股 票 代 码 ：600346
HENGLI PETROCHEMICAL
2023 ANNUAL REPORT
专 注 创 新 品 质 创 造 美 好 生 活
Focus on innovative nature
build a better life
2023 Annual Report
Letter to shareholders, partners and employees
Dear shareholders, partners and employees:
Time is like one circle after another of annual rings, regardless of thickness, they are markers of our
growth process. Farewell to 2023, a year filled with both challenges and opportunities. Despite facing
difficulties and setbacks, we worked together to overcome various obstacles and successfully navigated
through them.
The world is undergoing profound changes unseen in a century, with geopolitical competition
becoming more intense, and history and human civilization standing at a crucial crossroads. Meanwhile,
the global economy is still in the midst of recovery and reboot processes, while the external environment
remains fraught with uncertainty and risk. However, all the obstacles are just stepping stones for the
successful ones to move forward, and cannot deter the brave ones from forging ahead. As the old
Chinese poem says, “Don't mind the sound of the wind whistling through the trees; why not walk
leisurely while singing?” No matter what difficulties and challenges we face, even when barefoot or
facing strong enemies or arduous situations, we can maintain courage and determination, and persevere
and move forward relentlessly. Hengli has consistently adhered to its core business while embracing a
patriotic spirit rooted in industrial service to the nation. They have navigated through multiple economic
cycles, continually moving forward. Now, Hengli maintains this unwavering commitment, staying true to
their original aspirations, and continues to advance towards deeper levels of industrial development.
Mountains do not hinder our aspirations, and deep rivers do not prevent our actions.
This year, we have made progress day by day, regardless of the difficulties and challenges we
encountered. The PTA project with an annual output of 5 million tons at Hengli (Huizhou) Industrial Park
has been fully commissioned; the first phase of Hengli New Material Science and Technology Park and
Hengli Chemical Fiber's 400,000 tons per year intelligent industrial yarn production project are rapidly
advancing and have been partially commissioned in stages. This year, we have worked diligently and
innovated with brilliant achievements. Hengli Chemical Fiber has won the China Patent Excellence
Award and the "Jiangsu Science and Technology Award". Hengli New Materials has won the "CMAI Silver
Prize for Outstanding Patents". Kanghui New Material's self-developed "ultra-thin carbon tape base film"
became the first in China and unique in the industry, while its "solar back-sheet base film" received
international authoritative certification. This year, we have made significant achievements through our
journey. Hengli Chemical Fiber was recognized as a nationally certified "Industrial Product Green Design
Demonstration Enterprise". Hengli New Materials was awarded the title of a nationally recognized
"Outstanding Scenario of Intelligent Manufacturing". Hengli Chemical was honored with the national
accolade of being a "Green Factory". Kanghui New Materials was designated as an "Intelligent Factory in
Liaoning Province". This year, we have written the responsibility of a big enterprise with the heart of
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"gratitude" and "responsibility". Hengli continues to be passionate about poverty alleviation, education
support, and disaster relief as well as other philanthropic projects. For those with determination,
perseverance, and relentless effort, time will eventually reward them accordingly. In 2023, Hengli
achieved revenue of 234.8 billion yuan, an increase of 5.61% year-on-year, net profit reached 6.9 billion
yuan, an increase of 197.83% year-on-year. All business sectors of Hengli demonstrate strong vitality and
resilience.
The achievement demonstrates a strong business resilience and development tenacity of our
company, the continuous efforts and hard work of the people at Hengyi during day and night, and the
support from all shareholders and partners. Hengyi will continue to provide high dividends to investors
based on reasonable management of the company's development, allowing everyone to share in the
benefits of the company's growth.
The past is rich in splendor, and the future is even more promising.
A bright future awaits us to explore and cultivate. In pursuing our ideals, we must also focus on
practical operations. All of us need to deeply consider how to better save costs, to create benefits, to
change, to innovate, and to break through. Whether the road ahead of us is smooth or still fraught with
difficulties, we will face it with the determination and courage to win, moving forward without hesitation,
never backing down. We will continue to answer the questions that are essential for our team and
explore ways to enhance the value of our team.
In the new year, we should always keep our original aspiration and be in sync with the country.
We will Fully implement the development philosophy of the Party Central Committee, accelerate
the construction of a new development pattern, promote high-quality development and balance
development and security. We will also adhere to seeking progress while maintaining stability, using
progress to maintain stability, establishing a new system before breaking down the old one, developing
in a positive direction, and maintaining long-term stability. In the new year, we need to maintain our
determination and perseverance, working towards creating an enduring power that lasts for a century.
We are going to continue to focus on one purpose, implement two major strategies, consolidate three
foundational pillars, specialize in four key industries, perfect six comprehensive systems, accelerate
innovation and development, increase innovative management, speed up technological advancement,
and promote high-quality, steady progress in all Hengli operations. In the new year, we should
continuously refine our professional skills and qualities, just like craftsmen carefully carving every detail,
thus shaping a unique brand advantage. We are advocates for the craftsman's spirit, continuously
studying and innovating to perfect our products. We are determined to take our products to the ultimate
level, ensuring that their quality is outstanding, highlighting our advantage in quality, accumulating brand
effects, and consolidating our market position. In the new year, we will have unwavering faith, believing
that we can make new contributions in this era. We will have a clear goal and our steps must be
consistent. We need determination and courage - just as the old saying goes "If one does not defeat the
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2023 Annual Report
enemy, one will not return to their hometown." - to ensure that our work can proceed smoothly and
achieve a good beginning. We need to fully leverage our comprehensive advantages, turn them into a
winning edge in development, and break through time and space constraints to maximize benefits.
Behind every beautiful thing lies relentless effort and sacrifice.
We believe that spring will eventually reward those who persevere and put forth effort in winter. Their
actions not only affect the present but also have a profound impact on the future. These actions are like
constantly flickering, updating flames, which may disappear in an instant, yet contain immense power.
We believe that despite the challenges and detours we may encounter in pursuit of our goals, these
experiences are not meaningless, on the contrary, they are designed to help us grow and develop better,
ultimately reaching higher targets. We believe that with unwavering faith and a spirit of persistence, one
can overcome obstacles and achieve one's goals. In the future, we will still choose to keep climbing
upwards regardless of what difficulties and dangers we might face. The experiences of our struggles are
arduous and challenging, but only through ultimate victory can our hearts be truly inspired.
In the new year, let us ignite the fireworks of hope, hoist the sails of courage, and proceed
unstoppable towards a vast blue horizon where we will meet again!
Chairman:
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2023 Annual Report
Important notice
I. The company's board of directors, board of supervisors, directors, supervisors, and senior
managers guarantee that the content of the Annual report is true, accurate, and complete, and
that there are no false records, misleading statements, or major omissions, and assume individual
and joint legal responsibilities.
II. All directors of the company attended the board meeting.
III. Zhonghui Certified Public Accountants (Special General Partnership) issued a standard unqualified
audit report for the company.
IV. Fan Hongwei, the person in charge of the company, Liu Xuefen, the person in charge of accounting
work, and Zheng Minxia, the person in charge of the accounting department (accounting
supervisor), declare that they guarantee the authenticity, accuracy and completeness of the
financial report in the annual report.
V. Profit distribution plan for the reporting period approved by the board of directors or plan
for capitalization of public reserve funds
The company's profit distribution plan for 2023 is as follows: based on the total share capital
(excluding the company's cash share repurchases) on the equity distribution registration date, a
cash dividend of 0.55 yuan per share (including tax) will be distributed to all shareholders.
This profit distribution plan has been deliberated and approved at the nineteenth meeting of
the ninth board of directors and the thirteenth meeting of the ninth board of supervisors of the
company, and needs to be submitted to the company's 2023 annual general meeting of
shareholders for consideration.
VI. Disclaimer of Forward-Looking Statements
√适用 □不适用
Forward-looking descriptions such as future plans and development strategies involved in this
report do not constitute the company's actual commitment to investors. Investors are requested to
maintain sufficient risk awareness and understand the differences between plans, forecasts and
commitments.
VII. Whether there is any non-operational occupation of funds by controlling shareholders and
other related parties
No
VIII. Whether there is any external guarantee provided in violation of the prescribed decision-
making procedures
No
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2023 Annual Report
IX. Whether more than half of the directors cannot guarantee the authenticity, accuracy and
completeness of the annual report disclosed by the company
No
X. Significant risk warning
During the reporting period, the company had no particularly significant risks that would have
a substantial impact on production and operation.
XI. Others
√适用 □不适用
This annual report is prepared in Chinese and English respectively. If there is any discrepancy
between Chinese and English, the Chinese version shall prevail.
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2023 Annual Report
Content
Chapter 1 Definitions.................................................................................................................... 7
Chapter 2 Company Profile and Key Financial Indicators ......................................................... 10
Chapter 3 Management Discussion and Analysis ....................................................................... 15
Chapter 4 Corporate Governance ............................................................................................... 50
Chapter 5 Environmental and Social Responsibility .................................................................. 70
Chapter 6 Important events ......................................................................................................... 83
Chapter 7 Share Changes and Shareholders ............................................................................... 93
Chapter 8 Information of Preferred Shares ............................................................................... 102
Chapter 9 Information of Bonds ............................................................................................... 103
Chapter 10 Financial report ........................................................................................................ 106
Financial statements signed and sealed by the legal representative, person in
charge of accounting, and person in
charge of the accounting organization (accounting supervisor).
Reference File Directory Original audit report sealed by the accounting firm and signed and sealed by a
certified public accountant.
Original copies of all company documents and announcements
publicly disclosed during the reporting period.
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2023 Annual Report
Chapter 1 Definitions
I. Definition
In this report, the terms listed below are defined as follows, unless the context otherwise implies:
Definition of Frequently-Used Terms
Reporting Period Refer to From 1/1/2023 to 31/12/2023
Company, the Company, or Refer to Hengli Petrochemical Co., Ltd.
Hengli Petrochemical
CSRC Refer to China Securities Regulatory Commission
Ministry of Industry and Refer to Ministry of Industry and Information Technology of the People’s
Information Technology Republic of China
SSE Refer to Shanghai Stock Exchange
《Company Law》 Refer to 《Company Law of the People’s Republic of China》
《Securities Law》 Refer to 《Securities Law of the People’s Republic of China》
《Articles of Association》 Refer to 《Hengli Petrochemical Co., Ltd. Articles of Association》
Hengli Group Refer to Hengli Group Co., Ltd., controlling shareholder of the listed
company
Hailaide Refer to Hailaide International Investment Ltd., person acting-inconcert
with controlling shareholder of the listed company
Tak Shing Li Refer to Tak Shing Li International Holdings Ltd., person acting-inconcert
with controlling shareholder of the listed company
Hegao Investment Refer to Jiangsu Hegao Investment Co., Ltd., person acting-inconcert
with controlling shareholder of the listed company
Hengneng Investment Refer to Hengneng Investment (Dalian) Co., Ltd., person acting-inconcert
with controlling shareholder of the listed company
Hengfeng Investment Refer to Hengfeng Investment (Dalian) Co., Ltd., person acting-inconcert
with controlling shareholder of the listed company
Hengli Chemical Fiber Refer to Jiangsu Hengli Chemical Fiber Co., Ltd., subsidiary to the listed
company
Susheng Thermal Power Refer to Suzhou Susheng Thermal Power Co., Ltd., subsidiary to the
Hengli Chemical Fiber, sub-subsidiary to the listed company
Hengke Advanced Materials Refer to Jiangsu Hengke Advanced Materials Co. Ltd., subsidiary to the
Hengli Chemical Fiber, sub-subsidiary to the listed company
Deli Chemical Fiber Refer to Jiangsu Deli Chemical Fiber Co., Ltd., subsidiary to the Hengli
Chemical Fiber, sub-subsidiary to the listed company
Kanghui New Material Refer to Kanghui New Material Technology Co., Ltd., subsidiary to the
listed company
Kanghui Dalian New Material Refer to Kanghui Dalian New Material Technology Co., Ltd, subsidiary to
the Kanghui New Material, sub-subsidiary to the listed company
Hengli Petrochemical Refer to Hengli Petrochemical (Dalian) Chemical Co., Ltd., subsidiary to
Chemical the listed company
Hengli Investment Refer to Hengli Investment (Dalian) Co., Ltd., subsidiary to the listed
company
Hengli Petrochemical (Dalian) Refer to Hengli Petrochemical (Dalian) Co., Ltd., subsidiary to the
Hengneng Investment, sub-subsidiary to the listed company
Hengli Petrochemical Refer to Hengli Petrochemical (Huizhou) Co., Ltd., subsidiary to the
(Huizhou) Hengneng Investment, sub-subsidiary to the listed company
Hengli Petrochemical Refining Refer to Hengli Petrochemical (Dalian) Refining Co., Ltd., subsidiary to
the listed company
Crude Oil Refer to Crude oil is petroleum directly exploited from an oil well without
being processed, and is a dark-brown or dark-green viscous
liquid or semisolid flammable substance that is composed of
various hydrocarbons.
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Aromatic Hydrocarbon Refer to A hydrocarbon containing a benzene ring structure in its
molecule。Aromatic hydrocarbons, mainly including benzene,
methylbenzene, xylene, etc., are one of the most important
basic raw materials for the production of petrochemicals。
Ethylene Refer to A compound consisting of two carbon atoms and four hydrogen
atoms. It is the basic chemical raw material of synthetic fiber,
synthetic rubber, synthetic plastic- (polyethylene and polyvinyl
chloride), synthetic ethanol (alcohol), and also used in
manufacturing chloroethylene, styrene, ethylene oxide, acetic
acid, acetaldehyde, ethanol, and explosives, etc.
Polyethylene Refer to A thermoplastic resin obtained by polymerization of Ethylene.
Polyethylene is odorless, non-toxic, feels like wax, has excellent
low temperature resistance, good chemical stability, and is
resistant to most acids and alkalis.
POLYPROPYLENE (PP) Refer to A semi-crystalline synthetic resin material with strong acid and
alkali resistance, excellent electrical insulation performance,
harder and higher melting point than PE.
Styrene Refer to An organic compound, usually a colorless, aromatic liquid, used
primarily in the production of plastics, resins, and rubber.
Butadiene Refer to An organic compound, a colorless gas with a special smell, the
main raw material for the production of synthetic rubber.
PARAXYLENE (PX) Refer to A kind of Aromatic Hydrocarbon, a colorless transparent liquid,
is one of the raw materials for the production of purified
terephthalic acid (PTA), which is used to produce plastics,
Polyester Fiber and films.
PURIFIED TEREPHTHALIC ACID Refer to It is white crystal or powder at normal temperature, non-toxic,
(PTA) flammable, if mixed with air within a certain limit, it will burn
when exposed to fire.
METHYLENE GLYCOL (MEG OR Refer to Colorless, odorless, sweet, viscous liquid, mainly used in the
EG) production of Polyester Fiber, antifreeze, unsaturated polyester
resin, lubricants, plasticizers, non-ionic surfactants and
explosives.
BDO, 1, 4-Butanediol Refer to Colorless oily liquid, flammable, miscible with water. Soluble in
methanol, ethanol, acetone, slightly soluble in ether.
Acetic Acid Refer to Organic compound, a colorless liquid with a pungent odor. It is
the raw material for the manufacture of rayon, film, aspirin, etc.
Polyester, Polyester Chip or Refer to Polyethylene terephthalate (referred to as polyester) is a fiber-
PET forming high polymer prepared from PTA and MEG as raw
materials through transesterification or esterification and
polycondensation reactions. Fiber-grade polyester chips are
used to make polyester staple fiber and Polyester Filament Yarn
(PFY), and film-grade chips are used to make various film
products.
PBAT Refer to Polybutylene terephthalate-adipate, a petrochemical-based
biodegradable plastic, has excellent biodegradability. It is very
active in the research of biodegradable plastics and one of the
best degradable materials in the market.
PBS Refer to Polybutylene succinate, polymerized from succinic acid and 1, 4-
butanediol (BDO), has good thermal performance and
mechanical processing performance, and is easily destroyed by
various microorganisms in nature or animals and plants. Enzyme
decomposes, metabolizes, and finally decomposes into carbon
dioxide and water, which is a typical fully biodegradable
material.
Polyester Fiber Refer to Synthetic fiber obtained by spinning polyester obtained by
polycondensation of organic dibasic acid and dibasic alcohol.
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Industrialized mass-produced Polyester Fiber is made of
polyethylene terephthalate, and the trade name in China is
polyester. It is the largest variety of synthetic fibers at present.
Polybutylene Terephthalate Refer to Also known as polytetramethylene terephthalate, it is a
(PBT), PBT condensation polymer of terephthalic acid and 1, 4-butanediol.
It can be obtained by polycondensation through
transesterification or direct esterification. Together, PBT and
PET are known as thermoplastic polyesters.
Biaxially-Oriented Refer to Biaxially-Oriented Polyethylene Terephthalate (BOPET) has the
Polyethylene Terephthalate characteristics of high strength, good rigidity, transparency, high
(BOPET), BOPET gloss, excellent wear resistance, folding resistance, pinhole
resistance and tear resistance, etc.; heat shrinkage is extremely
small and has good antistatic properties.
Denier (D) Refer to A fiber of 9, 000 meters in length weighs 1 gram and is called 1
Denier (D).
Polyester Filament Yarn (PFY) Refer to Filament with a length of more than one kilometer, the filament
is wound into a ball.
PFY for Civil Use, Textile Yarn Refer to Polyester Filament Yarn (PFY) for apparel or home textiles.
PFY for Industrial Use, Refer to It is a polyester long fiber with high strength, high modulus and
Industrial Yarn large denier used in industrial fields.
Differential Fiber Refer to Through chemical modification or physical deformation, mainly
to improve the wearing performance, there are great
innovations in technology or performance, or new fiber varieties
with certain characteristics that are different from conventional
varieties.
POY Refer to Polyester pre-oriented yarn, full name PRE-ORIENTED YARN or
PARTIALLY ORIENTED YARN, is an incompletely drawn Polyester
Filament Yarn (PFY) obtained by high-speed spinning with an
orientation degree between the unoriented yarn and the drawn
yarn.
DTY Refer to Stretched textured yarn, also known as polyester stretched
yarn, full name DRAW TEXTURED YARN, is made of POY as raw
yarn, stretched and false twisted, and often has a certain degree
of elasticity and shrinkage.
FDY Refer to Full drawn yarn, also known as polyester drawn yarn, full name
FULL DRAWN YARN, is a synthetic fiber filament further
prepared by spinning and drawing process. The fiber has been
fully drawn and can be directly used for textile processing.
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2023 Annual Report
Chapter 2 Company Profile and Key Financial Indicators
I. Company information
Company's Chinese Name Hengli Petrochemical Co., Ltd.
Abbreviation of Chinese Name Hengli Petrochemical
Company's Foreign Name HENGLI PETROCHEMICAL CO., LTD.
Abbreviation of Foreign Name HLSH
Legal representative of the Company Fan Hongwei
II. Contacts and contact information
Secretary of the Board Securities Affairs Representative
Name Li Feng Wang Shan, Duan Mengyuan
Contact Floor 31, Building B, Victoria Plaza, No. 52
Floor 31, Building B, Victoria Plaza, No. 52
address Gangxing Road, Renmin Road Street,
Gangxing Road, Renmin Road Street, Zhongshan
Zhongshan District, Dalian City, Liaoning
District, Dalian City, Liaoning Province
Province
Telephone 0411-39865111 0411-39865111
Fax 0411-39901222 0411-39901222
E-mail wangshan@hengli.com
lifeng@hengli.com
duanmengyuan@hengli.com
III. Basic information
Place of registration of the OSBL Project-Public Office Building, No. 298, Changsong Road, Lingang
Company Industrial Zone, Changxing Island, Dalian City, Liaoning Province
Historical changes of the When the company was established, the place of registration address was: No.
Company's place of 1 Zhoushuizi Square, Ganjingzi District, Dalian; On June 8, 2009, the place of
registration address registration was changed to: No. 18, Yinghui Road, Ganjingzi District, Dalian;
On May 27, 2016, the place of registration was changed to: OSBL Project-Public
Office Building, No. 298 Changsong Road, Lingang Industrial Zone, Changxing
Island, Dalian City, Liaoning Province
Company office address Floor 31, Building B, Victoria Plaza, No. 52 Gangxing Road, Renmin Road Street,
Zhongshan District, Dalian City, Liaoning Province
Postal code of the 116001
Company's business address
Company website hengliinc.com
E-mail hlzq@hengli.com
IV. Information disclosure and location
Media name and website of the Company’s China Securities Journal, Shanghai Securities News,
annual report disclosure Securities Times, Securities Daily
Website of the stock exchange where the www.sse.com.cn
company discloses the annual report
The place where the Company's annual report is Office of the Company's board of directors
ready for inspection
V. Company stock profile
Company stock profile
Stock category Stock exchange Stock name Stock code Stock abbreviation
before change
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2023 Annual Report
A share Shanghai Stock Hengli 600346 Hengli Stock
Exchange Petrochemical
VI. Other relevant information
Name Zhonghui Certified Public Accountants (Special General
Partnership)
Accounting firm
Office address Room 601, Building A, Hualian Times Building, No. 8 Xinye
engaged by the
Road, Jianggan District, Hangzhou
Company (Domestic)
Name of signing Han Jian, Fang Sai
accountant
VII. Key accounting data and financial indicators in the past three years
(I) Key Accounting Data
Unit: ten thousand yuan Currency: RMB
Key Accounting Increase/decrease
2023 2022 2021
Data (%)
Revenue from
23, 479, 067.24 22, 232, 358.40 5.61 19, 797, 034.49
operations
Net profit
attributable to
690, 460.39 231, 830.32 197.83 1, 553, 107.67
shareholders of
listed company
Net profit
attributable to
shareholders of
listed company 599, 723.27 104, 528.51 473.74 1, 452, 069.80
after deduction of
non-recurring
gains and losses
Net cash flows
from operating 2, 353, 579.01 2, 595, 397.08 -9.32 1, 867, 017.37
activities
Key Accounting Increase/decrease
2023 2022 2021
Data (%)
Net assets
attributable to
5, 999, 240.10 5, 286, 254.36 13.49 5, 723, 138.30
shareholders of
listed company
Total assets 26, 059, 902.09 24, 143, 047.46 7.94 21, 029, 622.56
(II) Key Financial Indicators
Increase/decrease
Key Accounting Data 2023 2022 2021
(%)
Basic earnings per share
0.98 0.33 196.97 2.21
(Yuan/Share)
Diluted earnings per share
0.98 0.33 196.97 2.21
(Yuan/Share)
Basic earnings per share after
deducting non-recurring gains and 0.85 0.15 466.67 2.07
losses (Yuan/Share)
Weighted average return on equity 12.24 4.30 Increase by 7.94 30.07
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2023 Annual Report
(%) percentage points
Weighted average return on equity Increase by 8.69
after deducting non-recurring gains 10.63 1.94 percentage points 28.11
and losses (%)
Note of the key accounting data and financial indicators of the company in the prior three years at
the end of the reporting period
□适用 √不适用
VIII. Differences in accounting data under domestic accounting standards
(I) Differences between net profit and net assets attributable to shareholders of listed company
in financial reports disclosed in accordance with International Accounting Standards and
Chinese accounting standards
□适用 √不适用
(II) Differences between Net profit and net assets attributable to shareholders of listed company
in financial reports disclosed in accordance with Overseas Accounting Standards and Chinese
Accounting Standards
□适用 √不适用
(III) Note on differences in accounting standards between domestic and overseas:
□适用 √不适用
IX. Main financial data by quarter in 2023
Unit: ten-thousand-yuan Currency: RMB
First quarter Third quarter Fourth quarter
Second Quarter
(January to (July- (October-
(April-June)
March) September) December)
Revenue from operations 5, 614, 445.19 5, 328, 498.67 6, 368, 288.06 6, 167,835.32
Net profit attributable to
shareholders of listed 101, 969.79 202, 931.44 265, 151.32 120, 407.84
company
Net profit attributable to
shareholders of listed
company after deducting 58, 390.96 169, 108.31 270, 208.58 102, 015.42
non-recurring gains and
losses
Net cash flows from
1, 192, 172.54 21, 629.14 1, 181, 809.09 -42, 031.76
operating activities
Explanation of differences between quarterly data and disclosed periodic report data
□适用 √不适用
X. Non-recurring gains and losses items and amount
√适用 □不适用
Unit: yuan Currency: RMB
N
Item of non-recurring gains
2023 o 2022 2021
and losses
t
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2023 Annual Report
e
Gain or loss on disposal of non- -4, 564, 909.89 -8, 794, 093.17 1, 788, 290.01
current assets, Including the
write-off portion of the
provision for asset impairment
Government subsidies 638, 569, 056.98 1, 594, 250, 334.30 760, 570, 495.82
included in the current profit
or loss, except for government
subsidies that are closely
related to the company's
normal business operations,
comply with national policies
and regulations, and are
continuously enjoyed in
accordance with certain
standards or quantities
Except for the effective 431, 893, 116.94 -46, 001, 895.50 375, 366, 888.97
hedging business related to
the Company's normal
business operations, gains and
losses on fair value changes
arising from non-financial
enterprises holding financial
assets and financial liabilities,
as well as gains and losses on
disposal of financial assets and
financial liabilities
Gain on investment costs in 79, 415, 493.16
acquisition of subsidiaries,
associates and joint venture
less than the fair value of
identifiable net assets of the
investees
Other non-operating -25,075,119.31 10,695,487.35 -5,096,728.57
income/(expenses), net
Other gain or loss items met 7,339,987.53 3,692,791.90 45,080,477.29
the definition of non-recurring
item
Less: Impact on income tax 140,790,996.05 360,240,063.26 183,394,674.73
Impact on minority - -16, 064, 003.29
interests (after tax)
Total 907,371,136.20 1,273,018,054.78 1,010,378,752.08
XI. Items measured at fair value
√适用 □不适用
Unit: ten-thousand-yuan Currency: RMB
Impact on profit
Beginning Closing Changes in the
Item for the current
balance balance period
period
Debt instruments investments 200.00 13, 126.55 12, 926.55 -
Equity instrument investments 4, 698.39 8, 102.24 3, 403.85 -35.13
Derivative financial assets 49, 043.06 4, 865.22 -44, 177.84 37, 090.17
Wealth management products
6, 500.00 3, 789.00 -2, 711.00 -
and structured deposits
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2023 Annual Report
Receivable financing 228, 727.12 417, 004.76 188, 277.64 -
Derivative financial liabilities 34, 602.07 19, 032.43 -15, 569.64 -18, 828.23
Total 323, 770.64 465, 920.20 142, 149.56 18, 226.81
XII. Others
□适用 √不适用
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2023 Annual Report
Chapter 3 Management Discussion and Analysis
I. Business discussion and analysis
In 2023, the global economy will enter a recovery process, with developing economies showing
strong performance and becoming an important force supporting the global economy's positive
development. At the same time, global geopolitical conflicts continue to escalate, international
trade frictions continue, risks accumulate and challenges increase, energy and commodity prices
and major product prices continue to fall, economic recovery is weak, and economic growth still
faces multiple risks and challenges. The International Monetary Fund predicts that the world
economy will grow at a rate of 3% in 2023.
