.50
Total 6,451,373,143.28
263
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
3) Provision for bad debts accrued, recovered or reversed during the current period
4) Actual write-off of other receivables in the current period: None
5) Top five other receivable by closing balance of debtors
Unit: RMB
As a percentage of Closing balance of
Company name Nature of amount Closing balance Aging total closing balance provision for bad
of other receivables debts
Less than 1 year, 1-2
Wuxi Energy Capital lending 3,765,357,363.89 58.37%
years
Less than 1 year, 1-2
Jiangxi Tonry Capital lending 2,182,739,470.07 33.83%
years
Shanghai Energy Capital lending 501,850,690.25 Less than 1 year 7.78%
China Securities
Funds for odd
Depository and
stocks in conversion 200,000.00 Less than 1 year 0.00% 8,700.00
Clearing Co., Ltd.,
of convertible bonds
Shenzhen Branch
China Tobacco
Guarantee deposit
Chongqing Industrial 50,000.00 2-3 years 0.00% 2,175.00
and cash deposit
Co., Ltd.
Total -- 6,450,197,524.21 -- 99.98% 10,875.00
6) Accounts receivable related to government grants: None
7) Other receivables derecognized due to the transfer of financial assets: None
8) Amount of assets and liabilities generated by transfer of other receivables and continued involvement: None
3. Long-term equity investment
Unit: RMB
Closing balance Opening balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Investment in
4,658,382,761.62 4,658,382,761.62 4,662,093,871.62 4,662,093,871.62
subsidiaries
(1) Investments in subsidiaries
Unit: RMB
Increase/Decrease for the period Closing
Closing
Name of Opening balance balance of
Increase in Decrease in Provision for balance (book
investee (book value) Others provision for
investment investment impairment value)
impairment
264
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
162,135,598.4
Dexin Paper 162,135,598.40
0
418,898,313.0
Hongta Plastic 418,898,313.03
3
Hongchuang 441,809,808.4
441,809,808.43
Packaging 3
Shanghai 3,635,539,041.
3,635,539,041.76
Energy 76
Hong Kong
3,711,110.00 3,711,110.00
Chuangxin
4,658,382,761.
Total 4,662,093,871.62 3,711,110.00
62
(2) Investments in associates and joint ventures: None
(3) Other explanations
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 136,620,927.87 83,962,944.68 215,805,133.19 151,401,585.18
Other businesses 20,878,695.07 19,492,071.07 18,818,801.97 16,821,297.47
Total 157,499,622.94 103,455,015.75 234,623,935.16 168,222,882.65
5. Investment income
Unit: RMB
Item Amount for the current period Amount for the previous period
Gain from long-term equity investment under
38,000,000.00 58,000,000.00
the cost method
Interest on finance products 22,270,487.08
Total 60,270,487.08 58,000,000.00
6. Others
XVIII. Supplementary Information
1. Breakdown of non-recurring gain or loss for the current period
√ Applicable □ N/A
265
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
Unit: RMB
Item Amount Notes
Gains and losses from the disposal of non-current assets -1,303,244.16
Government subsidies recognized in current gains or losses (except for those closely related to the Company’s business and
140,888,128.01
are either in fixed amounts or determined under quantitative methods in accordance with the national standard)
Gains or losses on entrusted investments or assets management 25,422,322.79
Gains or losses from changes in fair value arising from the holding of trading financial assets and trading financial
liabilities, and investment income from disposal of trading financial assets, trading financial liabilities and available-for-sale 137,194.34
financial assets, excluding the effective hedging business related to the Company’s normal business operations
Reversal of the provisions for impairment of receivables subject to separate impairment test 11,749,733.34
Non-operating income and expenses other than above-mentioned items 4,316,746.86
Other items within the definition of non-recurring gains or losses 5,038,461.95
Less: effect of the income tax 27,937,401.47
Effect of minority equities 7,737,680.84
Total 150,574,260.82 --
Details of other profit or loss items that fall within the meaning of non-recurring gain or loss:
□ Applicable √ N/A
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 √ N/A
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
21.85% 3.06 3.05
stockholders of the Company
Net profits attributable to common
stockholders of the Company after
20.64% 2.89 2.88
the deduction of non-recurring gains
and loss
3. Accounting data differences under domestic and international accounting standards
(1) Differences in the net profit and in the net assets in the financial statements disclosed in accordance with international accounting
standards and in accordance with the PRC GAAP at the same time
□ Applicable N/A
266
2021 Annual Report of Yunnan Energy New Material Co., Ltd.
(2) Differences in the net profit and in the net assets in the financial statements disclosed in accordance with overseas accounting standards
and in accordance with the PRC GAAP at the same time
□ Applicable N/A
(3) Descriptions of reasons for accounting data differences occurring under domestic and foreign accounting standards; if adjustment is
made for data audited by an overseas audit institution, the name of the institution shall be provided
4. Others
267