"The basic trend of our country's economic recovery and long-term improvement has not
changed and will not change." Faced with complex and severe internal and external environment,
China adheres to the general tone of "seeking progress while maintaining stability" and fully,
accurately and comprehensively implements the new development concept. The main goals and
tasks of economic and social development for the whole year have been successfully completed,
and high-quality development has been solidly promoted. The overall economic recovery of our
country is good and the growth momentum continues to increase. In 2023, the gross domestic
product exceeded 126 trillion yuan, with a year-on-year growth rate of 5.2%, ranking among the top
in the world's major economies. The Central Economic Work Conference proposed that in 2024,
economic work should adhere to the principle of seeking progress while maintaining stability,
promoting stability through progress, and establishing first and then breaking down. We should
actively advance in transforming the mode, adjusting the structure, improving quality, and
increasing efficiency, and constantly consolidate the foundation of stability and improvement. We
should focus on expanding domestic demand, stimulating potential consumption, expanding
profitable investment, and forming a virtuous cycle of mutual promotion between consumption and
investment. As the country implements a comprehensive package of policies and follow-up
measures to stabilize the economy, the advantages of the super-large market and domestic demand
potential will continue to provide broad development space for the chemical industry. Promoting
industrial innovation through technological innovation and vigorously developing new productivity
will add new momentum to the steady growth of the chemical industry.
Returning to the industry, due to the impact of external environment, macroeconomic
slowdown, insufficient domestic market demand and other factors, the industry still faces great
difficulties and challenges in 2023, showing a situation of "increasing production and sales without
increasing profits". The overall industry benefit in the whole year shows a trend of low in the
beginning and high in the end. From the perspective of sectors, the refining sector has achieved
double growth in operating income and profit due to the low base in 2022. The chemical sector has
achieved double decline in operating income and profit due to the significant price decline of crude
oil, natural gas and most chemical products. According to the National Bureau of Statistics, the
refining sector achieved operating income of 4.96 trillion yuan, with a 2.1% year-on-year growth;
realized profit of 65.6 billion yuan, with a 192.3% year-on-year growth; the chemical sector achieved
operating income of 9.27 trillion yuan, with a 2.7% year-on-year reduction; realized profit of 486.26
billion yuan, with a 31.2% year-on-year reduction.
Specifically, in the "aromatics-PTA-polyester chemical fiber" industrial chain, aromatics still
occupy the vast majority of profits in the entire industrial chain, and the overall operation is
relatively strong throughout the year. Due to the impact of supply and demand, the processing fee
of PTA is generally low. Polyester chemical fiber shows a positive trend, with production and sales
basically stable, the market relatively stable, and export volume continues to grow. The profitability
is gradually restored. According to the National Bureau of Statistics, in 2023, the retail sales of
clothing, shoes and hats, and needle textile products of units above the national quota increased by
12.9% year-on-year, with a significant increase of 19.4 percentage points compared with 2022. With
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the recovery of domestic demand in the downstream and the gradual recovery of export orders, the
price difference of various products in the polyester industrial chain is gradually improved.
Figure 1 Average profit of POY150D/48F in East China Figure 2 Average profit of FDY150D/96F in East China
(unit: yuan/ton) (unit: yuan/ton)
元/吨 2019 2020 2021 2022 2023元/吨 2019 2020 2021 2022 2023
1,800 1,200
1,600 1,000
1,400
1,200 800
1,000 600
800
600 400
400 200
200
0 0
-200 -200
-400
-600 -400
-800 -600
Data source: Wind Hengli Futures Research Institute Data source: Wind Hengli Futures Research Institute
In the olefin chemical industry chain, which important end-consumers are real estate and
infrastructure, carry a huge consumption volume. Affected by multiple factors, the deep adjustment
trend of the real estate market has not changed. According to the National Bureau of Statistics, the
national real estate development investment in 2023 was 11.0913 trillion yuan, decrease 9.6% from
the previous year (calculated on a comparable basis). Chemical products such as polyethylene,
styrene, and polypropylene have difficulty in boosting prices, with narrowing price differences and
declining gross margins. As the domestic economic recovery trend continues to improve, measures
such as "actively and steadily resolving real estate risks" and "promoting the exchange of old
consumer goods for new ones" are gradually implemented, which are expected to support the
demand for upstream chemical products and drive the gradual repair of product price differences.
Enterprises with integrated whole industry chain can achieve self-sufficiency in raw materials,
and can absorb the boom and bust of intermediate chemicals within the enterprise, which has a
relatively considerable cost advantage and risk resistance ability. The synergy of the whole industry
chain plays a core role in smoothing fluctuations, resisting risks, and stabilizing profits. The basic
support of the domestic super-large-scale market and the continuous empowerment of high-quality
industry development also provide enterprises with a broad space for maneuvering and sustained
development momentum in response to increasing macroeconomic uncertainty.
2024 is a crucial year for achieving the goals and tasks of the 14th Five-Year Plan. "High-quality
development is the primary task in the comprehensive construction of a modern socialist country."
As an important pillar industry of the national economy, the petrochemical industry is also a
resource-based energy industry and an important supporting industry for basic industries. In the
process of accelerating the transition to high-quality development, technological innovation, digital
upgrading, green and low-carbon transformation, and other measures will be taken to accelerate
the cultivation and expansion of new productivity, bringing new development opportunities for
structural optimization and sustainable transformation and upgrading of the industrial structure.
With the continuous promotion of the "dual carbon" strategy, the rapid development of
strategic emerging industries such as new energy vehicles, new generation information technology,
energy conservation and environmental protection, smart grid, 3D printing, green and low-carbon
consumption transformation, and downstream industry demand, the demand for high-performance
resins, high-performance synthetic rubber, high-performance fibers, functional membrane
materials, degradable materials, high-end specialty chemicals, electronic chemicals and other new
chemical materials continues to grow. Leading enterprises in the industry, represented by Hengli,
have implemented the vertical and horizontal integration development of the entire industrial chain.
Relying on the rich basic chemical raw material warehouse of the refining and chemical integration
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project, they have rapidly extended their layout to downstream new material fields such as high-
end polyolefin, lithium battery materials, engineering plastics, petroleum-based degradable plastics,
etc., strengthening the efforts to extend, supplement and strengthen the chain, improving the level
of product refinement, specialization and serialization, enhancing product added value, enriching
product supply varieties, and cultivating new driving forces for enterprise development.
In recent years, the company has closely focused on the development of innovation chain with
the transformation of national industrial strategic, and on the layout of the industrial chain around
the innovation chain, focusing on "supplementing and strengthening the chain" and "research and
development innovation". Based on the unique advantages of the "oil, coal, and chemical" deep
integration of the "big chemical platform" in the industry, relying on the fine chemical park project,
it has accelerated the construction of high-end fine chemical industry clusters, further expanded the
industrial support and development foundation role of high-end chemical raw materials, and
continuously consolidated the platform role and operational efficiency of upstream "big chemical"
industries. It actively targets the downstream new material application demand generated by the
integration of new consumption, new energy and new intelligent manufacturing, consolidates the
advantages of traditional markets, benchmarks key new material breakthrough areas, and focuses
on creating PBS/PBAT degradable materials, functional polyester materials, high-performance resin
materials, high-end fiber materials, new energy materials, etc. It deeply anchors the high-tech
barriers and high-value-added high-growth tracks, actively builds the "Dalian Changxing Island" fine
chemical and new material industry chain ecosystem, and strives to build a platform-based chemical
new material research and development and manufacturing industry chain leading enterprise. On
July 24, 2023, the US Chemical and Engineering News (C&EN) released the list of the top 50 global
chemical companies for 2023, and Hengli Petrochemical was listed for the fourth consecutive year,
ranking 11th on the list.
During the reporting period, facing the complex and volatile market environment, under the
correct leadership of the company's board of directors, the company's management made plans
according to the situation, acted in response to the situation, and followed the trend. They
maintained strategic focus, made steady progress, and went all out to take the high-quality
development path. They continued to strengthen their strengths, fill their weaknesses, and cultivate
new strengths. They successfully completed the annual business performance goals and key
development indicators, and achieved phased results in all aspects of work. In 2023, the company
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achieved operating revenue of 234.791 billion yuan, an increase of 5.61% year-on-year; net profit
attributable to shareholders of listed companies was 6.905 billion yuan, an increase of 197.83%
year-on-year. The company's profitability improved significantly compared to the previous period.
During the reporting period, the company's key work is as follows:
I.We will implement cost reduction and efficiency improvement, strengthen the potential of
the entire industry chain, and constantly consolidate the advantage of cost moat.
As a "new productivity" in the domestic refining and chemical industry, the core advantage of
private large-scale refining and chemical industry lies mainly in the cost leadership of super-large
refinery units and the product management of "oil for oil, olefin for olefin, and aromatic for
aromatic". The company has built industry benchmarks and achieved industrial excellence on this
basis, continuously building the cost moat advantage of core competitiveness in the industry,
implementing continuous cost improvement and endogenous growth based on internal cost
reduction and efficiency improvement. This has also become one of the key driving forces for Hengli
Petrochemical to achieve performance recovery last year.
As the earliest "private large-scale refining and chemical" enterprise in China to put into
production, the scale of super-large plants, the synergy of integrated layout, and the aggregation of
upstream and downstream production capacity have created a synergistic advantage, which is the
main support for Hengli Petrochemical's "cost moat". Hengli Petrochemical was the first in China to
implement the concept of "component refining and molecular refining", selecting international
advanced technical standards, adopting world-leading and maturely applied process packages, and
using the best professional green environmental protection sewage treatment technology in the
world. The equipment selection requirements are significantly higher than the level of refineries in
the same period, and the energy and material consumption, green environmental protection,
intrinsic safety, and long-term operation of the plant are effectively guaranteed.
During the reporting period, the company made full use of its operational advantages of
"quality, cost, rapid response, and maximizing profits" as well as its flexible, efficient, and flexible
mechanism characteristics to actively adapt to market conditions and quickly respond to market
changes. The company strengthened resource planning, optimized production and sales
coordination, and timely combined with fluctuations in raw material prices and changes in market
demand to flexibly adjust raw materials, equipment, and product structures, giving priority to
increasing production of high-benefit products, achieving "oil when oil is suitable, olefin when olefin
is suitable, aromatic when aromatic is suitable, and chemical when chemical is suitable". The
company made every effort to ensure efficient collaborative operation of major industrial parks in
the refining, petrochemical, chemical, and new material industries, maintain a balance between
production and sales, smooth operation, and ensure the company's high-quality, endogenous
growth with benefits.
From the perspective of integrated production capacity layout, the listed company has a unique
"oil, coal, chemical" deep integration platform in the industry. For the first time in the industry, the
four major production capacity clusters of 20 million tons of refining, 5 million tons of coal chemical,
1.5 million tons of ethylene and 12 million tons of PTA are arranged in the same industrial park.
Various large-scale oil, coal and chemical plants are coupled through pipeline integration in the park
to achieve upstream and downstream connectivity, significantly optimizing the redundant
transportation, storage and cooling processes, saving a lot of intermediate operating costs and
logistics transportation costs. At the same time, the company has built the largest domestic coal-to-
hydrogen plant in the park, which can supply 250,000 tons of scarce pure hydrogen raw materials
at low cost every year. It has also built a high-power self-contained power plant with a total capacity
of 520MW, which is leading in energy efficiency in the industry. It provides a large amount of cheap
electricity and steam at all levels for refineries. It has self-operated two 300,000-ton crude oil
terminals, 6 million tons of self-contained crude oil tank farms, and other various complete raw
material, finished product terminals, tank farms, storage and other public works facilities,
significantly reducing various production and operating costs.
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The meticulous management of daily operations has led to continuous improvements in energy
and material consumption, as well as sustainable cost-effectiveness. The company focuses on
reducing costs in key elements, strengthening research and judgment on the market trend of raw
materials, and continuously improving its raw material procurement capabilities through domestic
and international resource integration, strategic and opportunistic combination, and other
measures. It also reasonably controls raw material inventory and reduces financial costs. In terms
of equipment management, it strengthens daily maintenance and repair of equipment, implements
regular monitoring and testing, and conducts systematic analysis and evaluation to timely identify
and eliminate potential risks, ensuring the long-term stable operation of production equipment.
Through continuous optimization and innovation of product technology, upgrading and
reconstruction of equipment, repairing old and utilizing waste, optimizing evaluation indicators, and
other measures, the company achieves product quality improvement, cost control, and benefit
increase. Starting from the second half of 2024, the company will basically end the peak period of
investment construction and capital expenditure, and the focus of subsequent operations will be
more on "optimizing operations, reducing liabilities, and strengthening dividends" under refined
cost control, continuing to build a value-added "growth + return" listed company.
II.Relying on the "big chemical industry" platform, the company has implemented the
expansion of fine chemical industry and new material industry,high efficiency opens up new
tracks and spaces.
The construction of major projects is the "stabilizer" and "ballast" for the high-quality
development of enterprises. In recent years, relying on the "big chemical industry" platform, the
company has continued to empower and develop new materials for many years, accelerating the
layout of downstream high-end chemical new material production capacity, realizing the
"optimization, extension, and supplement" of the industry chain, optimizing the company's
industrial structure, and enhancing the company's comprehensive competitiveness. After nearly
three years of careful organization, hard work, and efficient planning, the company's major projects
will gradually enter the peak production period in the first half of this year, and the company will
also achieve a significant increase in the production capacity of downstream chemical new material
products including high-end fine chemicals, optical films, electronic films, lithium battery separators,
battery electrolytes, composite current collector base films, and photovoltaic backplane base films.
During the reporting period, the progress of the company's key projects is as follows:
——The 1.6 million tons/year high-performance resin and new material project is expected to
be fully operational in the second quarter of 2024. As an important carrier for implementing the
company's development strategy of "improving the upstream and strengthening the downstream"
and accelerating the upgrade to the "platform + new material" development model, this fine
chemical project focuses on the downstream extension of the C2 industrial chain and the
improvement of coal chemical related production capacity, mainly including bisphenol A,
polycarbonate, electronic grade DMC, propylene glycol, ethanolamine, ethylene amine,
polyoxymethylene, acetic acid and other products, achieving efficient penetration and deep
connection from raw material supply to process technology to consumer market, reducing the
proportion of bulk chemical products in the company, improving the output of fine chemicals and
new material products, further consolidating the collaborative depth and industrial thickness of the
listed company's chemical new material business sector, and optimizing market coverage.
——Functional film project: The 12-line functional film project at the Suzhou Fenhu base has
been put into production one after another, and the other 12-line functional film project at the
Nantong base is also under construction in full swing. The project is expected to be put into
production in the second half of 2024. The full production of the Fenhu base and Nantong base will
lay a solid foundation for Kanghui New Materials to become the world's largest functional film
material enterprise with the largest production capacity and the most advanced technology.
——Lithium battery separator project: Yingkou base's annual output of super-strong wet
lithium battery separator 440 million square meters’ project (including 220 million square meters
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of lithium battery separator coating film), after one year, the first production line was fully
completed in early June 2023, and the company officially entered the lithium battery separator field,
achieving an important layout in the fields of new energy and new materials. The project is expected
to reach its production capacity by the first half of 2024.
The Nantong factory has an annual output of 1.2 billion square meters of wet lithium battery
separators and 600 million square meters of dry lithium battery separators. The project has already
been put into trial production on one production line, which is expected to reach its production
capacity in the first half of 2024. The remaining production lines are expected to start trial
production in succession in 2024.
—— The launch of new PTA production capacity further consolidates the leading edge of
upstream production capacity: Hengli (Huizhou) Industrial Park's 5 million tons/year PTA project has
achieved full production. The project adopts industry-leading green and intelligent PTA production
technology, focusing on the construction of two 2.5 million tons/year PTA plants and auxiliary
facilities, with characteristics of "large investment scale, strong production capacity, high process
level, and low energy consumption". It will further consolidate the company's scale and cost
advantages in the PTA field.
III. Innovation leads, intelligent manufacturing upgrades, and high standards create new
advantages and new driving forces.
The company always adheres to the strategy of "innovation-driven development",
continuously promotes the deep integration of innovation chain and industrial chain, and leads the
accelerated development of technological innovation in the company. The company adheres to the
development ideas of high technology, marketization, sustainability and greening, and has
established a technology innovation system covering the entire industrial chain. By continuously
deepening the cooperation of industry, academia and research, forming an alliance of industry,
academia and research, the company increases its investment in research and development,
strengthens the protection of intellectual property rights, cultivates innovative talent teams, and
overcomes many "choke point" technologies. It has obtained a large number of international and
domestic core patents and effectively promoted the transformation, application and production of
scientific and technological achievements. During the reporting period, the company's investment
in research and development was 1.371 billion yuan, a year-on-year increase of 15.73%. As of
December 31, 2023, the company has obtained 1,331 domestic and foreign patent licenses,
including more than 200 authorized patents in 2023.
Leveraging the company's meticulously built research and development platform over the
years, and focusing on the development path of market differentiation, high-end technology, and
business integration, the company has concentrated its advantageous resources and achieved
breakthroughs in the research and development of cutting-edge technologies and products for
differentiated functional materials. For instance, the "high uniformity super soft polyester fiber"
product's overall technology is at the leading level in China, filling a domestic gap. Kanghui New
Materials has successfully developed and mass-produced a 3.9-micron ultra-thin carbon ribbon base
film with an annual production capacity of 6,000 tons, becoming the first and only domestic
manufacturer using the melt direct-drawing method to produce 3.9-micron ultra-thin films. Hengli
Chemical Fiber has developed three new products, including "elastic cotton-like polyester filament",
"non-dyeable gray polyester filament", and "low shrinkage flame retardant polyester industrial
yarn", which have passed provincial-level appraisal. The first two of these products are at the leading
level in China and are pioneering in the industry. During the reporting period, Hengli Chemical
Fiber's invention patent for "a method for improving the quality of polyester industrial yarn" won
the China Patent Excellence Award; Hengke New Materials' invention patent for "a method for
preparing cationic dyeable polyester fiber" won the Silver Award for Excellent Patents of the China
National Textile and Apparel Council; Kanghui New Materials' solar backplane base film obtained
the German TüV Rhine certificate, marking the product's performance and quality have been
recognized by international authorities. Hengke New Materials and Kanghui New Materials have
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been recognized as "National Intellectual Property Advantage Enterprises", becoming another
major honor after Hengli Chemical Fiber was recognized as a "National Intellectual Property
Demonstration Enterprise".
Continuously deepening the "transformation of intelligence and data", upgrading intelligent
manufacturing, and striving to achieve lean production. By deeply integrating intelligent innovation
and data management, the company has achieved digital control of the entire process of
manufacturing resources, production processes, quality tracking, and production operations,
effectively improving quality control levels, reducing production costs, and improving production
efficiency. For example, Hengke New Materials vigorously promotes the deep integration of digital
technology and the real economy, making full use of information systems such as DeltaV-DCS
distributed control system, ERP, MES, WMS, etc., accelerating the construction of data assets,
mining data value, providing strong data support for benefit optimization, and improving product
quality and production efficiency. For example, Kanghui Dalian New Materials' newly built PBS
biodegradable material project adopts digital production workshop standards for the entire process,
with automation, digitalization, and intelligent equipment accounting for over 99% of the workshop,
all of which are connected to achieve collaborative operations.
During the reporting period, Hengke New Materials made significant achievements in
promoting the deep integration of industrialization and informatization, and was awarded the AAA-
level two-level integration management system evaluation certificate. Hengke New Materials has
been awarded the "National Excellent Demonstration Scenario of Intelligent Manufacturing",
"Advanced Enterprise of Intelligent Manufacturing in Chemical Fiber Industry", "Intelligent
Manufacturing Demonstration Factory in Jiangsu Province" and other honors; Kanghui New
Materials was awarded the "Intelligent Factory in Liaoning Province".
IV. Build a solid foundation, green and low-carbon, and achieve sustainable leadership in the
industry with high quality.
Based on high-starting point design planning, construction and operation, and detail
management, implementing high-standard intrinsic safety operation and green low-carbon
operation is the lifeline, benefit line, and scenic line to promote the stable, efficient, and sustainable
development of listed companies.
Firmly and steadily, we will build a strong safety production line. The company adheres to the
principle of "safety first, prevention first, comprehensive management", adheres to systematic
thinking, and consistently implements it to improve the level of intrinsic safety and build a strong
safety production line. We will fully implement the safety and environmental protection
responsibility system, implement the HSE management objectives one by one, and sign the safety
production target responsibility agreement with all employees. We will continue to improve and
perfect the safety standardization and HSE system management work, strengthen safety risk
assessment, carry out in-depth investigation and management of hidden dangers, organize regular
safety and environmental protection training, fire emergency evacuation drills, etc., to ensure the
stable situation of the company's safety production.
Green and low-carbon development, highlighting the distinctive background of high-quality
development. "Green development is the foundation of high-quality development, and new-quality
productivity itself is green productivity." The company fully implements the concept of "green
development, circular development, and low-carbon development across the entire industrial
chain", integrating green development into all aspects of project design, process package selection,
equipment procurement, installation, and operation to achieve essential energy conservation. It
continues to promote energy conservation and consumption reduction. Through measures such as
system optimization and transformation, optimizing production processes, and fine management,
the company makes full use of the joint efforts of upstream and downstream processes, mutual
supply of materials, and energy coupling across the entire industrial chain to rationally utilize
resources and promote clean production, thereby improving resource utilization efficiency and
achieving energy conservation and sustainable development throughout the entire production
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process. During the reporting period, Hengli Refining and Chemical implemented the PSA hydrogen
deep utilization and improvement project to recover hydrogen-rich gas produced by two sets of
ethylene and coal-to-hydrogen plants, increasing hydrogen production and effectively enhancing
material value. In order to fully recover and utilize oxygen-containing waste gas from ethylene glycol
plants, Hengli Chemical introduced oxygen-containing waste gas discharged into the flare system
and TO furnace for combustion treatment into the styrene plant steam superheater for combustion,
reducing natural gas consumption and saving fuel. After being put into operation, it reduced natural
gas consumption by 0.56 t/h, saving 4,704 tons of natural gas annually, equivalent to 7,940 tons of
standard coal. The company vigorously promoted the construction of photovoltaic projects. After the
fourth phase of photovoltaic projects were put into operation, the fifth phase of photovoltaic
projects of Hengke New Materials was put into operation in 2023, with a capacity of 12.5 MW and
an area of nearly 70,000 square meters, achieving an annual power generation capacity of 13.44
million kWh. The total installed capacity after operation is approximately 76.5 MW. Kanghui New
Materials utilized idle resources such as factory roofs and parking sheds to integrate photovoltaic
power generation and buildings according to local conditions, achieving "effective utilization of
resources". Currently, the first and second phases of distributed photovoltaic power generation
projects have been completed and put into operation, with a power generation capacity of 30.4
MW, making it the largest single-unit distributed photovoltaic project in Liaoning Province. After the
first and second phases of projects were put into operation, the current average daily power
generation capacity is 160,000 kWh. It is estimated that standard coal can be saved by 11,646.67
tons per year, reducing carbon dioxide emissions by 31,083.24 tons.
During the reporting period, the Ministry of Industry and Information Technology and other
agencies jointly released the "List of Key Water-Using Enterprises and Water Efficiency Leaders in
Parks in 2022" and the "List of Energy Efficiency 'Leaders' Enterprises in Key Energy-Using Industries
in 2022". Hengli Refining and Chemicals and Hengli Chemicals achieved "double leadership", and
Hengli Petrochemical (Dalian) was awarded the title of "Energy Efficiency Leader". Hengke New
Materials was awarded the title of "Leading Enterprise in Green Development in 2023" jointly issued
by the Jiangsu Provincial Department of Ecology and Environment and the Jiangsu Provincial
Federation of Industry and Commerce. Five companies under the company have been awarded the
title of "National Green Factory".
The company is committed to the future development trend of "carbon neutrality" and will
continue to transition to a green and low-carbon development path. It will focus on high-end
manufacturing and continue to promote enterprise innovation, intelligence, and green
development. It will also make great efforts in environmental, social, and governance
responsibilities, and embark on a high-quality, green and sustainable development path that
emphasizes both industrial development and ecological environmental protection, as well as
economic and social benefits.
V. Take the initiative to strengthen returns and promote value creation and
realization in multiple dimensions
Actively promote the spin-off and listing of Kanghui New Material. In order to optimize the
business structure and focus on the development of the main business, the company decided to
spin off Kanghui New Material and achieve listing through restructuring. Through the spin-off and
listing, Kanghui New Material will achieve direct connection with the capital market, give play to the
direct financing function and advantages of the capital market, broaden financing channels, improve
financing flexibility, and enhance financing efficiency, thereby effectively reducing capital costs and
providing sufficient financial support for Kanghui New Material to enhance its market
competitiveness. At the same time, it is beneficial for the capital market to rationally evaluate
different businesses of the company, so that the value of the company's high-quality assets can be
fully reflected in the capital market, thereby improving the overall market value of the company and
maximizing the interests of all shareholders. Up to now, the relevant work is being carried out in an
orderly manner.
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The company attaches great importance to reasonable investment returns for investors. Since
its restructuring and listing, the company has always maintained a high proportion of cash dividends,
and has maintained continuity and stability in profit distribution while taking into account
sustainable development. After consideration by the board of directors, the company's profit
distribution plan for 2023 is: cash dividends of 0.55 yuan per share (including tax). The amount of
cash dividends accounts for 56.07% of the net profit attributable to shareholders of the listed
company in the consolidated statement. This matter still needs to be considered by the
shareholders' meeting. After completing this dividend, the company has accumulated dividends of
22.371 billion yuan since its restructuring and listing in 2016, accounting for 41.08% of the
accumulated net profit attributable to shareholders, which significantly exceeds the matching funds
raised by the company from the capital market.
In the future, as the projects under construction are completed and put into operation, the
company will combine the actual business situation and development plan, balance the dynamic
balance of business development, performance growth and shareholder returns, continue to
improve the "long-term, stable and sustainable" shareholder value return mechanism, and allow
shareholders to fully enjoy the company's development achievements and enhance the sense of
gain of the majority of investors.
II. Industry situation of the company during the reporting period
See the relevant content of "I. Discussion and Analysis of Business Situation " in this section for
details.
III. Business situation of the company during the reporting period
The company's main business includes the production, research and development, and sales
of materials products in the fields of refining, aromatics, olefins, basic chemicals, fine chemicals, and
various downstream application areas from "one drop of oil to everything". At the same time,
relying on the upstream "oil, coal, and chemical" integrated large chemical platform, it deeply
anchors the rigid consumer market of "clothing, food, housing, transportation, and use" as well as
the high-tech barrier and high-value-added high-growth new material track. It continuously
strengthens its internal integration advantages, cost moats, and refined management and control,
and continues to build a value-growth listed enterprise of "platform + new materials"
The company has 20 million tons/year crude oil processing capacity, 5 million tons/year coal
processing capacity, 1.5 million tons/year ethylene plant, with an annual production capacity of 5.2
million tons of PX and 850,000 tons of acetic acid in the upstream. It has 16.6 million tons of PTA
production capacity and 1.8 million tons of fiber-grade ethylene glycol production capacity in the
midstream. The self-produced PTA and ethylene glycol products are partially used for self-
consumption, while the rest are sold. The downstream chemical new material products are rich in
variety and complete in specifications, targeting the mid-to-high-end market demand, covering
polyester and chemical new material products such as civilian polyester filament, industrial
polyester filament, BOPET, PBT, PBS/PBAT, etc., which are applied in textile, medicine, automotive
industry, environmental protection and new energy, electronic and electrical, photovoltaic industry,
optical equipment and other large-scale, differentiated and high value-added industrial
manufacturing and civilian consumption fields.
With the full production of world-class refining and ethylene key production capacity and the
continuous consolidation and expansion of the advantages of the entire industrial chain in the
upstream of the company, the company has accelerated the development of a "big chemical"
platform supporting and raw material supporting conditions for the downstream high-end new
material market, which is long-term, deep-going and refined. Based on internal technology research
and development and external industrial cooperation, the company continues to extend the value
chain of chemical materials and accelerates its entry into the market demand for "domestic
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substitution" and "rigid consumption" represented by advanced manufacturing, new energy, new
consumption, new materials and other end-use demand.
IV. Analysis of Core Competitiveness in Reporting Period
√适用 □不适用
1. Strategic Leadership in Full Industry Chain Development
The company is the industry leader in implementing the strategy of full industry chain
development for polyester new materials in China. It actively promotes the coordinated and
balanced development of various business segments and vigorously expands high-end capacity in
the upstream and downstream. The company is committed to building a world-class integrated
platform for the entire industry chain, from "crude oil-aromatics, olefins-PTA, ethylene glycol-
polyester-civil filament, industrial filament, films, plastics." The Hengli Integrated Refining and
Petrochemical Project with an annual capacity of 20 million tons and the Ethylene Project with a
capacity of 1.5 million tons have been fully put into operation, achieving strategic breakthroughs in
the refining, aromatics, and olefins segments. The company has become the first enterprise in the
industry to achieve integrated operation and development of the entire industry chain from "crude
oil-aromatics, olefins-PTA, ethylene glycol-polyester new materials." With the sequential
construction and operation of newly built capacities, such as PTA, chemical new materials,
PBS/PBAT biodegradable new materials, the company continuously upgrades and optimizes its
industrial model, consolidates and expands the advantages of each link's production capacity,
promotes the quantitative change in business scale, and the qualitative change in business structure.
It establishes a strategic leadership advantage in adapting to the high-quality competitive situation
of the industry's full industry chain collaboration, production capacity structure quality, equipment
scale cost, technological process accumulation, project start-up speed, and the development of
listed platforms.
2. Comprehensive Operation Advantage of Scale, Technology, and Support
The company continuously introduces internationally leading production equipment and
mature technology packages, digests, absorbs, and utilizes them, and continuously innovates and
improves technology and processes. It has established a high-quality and efficient production
capacity structure and supporting public engineering in the upstream, midstream, and downstream
of the polyester new materials industry chain, characterized by "large-scale equipment, large-scale
production capacity, integrated structure, advanced technology, green and environmental
protection, and comprehensive supporting facilities." Whether it is individual equipment, total
production capacity, or production processes, the company is at the industry's leading processing
scale and technological level. This ensures the company's advantages in unit investment cost,
material and energy consumption saving, unit processing cost, product delivery cycle, product
quality, and diversification. Moreover, the company has the most comprehensive supporting
capabilities in the industry, including power supply, energy, ports, terminals, tank farms, storage,
and transportation. It stands out in terms of comprehensive cost savings, service quality
performance, and operational efficiency improvement. The complementary relationships among
refining, petrochemicals, and coal chemicals in the industrial park form an efficient synergy of
operations and costs. The refining business has the largest coal-to-hydrogen unit in the country,
producing low-cost coal chemicals such as pure hydrogen, methanol, acetic acid, and synthesis gas.
In addition, the advantages of raw material and product storage and transportation systems greatly
enhance the operational flexibility and comprehensive cost advantages of projects.
3. Market Competition Advantage Driven by High-end Research and Development
The company follows a development path that emphasizes market differentiation, high-end
technology, and large-scale facilities while integrating business operations. It has a long-term
accumulated market-technology innovation mechanism and has established an international R&D
team and a high-level scientific research platform. Its technological research and development
strength and innovation capability in new products are leading in the industry. The company can
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2023 Annual Report
quickly respond to the latest market consumption demand changes and has a stable reserve of mid-
to-high-end customer resources. The four main operating entities of the company, Hengli Fibre, Deli
Fibre, Hengke New Materials, and Kanghui New Materials, are all national high-tech enterprises.
Through fine management of the production process and continuous improvement of technology
and processes, the company has independently developed and accumulated a series of
differentiated and functional products, holds numerous production patents for various products,
and has gained wide market recognition. The company's products are superior to competitors in
terms of quality and stability. It is the only company in China that can produce specification 5DFDY
products on a large scale. Its market share in MLCC separator films exceeds 65% domestically. It is
also the only domestic and the second global enterprise capable of producing 12-micrometer
silicon-coated stacked lithium battery protection films online. The company has absolute
technological advantages and process accumulation in functional films and civil polyester filament,
forming a competitive moat that is difficult to replicate in the industry in the short term.
4. Efficient Management Advantage of Intelligence and Lean Manufacturing
The company strives to promote the deep integration of "Internet, big data, artificial
intelligence, and the real economy" and develop advanced manufacturing capacity to regenerate
internal growth momentum. It regards "intelligent interconnection" as an important entry point for
industrial upgrading and transformation. By gradually implementing methods such as "machine
replacing human, " "automatic equipment change, " "complete set replacement of single machine,
" and "intelligence replacing digitization, " the company transforms its development model from
relying on "population dividends" to "technology dividends." Through the integration and
application of intelligent manufacturing, the Internet, and the Internet of Things, the company
continuously improves the level of intelligent manufacturing throughout the entire process. It
seamlessly integrates key links such as control, research and development, manufacturing, business
management, and finance through self-developed product testing systems, automatic barcode
systems, intelligent warehousing systems, and sales systems, and interfaces with ERP systems to
achieve product traceability and full-process control. This promotes the company's transformation
from "manufacturing" to "intelligent manufacturing" and from single business management to
highly synergistic operation of the industrial chain.
5. Accumulated Talent Management Advantage
The company has formed a multidisciplinary and multi-professional scientific research team,
including disciplines such as refining, petrochemicals, polymer materials, chemical fiber engineering,
textile engineering, electrical engineering, etc. Its scientific research and development capabilities
are ahead of domestic peers. While introducing external talents, the company attaches great
importance to the cultivation of internal talents and provides a good career development path for
employees. The company has also established a sound internal training system, covering research
and development, production, sales, management, and other aspects, and has cultivated a large
number of backbone personnel.
V. Main operating information in the reporting period
As of the end of 2023, the company's total assets were 260.599 billion yuan, a year-on-year
increase of 7.94%, and the net assets attributable to shareholders of listed companies were 59.992
billion yuan, a year-on-year increase of 13.49%.
In 2023, the Company recognised a revenue from operations of 234.791 billion yuan, a year-
on-year increase of 5.61%; a net profit attributable to shareholders of listed company of 6.905 billion
yuan, a year-on-year increase of 197.83%.
(I) Analysis of Primary operations
1. Analysis of changes in items related to income statement and cash flow
statement
Unit: ten-thousand-yuan Currency: RMB
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2023 Annual Report
Item Amount in the
Amount in the
same period of last Variance (%)
reporting period
year
Revenue from operations 23, 479, 067.24 22, 232, 358.4 5.61
Cost of sales 20, 838, 385.19 20, 407, 759.71 2.11
Selling expenses 29, 347.30 39, 276.92 -25.28
Administrative expenses 199, 736.80 188, 929.87 5.72
Financial expense 536, 476.39 428, 737.15 25.13
Research and development 137, 102.85 118, 471.10 15.73
expenses
Net cash flows from operating 2, 353, 579.01 2, 595, 397.08 -9.32
activities
Net cash flows from investing -3, 881, 449.94 -2, 629, 706.99 Not applicable
activities
Net cash flows from financing 990, 970.42 1, 040, 541.64 -4.76
activities
Detailed description of major changes in the company's business type, profit composition or profit
source in the current period
□适用 √不适用
2. Revenue and Cost Analysis
√适用 □不适用
(1). Segmentation of Main Business by Sector, Product, Region, and Sales Model
Unit: ten-thousand-yuan Currency: RMB
Segmentation of main operations by sector
Year-on- Year-on- Year-on-
Gross
Revenue from year change year change year change
By sector Cost of sales margi
operations of of cost of of gross
n (%)
revenue(%) sales(%) margin(%)
Petrochemic 22, 668, 414.46 20, 189, 829.10 10.93 8.23 5.41 2.38% pts
al industry
Other 651, 548.82 570, 713.93 12.41 -46.75 -53.71 13.16% pts
industries
Segmentation of main operations by product
Year-on- Year-on- Year-on-
Gross
Revenue from year change year change year change
By product Cost of sales margi
operations of of cost of of gross
n (%)
revenue(%) sales(%) margin(%)
Refining 11, 996, 139.48 9, 773, 674.08 18.53 -3.00 -6.69 3.22% pts
products
PTA 7, 260, 732.58 7, 359, 322.54 -1.36 28.20 22.02 5.13% pts
Polyester 3, 411, 542.41 3, 056, 832.48 10.40 17.09 15.38 1.33% pts
products
Others 651, 548.82 570, 713.93 12.41 -46.75 -53.71 13.16%pts
Segmentation of main operations by region
Year-on- Year-on- Year-on-
Gross
Revenue from year change year change year change
By region Cost of sales margi
operations of of cost of of gross
n (%)
revenue(%) sales(%) margin(%)
Domestic 21, 752, 029.48 19, 295, 205.41 11.29 6.37 3.16 2.76% pts
Overseas 1,567,933.80 1,465,337.62 6.54 -8.78 -12.93 4.45% pts
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2023 Annual Report
Description of main business by industry, by product, by region, and by sales model
Revenues, costs and gross margins for refined products, PTA and polyester products include sale
revenues, purchase costs and gross margins.
(2). Production and sales volume analysis
√适用 □不适用
Year-on- Year-on-
Year-on-
Producti year year
Main Sales Inventory year
Unit on change of change of
products volume quantity change of
volume productio inventory(
sale(%)
n(%) %)
Refining 10, 000 tons 2, 465.42 2, 164.27 71.88 5.41 1.33 -22.93
products
PTA 10, 000 tons 1, 444.37 1, 422.20 47.58 25.22 33.99 76.29
New 10, 000 tons 429.00 409.04 40.18 19.94 25.4 -4.79
material
products
Explanation of production and sales volume:
1. Refining and chemical products include all products of Hengli Refining and Hengli Petrochemical;
2. New material products include polyester new materials, engineering plastics, functional films,
and biodegradable materials;
3. The sales volume of refining and chemical products and PTA includes trade volume but excludes
internal consumption within the company.
(3). Performance of Major Procurement Contracts and Major Sales Contracts
□适用 √不适用
(4). Cost Analysis
Unit: ten thousand yuan
By Sector
Proportion
Proport in
ion in total
Amount in Year-on-
total Amount in the costs
Cost the year Explana
By sector costs same period of of the
composition reporting change tion
of the last year same
period (%)
reporting period
period (%) of last
year (%)
Direct 18, 644, 485.10 89.81 17, 435, 956.16 85.52 6.93
materials
Petrochem
Direct labor 147, 931.07 0.71 168, 283.79 0.83 -12.09
ical
Power fuel 668, 913.47 3.22 703, 924.33 3.45 -4.97
industry
Manufacturin 728, 499.46 3.51 673, 959.64 3.31 8.09
g expenses
Direct 535, 657.18 2.58 1, 154, 573.45 5.66 -53.61
materials
Other Direct labor 8, 957.68 0.04 176, 343.65 0.86 -94.92
industries Power fuel 880.36 - 64, 379.42 0.32 -98.63
Manufacturin 25, 218.71 0.12 9, 756.32 0.05 158.49
g expenses
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2023 Annual Report
By Product
Proportion
Proport in
ion in total
Amount in Year-on-
total Amount in the costs
Cost the year Explana
By product costs same period of of the
composition reporting change tion
of the last year same
period (%)
reporting period
period (%) of last
year (%)
Direct 8, 881, 184.28 42.78 9, 574, 213.92 46.96 -7.24
materials
Refining Direct labor 64, 564.35 0.31 56, 910.15 0.28 13.45
products Power fuel 335, 907.95 1.62 327, 732.97 1.61 2.49
Manufacturin 492, 017.50 2.37 440, 075.17 2.16 11.80
g expenses
Direct 7, 101, 089.02 34.20 5, 681, 885.50 27.87 24.98
materials
Direct labor 8, 834.21 0.04 24, 616.91 0.12 -64.11
PTA
Power fuel 127, 750.10 0.62 143, 261.15 0.70 -10.83
Manufacturin 121, 649.21 0.59 113, 145.96 0.55 7.52
g expenses
Direct 2, 662, 211.80 12.82 2, 179, 856.74 10.69 22.13
materials
Polyester Direct labor 74, 532.51 0.36 86, 756.73 0.43 -14.09
products Power fuel 205, 255.42 0.99 232, 930.21 1.14 -11.88
Manufacturin 114, 832.75 0.55 120, 738.51 0.59 -4.89
g expenses
Direct 535, 657.18 2.58 1, 154, 573.45 5.66 -53.61
materials
Direct labor 8, 957.68 0.04 176, 343.65 0.86 -94.92
Others
Power fuel 880.36 - 64, 379.42 0.32 -98.63
Manufacturin 25, 218.71 0.12 9, 756.32 0.05 158.49
g expenses
Explanation of cost analysis and other situations
None
(5). Changes in Consolidation Scope Due to Significant Equity Changes in Subsidiaries during the
Reporting Period
□适用 √不适用
(6). Significant Changes or Adjustments in Business, Products, or Services during the Reporting
Period
□适用 √不适用
(7). Key Sales Customers and Key Suppliers Situation
A. Overview of Key Sales Customers
√适用 □不适用
The sales revenue from the top five customers amounted to 21.28 billion yuan, accounting for
9.07 % of the total annual sales. Among the sales revenue from the top five customers, there were
no sales made to related parties, representing 0% of the total annual sales.
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2023 Annual Report
During the reporting period, the proportion of sales to a single customer exceeded 50% of the
total, and among the top five customers there were new customers or heavy reliance on a small
number of customers
□适用 √不适用
B. Overview of Key Suppliers
√适用 □不适用
The purchasing amount from the top five suppliers amounted to 64.12 billion yuan, accounting for
28.23 % of the total annual procurement. Among the purchasing amount from the top five suppliers,
there were no purchases made from related parties, representing 0% of the total annual
procurement.
The proportion of purchases from a single supplier in the Reporting Period exceeds 50% of the total,
and there are new suppliers among the top 5 suppliers or heavy reliance on a small number of
suppliers
□适用 √不适用
Other note
None
3. Expenses
□适用 √不适用
4. Research and Development Investment
(1). Table of Research and Development Investment Status
√适用 □不适用
Unit: ten thousand yuan
Expensed research and development 137, 102.85
investment in the current period
Capitalized research and development -
investment in the current period
Total R&D investment 137, 102.85
Percentage of research and development 0.58
investment to operating revenue (%)
Percentage of capitalized research and -
development investment to total research
and development investment (%)
5. Cash flows
□适用 √不适用
(II) Explanation of Significant Profit Changes Due to Non-Core Business
□适用 √不适用
(III) Analysis of Asset and Liability Situation
√适用 □不适用
1. Asset and Liability Status
Unit: ten thousand yuan
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2023 Annual Report
Ratio Percentage
Ratio of
of change in
closing
closing closing
balance
balance Closing balance
Closing balance of
of balance of compared
Item of current previous Explanation
current previous between
period period
period period current
to total
to total period to
assets
assets previous
(%)
(%) period(%)
Financial 29, 883.01 0.11 60, 441.44 0.25 -50.56 Mainly due to
assets held a decrease in
for trading fair value of
derivative
financial
instruments
held during
the current
period.
Accounts 53, 841.53 0.21 37, 244.59 0.15 44.56 Mainly due to
receivable an increase in
unsettled
receivables
for sales
within the
closing
accounting
period
Receivable 417, 004.76 1.60 228, 727.12 0.95 82.32 Mainly due to
financing an increase in
the amount
of holding of
bank
acceptance
bills at the
end of
accounting
period.
Other 679, 449.79 2.61 446, 872.66 1.85 52.05 Mainly due to
current an increase in
assets investment in
construction
in progress
during the
period, and
an increase in
VAT retention
at the end of
accounting
period.
Construction 4, 882, 413.77 18.74 2, 728, 749.15 11.30 78.92 Mainly due to
in progress an increase in
investment in
the current
period for the
1.6 million
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2023 Annual Report
tons per year
high-
performance
resin and new
material
project and
the second
phase of the
new material
industrial
park project
Deferred tax 27, 632.52 0.11 89, 222.72 0.37 -69.03 Mainly due to
assets a decrease in
deferred tax
assets
recognized as
a result of the
provision for
decline in
value of
inventories
made at the
beginning of
the
accounting
period,
because of
the written
off of the
inventory.
Other non- 338, 328.79 1.30 632, 724.84 2.62 -46.53 Mainly due to
current a decrease in
assets long-term
asset
purchase
payments
related to
construction
in progress
made during
the current
period.
Financial 19, 032.43 0.07 34, 602.07 0.14 -45.00 Mainly due to
liabilities a decrease in
held for fair value of
trading unsettled
derivative
financial
instruments
at the end of
the
accounting
period
Bills payable 1, 200,245.36 4.61 2, 060,377.59 8.53 -41.75 Mainly due to
a decrease in
letters of
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2023 Annual Report
credit issued
that have not
yet expired at
the end of the
accounting
period
Accounts 1, 559, 866.76 5.99 886, 931.00 3.67 75.87 Mainly due to
payable an increase in
purchase
payable of
material and
long-term
assets at the
end of the
accounting
period
Taxes 143, 960.17 0.55 103, 601.37 0.43 38.96 Mainly due to
payable an increase in
payable of
enterprise
income tax
and value-
added tax at
the end of the
accounting
period
Non-current 1, 349, 807.17 5.18 934, 902.82 3.87 44.38 Mainly due to
liabilities an increase in
due within the amount
one year of long-term
loans payable
that will
mature
within one
year.
Other 471, 835.39 1.81 338, 212.76 1.40 39.51 Mainly due to
current an increase of
liabilities Hengli
Futures that
received from
currency
margin of
client with its
operation.
Long-term 208, 546.03 0.80 85, 883.33 0.36 142.82 Mainly due
payables to the
addition of
new
financing
leases
payable
during the
current
period.
Specific 10, 935.81 0.04 160.22 - 6, 725.50 Mainly due
reserve to a
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2023 Annual Report
decrease of
input of
safety
production
during the
current
period.
Other note
None
2. Overseas Asset Situation
√适用 □不适用
(1) Assets Scale
Including: Overseas assets 54.57(Unit: hundred million yuan Currency: RMB), accounting for 2.09 %
of the total assets.
(2) Explanation of a higher proportion of overseas assets
□适用 √不适用
3. Major assets under restriction at the end of the reporting period
√适用 □不适用
Unit: ten thousand yuan Currency: RMB
Item Carrying value at year Reason of restriction
end
Cash and bank 525, 289.58 Pledge cash and bank balances to obtain financing credit
balances from financial institutions
Cash and bank 7, 026.95 Security deposits for trading in futures and financial
balances derivatives
Cash and bank 11, 960.00 Freezing funds involved in litigation
balances
Receivable 287, 353.51 Pledge notes receivable to obtain financing credit from
financing financial institutions
Fixed assets 10, 829, 453.36 Mortgage fixed assets to obtain financing credit from
financial institutions
Fixed assets 464, 743.62 Mortgage is used to provide security for the sale and
leaseback contract
Intangible assets 506, 712.06 Mortgage intangible assets to obtain financing credit
from financial institutions
Construction in 2, 401, 409.53 Mortgage construction in progress to obtain financing
progress credit from financial institutions
Total 15, 033, 948.61
4. Other note
□适用 √不适用
(IV) Analysis of Industry Operating Information
√适用 □不适用
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2023 Annual Report
Analysis of Operating Information in the Chemical Industry
1 Overview of the Industry
(1). Industry Policies and Their Changes
√适用 □不适用
①《Work Plan for Stable Growth in Petrochemical and Chemical Industry》
The "Work Plan for Stable Growth in the Petrochemical and Chemical Industry" jointly issued
by the Ministry of Industry and Information Technology and other six departments in 2023 pointed
out that we should vigorously implement the goals and tasks of the "Guiding Opinions on Promoting
High-quality Development of the Petrochemical and Chemical Industry in the 14th Five-Year Plan".
The Plan proposed that we should support key enterprises to create an original technology source
for the industry, which is mainly based on the needs of strategic emerging industries and the
transformation and upgrading needs of traditional industries, to enrich the supply of new chemical
materials and specialty chemicals, and increase the supply of key generic technology innovation
solutions, so as to effectively play a leading role in supporting and demonstrating the industrial chain.
②《Guiding Opinions on Promoting the High-Quality Development of the Petrochemical and
Chemical Industry During the "14th Five-Year Plan"》
In March 2022, the Ministry of Industry and Information Technology and five other
departments jointly issued the Guiding Opinions on Promoting High-Quality Development of the
Petrochemical and Chemical Industry during the 14th Five-Year Plan. It proposed that by 2025, the
petrochemical and chemical industry should establish a high-quality development pattern
characterized by strong independent innovation capability, rational structural layout, green and
low-carbon practices. The industry's ability to ensure the supply of high-end products should be
significantly improved, core competitiveness should be noticeably enhanced, and substantial
progress should be made in achieving self-reliance at a high level.
③ 《 Action Plan for Energy Conservation and Carbon Reduction Driven by Strict Energy
Efficiency Constraints in the Petrochemical and Chemical Industry (2021-2025 years) 》
In October 2021, the National Development and Reform Commission, the Ministry of Industry
and Information Technology, and other departments jointly issued the "Opinions on Strict Energy
Efficiency Constraints to Promote Energy Conservation and Carbon Reduction in Key Sectors" and
the "Action Plan for Energy Conservation and Carbon Reduction Driven by Strict Energy Efficiency
Constraints in the Petrochemical and Chemical Industry (2021-2025 years) ". The plan aims to
promote green and low-carbon transformation in the refining, ethylene, and synthetic ammonia
industries and ensure the timely achievement of carbon peak targets.
《 The "Action Plan" clearly puts forward the action goals of achieving a capacity ratio
exceeding 30% at benchmark levels for the refining, ethylene, synthetic ammonia, and calcium
carbide industries by 2025 through the implementation of energy conservation and carbon
reduction measures. It aims to significantly improve the overall energy efficiency level, reduce
carbon emissions intensity, and significantly enhance the capabilities for green and low-carbon
development. Key tasks outlined in the plan include formulating a general implementation plan for
technological transformation in key petrochemical industries, guiding the orderly phasing out of
inefficient production capacity, promoting energy-saving and low-carbon technologies and
equipment, and driving collaborative and clustered development in the industry. This includes
selecting advanced and applicable energy-saving technologies for the refining, ethylene, and
synthetic ammonia industries, as well as guiding technological transformation in enterprises with
low energy efficiency. The plan also promotes the elimination of refining units with a capacity of 2
million tons/year and below, ethylene units with a capacity of 300, 000 tons/year and below, and
imposes strict restrictions on the construction of certain types of units with limited capacities.
Additionally, the plan encourages the promotion of low-carbon deep processing of heavy and poor-
quality residual oil, one-step method for ethylene production from synthesis gas, and crude oil
direct cracking to produce ethylene. It emphasizes the integration of refining and petrochemical
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2023 Annual Report
industries, coal conversion and electricity heating integration, and the development of multiple co-
production. The aim is to establish interconnected industrial chains where enterprises are
connected from upstream to downstream, with mutual supply and demand and interconnectivity
of production facilities. This will improve the level of comprehensive resource utilization, reduce
energy consumption in logistics and transportation, and promote the recognition of chemical
industrial parks.
④《The "14th Five-Year Plan" for the ecological economic development of Liaoning Province》
In January 2022, the General Office of the People's Government of Liaoning Province issued
the "14th Five-Year Plan" for the ecological economic development of Liaoning Province. The plan
highlights the following key points:
Extending the Petrochemical Industry Chain: The plan aims to maintain the scale advantage of
bulk basic chemical raw materials such as ethylene, propylene, PX (paraxylene), and PTA (purified
terephthalic acid). It also seeks to promote the development of the petrochemical industry towards
higher value-added products, focusing on the olefin, aromatic hydrocarbon, new materials, and fine
chemical industrial chains.
Promoting the "Reduction of Oil and Increase of Chemicals" in the Petrochemical Industry: The
plan aims to transform the refining and chemical production towards safe, clean, green, and
efficient practices. The goal is to achieve intensive, high-end, green, and integrated development of
the refining and chemical industry. Key areas of focus include the development of high-end
polyolefins, specialty resins, specialty engineering plastics, high-end membrane materials, and other
chemical new materials.
(2). Basic information on the main industrial segment and industrial status of the
Company
√适用 □不适用
① In the petroleum refining and chemical sector
The company has established a processing capacity of 20 million tons of crude oil and 5 million
tons of raw coal in the upstream and midstream business sectors, with a main annual output of 5.2
million tons of PX, 1.8 million tons of ethylene glycol, 1.2 million tons of pure benzene, 850,
000 tons of polypropylene, 720, 000 tons of styrene, 400, 000 tons of high-density polyethylene,
850, 000 tons of acetic acid, 140, 000 tons of butadiene, and other domestically scarce and high-
value-added chemical products, as well as Refined oil products such as gasoline, diesel, and
aviation kerosene that meet the national standards above China VI. As smaller refineries
with higher production costs and outdated facilities are gradually phased out, the concentration
of the refining and chemical industry and the competitiveness of large-scale newly built
refineries will greatly improve. The company has prominent advantages in policy support,
process technology, and industrial synergy. Compared to other refineries, it has characteristics of
high quality and low cost, making it highly competitive in the market.
② In the PTA sector
PTA serves as the direct upstream raw material for polyester production, and China is the
world's largest producer and consumer of PTA. The company currently has built and put into
operation a PTA production capacity of 16.6 million tons/year. It is the largest PTA production
supplier in the world in terms of capacity, with the most advanced technology and the most
significant cost advantages. It is also the only company in the industry with a capacity of over 10,
000 tons per year.
③ In the polyester new materials sector
One of the company's primary operations is the research, production, and sales of related
products. The main products include PET (Polyethylene Terephthalate), POY (Partially Oriented
Yarn), FDY (Fully Drawn Yarn), DTY (Drawn Textured Yarn), BOPET (Biaxially Oriented PET), PBT
(Polybutylene Terephthalate), PBS/PBAT (Polybutylene Succinate/Polybutylene Adipate
Terephthalate), and other polyester and chemical new materials products. The company ranks
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2023 Annual Report
among the top five in the national civil filament capacity and second in the national industrial
filament capacity. It is one of the largest and technologically advanced manufacturers of polyester
filament for both civilian and industrial applications in China.
The subsidiary company Kanghui New Material, focuses on creating world-leading high-end,
differentiated, green and environmentally friendly functional film materials, high-performance
engineering plastics and biodegradable materials. In terms of functional film materials, Kanghui New
Material has broken through foreign technical barriers in the fields of high-end MLCC release base
film, polarizer release protection base film, OCA release base film, environmental protection RPET
base film, composite current collector base film, lithium battery process protection film,
photosensitive dry film base film, ultra-thin capacitor film, etc., and has continued to solve the
"choke point" problem in the field of new materials. It has the core competitiveness and industrial
development strength of the industry.
In terms of high-performance engineering plastics, Kanghui New Material has an annual
production capacity of 210,000 tons of PBT engineering plastics, making it the largest PBT producer
in China. It is mainly used in automotive parts, polymer alloys, cable protective sheaths, electronic
appliances and other industrial fields. In terms of biodegradable materials, Kanghui New Material
has the largest single-set annual production capacity of 33,000 tons of PBAT based on its own
technology in China, which is applied to green environmental protection applications such as food-
grade shopping bags, tableware and straws for PBS/PBAT.
2 Products and production
(1). Main business model
√适用 □不适用
The company's main business model involves the procurement of crude oil and related
additives, primarily producing PX products and finished oil, as well as other chemicals. The PX
products are mainly used as raw materials for the company's PTA plant, with a portion of the PTA
products being used internally by the company's polyester factory, and the rest being sold to
downstream customers in the fiber industry for the production of polyester fibers and other
products. Various polyester products are sold to downstream weaving factories for the production
of textiles, industrial yarn is sold to construction and automotive component manufacturers,
polyester chips are sold to spinning companies, BOPET films are sold to downstream printing,
packaging, and electronics companies, and PBT resins are sold to downstream automotive,
electronics, and machinery companies. The specific operating modes are as follows:
(1) Petroleum Refining Sector
Petroleum products, also known as oil products, are processed from crude oil through various
refining processes such as atmospheric distillation, hydrogenation cracking, and reforming. These
processes produce various fuel oils (gasoline, kerosene, diesel, etc.), lubricants, coke, paraffin wax,
asphalt, basic organic materials (ethylene, propylene, butene, benzene, toluene, xylene, acetylene,
naphthalene), as well as various synthetic organic materials derived from the basic organic materials.
(2) PTA Sector
PTA (Purified Terephthalic Acid) is an important bulk organic material widely used in various
sectors of the national economy, including chemical fibers, light industry, electronics, and
construction. In the domestic market, the main downstream products of PTA are polyester fibers,
which are primarily used in clothing, home textiles, and industrial textiles. The main business
process involves purchasing para-xylene (PX) and producing PTA through oxidation reactions,
crystallization, drying, hydrogenation, and further crystallization processes, followed by selling the
product to downstream customers.
The profit model in the PTA industry is based on producing and selling PTA products to generate
profits. Since the fixed investment for the products is significant, improving profitability relies mainly
on reducing the fixed cost per unit. Companies achieve this by capitalizing on economies of scale,
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2023 Annual Report
adopting advanced processing technologies and equipment, establishing efficient public
infrastructure, enhancing production safety and product quality stability, and ultimately lowering
production costs to increase profitability.
(3) Polyester Sector
The primary business process involves the procurement of petrochemical products such as PTA,
MEG, and other additives, followed by polymerization reactions using appropriate production
equipment. Subsequently, the polyester filaments are produced through spinning and drawing
processes, and the products are sold to downstream weaving companies for the production of civil
and industrial textiles.
The profit model in the polyester filament industry is based on producing and selling polyester
filaments to generate profits. Due to the significant fixed costs associated with the products,
improving profitability depends on three main factors: reducing the fixed cost per unit, increasing
the rate of new product development, and adding differentiated products. Companies achieve this
by focusing on increasing the rate of new product development, pursuing differentiation in product
lines, enhancing product value, and ultimately improving overall profitability.
(4) Polyester Film Sector
The main business process involves the procurement of petrochemical products such as PTA,
MEG, and other additives. Unlike the polyester industry, the equipment and process routes differ.
In the polyester industry, equipment is used to extrude the film into polyester filaments, while in
the polyester film industry, equipment is used to extrude the film directly. Consequently, the
downstream customer base is different.
The profit model in the polyester film industry is based on producing and selling polyester films
to generate profits. Due to the significant fixed investment required, improving profitability depends
mainly on two factors: reducing the fixed cost per unit and developing new products. For companies,
relying on the cutting-edge equipment technology, self-owned synthesis technology and
independent research and development capabilities accumulated in the industry for more than ten
years, they overcome various technical difficulties, break through foreign technical barriers in the
fields of medium and high-end MLCC release base film, polarizer release protection base film, OCA
release base film, environmental protection RPET base film, composite current collector base film,
lithium battery process protection film, photosensitive dry film base film, ultra-thin capacitive film
and PBS-based biodegradable materials, and actively extend and expand the medium and high-end
material business in various application scenarios.
(5) Engineering Plastics Sector
The primary business process involves the procurement of petrochemical products such as PTA,
BDO, and other additives. The production process includes polymerization, extrusion, pulverization,
and granulation, ultimately producing engineering plastics. The products are then sold to
downstream customers.
The profit model in the engineering plastics industry is based on producing and selling plastic
pellets to generate profits. Due to the significant fixed investment associated with the products,
improving profitability relies mainly on two factors: reducing the fixed cost per unit and developing
new products. For companies, the future primarily involves capitalizing on economies of scale to
seize market share, increasing product added value, and improving overall profitability.
Main situation of adjusting the business model during the reporting period
□适用 √不适用
(2). Main products
√适用 □不适用
Primary upstream Applications of major Main factors affecting
Product Business sector
raw materials downstream materials prices
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2023 Annual Report
Refined oil Petroleum Crude Oil Aviation kerosene, Upstream raw materials
refining gasoline, and diesel and like crude oil and
other power fuels downstream demand
PX Chemical raw Crude Oil PTA Upstream raw materials
materials and like crude oil and
chemicals downstream demand
manufacturing
Ethylene Chemical raw Crude Oil Polyethylene, ethylene Upstream raw materials
materials and glycol like crude oil and
chemicals downstream demand
manufacturing
PTA Chemical raw PX Polyester fiber, bottle Crude oil and PX supply
materials and grade chips, film grade and downstream
chemicals chips, etc. demand
manufacturing
Polyester Polyester PTA, MEG Advertising light box Upstream raw materials
Filament manufacturing cloth, geotextile, like crude oil and
Yarn (PFY) conveyor belt, downstream textile
automobile fiber and tire prosperity
meridian, clothing and
home textiles, etc.
Polyester Polyester PTA, MEG Filature Upstream raw materials
Filament manufacturing like crude oil and
downstream demand
BOPET Plastics product PTA, MEG Packaging film, insulating Upstream raw materials
manufacturing film, capacitor film, etc. like crude oil and
downstream demand
PBT Plastics product PTA, BDO Auto parts, electronic Upstream raw materials
manufacturing appliances, aerospace like crude oil and
materials, etc. downstream demand
PBS/PBAT Plastics product PTA, BDO, Adipic Packaging materials, Upstream raw materials
manufacturing acid shrink film, agricultural like crude oil and
film, etc. downstream demand
(3). R&D and innovation
√适用 □不适用
As of the end of 2022, the company has accumulatively held 1, 331 patents, of which 215 were
newly approved during the reporting period.
(4). Production Technology and Process
√适用 □不适用
During the reporting period, there were no significant changes in the company's main products
and their production processes.
For specific details regarding the production processes of the company's main products in the
polyester fiber sector, please refer to Section 4, "Discussion and Analysis of Operating Conditions, "
subsection "II. (IV) Analysis of Operational Information in the Chemical Industry, " and the section
"Production Processes and Flow" (page 33) in the company's "2016 Annual Report."
Regarding the production processes of the company's refining and ethylene engineering, as
well as the PBAT project, please refer to Section 4, "Discussion and Analysis of Operating Conditions,
" subsection "II. (IV) Analysis of Operational Information in the Chemical Industry, " and the section
"Production Processes and Flow" (page 34) in the company's "2020 Annual Report."
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2023 Annual Report
(5). Production capacity and construction work
√适用 □不适用
Unit: hundred million yuan Currency: RMB
Investmen
t
in Planned
Major Designed Capacity Capacity under
capacity completion
plants/projects capacity utilization(%) construction
under time
constructi
on
High-performance
Polyester Currently in
industrial yarn
Filament Yarn 1, 400, 000 the trial
100 project with an 22.93
(PFY) of Suzhou tons/Year operation
annual output of
plant stage
400, 000 tons
The
production of
150,000
tons/year
elastic fiber,
150,000
Annual output of
tons/year
1.5 million tons of
PFY for civil environmental
1, 750, 000 green multi-
use of Nantong 100 82.28 protection
tons/Year functional textile
plant fiber, 300,000
new materials
tons/year full
project
matting POY
and 300,000
tons/year
cationic POY
has been
completed
PFY for civil
200, 000
use of Suqian 100
tons/Year
plant
Polyester film
of Kanghui
386, 000
New Material 100
tons/Year
(Yingkou)
Industrial Park
Engineering
plastics of
Kanghui New 210, 000
100
Material tons/Year
(Yingkou)
Industrial Park
PBS bio-
degradable
advanced 33, 000
100
materials project tons/Year
of Kanghui New
Material
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2023 Annual Report
(Yingkou)
Industrial Park
PTA of Dalian 1, 1600, 000
99.44
plant tons/Year
Refining and
20, 000, 000
chemical project 102.44
tons/Year
of Dalian plant
Ethylene project 1, 500, 000
106.06
of Dalian plant tons/Year
Expected to be
PBS
put into
biodegradable
production
plastics in / / 450, 000 tons/Year 26.77
gradually in
Kanghui Dalian
the first half of
plant 2024
Gradually put
into
Lithium battery production in
separator in 440 million square the middle of
/ / 9.85 2023, and
Kanghui Yingkou meters/Year
currently in the
Plant
trial
production
stage
Fully put into
production in
the middle of
PTA of Huizhou 2 sets of 2, 500, 000 2023, and
/ / 107.72
Plant tons/year PTA plant currently in the
trial
production
stage
Hengli Gradually put
Petrochemical into
Chemical New 300, 000 tons/Year production in
/ / 28.70
Material Adipic acid, etc. the middle of
Supporting 2023
Chemical Project
Gradually put
into
production in
Bisphenol A, the third
Annual output of
isopropanol, quarter of
1.6 million tons
ethylene oxide, 2023, and
of high-
/ / electronic grade 159.48 expected to
performance
DMC (including EC, be fully put
resin and new
EMC and DEC), ABS, into
material projects
etc. production in
the second
quarter of
2024
Annual output of The first phase of The first
800, 000 tons of / / the project plans to 46.25 phase of the
functional films build a 470,000 project will be
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2023 Annual Report
and functional tons/year high-end put into
plastics functional polyester production
film plant (totaling line by line in
12 lines), and the 2023. By the
second phase end of 2023,
includes a 100,000 production
tons/year and
functional film debugging of
modification plant, 9 out of 12
a 150,000 tons/year lines have
modified PBT plant, been
and a 80,000 completed. It
tons/year modified is expected
PBAT plant, etc. that all lines
will reach
their
production
capacity in the
second half of
2024. The
follow-up will
be the second
phase of the
project
The first phase of
the project plans to
build a 500,000
tons/year polyester
Annual output of
film production
600, 000 tons of
line, a 100,000
functional films Expected to
tons/year polyester
and functional be put into
film coating
plastics, production
production line, a 33.23
functional film line by line in
1.5 billion square
and 3 billion the second
meters/year lithium
square meters half of 2024
battery separator
lithium battery
production line,
separator project
and a 600 million
square meters/year
coating production
line
Note: 1. The designed capacity of the plants and the projects listed above refers to what has
been put into production, excluding those under construction.
2. The date of the invested amount of production capacity under construction is as of the
end of 2023
Increase and decrease of production capacity
√适用 □不适用
1. The annual production capacity of Kanghui New Material Yingkou factory's super wet lithium
battery separator of 440 million square meters has been gradually put into production in mid-2023
and is currently in the trial production stage.
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2023 Annual Report
2. Hengli (Huizhou) Industrial Park has fully put into operation of the 5 million tons/year PTA and
is currently in the trial production stage.
3. The 300,000 tons/year adipic acid and other new material supporting chemical projects of Hengli
Chemical have been gradually put into production in mid-2023.
4. The project of annul producing 1.6 million tons of high-performance resin and netting materials
has been gradually put into production in the third quarter of 2023, and is expected to be fully put
into production in the second quarter of 2024.
Adjustment of product line and production capacity structure optimization
□适用 √不适用
Abnormal shutdown
□适用 √不适用
3 Raw materials procurement
(1). Basic situation of main raw materials
√适用 □不适用
Unit:10, 000 tons
Year-on-
year
Major raw Procurement Procurement Consumption
Settlement model price
materials model quantity quantity
change
ratio(%)
Letter of credit, Cable -14.90 2, 101.06 2, 199.04
Crude Oil Contract, spot
transfer
Contract, spot Cable transfer, Letter of -0.13 366.87 961.38
PX
credit, Bank acceptance bills
MEG Contract, spot Cable transfer 6.17 117.6
BDO Contract, spot Bank acceptance bills -41.28 16.22 17.05
The impact of major procurement price changes on the Company’s operating costs: the
procurement prices of the raw material exerting positive impact on the Company’s operating costs.
(2). Basic situation of main energy
√适用 □不适用
Year-on-
Procurement Settlement year price Procurement Consumption
Major energy
model model change quantity quantity
ratio(%)
Market-
Monthly 4, 316.7939 6, 083.5231 million
Electricity oriented
settlement million kwh kwh
procurement
Market-
Monthly
Thermal coal oriented 7, 587, 800 tons 7,914, 000 tons
settlement
procurement
Market-
Monthly 309.4508 million 309.6087 million
Natural gas oriented
settlement meters cubic meters
procurement
The price of major energy sources is directly proportional to the Company's operating costs. The
prices of major energies are affected by national policies, the supply and demand structure of the
regional markets, and the stability of supply.
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2023 Annual Report
(3). Risk response measures for raw material price fluctuations
The main situation of holding derivatives and other financial products
√适用 □不适用
To reasonably mitigate the significant price fluctuations of major raw materials, the company and
its subsidiaries engaged in hedging activities during the reporting period. The hedging primarily
involved commodities related to production and operations, such as Crude Oil, petroleum products,
PTA, and chemicals (including but not limited to Styrene, Ethylene Glycol, Polypropylene).
(4). Basic situation of adopting other methods such as staged reserves
□适用 √不适用
4 Product sales
(1). Basic situation of the company's main operations by segment
√适用 □不适用
Unit: ten thousand yuan Currency: RMB
Year-
Year-on- Year-
on-year
year on-year Gross
change
Gross changes change margins
Business Revenue from s in
Cost of sales margin in s among
segment operations operati
(%) operatin in gross the
ng
g margin( peers
revenu
cost(%) %)
e(%)
Petrochem 22, 668, 414.46 20, 189, 829.10 10.93 8.23 5.41 2.38
ical
segment
Other 651, 548.82 570, 713.93 12.41 -46.75 -53.71 13.16
segments
(2). Basic situation of the company's main operations by sales channel
□适用 √不适用
Note to accounting policies
□适用 √不适用
5 Environmental protection and safety situation
(1). Basic Situation of Major Safety Production Accidents During the Company’s Reporting Period
□适用 √不适用
(2). Major environmental violations
□适用 √不适用
(V) Investment Status Analysis
General Analysis on External Equity Investment
□适用 √不适用
1. Major equity investments
□适用 √不适用
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2023 Annual Report
2. Major non-equity investment
□适用 √不适用
3. Financial assets measured at fair value
√适用 □不适用
For details, see note of this report.
Securities investment situation
□适用 √不适用
Securities Investment Situation
□适用 √不适用
Private Equity Fund Investment Situation
□适用 √不适用
Derivatives Investment Situation
□适用 √不适用
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2023 Annual Report
4. The specific progress of major asset reorganization and integration during the reporting
period
□适用 √不适用
(VI) Sale of major assets and equity interests
□适用 √不适用
(VII) Analysis of Major Holding and Participating Companies
√适用 □不适用
Unit: hundred million yuan
Shareholding Business Registered Total
Company name Net assets Net profit
(%) nature capital assets
Hengli 100.00 Manufacturing 175.96 1,109.78 321.39 33.58
Petrochemical
Refining
Hengli 100.00 Manufacturing 58.90 361.75 115.78 1.62
Petrochemical
(Dalian)
Hengli Chemical 100.00 Manufacturing 22.08 451.38 67.69 16.39
Fiber
Hengli 100.00 Manufacturing 45.75 610.85 76.92 13.04
Petrochemical
Chemical
Kanghui New 100.00 Manufacturing 16.78 212.73 63.47 2.44
Material
Note: Jiangsu Hengli Chemical Fiber Co., Ltd. includes its subsidiaries Jiangsu Hengke Advanced
Materials Co. Ltd., Nantong Teng'an Logistics Co., Ltd., Jiangsu Xuanda Polymer Material Co., Ltd.,
Jiangsu Deli Chemical Fiber Co., Ltd., Hengli Futures Co., Ltd., Hengli Hengxin Industry and Trade
(Shanghai) Co., Ltd., Suzhou Susheng Thermal Power Co., Ltd., Suzhou Binglin Trading Co. , Ltd.,
Sichuan Hengli New Material Co., Ltd., Hengli New Materials (Suqian) Co., Ltd., Suzhou Hengli
Chemical New Material Co., Ltd.
Hengli Petrochemical (Dalian) Co., Ltd. including its subsidiaries Hengli Shipping (Dalian) Co.,
Ltd. . HENGLI PETROCHEMICAL CO., LIMITED, and Shenzhen Ganghui Trading Co., Ltd.
engli Petrochemical (Dalian) Refining and Chemical Co., Ltd. includes its subsidiaries Hengli
Petrochemical International Pte. Ltd., Hengli Oilfield Pte. Ltd., Hengli Shipping International Pte. Ltd.,
Hengli Energy (Hainan) Co., Ltd., Hengli Oil and Chemical (Hainan) Co., Ltd., Suzhou Hengli Chemical
Import and Export Co., Ltd., Shenzhen Shengang Trading Co., Ltd., Hengli Refining and Chemical
Product Sales (Dalian) Co., Ltd., Hengli Aviation Oil Co., Ltd., Hengli Oil and Chemical (Suzhou) Co.,
Ltd., Hengli Energy (Jiangsu) Co., Ltd., Hengli Logistics (Dalian) Co., Ltd. Company, Suzhou Hengli
Chemical Polymer Co., Ltd., Suzhou Hengli Energy Chemical Import and Export Co., Ltd.
Hengli Petrochemical (Dalian) Chemical Co., Ltd. includes its subsidiaries Hengli Petrochemical
(Dalian) New Materials Technology Co., Ltd., Hengli Petrochemical Public Engineering (Dalian) Co.,
Ltd., and Dalian Hengzhong Special Materials Co., Ltd.
Kanghui New Materials Technology Co., Ltd. includes its subsidiaries Kanghui International
Trade (Jiangsu) Co., Ltd., Suqian Kanghui New Materials Co., Ltd., Jiangsu Kanghui New Materials
Technology Co., Ltd., Kanghui Dalian New Materials Technology Co., Ltd., and Kanghui Nantong New
Materials Technology Co., Ltd.
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2023 Annual Report
(VIII) Structured entities controlled by the company
√适用 □不适用
On December 31, 2023, structured entities related to the company but not included in the
scope of the financial statements are mainly engaged in asset management business, operating
client assets, and providing clients with investment management services for securities, futures and
other financial products. The total assets of this type of structured entity on December 31, 2023 are
738.5488 million yuan.
VI. Discussions and analysis of the Company’s future development
(I) Industrial landscape and trend
√适用 □不适用
1. Petrochemical industry
(1) The industry is accelerating its transformation towards green and low-carbon development,
promoting digital and green transformation
Under the "dual carbon" goal, we will vigorously promote the transformation of clean
production technology and recycling, promote advanced and applicable energy-saving, low-carbon,
water-saving technologies, and comprehensive waste utilization technologies, and attach great
importance to the conservation and intensive utilization of various resources. Accelerate the
demonstration application of CCUS, effectively reduce carbon emissions, and explore the
development of hydrogen production tail gas and catalytic cracking flue gas carbon dioxide direct
conversion, carbon dioxide dry reforming, carbon dioxide hydrogenation to produce oil products
and chemical technology demonstrations.
Accelerate the integration of new generation information technologies such as 5G, big data,
and artificial intelligence with the petrochemical and chemical industry, continuously enhance the
ability to obtain chemical process data, enrich data in enterprise production management, process
control, product flow, and other aspects, connect production and operation information data
"islands", build analysis models for production and operation, market and supply chain, strengthen
integrated control of the entire process, promote innovative applications of digital twins, accelerate
digital transformation, achieve organizational structure optimization, dynamic and accurate services,
assist management decision-making and other management model innovations, improve intrinsic
safety, and enhance enterprise management capabilities.
(2) The market for high-end chemical new materials is vast
Some high-end petrochemical products and new chemical materials in China are currently
unable to meet market demand, and the market potential is enormous. Focusing closely on the
demand for chemical materials in strategic emerging industries such as new energy vehicles, next-
generation information technology, aerospace, rail transit, energy conservation and environmental
protection, and big health, we will accelerate the transformation and upgrading of advanced and
applicable technologies, increase efforts to extend, supplement, and strengthen the supply chain,
and improve the level of product refinement, specialization, and serialization. With the
development of downstream industries, the future market development space for chemical new
materials is vast.
2. PTA
China is the largest producer and consumer of PTA. Under the competitive landscape of the
integrated industrial chain, leading companies in the PTA industry have strong market
competitiveness in terms of the scale of a single set of facility, stable production and operation,
material consumption, energy consumption, and product quality. As the PTA industry is going
through fiercer competition, its concentration will be further increased.
3. Polyester fiber
The chemical fiber industry is the core support for the stable development and continuous
innovation of the textile industry chain, an internationally competitive advantage industry, an
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2023 Annual Report
important component of the new materials industry, and plays an important role in the construction
of a modern industrial system. The chemical fiber industry is accelerating its development towards
high-end, intelligent, green, and branded products:
Improve the added value of conventional fibers, enhance the production and application level
of high-performance fibers, accelerate the development of bio based chemical fibers and
degradable fiber materials, develop high-quality differentiated products, and strengthen the
development of application technologies.
Strengthen the research and application of intelligent equipment, and promote the research
and application of equipment such as large-scale integration, low energy intelligent logistics,
automatic tube dropping, and automatic packaging. Accelerate the research and application of
automatic head forming devices and online quality monitoring systems for polyester texturing
equipment, and improve the intelligence level of spinning and winding equipment for polyester,
spandex, and nylon. Promote the application of emerging digital technologies and enhance the
digitalization level of various links in the industrial chain, such as research and development design,
production and manufacturing, warehousing and logistics. Build an industrial Internet platform
integrated with master data, real-time data, applications, identity resolution, management
information system and business intelligence, promote upstream and downstream enterprises in
the industrial chain to realize resource data sharing through the industrial Internet platform,
strengthen supply and demand docking, and promote collaborative development and collaborative
application of the whole industry chain.
Optimize energy structure, strengthen clean production technology transformation and
promote key energy-saving and emission reduction technologies, and promote energy-saving and
low-carbon development. Improve the level of recycling, promote key technological breakthroughs
and industrial development in the high-value utilization of waste textiles, accelerate the
optimization of the industrial structure and enterprise upgrading of recycled chemical fibers.
Taking technology as the core and demand oriented, increasing the supply of high-quality
products, cultivating well-known fiber brands, enhancing consumer awareness of Chinese fibers and
corporate brands, and promoting the internationalization of Chinese fibers and corporate brands.
(II) Development strategy
√适用 □不适用
General development strategy: we are committed to providing quality fiber and creating a
better life for the society. Under the principle of “doing the right things at the right time”, we adhere
to the development philosophy of “innovation, coordination, green, and sharing”, the operation
concept of “winning global markets with surpassing quality, persistence, and will”, and the
management ideal of “people-centered, scientific, institutionalized, and professional”, foster a
company spirit of “solidarity, integrity, steadiness, and innovation”, increase the industrial
innovation capacity, improve industrial structures, and drive the Company into high-end, intelligent,
green, integrated, and international development.
(1) The Company will take solid steps in “improving the upstream and enhancing the
downstream”. In the first place, the Company will continue to strengthen the upstream industrial
platform to support the development of “refining+ethylene+coalification” underpinning the “big
chemicals”, and implement “making up and enhancing the industrial chains” and “R&D and
innovations”, reserving space and paving ways for the new downstream material businesses in the
future. On top of that, the Company will redouble its efforts in the downstream businesses,
consolidate traditional market strengths, benchmark the breakthroughs in major new materials as
the development and upgrading of “new consumption” and “key&core technologies”, nurture new
leading material business growth points in scale, and make strides toward a world leading
petrochemical new material company that covers the whole industrial chain.
(2) The Company will take unswerving steps in adopting integrated development strategy
across the board. The Company will focus on diversifying the specs of the products, expanding
capacity, differentiating the products through R&D, technology and innovation upgrading, and strive
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2023 Annual Report
to realize the industrial development goal of “industrial growth in bases, scale production,
meticulous products, professional technology, and sound management”.
(III) Operational plan
√适用 □不适用
2024 is a crucial year for achieving the goals and tasks of the 14th Five Year Plan. The company
adheres to the overall tone of seeking progress while maintaining stability, consolidates traditional
advantages, develops new driving forces, coordinates development and safety, mobilizes all positive
factors, gathers strength, adheres to integrity and innovation, and strives to achieve the company's
annual business goals, ensuring high-quality economic growth, and continuing to strive towards the
great goal of "century long perseverance". The key work for the whole year will revolve around the
following aspects:
1. Strengthen efficient collaboration between production and sales, and make every effort to
increase market share.
Continue to strengthen "quality, cost, and quick response", adhere to the business policy of
"sales determine production, production promotion", adhere to the business philosophy of
"customer centered, market centered, and all staff marketing", quickly identify market changes and
customer needs, establish a sound and flexible organizational structure, quickly respond to market
changes, continuously optimize product structure, and meet market demand. Fully utilize the two
major domestic and international markets, continue to increase market development efforts,
expand marketing channels, and enhance market share.
2. Stimulate new productive forces and strengthen innovation driven development.
Deeply implement the innovation driven development strategy, continuously improve the
technological innovation system, target key core technology links in the industrial chain, and deepen
the integration of industry, academia, research and application to promote industrial innovation.
The refining, chemical, petrochemical, and fine chemical sectors should fully utilize the resource
advantages of industrial parks, strengthen the extension of products to high-end fields, enhance
product competitiveness, and effectively promote green development of enterprises. The polyester
new materials sector should continue to leverage its technological advantages, increase efforts in
new product development, concentrate advantageous resources, and break through the key core
technologies of high-value fiber products.
3. Strengthen management empowerment and build a solid foundation for high-quality
development.
Further improve and perfect the safety and environmental protection management system,
implement safety production responsibilities and safety management work, and build a higher and
stronger safety defense line. Under the guidance of the national dual carbon policy, we will
vigorously promote green manufacturing, optimize the industrial system, improve industrial layout,
and continue to develop towards high-end, intelligent, and high-quality green development.
Efficiently implement "system management of personnel, process management, and form
management efficiency", further improve systems, optimize processes, and enhance management
efficiency and execution. Make full use of existing digital platforms, further improve overall research
and development capabilities, promote the improvement of intelligent manufacturing level, and
help build industry-leading intelligent factories.
(IV) Potential Risks
√适用 □不适用
Risk of macroeconomic fluctuations
The products involved in the company's business field are closely related to the national
economy and people's livelihood, and there is a high degree of linkage between industry
development and the prosperity of the national economy. The changes in the macro environment
of China's national economy, export policies, and consumer demand to a certain extent affect
industry operating rates, product prices, profitability, and so on. The company closely monitors the
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2023 Annual Report
macroeconomic situation and market dynamics, makes timely predictions, adjusts business
strategies, and minimizes the risks caused by macroeconomic fluctuations.
2. Risk of raw material price fluctuations
The production and operation of the company are greatly affected by the price changes of
upstream raw materials, especially crude oil and coal. If the company's inventory and procurement
management, as well as downstream product market price adjustments, cannot effectively reduce
or digest the impact of raw material price fluctuations, it may have adverse effects on the company's
business production and performance. The company will continue to monitor market changes in
raw materials, conduct dynamic analysis and judgment, choose appropriate procurement
opportunities, control the fluctuation of raw material procurement prices, and effectively control
procurement costs; Strengthen marketing management and reduce the adverse effects of raw
material fluctuations on the company.
3. Foreign exchange risk
If the RMB continues to fluctuate substantially, great uncertainties would be posed to the
Company’s exchange gains or losses, export product prices denominated in foreign currencies, raw
material prices and other operational factors. The Company will leverage forward foreign exchange
contracts and other methods to establish and improve the exchange rate hedging mechanism and
reduce the amount of foreign currency receipts and payments in order to reduce the impact of
exchange rate changes on the Company’s profitability.
4. Environmental protection and safety risk
Realizing high standards of safety production and environmental protection operation is the
lifeline, benefit line, and scenic line of enterprises. Environmental protection and safety issues
remain the top priority of enterprise risk management. The company has always adhered to the
policy of "safety first, prevention oriented, and comprehensive governance", strengthened essential
safety management, fully implemented the main responsibility of enterprise safety, deepened
safety standardization and HSE system management, and continuously improved the ability of
safety production technology innovation and risk control. Standardize accident emergency
management work, establish an emergency management system, prevent and reduce the risk of
emergencies, and improve the ability to respond to emergencies. With the enhancement of
environmental awareness and the tightening of government environmental protection
requirements, the company actively integrates green and low-carbon production into enterprise
development, increases environmental investment, and meets the requirements of potentially
increasingly strict environmental laws, regulations, and rules in the future
(V) Others
□适用 √不适用
VII. Explanation of the circumstances and reasons why the company did not disclose
in accordance with the guidelines due to special reasons such as non-
applicability of the guidelines or state secrets and commercial secrets
□适用 √不适用
49 / 319
2023 Annual Report
Chapter 4 Corporate Governance
I. Notes on Corporate Governance
√适用 □不适用
In strict accordance with the requirements of the Company Law, the Securities Law, the Code of
Corporate Governance for Listed Companies, the Rules Governing the Listing of Stocks on Shanghai
Stock Exchange and other laws, regulations and regulatory documents, the Company continuously
improved the corporate governance structure, established and improved a sound system of internal
management including General Shareholders Meetings, the Board of Directors and the Supervisory
Committee to regulate its operations. The Company has formed a corporate governance structure
with clear rights and responsibilities, effective checks and balances, scientific decision-making and
coordinated operations among organs of authority, decision-making organs, supervisory organs and
the senior management teams. The structure ensures the effective implementation of the decision-
making power of the general shareholders’ meeting and the Board of Directors and the supervisory
power of the supervisory committee as well as efficient and compliant operations and management
of the senior management team. The company's board of directors has four special committees for
strategy and sustainable development, audit, nomination, and compensation and evaluation, which
provide consultation and suggestions for major decisions of the board of directors to ensure
professional and efficient decision-making. The company continues to pay attention to new changes
in regulatory laws and regulations, effectively implements new regulatory policies and requirements,
continuously strengthens risk prevention and control, solidly promotes internal control
management, carries out high-quality information disclosure, follows the principles of truthfulness,
accuracy, completeness, timeliness, and fairness, reduces the scope of insiders, and ensures that all
shareholders have fair access to information. Actively carry out investor relations management work,
treat all investors fairly with an honest and open attitude. Promote the construction of ESG system,
strive to fulfill social responsibilities, effectively safeguard the legitimate rights and interests of the
company and all shareholders, and ensure the company's sustained and stable development..
Whether there is any major difference between corporate governance and laws, administrative
regulations, and the provisions of the China Securities Regulatory Commission on the governance
of listed companies; if there is a major difference, the reason should be explained
□适用 √不适用
II. The specific measures taken by the company's controlling shareholders and actual
controllers to ensure the independence of the company's assets, personnel,
finances, institutions, and operations, as well as the solutions adopted to
address factors affecting the company's independence, work progress, and
subsequent work plans
□适用 √不适用
The situation of the controlling shareholders, actual controllers, and their affiliated entities engaging
in similar or related businesses as the company, as well as the impact of significant changes in
industry competition or competition, the measures taken to address them, the progress of the
solutions, and the subsequent resolution plans
□适用 √不适用
III. Notes on General Shareholders Meetings
Inquiry index of the Disclosure
Date of
Meeting session designated website where date of Meeting resolution
meeting
the resolution is published resolution
50 / 319
2023 Annual Report
publication
2022 Annual May 19, 2023 http://www.sse.com.cn/ May 20, 2023 For details, please
General Meeting refer to the
"Announcement on
the Resolutions of
Hengli
Petrochemical's 2022
Annual Shareholders'
Meeting"
(Announcement No.:
2023-025)
2023 The first June 27, 2023 http://www.sse.com.cn/ June 28, 2023 For details, please
extraordinary refer to the
general meeting "Announcement on
of shareholders Resolutions of Hengli
Petrochemical's 2023
First Extraordinary
General Meeting of
Shareholders"
(Announcement No.:
2023-036)
2023 The second October 12, http://www.sse.com.cn/ October 13, For details, please
extraordinary 2023 2023 refer to the
general meeting "Announcement on
of shareholders Resolutions of Hengli
Petrochemical's 2023
Second Extraordinary
General Meeting of
Shareholders"
(Announcement No.:
2023-057)
2023 The third December 29, http://www.sse.com.cn/ December 30, For details, please
extraordinary 2023 2023 refer to the
general meeting "Announcement on
of shareholders Resolutions of Hengli
Petrochemical's 2023
Third Extraordinary
General Meeting of
Shareholders"
(Announcement No.:
2023-071)
Shareholders of preference shares whose voting rights have been restored request to convene an
extraordinary general meeting
□适用 √不适用
Note to the general meeting of shareholders
√适用 □不适用
During the reporting period, the company held a total of four shareholder meetings, including
one annual shareholder meeting and three extraordinary shareholder meetings. The convening and
procedures of the shareholder meetings complied with the provisions of laws, administrative
regulations, the "Rules of Shareholders' General Meetings of Listed Companies, " and the company's
articles of association. The attendees and the convener of the meetings were qualified and valid.
The voting procedures and results of the shareholder meetings were legal and effective.
51 / 319
2023 Annual Report
IV. Information about directors, supervisors and senior executives
(I) Changes in shareholding and remuneration of current and resigned directors, supervisors and senior executives within the reporting period
√适用 □不适用
Unit: Share
The total pre-
tax
Whether
Number of Increase or Reason remuneration
Number of to get paid
shares held decrease of for received from
Position Position shares held at the
Name Position (Note) Sex Age at the shares increase the company
start date end date at the end of company’s
beginning of during the or within the
the year related
the year year decrease Reporting
party
Period (10, 000
yuan)
Fan Chairman of Female 57 2022-04-27 2025-04-27 791,494,169 791,494,169 - 120 No
Hongwei the board
Wang Director, Male 62 2022-12-29 2025-04-27 - - - 165 No
Zhiqing General
Manager
Li Feng Director, Male 45 2022-04-27 2025-04-27 - - - 108.82 No
Deputy
General
Manager,
Board
Secretary
Liu Dunlei Director, Male 52 2022-04-27 2025-04-27 - - - 146.49 No
Deputy
General
Manager
Gong Tao director Male 44 2022-04-27 2025-04-27 - - - 107.56 No
Liu Jun Independent Male 60 2022-04-27 2025-04-27 - - - 20.00 No
Director
Wu Independent Male 44 2022-04-27 2025-04-27 - - - 20.00 No
Yongdong Director
Xue Independent Male 45 2022-04-27 2025-04-27 - - - 20.00 No
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2023 Annual Report
Wenliang Director
Kang Chairman of Female 44 2022-04-27 2025-04-27 4,640 4,640 - - Yes
Yunqiu the
Supervisory
Board
Shen Supervisor Male 46 2022-04-27 2025-04-27 - - - 49.34 No
Guohua
Tang Employee Male 44 2022-04-06 2025-04-27 - - - 37.26 No
Fangming Supervisor
Liu Deputy Male 47 2022-04-27 2025-04-27 - - - 72.50 No
Qianhan General
Manager
Liu Xuefen Deputy Female 52 2022-04-27 2025-04-27 - - - 143.48 No
General
Manager, Chief
Financial
Officer
Zhang Deputy Male 49 2023-08-07 2025-04-27 15,000 - -15,000 Note: 32.99 No
Wenyu General Zhang
Manager Wenyu
has not
bought or
sold the
company's
stock
since he
became
the
deputy
general
manager
Total / / / / / 791,513,809 791,498,809 -15,000 / 1,043.45 /
Name Main work experience
Fan Born in 1967, Chinese nationality, no overseas permanent residence, college degree. From May 1994 to December 2001, he served as the general manager
53 / 319
2023 Annual Report
Hongwei of Wujiang Chemical Fiber Weaving Factory Co., Ltd.; from January 2002, he served as the director of Hengli Group Co., Ltd.; from November 2002 to
August 2011, he served as the director of Jiangsu Hengli Chemical Fiber Limited; From August 2011 to March 2016, served as the vice chairman and
general manager of Jiangsu Hengli Chemical Fiber Co., Ltd.; since March 2016, he has served as the chairman of Jiangsu Hengli Chemical Fiber Co., Ltd.
From March 2016 to December 2022, he served as the chairman and general manager of the Company; since December 2022, he has served as the
chairman of the Company.
Born in 1962, Chinese nationality, no overseas permanent residence, Doctor of Engineering, professor-level senior engineer. Started to work in 1983,
successively served as chief engineer of Luoyang Petrochemical General Plant, deputy manager and manager of Sinopec Luoyang Branch, leader of Sinopec
Wang
Guangxi Oil Refining Preparatory Team, general manager of Sinopec Jiujiang Branch, Director of Jiujiang Petrochemical Complex, chairman, general
Zhiqing
manager, and deputy secretary of the party committee of Shanghai Petrochemical Co., Ltd. Since December 2022, he has served as the general manager
of the Company,and since June 2023 served as a director of the Company.
Li Feng Born in 1979, Chinese nationality, no overseas permanent residence, master's degree, senior economist, member of the third M&A financing committee
of China Association of Listed Companies. Served as project manager, office director, and deputy general manager of Jiangsu Hengli Chemical Fiber Co.,
Ltd.; served as deputy general manager and secretary of the board of directors of Jiangsu Hengli Chemical Fiber Co., Ltd. from August 2011 to March 2016;
Since March 2016, he has served as director and deputy general manager of Jiangsu Hengli Chemical Fiber Co., Ltd.; since March 2016, he has served as
director, deputy general manager and secretary of the board of directors of the Company.
Gong Tao Born in 1980, Chinese nationality, no overseas permanent residence, master degree. He used to be a technician of Xianglu Petrochemical (Xiamen) Co.,
Ltd., a monitor of Zhejiang Yisheng Petrochemical Co., Ltd., and an engineer of Hanbang (Jiangyin) Petrochemical Co., Ltd.; from February 2011 to May
2015 years, he was the director and manager of Hengli Petrochemical (Dalian) Co., Ltd.; From May 2015 to now, he has been the deputy general manager
of Hengli Petrochemical (Dalian) Co., Ltd. Since March 2018, he has served as a director of the Company.
Liu Dunlei Born in 1972, Chinese nationality, no overseas permanent residence, bachelor degree. Served as assistant to the general manager and manager of Qingdao
Gaohe Co., Ltd.; successively served as FDY engineer, workshop director, and manager of Area E of the filament department of Jiangsu Hengli Chemical
Fiber Co., Ltd.; Since August 2012, he has served as the general manager of Jiangsu Hengke Advanced Materials Co. Ltd.; since March 2016, he has served
as the Company's deputy general manager; since March 2018, he has served as the Company's director and deputy general manager.
Liu Jun Born in 1964, Chinese nationality, no overseas permanent residence, Ph.D. He used to be an associate professor, professor, and vice president of Nanjing
Normal University, and served as a member of the party group, vice president, member of the judicial committee, and judge of Yangzhou Intermediate
People's Court. He is currently a professor at the Law School of Nanjing Normal University. Since April 2022, he has served as an independent director of
the Company.
Wu Born in 1980, Chinese nationality, no overseas permanent residence, bachelor degree, Chinese certified public accountant. Served as senior project
Yongdong manager of Tianjian Certified Public Accountants (Special General Partnership), credit partner of Ruihua Certified Public Accountants (Special General
Partnership) Zhejiang Branch, Internal audit director and director of Hangzhou Shunwang Technology Co., Ltd., and financial director of Zhejiang Chuangke
Network Co., Ltd. He is currently the financial director of Hangzhou Jierui Air Treatment Equipment Co., Ltd. Since April 2022, he has served as an
independent director of the Company.
Xue Born in 1979, Chinese nationality, no overseas permanent residence, Ph.D., once served as an associate researcher and master tutor at the Textile College
Wenliang of Donghua University, and is now a professor and doctoral tutor at the Textile College of Donghua University. Since April 2022, he has served as an
independent director of the Company.
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2023 Annual Report
Kang Yunqiu Born in 1980, Chinese nationality, no permanent residence abroad, bachelor degree, senior economist. Served as general ledger accountant of Jiangsu
Hengli Chemical Fiber Co., Ltd., financial manager of Jiangsu Boyada Textile Co., Ltd., financial director of Suzhou Wujiang Tongli Lake Tourist Resort Co.,
Ltd. He is currently the assistant to the chief financial officer of Hengli Group Co., Ltd., and the director of Suzhou Wujiang Tongli Lake Tourist Resort Co.,
Ltd. Since April 2022, he has served as the chairman of the Company's board of supervisors.
Shen Born in 1978, Chinese nationality, no overseas permanent residence, college degree. Previously served as deputy manager of the general ledger
Guohua accountant and finance department of Jiangsu Hengli Chemical Fiber Co., Ltd.; from December 2017 to August 2021, he served as the manager of the
Company's audit department. Since August 2021, he has served as the Company's audit director. Since April 2022, he has served as a supervisor of the
Company.
Tang Born in 1980, Chinese nationality, no overseas permanent residence, bachelor degree, senior engineer, successively worked as a technician, engineer,
Fangming and director of the enterprise management department of Jiangsu Hengli Chemical Fiber Co., Ltd.; he is currently the assistant to the general manager of
Jiangsu Hengli Chemical Fiber Co., Ltd. Since April 2022, he has served as the employee supervisor of the Company.
Liu Qianhan Born in 1977, Chinese nationality, no overseas permanent residence, master degree. Served as business representative, deputy sales manager and sales
manager of Jiangsu Hengli Chemical Fiber Co., Ltd.; Deputy General Manager of Jiangsu Hengli Chemical Fiber Co., Ltd. from September 2010 to now;
current Deputy General Manager of the Company.
Liu Xuefen Born in 1972, Chinese nationality, no overseas permanent residence, college degree. Worked as cashier and accountant of Wujiang Silk Sample Factory;
teller, loan officer and accounting supervisor of Shengze Branch of China Construction Bank; from April 2004 to April 2012, manager of the audit
department of Jiangsu Hengli Chemical Fiber Co., Ltd; Since April 2012, he has served as the financial director of Hengli Petrochemical (Dalian) Co., Ltd.;
from May 2016 to March 2018, he has served as the Company's supervisor; he is currently the Company's deputy general manager and financial director.
Zhang Born in 1975, Chinese nationality, no overseas permanent residence, college degree. He has served as the sales manager of Jiangsu Hengke New Material
Wenyu Co., Ltd. and the sales director of Jiangsu Hengli Chemical Fiber Co., Ltd. He is currently the deputy general manager of Jiangsu Hengli Chemical Fiber Co.,
Ltd. and the deputy general manager of the company.
Other note
√适用 □不适用
1. The total pre-tax remuneration received by directors, supervisors, and senior management during the reporting period only includes their
remuneration during their tenure.
2. The shareholding changes of Zhang Wenyu during the reporting period occurred before he became the deputy general manager, and he has not
bought or sold the company's shares since taking office as the deputy general manager.
3. The company held the ninth meeting of the ninth board of directors on June 7, 2023 and the first extraordinary general meeting of shareholders
in 2023 on June 27, 2023 to consider and approve relevant proposals, agreeing to elect Wang Zhiqing as a non-independent director of the ninth board of
directors. On August 7, 2023, the eleventh meeting of the ninth board of directors was held to consider and approve relevant proposals, agreeing to appoint
Zhang Wenyu as the deputy general manager of the company.
or details, please refer to the "Announcement of the Resolution of the Ninth Meeting of the Ninth Board of Directors of Hengli Petrochemical"
55 / 319
2023 Annual Report
(Announcement No. 2023-030), "Announcement of the Resolution of the First Extraordinary General Meeting of Shareholders of Hengli Petrochemical in
2023" (Announcement No. 2023-036), and "Announcement of the Resolution of the Eleventh Meeting of the Ninth Board of Directors of Hengli
Petrochemical" (Announcement No. 2023-044) published by the company on June 8, 2023, June 28, 2023, and August 8, 2023 respectively on the designated
information disclosure media.
56 / 319
2023 Annual Report
(II) Positions of current and resigned directors, supervisors and senior executives during the
reporting period
1. Employment in shareholders' entities
√适用 □不适用
Positions held in
Name of shareholders' Start date of End date of
Staff name shareholders’
entity the term the term
entity
Fan Hongwei Hengli Group Co., Ltd. Director January 2014
Fan Hongwei Hailaide International Director January 2014
Investment Ltd.
Fan Hongwei Tak Shing Li International Director January 2014
Holdings Ltd.
Fan Hongwei Hengneng Investment Executive January 2017
(Dalian) Co., Ltd. Director
Fan Hongwei Hengfeng Investment Executive January 2017
(Dalian) Co., Ltd. Director
Fan Hongwei Suzhou Huaer Investment Supervisor January 2014
Co., Ltd.
Fan Hongwei Suzhou Shenglun Investment Supervisor January 2014
Co., Ltd.
Kang Yunqiu Assistant to the February 2014
Hengli Group Co., Ltd. Chief Financial
Officer
Note to Suzhou Huaer Investment Co., Ltd. and Suzhou Shenglun Investment Co., Ltd. are
employment in the secondary shareholders of the company
shareholders'
entity
2. Employment in other entities
√适用 □不适用
Positions
Start date of End date of
Staff name Name of other entity held in other
the term the term
entity
Fan Hongwei Suzhou Tongli Lake Conference Center Supervisor April 2015
Co., Ltd.
Fan Hongwei Wujiang Huayi Investment Co., Ltd. Supervisor January
2014
Fan Hongwei Jiangsu Boyada Textile Co., Ltd. Director January
2014
Fan Hongwei Suzhou Kanglian Investment Co., Ltd. Supervisor October
2014
Fan Hongwei Suzhou Haolan Investment Co., Ltd. Supervisor October
2014
Fan Hongwei Suzhou Chundao Investment Co., Ltd. Supervisor October
2014
Fan Hongwei Suzhou Hanci Investment Co., Ltd. Supervisor October
2014
Fan Hongwei Suzhou Zhongkun Investment Co., Ltd. Supervisor October
2014
Fan Hongwei Wujiang Chemical Fiber Weaving Supervisor January
Factory Co., Ltd. 2014
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2023 Annual Report
Fan Hongwei Hengli Import and Export Co., Ltd. Supervisor January
2014
Fan Hongwei Wujiang Tiancheng Real Estate Co., Ltd. Supervisor January
2014
Fan Hongwei Suzhou Kangjia Property Management Supervisor January
Co., Ltd. 2014
Fan Hongwei Suzhou Hengli Real Estate Co., Ltd. Supervisor January
2014
Fan Hongwei Suzhou Wujiang Tongli Lake Tourist Director July 2015
Resort Co., Ltd.
Fan Hongwei Yingkou Henghan Investment Co., Ltd. Supervisor January
2014
Fan Hongwei Hengli Investment (Yingkou) Co., Ltd. Supervisor June 2014
Fan Hongwei Yingkou Comfort Investment Co., Ltd. Supervisor June 2014
Fan Hongwei Yingkou Lishun Real Estate Co., Ltd. Supervisor July 2014
Fan Hongwei Yingkou Lida Real Estate Co., Ltd. Supervisor July 2014
Fan Hongwei Yingkou Ligang Real Estate Co., Ltd. Supervisor July 2014
Fan Hongwei Zidian International Investment Co., Director January
Ltd. 2014
Fan Hongwei Suzhou Hengli Intelligent Technology Supervisor July 2017
Co., Ltd.
Fan Hongwei Sichuan Hengli Real Estate Co., Ltd. Executive November
Director 2019
Fan Hongwei Shanghai Yuanyuan Education Director August 2020
Technology Co., Ltd.
Kang Yunqiu Hengli Industrial Investment (Suzhou) Supervisor November
Co., Ltd. 2019
Kang Yunqiu Hengli (Suzhou) Technology R&D Co., Supervisor July 2020
Ltd.
Kang Yunqiu Hengli Industrial Construction (Suzhou) Supervisor January
Co., Ltd. 2021
Kang Yunqiu Suzhou Wujiang Tongli Lake Tourist Director October July 2024
Resort Co., Ltd. 2022
Kang Yunqiu Hengli (Shenzhen) Investment Group Co., Supervisor March 2024
Ltd
Kang Yunqiu Suzhou Jiebang Real Estate Co., Ltd Supervisor November
2023
Kang Yunqiu Suzhou Beifu Real Estate Co., Ltd Supervisor November
2023
Kang Yunqiu Suzhou Anjing Real Estate Co., Ltd Supervisor November
2023
Kang Yunqiu HengAn Internet (Beijing) Information Supervisor December
Technology Co., Ltd 2023
Kang Yunqiu Suzhou Hengli System Integration Co., Ltd Supervisor September
2020
Kang Yunqiu Suzhou Yuean Real Estate Co., Ltd Supervisor November
2023
Li Feng Suzhou Yikai Statistics Office Co., Ltd Supervisor May 2015
Liu Jun Guangxi Ruiyi New Energy Co., Ltd Director October
2020
Wu Yongdong Hangzhou Jierui Air Treatment Chief December
Equipment Co., Ltd. Financial 2021
Officer
58 / 319
2023 Annual Report
Note to
employment in
other
organizations
(III) Remuneration of Directors, Supervisors and Senior Management
√适用 □不适用
Decision-making procedures for The compensation plan for the company's directors and the salary
the remuneration of directors, distribution plan for senior executives proposed by the
supervisors and senior Remuneration and Appraisal Committee, and reported to the
executives Board of Directors for approval
Whether the director withdraws Yes
when discussing his own
remuneration in the board
meeting
Specific details of the The Remuneration and Evaluation Committee evaluated the annual
recommendations made by the performance of the company's directors and senior executives by
Remuneration and Evaluation understanding the company's main financial indicators and the
Committee or the special meeting completion of business objectives, reviewing the company's directors
of independent directors on the and senior executives' personal performance reports, and convening
remuneration of directors, a meeting to review their remuneration plans. They concluded that
supervisors, and senior the remuneration plan was reasonable and that the management
management personnel team's remuneration was in line with market-based salaries.
Basis for Determination of According to the company's overall operating conditions and the
Remuneration of Directors, annual salary level of previous years, it is determined by comparing
Supervisors and Senior the director and executive salary levels of similar listed companies
Management and Others companies in the same industry
Actual Payment of The payment has been completed according to the results of the
Remuneration to Directors, performance appraisal. For details, please refer to the "Statement
Supervisors and Senior of Shareholding Changes and Remuneration of Directors,
Management Supervisors and Senior Management"
Total remuneration actually 10.4345 million yuan
received by all directors,
supervisors and senior
management at the end of the
reporting period
(IV) Changes in Directors, Supervisors and Senior Management of the Company
√适用 □不适用
Name Position held Changes Reason for change
Wang Zhiqing Director Election Company work
arrangement
Zhang Wenyu Deputy General Appointment General Election of the
Manager Board of Directors
(V) Explanation of punishments received by securities regulatory agencies in the past three years
□适用 √不适用
(VI) Others
□适用 √不适用
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2023 Annual Report
V. Relevant information on board meetings held during the reporting period
Date of
Meeting session Meeting resolutions
Meeting
Announcement of the 2023-2-12 1. “Proposal on Changing the Asset Management Institution of
Resolution of the the Third Phase Employee Stock Ownership Plan”
Seventh Meeting of 2. “Proposal on Changing the Asset Management Institution of
the Ninth Board of the Fifth Employee Stock Ownership Plan”
Directors
Announcement of the 2023-4-26 1. “General Manager Work Report for 2022”
Resolution of the 8th 2. “Work Report of the Board of Directors for 2022”
Meeting of the 9th 3.” Annual Report 2022 and Abstract”
Board of Directors 4. “Financial Final Account Report for 2022”
5. “Proposal on Not Proposing Profit Distribution in 2022”
6. “Company's 2022 Annual Internal Control Evaluation
Report"
7. “Proposal on the Remuneration of Directors and Senior
Management in 2022”
8. “2022 Social Responsibility Report”
9. “Proposal on the Estimated Situation of Daily Related
Transactions in 2023”
10. “Proposal on Conducting Foreign Exchange Derivatives
Trading Business in 2023”
11. “Proposal on Carrying out Futures Hedging Business in
2023”
12. “Proposal on the 2023 Entrusted Investment Plan”
13. “Proposal on the 2023 Guarantee Plan”
14. “Proposal on Applying for Comprehensive Credit Line in
2023”
15. “Proposal on Renewal of Appointment of Accounting Firm”
16. “First Quarterly Report of 2023”
17. “Proposal on Revising the Information Disclosure
Suspension and Exemption Management System”
18. “Proposal on the Revision of the Investor Relations
Management System”
19. “Proposal on Changes in Accounting Policies”
20. “Proposal on Convening the 2022 Annual General Meeting
of Shareholders of the Company”
Announcement of the 2023-6-7 1.” Proposal on Increasing the Number of Board of Directors
Resolution of the 9th and Amending Some Provisions of the Articles of Association”
Meeting of the 9th 2. “Proposal on Amending the Rules of Procedure of the Board
Board of Directors of Directors”
3. “Proposal on the Renaming of the Strategy and Investment
Committee of the Board of Directors and the Revision of the
Relevant Implementation Rules”
4. “Proposal on the election of Mr. Wang Zhiqing as a non-
independent director of the 9th Board of Directors of the
Company”
5. “Proposal on Adjusting the Members of the Special
Committee of the Board of Directors”
6. “Proposal on Convening the First Extraordinary General
Meeting of Shareholders of the Company in 2023”
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2023 Annual Report
Announcement of the 2023-7-4 1. “Proposal on Approving the Restructuring and Listing of the
Resolution of the Company's Subsidiary, Kanghui New Material Technology Co.,
10th Meeting of the Ltd.”
9th Board of 2. “Proposal on the Restructuring and Listing of the Subsidiary
Directors Kanghui New Material Technology Co., Ltd. in Compliance with
Relevant Laws and Regulations”
3. “Proposal on the Restructuring and Listing Plan for the Spin-
off of the Subsidiary Kanghui New Material Technology Co.,
Ltd.”
4. “Plan on Restructuring and Listing of the Subsidiary Kanghui
New Material Technology Co., Ltd.”
5. “Proposal on the Restructuring and Listing of the Subsidiary
Kanghui New Material Technology Co., Ltd. in Accordance with
the "Split Rules for Listed Companies (Trial Implementation)"
6. “Proposal on the Restructuring and Listing of the Subsidiary
Kanghui New Material Technology Co., Ltd. to Safeguard the
Legitimate Rights and Interests of Shareholders and Creditors”
7. “Proposal on the Maintenance of Independence and
Continuous Operation Capacity of Listed Companies”
8. “Proposal on the Ability of New Companies Formed by Spin-
off to Operate in a Standardized Manner”
9. “Proposal on the completeness and compliance of the legal
procedures for this spin-off and the validity of the legal
documents submitted”
10. “Proposal on the Purpose, Commercial Rationality,
Necessity and Feasibility Analysis of This Spin-off”
11. “Proposal on Requesting the General Meeting of
Shareholders to Authorize the Board of Directors and Its
Authorized Personnel to Handle Matters Related to This Spin-
off”
12. “Proposal on Not Convening a Shareholders' Meeting to
Review the Restructuring and Listing of the Company's
Subsidiaries”
Announcement of the 2023-8-7 “Proposal on Appointment of Deputy General Manager of the
Resolution of the Company”
11th Meeting of the
9th Board of
Directors
Announcement of the 2023-8-22 “Full Text and Abstract of the 2023 Semi-annual Report”
resolution of the 12th
meeting of the 9th
Board of Directors
Announcement of the 2023-9-11 1. “Proposal on Approving the Restructuring and Listing of the
resolution of the 13th Company's Subsidiary, Kanghui New Material Technology Co., Ltd”
meeting of the 9th 2. “Proposal on the Restructuring and Listing of the Subsidiary
Board of Directors Company Kanghui New Material Technology Co., Ltd. in
Accordance with Relevant Laws and Regulations”
3. “Proposal on the Restructuring and Listing Plan for the Spin-off
of Subsidiary Kanghui New Material Technology Co., Ltd”
4. “Proposal on the Plan (Revised Draft) of Hengli Petrochemical
Co., Ltd. to Split and Restructure its Subsidiary Kanghui New
Material Technology Co., Ltd. for Listing”
61 / 319
2023 Annual Report
5. “Proposal on the Restructuring and Listing of the Subsidiary
Kanghui New Material Technology Co., Ltd. in Accordance with the
"Listed Company Spin-off Rules (Trial Implementation)"
6. “Proposal on the Restructuring and Listing of the Subsidiary
Kanghui New Material Technology Co., Ltd. to Safeguard the
Legitimate Rights and Interests of Shareholders and Creditors”
7. “Proposal on the Maintenance of Independence and
Continuous Operation Capacity of Listed Companies”
8. “Proposal on the Ability of New Companies Formed by Spin-off
to Operate in a Standardized Manner”
9. “Proposal on the Completeness and Compliance of the Legal
Procedures for the Performance of This Spin-off and the Validity
of the Legal Documents Submitted”
10. “Proposal on the purpose, commercial rationality, necessity
and feasibility analysis of this spin-off”
11. “Proposal on Requesting the General Meeting of Shareholders
to Authorize the Board of Directors and Its Authorized Personnel
to Handle Matters Related to This Spin-off”
12. “Proposal on Convening the Second Extraordinary General
Meeting of Shareholders in 2023”
Announcement of the 2023-10-27 “Third Quarterly Report of 2023”
Resolution of the
14th Meeting of the
9th Board of
Directors
Announcement of the 2023-12-13 1. “Proposal on Amending the Working System of Independent
Resolution of the Directors”
15th Meeting of the 2. “Proposal on Amending the Implementation Rules of the Special
9th Board of Committees of the Board of Directors”
Directors 3. “Proposal on Amending the Special Management System for
Raised Funds”
4. “Proposal on the Revision of the Foreign Exchange Derivatives
Trading Business Management System”
5. “Proposal on Revising the Management System of Foreign
Guarantees”
6. “Proposal on Establishing the Accounting Firm Selection and
Employment System”
7. “Proposal on Adjusting the Members of the Special Committee
of the Ninth Board of Directors”
8. “Proposal on Convening the Third Extraordinary General
Meeting of Shareholders in 2023”
VI. Performance of duties by directors
(I) Participation of Directors in the Board of Directors and General Meetings of Shareholders
Wh Participati
eth on in the
er general
ind Participation in the board of directors meeting
Director's name
epe of
nde sharehold
nt ers
dire Numbe In- Participation Entruste Numbe Did not Attendanc
62 / 319
2023 Annual Report
ctor r of person by means of d r of attend e at
board attenda communicat attenda absenc two general
meetin nce ion nce es meetin meetings
gs this gs in of
year person sharehold
in a ers
row
Fan Hongwei No 9 9 2 0 0 No 3
Wang Zhiqing No 6 6 4 0 0 No 1
Li Feng No 9 9 2 0 0 No 4
Liu Dunlei No 9 9 7 0 0 No 2
Gong Tao No 9 9 7 0 0 No 1
Liu Jun Yes 9 9 7 0 0 No 2
Xue Wenliang Yes 9 9 7 0 0 No 2
Wu Yongdong Yes 9 9 7 0 0 No 2
Explanation for failing to attend two board meetings in person in a row
□适用 √不适用
Number of board meetings held 9 10
during the year
Including: Number of on-site 0 0
meetings
Number of meetings held by 2 2
means of communication
Number of meetings held on site 7 8
combined with communication
(II) Situation where directors raise objections to relevant matters of the company
□适用 √不适用
(III) Others
□适用 √不适用
VII. Special committees under the board of directors
√适用 □不适用
(I). Membership of special committees under the board of directors
Special committee Members
Audit Committee Wu Yongdong, Liu Jun, Gong Tao
Nominating Committee Liu Jun, Xue Wenliang, Liu Dunlei
Remuneration and Appraisal Committee Xue Wenliang, Wu Yongdong, Li Feng
Strategy Committee Fan Hongwei, Wang Zhiqing, Xue Wenliang
(II). During the reporting period, the Audit Committee held 6 meetings
Material
Other
Date of comments
Meeting content performance
meeting and
of duties
suggestions
April 20, 2023 The second annual audit communication meeting was Nil Nil
held to express opinions on matters such as the
preliminary audit opinions to be issued by the annual
63 / 319
2023 Annual Report
audit accountants on the company's financial and
accounting statements.
April 26, 2023 Deliberate the Company's 2022 Annual Financial Nil Nil
Accounting Statement, the Summary Report of the
Audit Committee of the Board of Directors on the 2022
Annual Audit Work, the Company's 2022 Annual
Internal Control Evaluation Report, the Proposal for
Renewing the Accounting Firm, the 2022 Annual
Report and its Summary, the Proposal on the
Estimated Daily Related Transactions in 2023, the
Company's First Quarter Financial Accounting
Statement for 2023, and the First Quarter Report for
2023, and issue written audit opinions
August 22, Review the "2023 Semi-annual Report" and provide Nil Nil
2023 written review comments
October 27, Review the Third Quarterly Report of 2023 and provide Nil Nil
2023 written review opinions
December 1, The first annual review communication meeting for the Nil Nil
2023 2023 annual report was held
December 12, The company will review the "Accounting Firm Nil Nil
2023 Selection and Employment System" and provide audit
opinions
(III). During the reporting period, the Nomination Committee held 2 meetings
Material
Other
Date of comments
Meeting content performance
meeting and
of duties
suggestions
June 7, 2023 The company conducted a review of the qualifications Nil Nil
of Wang Zhiqing, a non-independent director candidate
who was elected by the company, and reviewed his
resume and other information to determine whether
he had the qualifications and abilities to hold the
position. An audit opinion was issued
August 7, The qualification review of Zhang Wenyu, the candidate Nil Nil
2023 for the deputy general manager of the company, was
conducted by reviewing his resume and other
information to determine whether he has the
qualifications and abilities to assume the position, and
an audit opinion was issued
(IV). During the reporting period, the Remuneration and Appraisal Committee held 1 meeting
Material
Other
Date of comments
Meeting content performance
meeting and
of duties
suggestions
April 25, 2023 Deliberate “the Proposal on the Remuneration of Nil Nil
Directors and Senior Management of the Company in
2022”
(V). During the reporting period, the Strategy and Investment Committee held 2 meeting
Material
Other
Date of comments
Meeting content performance
meeting and
of duties
suggestions
64 / 319
2023 Annual Report
July 3, 2023 Deliberate the restructuring and listing of the company's Nil Nil
spin-off subsidiary Kanghui New Material Technology
Co., Ltd., and issue audit opinions
September 10, Deliberate the matters related to the restructuring and Nil Nil
2023 listing of the company's spin-off subsidiary Kanghui New
Material Technology Co., Ltd., and issue audit opinions
(VI). Specific circumstances of objections
□适用 √不适用
VIII. Explanation of the Board of Supervisors’ discovery of risks in the company
□适用 √不适用
The Supervisory Committee had no objection to the supervisory matters during the reporting period.
IX. Employees of the parent company and major subsidiaries at the end of the
reporting period
(I) Employees
The number of employees employed by the parent company 32
The number of employees in the main subsidiary 35,975
Total Number of Employees 39,615
Number of retired employees whose parent company and 428
main subsidiaries need to bear the expenses
Professional composition
Professional composition category Headcount
Production staff 29,854
Sales staff 390
Technical staff 5,539
Financial officer 258
Administrative staff 1,544
Others 2,030
Total 39,615
Education level
Education level category Headcount
Doctor
Master 17
Undergraduate 277
College and below 5,979
Total 33,342
39,615
(II) Remuneration policy
√适用 □不适用
The company has established a legal, standardized, and effective salary and job grading system,
taking into account the internal and external labor market conditions, regional and industry
differences, and the value of employee positions. The principles guiding the system are
"competitiveness externally, fairness internally, and protection of employee development space."
The grading and salary determination are based on factors such as responsibilities, capabilities, and
performance contributions. Each subsidiary company refines and implements specific
compensation plans, promotion channels, and assessment indicators that are suitable for its own
development, based on its business scope, industry, and regional factors.
The company's compensation and benefits primarily include basic salary, position-based salary,
seniority-based salary, piecework wages, bonuses, overtime pay, night shift allowances,
65 / 319
2023 Annual Report
management allowances, skill allowances, etc. The company also provides social insurance and
housing fund contributions for employees, offers free entry medical examinations, free work meals,
holiday allowances, birthday cakes, etc. Annual salary increases are determined based on market
benchmarks and the company's salary range, while annual bonuses are distributed based on
company performance and individual achievements. The fair, reasonable, and competitive
compensation system aims to attract and retain outstanding talents, provide employees with a
sense of belonging and identity, motivate their sense of responsibility and enthusiasm, and promote
the mutual enhancement of company and employee value.
(III) Training plan
□适用 √不适用
(IV) Labor outsourcing
□适用 √不适用
X. Profit distribution or capital reserve conversion plan
(I) Formulation, implementation or adjustment of cash dividend policy
√适用 □不适用
During the reporting period, there was no adjustment to the company's cash dividend policy.
The company strictly follows the relevant provisions of the "Articles of Association" and
"Shareholder Return Plan for the Next Five Years (2020-2024) ".
(II) Special Notes on Cash Dividend Policy
√适用 □不适用
Does it comply with the provisions of the company's bylaws or requirements set by √是 □否
the shareholders' meeting resolutions?
Are the dividend standards and ratios clear and explicit? √是 □否
Are the relevant decision-making procedures and mechanisms complete? √是 □否
Have the independent directors fulfilled their duties and played their expected roles? √是 □否
Do minority shareholders have sufficient opportunities to express their opinions and √是 □否
demands, and have their legal rights and interests been adequately protected?
(III) If the company has made profits during the reporting period and the parent company has
distributable profits, but no proposed cash dividend distribution plan has been put forward,
the company should provide detailed disclosure of the reasons as well as the purpose and
utilization plan of the undistributed profits
□适用 √不适用
(IV) Profit distribution and conversion of capital reserve into share capital during the reporting
period
√适用 □不适用
Unit: Ten thousand Yuan Currency: RMB
Bonus shares for every 10 shares (shares) 0
Dividend per 10 shares (yuan) (tax included) 5.5
Number of conversions per 10 shares (shares) 0
66 / 319
2023 Annual Report
Cash dividend amount (tax included) 387,150.49
Net profit attributable to ordinary shareholders of listed companies in the annual
690,460.39
consolidated statement of dividends
Ratio of net profit attributable to ordinary shareholders of listed companies in the
56.07
consolidated statements (%)
Repurchase of shares in cash is included in the amount of cash dividends 0
Total dividend amount (tax included) 387,150.49
The ratio of the total dividend amount to the net profit attributable to ordinary
56.07
shareholders of the listed company in the consolidated statement (%)
XI. The status and impact of the company's equity incentive plan, employee stock
ownership plan or other employee incentives
(I) Relevant incentives have been disclosed in temporary announcements and there is no
progress or change in subsequent implementation
√适用 □不适用
Event Index
Proposed to change the asset For details, please refer to the "Announcement of Hengli
management institution of the Petrochemical on Changing the Asset Management Institution of
third and fifth employee stock the Third and Fifth Employee Stock Ownership Plans"
ownership plans (Announcement No. 2023-003) disclosed by the company on the
website of the Shanghai Stock Exchange on February 18, 2023
The lock-up period of the sixth For details, please refer to the "Indicative Announcement of Hengli
employee stock ownership plan Petrochemical on the Expiration of the Lock-up Period for the Sixth
has expired Employee Stock Ownership Plan" (Announcement No. 2023-023)
disclosed by the company on the website of the Shanghai Stock
Exchange on May 10, 2023
The asset management institution For details, please refer to the announcement of Hengli
for the third and fifth employee Petrochemical on the completion of the change of asset
stock ownership plans has been management institutions for the third and fifth employee stock
changed ownership plans disclosed on the website of the Shanghai Stock
Exchange on May 27, 2023 (Announcement No. 2023-027)
(II) Incentives not disclosed in the temporary announcement or with follow-up progress
Equity Incentive Situation
□适用 √不适用
Other note
□适用 √不适用
Employee Stock Ownership Plan Status
□适用 √不适用
Other incentives
□适用 √不适用
(III) Share incentives granted to directors and senior executives during the reporting period
□适用 √不适用
67 / 319
2023 Annual Report
(IV) The establishment and implementation of the evaluation mechanism for senior
management personnel and the incentive mechanism during the reporting period
√适用 □不适用
The company has established a senior management performance evaluation and incentive
mechanism, with a compensation and assessment committee under the board of directors. This
committee is responsible for studying and formulating the standards and procedures for evaluating
senior management personnel and reviewing their compensation policies and plans. The company
continuously improves its long-term incentive policies based on actual circumstances, aiming to
motivate senior management to fulfill their responsibilities diligently and responsibly.
XII. Construction and implementation of internal control system during the reporting
period
√适用 □不适用
During the reporting period, the company strictly adhered to various laws and regulations, such
as the "Company Law, " "Basic Norms for Enterprise Internal Control, " "Listing Rules of the Shanghai
Stock Exchange, " and "Self-regulatory Guidelines for Listed Companies of the Shanghai Stock
Exchange - Standard Operations." The company also followed internal control system standards to
operate and manage risks effectively. The company established a robust internal control
management system, taking into account industry characteristics and actual business operations.
The internal control system was continuously optimized and improved to ensure the lawful and
compliant operation and management of the company, asset security, and the accuracy and
integrity of financial reporting and related information. These measures aimed to enhance
operational efficiency, actual results, and protect the interests of the company and all shareholders.
Explanation on major deficiencies in internal control during the reporting period
□适用 √不适用
XIII. Management and control over subsidiaries during the reporting period
√适用 □不适用
In compliance with the requirements of the "Company Law, " the company has established and
continuously improved a modern corporate system. Through the shareholders' meeting, the board
of directors, and the supervisory board, effective management of subsidiary companies has been
implemented. The company has developed a comprehensive management system that covers its
major business areas, achieving institutionalization of management practices. The management
system has also been disseminated to the subsidiary companies, which have formulated their own
management systems based on it.
XIV. Explanation on the relevant situation of the internal control audit report
√适用 □不适用
According to the "Basic Norms for Enterprise Internal Control" and its supporting guidelines,
as well as other internal control regulatory requirements, the company, in conjunction with its
internal control system and evaluation methods, conducted an assessment of the effectiveness of
internal controls as of the benchmark date for the internal control evaluation report. The company
prepared the "2023 Annual Internal Control Evaluation Report" in accordance with the format,
content, and requirements specified by the China Securities Regulatory Commission (CSRC) and the
Shanghai Stock Exchange (SSE).
The company engaged an external auditing firm, Zhong Hui Certified Public Accountants LLP
(Special General Partnership), to perform an internal control audit. The audit firm issued a standard
unqualified opinion in the internal control audit report.
68 / 319
2023 Annual Report
Whether to disclose the internal control audit report: Yes
Type of internal control audit report opinion: standard unqualified opinion
XV. The rectification of problems in the self-examination of the special action of listed
company governance
During the reporting period, there were no significant differences between the company's
corporate governance status and the relevant regulations of the China Securities Regulatory
Commission (CSRC) regarding the governance of listed companies. The company will continue to
enhance its corporate governance level and improve its governance framework in accordance with
legal regulations and regulatory requirements. This ongoing effort aims to continuously enhance
the quality of the listed company.
XVI. Others
□适用 √不适用
69 / 319
2023 Annual Report
Chapter 5 Environmental and Social Responsibility
I. Environmental information
Whether to establish relevant mechanisms for Yes
environmental protection
Investment in environmental protection funds 23, 297
during the reporting period (unit: ten thousand
yuan)
(I) Explanation on the environmental protection status of companies and their major subsidiaries that
belong to the key pollutant discharge units announced by the environmental protection
department
√适用 □不适用
1. Sewage Information
√适用 □不适用
The Company pays great heed to environmental protection, and strictly acts upon the Environmental
Protection Law of the People’s Republic of China, the Law of the People’s Republic of China on Promoting
Clean Production, and the Law of the People’s Republic of China on the Prevention and Control of
Environmental Pollution by Solid Wastes and other relevant laws and regulations. The key pollutant
discharging companies and their subsidiaries mainly include Hengli Refining and Chemical, Hengli
Chemical, Hengli Petrochemical (Dalian), Kanghui New Materials, Kanghui Dalian New Materials, Hengli
Chemical Fiber, Deli Chemical Fiber, Hengke New Materials, and Su Sheng Thermal Power.
During the reporting period, each pollutant discharging subsidiary carried out self-monitoring of
their environmental impact and engaged professional third parties to test various pollutant factors. The
test results showed that the emission concentrations of various pollutants were in compliance with
national and local pollutant discharge standards and other relevant standards. The total discharge of
pollutants is under the required limit as outlined by operation permits. (Due to the switch between old
and new pollutant discharge licenses, there were some changes in the approved total annual pollutant
discharge amount and discharge calculation methods of some key pollutant discharge subsidiaries.)
The specific pollutant discharge is as follows:
1. Hengli Petrochemical Refining
T
h
e
d
is
tr
i Ex
Nu b ce
mb u ssi
Ty Em er ti Approve ve
Main
pe issi of o d total e
Pollutants Total
of on dis n Emission emission Pollutant Emission mi
and emissions
pol me ch o Concentration s Standards Executed ssi
Characteristi (tons/year)
lut th arg f (tons/ye on
c Pollutants
ant od e d ar) sit
po is ua
rts c tio
h n
a
r
g
e
p
o
70 / 319
2023 Annual Report
rt
s
Wastewater
1 / 1684208 / /
volume
DB21/1627-2008
Chemical
26.416667mg/ Comprehensive
oxygen 1 30.348308 237.42
L Wastewater Discharge
demand
Co Standard
DW011 discharge port
nti GB31570-2015 Pollutant
Wa Ammonia nu Discharge Standard for
1 0.2525mg/L 0.086613 17.97
ste nitrogen ou Petroleum Refining
wa s Industry
ter em GB31570-2015 Pollutant
Total issi Discharge Standard for
1 0.2775mg/L 0.445129 /
Phosphorus on Petroleum Refining
Industry
DB21/1627-2008 Nil
Total Comprehensive
1 8.7675mg/L 13.838439 70.9
nitrogen Wastewater Discharge
Standard
Sulfur 1189.74953 GB31570-2015 Pollutant
14 9.9379mg/m3 2449.38
dioxide 4 Discharge Standard for
Or
Nitrogen 25.81195mg/ 2394.01619 Petroleum Refining
ga 12 5091.54
oxides m3 7 Industry
Ex niz
particulate 1.10555mg/m
ha ed 16 117.585235 1051.2
matter 3
/
ust em
Non-
gas issi
methane
on
total 11 2.3925mg/m3 103.592676 2785.57
s
hydrocarbon
s
2. Hengli Chemical
Th
e
Nu dis
Exc
mb tri
Appro ess
Ty Em er bu
Main ved ive
pe issi of tio
Pollutants Total total em
of on dis n Emission Pollutant Emission
and emissions emissi issi
pol me ch of Concentration Standards Executed
Characteristi (tons/year) ons on
lut th arg dis
c Pollutants (tons/ sit
ant od e ch
year) uat
po arg
ion
rts e
po
rts
Wastewater
1 / 1585987 / /
volume
Co DB21/1627-2008
DW001 discharge port
Chemical
nti Comprehensive
W oxygen 1 22.526mg/L 37.7575 204.3
nu Wastewater Discharge
ast demand
ou Standard
e Nil
s GB31570-2015 Pollutant
wa
Ammonia em Discharge Standard for
ter 1 0.075mg/L 0.15644 32.7
nitrogen issi Petroleum Refining
on Industry
Total GB31570-2015 Pollutant
1 0.182mg/L 0.28337 /
Phosphorus Discharge Standard for
71 / 319
2023 Annual Report
Petroleum Refining
Industry
DB21/1627-2008
Total Comprehensive
1 6.997mg/L 11.0088 61.3
nitrogen Wastewater Discharge
Standard
Sulfur GB31570-2015 Pollutant
5 2.4105mg/m3 55.881175 116.5
dioxide Discharge Standard for
Or
Nitrogen 25.8145mg/m Petroleum Refining
ga 5 434.712418 974.4
oxides 3 Industry
Ex niz
particulate
ha ed 21 0.4141mg/m3 9.182814 149
matter /
ust em
Non-
gas issi
methane
on
total 19 8.0292mg/m3 38.748273 745.6
s
hydrocarbon
s
72 / 319
2023 Annual Report
3. Hengli Petrochemical (Dalian)
Th
e Ex
Nu dis ce
mb tri ssi
Ty Em er bu ve
Main Approved
pe issi of tio e
Pollutants Total total
of on dis n Emission Pollutant Emission mi
and emissions emissions
pol me ch of Concentration Standards Executed ssi
Characteristi (tons/year) (tons/year
lut th arg dis on
c Pollutants )
ant od e ch sit
po arg ua
rts e tio
po n
rts
Wastewater
1 / 3485880 / /
volume
DB21/1627-2008
Chemical
32.916667mg/ "Comprehensive
oxygen 1 290.40595 559
L Wastewater
demand
Discharge Standard"
Co GB31570-2015
DW004 discharge port
nti Pollutant Discharge
Ammonia
Wa nu 1 0.03mg/L 0.36582 111.8 Standard for
nitrogen
ste ou Petroleum Refining
wa s Industry
ter em GB31570-2015
issi Pollutant Discharge
Total
on 1 0.131923mg/L 1.729 / Standard for
Phosphorus
Petroleum Refining
Industry
DB21/1627-2008
Total "Comprehensive
1 4.848462mg/L 63.0157 239.81
nitrogen Wastewater
Discharge Standard" Nil
Emission Standards
for Air Pollutants
Sulfur
2 13.76mg/m3 217.18 477.4409 from Coal-fired
dioxide
Power Plants in
Liaoning Province
Emission Standards
Or
for Air Pollutants
Nitrogen ga
2 28.605mg/m3 445.71 682.058 from Coal-fired
Ex oxides niz
Power Plants in
ha ed
/ Liaoning Province
ust em
GB31571-2015
gas issi
particulate "Petrochemical
on 72 1.16mg/m3 19.7547 319.525
matter Industry Pollutant
s
Discharge Standard"
Non-
GB31571-2015
methane
"Petrochemical
total 72 1.1317mg/m3 209.670281 877.2
Industry Pollutant
hydrocarbon
Discharge Standard"
s
73 / 319
2023 Annual Report
4. Kanghui New Material
Th
e Ex
Nu
dis ce
m
tri ssi
Ty be
Em bu Approve ve
pe Main r Total
issi tio d total e
of Pollutants of emission
on n Emission emission Pollutant Emission Standards mi
pol and dis s
me of Concentration s Executed ssi
lut Characterist ch (tons/ye
th dis (tons/ye on
an ic Pollutants arg ar)
od ch ar) sit
t e
arg ua
po
e tio
rts
po n
rts
Wastewater Fe / 512674 652352 Table 2 standard in Liaoning
volume nc Province's comprehensive
Chemical e 11.6225mg/L 5.9401 28.808 sewage discharge standard
oxygen on DB21-1627-2008
demand th
Ammonia e 0.0705mg/L 0.0356 2.91
nitrogen so
W Total ut 0.749mg/L 0.384 /
ast Phosphorus h
e 1 sid 17.187mg/L 7.273 14.185
wa e
Co
ter of
nti
th
nu
Total e
ou
nitrogen fac Nil
s
tor
em
y
issi
ar
on
ea
Particulate Fa 2.8337mg/m 1.775 50.591 Emission Standard of Air
matter cto Pollutants for Boilers
Sulfur ry 3.1783mg/m 1.931 20.23 GB13271-2014
Ex
dioxide ce
ha
Nitrogen ntr 32.8725mg/m 20.061 89.71 Emission Standard of
ust 1
oxide al Pollutants for Synthetic Resin
ga
chi 15.127mg/m 22.46 170.763 Industry GB31572-2015
s
m
VOCs
ne
y
5. Kanghui Dalian New Material
74 / 319
2023 Annual Report
N
u
Ex
m
ce
b
ssi
Ty er
ve
pe Main Emi of The Approved
Total Pollutant e
of Pollutants ssio di distributio total
Emission emissions Emission mi
pol and n sc n of emissions
Concentration (tons/year Standards ssi
lut Characterist met h discharge (tons/year
) Executed on
an ic Pollutants hod ar ports )
sit
t g
ua
e
tio
p
n
or
ts
Wastewater / 37894 / Liaoning
volume Province
Relying on
Chemical 32.9166mg/L 0.716145 4.15 Integrated
the main Wastewater
W oxygen Indi
wastewate
ast demand rect Discharge
r discharge Standard
e Ammonia emi 1 4.848mg/L 0.1484 0.42
outlet of
wa nitrogen ssio DB21/1627
Hengli
ter Total ns 0.03mg/L 0.000838 0.13 Emission
Petrochem
Phosphorus Standard of Nil
ical
Total 0.131mg/L 0.004216 / Pollutants for
nitrogen Synthetic Resin
Nitrogen Each 0 0 7.92 Industry
Ex Dire
oxide workshop GB31572
ha ct
Particulate and 7.745mg/m 0.183379 0.342
ust emi 5
matter auxiliary
ga ssio
feeding 5.17mg/m 0.044043 5.52
s VOCs ns
workshop
6. Hengli Chemical Fiber
Ex
Nu ce
mb ssi
Ty
er ve
pe Main Emi The Approved
of Pollutant e
of Pollutants ssio distribut Emission Total total
dis Emission mi
po and n ion of Concentration emissions emissions
ch Standards ssi
llu Characteristic met discharg (tons/year) (tons/year
arg Executed on
ta Pollutants hod e ports )
e sit
nt
po ua
rts tio
n
Con
Wastewater tinu
ous 1 / 54684 132000
volume
indir
W ect
as disc
harg In the Takeover
te
e of factory standard of Nil
w
Chemical mun area sewage plant
at icip
oxygen 1 33.28 mg/L 1.82 6.02
er al
demand
sew
age
plan
t
75 / 319
2023 Annual Report
Sulfur dioxide 7 1.5mg/m3 5.34 20.83 Emission
Standard of Air
Nitrogen Con
7 30mg/m3 31.18 58.79 Pollutants for
oxides tinu
Boilers
ous
DB32/4385-
Particles emis 7 In the 2mg/m3 1.65 30.7
2022
sion factory
Integrated
envi area
Emission
ron
Standard of Air
VOCs men 4 1.5mg/m3 0.85 46.67
Pollutants
t
DB32/4041-
2021
7. Deli Chemical Fiber
Th
E e Ex
Nu
m dis ce
m
is tri ssi
Ty be
si bu Approve ve
pe Main r
o tio d total e
of Pollutants of Emission Total
n n emissio Pollutant Emission mi
po and dis Concentration emissions
m of ns Standards Executed ssi
llu Characteristic ch (tons/year)
e dis (tons/ye on
ta Pollutants ar
t ch ar) sit
nt ge
h ar ua
po
o ge tio
rts
d po n
rts
Wastewater GB/T31962-2015
1 / 89118 115350
volume Emission Standard of
Chemical Pollutants for Synthetic
oxygen 1 32.432mg/L 3.013 46.14 Resin Industry GB31572-
demand 2015, Integrated
W Ammonia Wastewater Discharge
1 1.315mg/L 0.125 0.9577
as nitrogen Standard GB8978-1996,
te Total Antimony Pollutant
w I 1 / 0.009 0.16075 Emission Standard for
phosphorus
at n Textile Dyeing and Finishing
er d Industrial Wastewater
ir DB32/3432-2018, Water
Total Quality Standard for
e 1 / 0.432 0.5972
nitrogen Sewage Discharge into
c
t Urban Sewers GB/T31962-
/ Nil
e 2015
Sulfur dioxide m 1 3.08mg/m 0.48069 13.2 Integrated Emission
is Standard of Air Pollutants
Nitrogen si DB/324041-2021, Emission
1 24.572mg/m 4.01392 22.706
oxides o Standard of Air Pollutants
Ex Particulate n for Boilers DB32/4385-
1 2.381mg/m 0.39028 2.113
ha matter s 2022, Emission Standard of
us Odor Pollutants GB14554-
t 93, Emission Standard of
ga Pollutants for Synthetic
Non-methane
s Resin Industry GB31572-
total 1 / 0.86792 1.92
2015, Unorganized
hydrocarbons
Emission Control Standard
for Volatile Organic
Compounds GB37822-2019
76 / 319
2023 Annual Report
8. Hengke Advanced Materials
T
h
e
di
st
ri
E b
Appro
Main mi ut Excessi
Total ved
Type Pollutants ssi io Pollutant ve
Number of emissio total
of and on n Emission Emission emissi
discharge ns emissi
polluta Characteris m of Concentration Standards on
ports (tons/ye ons
nt tic et di Executed situati
ar) (tons/
Pollutants ho sc on
year)
d h
ar
g
e
p
or
ts
/ 67398 / "Water Quality
Standards for
Wastewate Sewage Discharge
r volume into Urban Sewers
GB/T31962-
2015", "Emission
Chemical 16.21mg/L 1.122 361.2 Standards for
oxygen 5 Pollutants in the
demand Synthetic Resin
In S 0.55mg/L 0.042 1.21 Industry
Ammonia e GB31572-2015",
dir
nitrogen w "Emission
ec
t a Standards for
Waste g 0.165mg/L 0.0083 0.44 Water Pollutants
e 1
water Total e in the Textile
mi
Phosphorus st Dyeing and
ssi at Finishing Industry
on io GB4287-2012",
s n 4.38mg/L 0.348 9.41 "Emission Nil
Standards for
Pollutants in the
Petrochemical
Total Industry
nitrogen GB31571-2015",
"Comprehensive
Sewage Discharge
Standards
GB8978-1996"
H 1.65mg/m 2.68 69.84 Emission
Di ea Standards for Air
re ti Pollutants from
Exhaus Sulfur ctl n Boilers
1
t gas dioxide y g DB32/4385-2022,
di m Emission
sc e Standards for
ha di Pollutants from
77 / 319
2023 Annual Report
rg u Synthetic Resin
e m Industry
aft st GB31572-2015,
er at Emission
tre io Standards for
Nitrogen at n 349.3 Pollutants from
m 18.4 mg/m3 8.82 Petrochemical
oxides 9
en Industry
t GB31571-2015,
Comprehensive
Emission
Standards for Air
Pollutants
Particulate DB32/4041-2021,
3.59 mg/m3 4.44 52.41 Emission
matter
Standards for
Non- Odor Pollutants
2.52 mg/m3 0.66 28.86 GB14554-93
methane
9. Su Sheng Thermal Power
Main Approve Excessi
Numbe The Total
Type Pollutants Emissio d total Pollutant ve
r of distributi Emission emission
of and n emission Emission emissi
dischar on of Concentrat s
polluta Characteri metho s Standards on
ge discharg ion (tons/ye
nt stic d (tons/ye Executed situati
ports e ports ar)
Pollutants ar) on
Integrated
Wastewate
Waste Indirect r
waste /
water emissio 1 6649.39 11000 Discharge
water /
volume ns Standard
GB8978-
1996
10.11mg/ DB32/414
Within
Sulfur m3 8—2021
the 46.34 434.337
dioxide 10.11mg/m Emission Nil
factory
3 Standard
area
Direct 28.99mg/ of Air
Exhaus Nitrogen m3 Pollutants
emissio 2 133.17 868.674
t gas oxide 28.99mg/m for Coal-
ns
3 fired
Power
1.59mg/m
Particulate Plants
3 7.03 172.424
matter DB32/414
1.59mg/m3 8-2021
2. Construction and operation of pollution prevention and control facilities
√适用 □不适用
During the reporting period, the above companies who discharged pollutants all built their
pollutant control facilities following the requirements for environmental impact assessment of the
construction project. Currently, the facilities are under normal operation. The companies carry out
daily maintenance of the facilities to ensure their efficient and stable operations of keeping
emissions within the standards.
3. Environmental Impact Assessment of Construction Projects and Other Environmental
Protection Administrative Licensing
√适用 □不适用
During the reporting period, the company's construction and renovation projects have been
accompanied by the preparation of environmental impact assessment reports by relevant
78 / 319
2023 Annual Report
construction units. These reports have received approval from the corresponding ecological and
environmental departments, granting permission for construction. Various pollution prevention and
control facilities (including those for air, water, noise, and solid waste classification and disposal)
and environmental management during the construction period have been implemented in
accordance with the approved content of the environmental impact assessment report. The
company strictly adheres to the "design, construction, and production simultaneously" system for
environmental protection.
4. Emergency plan for environmental emergencies
√适用 □不适用
Company Emergency plan Filing party Filing number
“Hengli Petrochemical (Dalian) Dalian Wafangdian
Hengli
Refining Co., Ltd. Emergency (Changxing Island Economic
Petrochemical 210281-2021-052-H
plan for environmental Zone) Ecological
Refining
emergencies “ Environment Branch
Dalian Wafangdian
Hengli “Hengli Petrochemical (Dalian)
(Changxing Island Economic
Petrochemical Co., Ltd. Emergency plan for 210281-2022-068-H
Zone) Ecological
(Dalian) environmental emergencies “
Environment Branch
“Hengli Petrochemical (Dalian) Dalian Wafangdian
Hengli
Chemical Co., Ltd. Emergency (Changxing Island Economic
Petrochemical 210281-2022-069-H
plan for environmental Zone) Ecological
Chemical
emergencies “ Environment Branch
Environmental Protection
“Kanghui New Material
Bureau of Administrative
Kanghui New Technology Co., Ltd. Emergency
Committee of Yingkou 210881-2021-037-M
Material plan for environmental
Xianrendao Economic
emergencies “
Development Zone
“Kanghui Dalian New Material Dalian Wafangdian
Kanghui Dalian Technology Co., Ltd Emergency (Changxing Island Economic
210281-2022-034-L
New Material Plan for environmental Zone) Ecological
emergencies” Environment Branch
“Jiangsu Hengli Chemical Fiber Suzhou Wujiang Ecological
Co., Ltd. Emergency plan for Environment Bureau 320509-2022-042-M
environmental emergencies “
Hengli
Chemical Fiber “Daxie Village Factory of Jiangsu Suzhou Wujiang Ecological
Hengli Chemical Fiber Co., Ltd. Environment Bureau
320509-2023-129-L
Emergency plan for
environmental emergencies”
“Jiangsu Deli Chemical Fiber Co., Suqian Sucheng Ecological
Deli Chemical
Ltd. Emergency plan for Environment Bureau 321302-2023-025-L
Fiber
environmental emergencies “
《Jiangsu Hengke Advanced Nantong Tongzhou
Hengke Ecological Environment
Materials Co. Ltd. Contingency
Advanced Bureau 320683-2023-090-H
plans for environmental
Materials
emergencies》
79 / 319
2023 Annual Report
Susheng “Suzhou Susheng Thermal Power Suzhou Wujiang Ecological
Thermal Co., Ltd. Emergency plan for Environment Bureau 320509-2023-138-M
Power environmental emergencies “
5. Environmental Self-Monitoring Program
√适用 □不适用
The company's key pollutant-emitting subsidiaries under its jurisdiction have developed
environmental monitoring plans in accordance with relevant national self-monitoring standards and
environmental management system requirements. These plans are submitted to the local
environmental regulatory authorities for record-keeping while applying for pollutant discharge
permits. The company regularly organizes its environmental monitoring station to conduct tests on
various pollutants emitted from each workshop's discharge outlets. For projects where the company
lacks testing capabilities, it entrusts third-party institutions with environmental monitoring
qualifications to conduct emission testing for specific pollutants, such as wastewater and exhaust
gases. The company assigns dedicated personnel to inspect and aggregate data on various pollutant
indicators. Additionally, data analysis is performed to provide timely feedback to relevant
departments as a basis for adjusting process parameters and ensuring compliance with emission
standards. This systematic approach ensures that the company achieves standardized emissions.
6. Administrative penalties due to environmental issues during the reporting period
□适用 √不适用
7. Other environmental information that should be disclosed
□适用 √不适用
(II) Explanation on environmental protection of companies other than key pollutant discharge
entities
√适用 □不适用
1. Cases of receiving administrative penalties due to environmental issues
□适用 √不适用
2. Disclose other environmental information with reference to key pollutant discharge entities
□适用 √不适用
3. Reasons for not disclosing other environmental information
√适用 □不适用
The company places great importance on environmental protection and strictly implements the
"Environmental Protection Law of the People's Republic of China." It is committed to complying with national
and local environmental laws and regulations, industry technical specifications, and government management
provisions. The company actively carries out daily environmental management work. Non-production
subsidiaries under the company have minimal impact on the environment, with their energy consumption
and emissions mainly concentrated in daily operational and office activities. The company's subsidiaries
80 / 319
2023 Annual Report
actively assume corporate environmental responsibilities and strictly adhere to various environmental policies.
They effectively implement environmental measures to protect the environment.
(III) Relevant information that is conducive to protecting the ecology, preventing pollution, and
fulfilling environmental responsibilities
√适用 □不适用
Please refer to the relevant content in the chapter "03 Energy Conservation and Emissions
Reduction, Permanent Protection of Green" of the 2023 Environmental, Social and Governance (ESG)
Report disclosed by the company on the website of the Shanghai Stock Exchange (www.sse.com.cn)
on April 10, 2024.
(IV) Measures and effects taken to reduce its carbon emissions during the reporting period
Whether to take carbon reduction measures Yes
Reduction of carbon dioxide equivalent emissions (unit: Not applicable
tons)
Types of carbon reduction measures (such as using clean In the production process, use carbon
energy for power generation, using carbon reduction reduction technologies such as carbon
technologies in the production process, and developing dioxide recovery, clean energy generation
new products that help reduce carbon emissions) such as photovoltaics and biogas, and
research and development of new green
products that help reduce carbon emissions
Specific note
√适用 □不适用
Please refer to the relevant content in the chapter "03 Energy Conservation and Emissions
Reduction, Sustainable Green Protection" of the 2023 Environmental, Social and Governance (ESG)
Report disclosed by the company on the website of the Shanghai Stock Exchange (www.sse.com.cn)
on April 10, 2024.
II. Social Responsibility Work Situation
(I) Whether to disclose social responsibility report, sustainable development report or ESG
report separately
√适用 □不适用
The company has prepared and disclosed its separate Annual Corporate Social Responsibility Report
for the year 2023. For specific details, please refer to the "2023 Annual Corporate Social
Responsibility Report" disclosed by the company on April 10, 2024, on the SSE website
(www.sse.com.cn).
(II) Specific situation of social responsibility work
√适用 □不适用
External donation, public Quantity/Content Detail
welfare projects
Total investment (ten thousand 10,200 Subsidiary Hengli Refining and Chemical
yuan) donated 100 million yuan to help Dalian
The construction of medical and educational
infrastructure in Changxing Island area; the
subsidiary Jiangsu Xuanda Polymer Materials
Co., Ltd. donated 2 million yuan to Nantong
Hengli Education Development Foundation
Including: capital (ten 10,200
thousand yuan)
Material discount (ten 0
81 / 319
2023 Annual Report
thousand yuan)
Number of people benefited
(person)
Special note
□适用 √不适用
III. Consolidate and expand the achievements of poverty alleviation and rural
revitalization
√适用 □不适用
Poverty Alleviation and Rural Quantity/Content Details
Revitalization Projects
Total investment (ten thousand 0.3 Subsidiary Hengli Futures Co., Ltd. donated
yuan) 3,000 yuan for rural revitalization projects
Including: capital (ten 0.3
thousand yuan)
Material discount (ten
thousand yuan)
Number of people benefited
(person)
Forms of assistance (such as
industrial poverty alleviation,
employment poverty alleviation,
education poverty alleviation,
etc.)
Special note
□适用 √不适用
82 / 319
2023 Annual Report
Chapter 6 Important events
I. Fulfillment of Commitments
(I) Commitments made by the actual controller, shareholders, related parties, acquirers, and
the company itself, as well as relevant parties, during the reporting period or continuing
into the reporting period
□适用 √不适用
(II) The company's assets or projects have profit forecasts, and the reporting period is still in
the period of profit forecasts. The company shall explain whether the assets or projects have
reached the original profit forecasts and the reasons
□已达到 □未达到 √不适用
(III) Fulfillment of Performance Commitment and Its Impact on Goodwill Impairment Test
□适用 √不适用
II. Non-operating funds occupied by controlling shareholders and other related
parties during the reporting period
□适用 √不适用
III. Guarantee in violation of regulations
□适用 √不适用
IV. Explanation of the company's board of directors to the accounting firm's "non-
standard opinion audit report"
□适用 √不适用
V. The company's analysis and explanation on the reasons and effects of changes in
accounting policies, accounting estimates, or corrections of major accounting
errors
(I) The company's analysis and explanation of the reasons and effects of the correction of major
accounting errors
□适用 √不适用
(II) The company's analysis and explanation of the reasons and effects of the correction of major
accounting errors
□适用 √不适用
(III) Communication with the former accounting firm
□适用 √不适用
(IV) Approval procedures and other note
□适用 √不适用
VI. Appointment and Dismissal of Accounting Firms
Unit: ten thousand yuan Currency: RMB
83 / 319
2023 Annual Report
Currently employed
Domestic accounting firm name Zhonghui Certified Public Accountants
(Special General Partnership)
Domestic accounting firm remuneration 379
Audit period for domestic accounting firms 4
The name of the certified public accountant of the domestic Han Jian, Fang Sai
accounting firm
Consecutive years of audit services of CPAs of domestic Han Jian (5 years), Fang Sai (2 year)
accounting firms
Name Remuneration
Internal control audit accounting Zhonghui Certified Public Accountants 60
firm (Special General Partnership)
Explanation on the appointment and dismissal of accounting firms
□适用 √不适用
Explanation on the change of accounting firm during the audit period
□适用 √不适用
Explanation of the situation where the audit fee has decreased by more than 20% (including 20%)
compared to the previous year
□适用 √不适用
VII. Situations at risk of delisting
(I) Reasons for delisting risk warning
□适用 √不适用
(II) Countermeasures the company intends to take
□适用 √不适用
(III) Circumstances and reasons for facing termination of listing
□适用 √不适用
VIII. Matters related to bankruptcy and reorganization
□适用 √不适用
IX. Major litigation and arbitration matters
□本年度公司有重大诉讼、仲裁事项 √本年度公司无重大诉讼、仲裁事项
X. Listed companies and their directors, supervisors, senior managers, controlling
shareholders, and actual controllers suspected of violating laws and regulations,
punishments and rectifications
√适用 □不适用
The Shanghai Stock Exchange issued the "Decision on the Criticism of the Controlling
Shareholder and Actual Controller of Hengli Petrochemical Co., Ltd." on February 15, 2023
(Disciplinary Action Decision [2023] No. 16 of Shanghai Stock Exchange). For details, please refer to
the website of Shanghai Stock Exchange (www.sse.com.cn).
84 / 319
2023 Annual Report
XI. Explanation on the integrity status of the company and its controlling
shareholders and actual controllers during the reporting period
□适用 √不适用
XII. Significant related party transactions
(I) Related party transactions related to daily operations
1. Matters that have been disclosed in the temporary announcement and have no progress
or change in subsequent implementation
√适用 □不适用
Matter Index
Estimated daily related For details, please refer to the "Announcement of Hengli Petrochemical on
party transactions in 2023 the Expected Status of Daily Related Transactions in 2023" (Announcement
No. 2023-010) disclosed by the company on the website of the Shanghai
Stock Exchange on April 28, 2023
2. Matters that have been disclosed in the interim announcement, but have progress or
changes in subsequent implementation
□适用 √不适用
3. Matters not disclosed in the interim announcement
□适用 √不适用
(II) Related party transactions in asset or equity acquisition and sale
1. Matters that have been disclosed in the temporary announcement and have no progress or
□适用 √不适用
2. Matters that have been disclosed in the interim announcement, but have progress or changes
in subsequent implementation
□适用 √不适用
3. Matters not disclosed in the interim announcement
□适用 √不适用
4. If performance agreement is involved, the performance realization within the Reporting
Period shall be disclosed
□适用 √不适用
(III) Significant connected transactions involving joint foreign investment
1. Matters that have been disclosed in the temporary announcement and have no progress or
change in subsequent implementation
□适用 √不适用
2. Matters that have been disclosed in the interim announcement, but have progress or changes
in subsequent implementation
□适用 √不适用
85 / 319
2023 Annual Report
3. Matters not disclosed in the interim announcement
□适用 √不适用
(IV) Creditor's rights and liabilities with related parties
1. Matters that have been disclosed in the temporary announcement and have no progress or
change in subsequent implementation
□适用 √不适用
2. Matters that have been disclosed in the interim announcement, but have progress or changes
in subsequent implementation
□适用 √不适用
3. Matters not disclosed in the interim announcement
□适用 √不适用
(V) The financial business between the company and the financial company that has a related
relationship, the company's holding financial company and related parties
□适用 √不适用
(VI) Others
□适用 √不适用
XIII. Significant contracts and their performance
(I) Trusteeship, contracting and leasing
1. Trusteeship
□适用 √不适用
2. Contracting
□适用 √不适用
3. Leasing
□适用 √不适用
86 / 319
2023 Annual Report
(II) Guarantee
√适用 □不适用
Unit: hundred million yuan Currency: RMB
The company's external guarantees (excluding guarantees for subsidiaries)
Whether
Guarantor's Guarantee Whether Whether
to
relationship The party date Guarantee the the Guarantee Relationship
Guarantee Guarantee Guarantee Collateral Counter guarantee
Guarantor with the being (signing expiry guarantee guarantee overdue with related
amount start date type (if any) guarantee for
listed guaranteed date of the date has been is amount party
related
company agreement) fulfilled overdue
parties
Nil
Total amount of guarantees incurred during the reporting period (excluding
-
guarantees to subsidiaries)
Total balance of guarantees at the end of the reporting period (A)
-
(excluding guarantees to subsidiaries)
Guarantees provided by the company and subsidiaries to its subsidiaries
Total amount of guarantees for subsidiaries during the reporting period 2,941.87
Total balance of guarantees to subsidiaries at the end of the reporting 2,005.64
period (B)
Total company guarantees (including guarantees to subsidiaries)
Total Guarantee (A+B) 2,005.64
The ratio of the total guarantee amount to the company's net assets (%) 334.32
Including:
Amount of guarantee provided for shareholders, actual controllers and 0
their related parties (C)
Amount of debt guarantee provided directly or indirectly for guaranteed
objects whose asset-liability ratio exceeds 70% (D)
The amount of the part where the total guarantee exceeds 50% of the net 1,581.84
assets (E)
The total amount of the above three guarantees (C+D+E) 1,581.84
87 / 319
2023 Annual Report
Explanation on possible joint and several liability for unexpired guarantees
Guarantee information During the reporting period, the company's guarantees were mutual guarantees between the
company and its subsidiaries (sub-subsidiaries).
88 / 319
2023 Annual Report
(III) Entrusting others to manage cash assets
1. Entrusted financial management
(1) Overall situation of entrusted financial management
√适用 □不适用
Unit: ten thousand yuan Currency: RMB
Outstanding Overdue uncollected
Type Source of fund Amount
balance amount
Bank financial 92,970.00
Self-owned funds
products
Financial Self-owned funds 24,930.40 23,450.00
products of
securities
companies
Trust financial 16,000.00 2,000.00
Self-owned funds
products
Public fund Self-owned funds 4,999.90 4,999.90
products
Private equity Self-owned funds 7,800.00 3,300.00
fund products
Others
□适用 √不适用
89 / 319
2023 Annual Report
(2) Individual entrusted financial management
√适用 □不适用
Unit: yuan Currency: RMB
Is Amoun
there t of
Wheth
Entruste Entruste any provisi
Entruste er it
Entrusted d d Sour restrict Remuner Annual Expec Act entrus on for
d has
financial financial financial ces Funding ions ation ized ted ual ted impair
financial Unexpired gone
Trustee managem manage manage of directio situatio determin rate of incom gain financ ment
manage amount throug
ent ment ment fund n n ation return e (if or ial (if any)
ment h legal
amount start maturity s method any) loss plan
type proced
date date in the
ures
future
?
Galaxy Financial 10,000,00 2023/4/ Self- Fixed- NIL Yes
Securitie products 0.00 27 own income 10,000,00
s of ed bonds 0.00
securitie fund
s s
compani
es
Guolian Financial 49,500,00 2023/12 Self- Fixed- NIL Yes
Securitie products 0.00 /25 own income 49,500,00
s of ed bonds 0.00
securitie fund
s s
compani
es
China Financial 125,000,0 2023/12 Self- Fixed- NIL Yes
Securitie products 00.00 /29 own income 125,000,0
s Co., of ed bonds 00.00
Ltd securitie
90 / 319
2023 Annual Report
s fund
compani s
es
Jiangsu Trust 20,000,00 2023/4/ Self- money NIL Yes
Internati financial 0.00 26 own market 20,000,00
onal products ed instrum 0.00
Trust fund ents
Co., Ltd s
Federal Financial 50,000,00 2023/8/ Self- bond NIL Yes
Reserve products 0.00 8 own 50,000,00
Securitie of ed 0.00
s securitie fund
s s
compani
es
Tianzhi Public 49,999,00 2023/12 Self- mixed NIL Yes
Fund fund 0.00 /5 own securiti 49,999,00
Manage products ed es 0.00
ment fund investm
Co., Ltd s ent
Others
□适用 √不适用
91 / 319
2023 Annual Report
(3) Provision for impairment of entrusted financial management
□适用 √不适用
2. Entrusted loan situation
(1) General situation of entrusted loans
□适用 √不适用
Others
□适用 √不适用
(2) Individual entrusted loans
□适用 √不适用
Others
□适用 √不适用
(3) Provision for impairment of entrusted loans
□适用 √不适用
3. Others
□适用 √不适用
(IV) Other major contracts
□适用 √不适用
XIV. Progress description of the use of raised funds
□适用 √不适用
XV. Explanations on other major events that have a significant impact on investors'
value judgments and investment decisions
□适用 √不适用
92 / 319
2023 Annual Report
Chapter 7 Share Changes and Shareholders
I. Changes in Shares
(I) Changes in Shares
1. Changes in Shares
During the reporting period, the total number of shares and share capital structure of the company
remained unchanged.
2. Description of changes in shares
□适用 √不适用
3. The impact of shareholding changes on financial indicators such as earnings per share and
net assets per share in the last year and the latest period (if any)
□适用 √不适用
4. Other content that the company deems necessary or required by securities regulators to
disclose
□适用 √不适用
(II) Changes in restricted shares
□适用 √不适用
II. Securities Issuance and Listing
(I) Securities issuance as of the reporting period
√适用 □不适用
Unit: share Currency: RMB
Types of Issue The
stocks and price number of
Issuance Transaction
their (or Issue quantity Listing date transactions
date end date
derivative interest approved
securities rate) for listing
Common stock
Convertible corporate bonds, convertible bonds with warrants
Bonds (including corporate bonds, corporate bonds, and non-financial corporate bond financing instruments)
Short-term 2023-07-17 3.53% 1 billion yuan 2023-07-20 2024-07-19
bond
Short-term 2022-07-22 3.18% 1 billion yuan 2022-07-26 2023-07-25
bond
93 / 319
2023 Annual Report
Explanation on securities issuance as of the reporting period (for bonds with different interest rates
during the duration, please explain separately) :
√适用 □不适用
On November 10, 2021, and November 26, 2021, the company convened the 23rd meeting of
the eighth Board of Directors and the second extraordinary general meeting of shareholders in 2021.
The meetings reviewed and approved the Proposal on Registering and Issuing Short-Term Financing
Bonds, agreeing that the company would apply to the China Interbank Market Dealers Association
to register and issue short-term financing bonds with an amount not exceeding RMB 3 billion
(including 3 billion yuan).
On March 11, 2022, the company received the Acceptance of Registration Notice (Zhong Shi
Xie Zhu [2022] CP14) from the Dealers Association, stating that the Dealers Association accepted
the registration of the company's short-term financing bonds with a registered amount of 3 billion
yuan. The registered quota is valid for a period of 2 years from the date of the notice.
On May 31, 2022, the company issued the first tranche of short-term financing bonds for the
year 2022 in the national interbank market. The bonds have a maturity of 1 year, with a total
issuance amount of 1 billion yuan and an issuance interest rate of 3.03%.
On July 22, 2022, the company issued the second tranche of short-term financing bonds for the
year 2022 in the national interbank market. The bonds have a maturity of 1 year, with a total
issuance amount of 1 billion yuan and an issuance interest rate of 3.18%.
On July 17, 2022, the company issued the first tranche of short-term financing bonds for the
year 2023 in the national interbank market. The bonds have a maturity of 1 year, with a total
issuance amount of 1 billion yuan and an issuance interest rate of 3. 53%.
(II) Changes in the total number of shares of the company and the structure of shareholders, as
well as changes in the structure of the company's assets and liabilities
□适用 √不适用
(III) Existing Internal Staff Shares
□适用 √不适用
III. Shareholders and actual controllers
(I) Total number of shareholders
Total number of ordinary shareholders as of the end of the 101,183 114, 006
reporting period (accounts)
The total number of ordinary shareholders at the end of the 98,151 113, 210
previous month before the annual report disclosure date
(accounts)
Total number of preferred shareholders with voting rights restored 0 0
as of the end of the reporting period (accounts)
The total number of preference shareholders whose voting rights 0 0
have been restored at the end of the previous month before the
annual report disclosure date (accounts)
94 / 319
2023 Annual Report
(II) Table of shareholdings of the top ten shareholders and top ten tradable shareholders (or shareholders not subject to sales restrictions) as of the end
of the reporting period
Unit: share
Shareholdings of the top ten shareholders
Shareholder's name Pledge, Mark or Freeze
Changes during Number of shares Number of
Situation Shareholder
the reporting held at the end of Ratio (%) restricted
(Full name) Share nature
period the period shares held Quantity
status
0 1,498,478,926 21.29 0 Pledged 0 Domestic non-
Hengneng Investment (Dalian) Co., Ltd. state-owned legal
person
-123,000,000 1,120,172,342 15.91 0 Pledged 279, 000, 000 Domestic non-
Hengli Group Co., Ltd. state-owned legal
person
Hengli Group - Southwest Securities－21 Hengli 123,000,000 980,440,000 13.93 0 None 0 Other
E1 Guarantee and Trust Property Account
0 791,494,169 11.24 0 None 0 Domestic natural
Fan Hongwei
person
0 732,711,668 10.41 0 None 0 Foreign legal
Tak Shing Li International Holdings Ltd.
person
Hong Kong Securities Clearing Company Limited 3,242,891 120,480,118 1.71 0 None 0 Other
Xuanyuan Private Equity Fund Investment -1,066,200 82,600,783 1.17 0 None 0 Other
Management (Guangdong) Co., Ltd. - Xuanyuan
Yuanbao No. 16 Private Securities Investment
Fund
Xuanyuan Private Equity Fund Investment -1,008,600 74,115,694 1.05 0 None 0 Other
Management (Guangdong) Co., Ltd. - Xuanyuan
Yuanbao No. 15 Private Securities Investment
Fund
Dalian State-owned Assets Investment and -80,000 68,818,123 0.98 0 Pledged 15, 000, 000 State-owned legal
Operation Group Co., Ltd. entity
95 / 319
2023 Annual Report
Xuanyuan Private Equity Fund Investment -865,800 66,297,823 0.94 0 None 0 Other
Management (Guangdong) Co., Ltd. - Xuanyuan
Yuanbao No. 17 Private Equity Securities
Investment Fund
Shareholdings of the top ten shareholders not subject to sales restrictions
Shareholder's name Share type and quantity
Number of unrestricted tradable shares held
Type Quantity
Hengneng Investment (Dalian) Co., Ltd. 1,498,478,926 Renminbi ordinary shares 1, 498, 478, 926
Hengli Group Co., Ltd. 1,120,172,342 Renminbi ordinary shares 1, 243, 172, 342
Hengli Group－Southwest Securities－21 Hengli E1 Guarantee and
980,440,000 Renminbi ordinary shares 857, 440, 000
Trust Property Account
Fan Hongwei 791,494,169 Renminbi ordinary shares 791, 494, 169
Tak Shing Li International Holdings Ltd. 732,711,668 Renminbi ordinary shares 732, 711, 668
Hong Kong Securities Clearing Company Limited 120,480,118 Renminbi ordinary shares 117, 237, 227
Xuanyuan Private Equity Fund Investment Management
(Guangdong) Co., Ltd. - Xuanyuan Yuanbao No. 16 Private Securities 82,600,783 Renminbi ordinary shares 83, 666, 983
Investment Fund
Xuanyuan Private Equity Fund Investment Management
(Guangdong) Co., Ltd. - Xuanyuan Yuanbao No. 15 Private Securities 74,115,694 Renminbi ordinary shares 75, 124, 294
Investment Fund
Dalian State-owned Assets Investment and Operation Group Co., Ltd. 68,818,123 Renminbi ordinary shares 68, 898, 123
Xuanyuan Private Equity Fund Investment Management
(Guangdong) Co., Ltd. - Xuanyuan Yuanbao No. 17 Private Equity 66,297,823 Renminbi ordinary shares 67, 163, 623
Securities Investment Fund
Explanation of the repurchase accounts among the top ten As of the end of the reporting period, none of the top ten shareholders had a corporate repurchase
shareholders account.
When Hengli Group, the controlling shareholder of the company, conducted a non-public issuance
of exchangeable corporate bonds, it established a guarantee and trust account through the trustee,
using a portion of Hengli Petrochemical's legally owned A-share stocks as collateral and trust
Explanation on proxy voting rights, proxy voting rights and waiver of property. The account is held in the name of Southwest Securities Co., Ltd. and is registered as the
voting rights of the above-mentioned shareholders securities holder in the company's shareholder register under the name "Hengli Group-Southwest
Securities-21 Hengli E1 Guarantee and Trust Property Account." When exercising voting rights,
Southwest Securities Co., Ltd. will act in accordance with the opinions of Hengli Group, while
ensuring the interests of the holders of the exchangeable bonds are not compromised.
96 / 319
2023 Annual Report
Explanation on the related relationship or concerted action of the Hengli Group, Hengneng Investment, Fan Hongwei and Tak Shing Li are parties acting in concert with
above-mentioned shareholders each other; the relationship between other shareholders is unknown.
Explanation on preferred stockholders with restored voting rights
During the reporting period, the company had no preferred shareholders.
and the number of shares held
The top ten shareholders' participation in the refinancing business and their share lending
√适用 □不适用
Unit: share
The top ten shareholders' participation in the refinancing business and their share lending
Refinancing lending shares at Transferred and financed
Shareholding in general accounts
Ending ordinary account and lending shares at the end of
and credit accounts at the the beginning of the period and
credit account shareholding the period and not yet
Shareholder's name beginning of the period not yet returned
returned
Proportion Proportion Proportion Proportion
Total quantity Total quantity Total quantity Total quantity
(%) (%) (%) (%)
Dalian State-owned Assets
Investment and Operation 68,898,123 0.98 0 0 68,818,123 0.98 80,000 0.12
Group Co., Ltd.
The top ten shareholders have changed compared to the previous period
□适用 √不适用
The number of shares held by the top ten shareholders with sales restrictions and the conditions for sales restrictions
□适用 √不适用
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2023 Annual Report
(III) Strategic investors or general legal persons become the top 10 shareholders due to allotment
of new shares
□适用 √不适用
IV. Controlling Shareholders and Actual Controllers
(I) Controlling Shareholders
1 Legal person
√适用 □不适用
Name Hengli Group Co., Ltd.
The person in charge or legal Chen Jianhua
representative of the entity
Date of establishment January 16, 2002
Main operating business Production and sales of needle textiles and paper packaging materials
(excluding printing) ; sales of chemical fiber raw materials, plastics,
mechanical and electrical equipment, instruments, ash residue, purified
terephthalic acid (PTA), and monoethylene glycol (MEG) ; industrial
investment; research and development of new textile raw materials
products; self-operated and agency import and export of various
commodities and technologies; limited branch operations include thermal
power generation and steam production and supply. (Business activities in
projects that require approval by law can only be conducted after obtaining
approvals from relevant departments).
Shareholdings of other Hengli Group is the controlling shareholder of the listed company
domestic and foreign listed Guangdong Songfa Ceramics Co., Ltd. (stock code: 603268) and the listed
companies controlled and company Suzhou Wujiang Tongli Lake Tourist Resort Co., Ltd. (stock
participated in during the code: 834199).
reporting period
Other information Nil
2 Natural Person
□适用 √不适用
3 Special note on the absence of a controlling shareholder in the company
□适用 √不适用
4 Explanation on the change of controlling shareholders during the reporting period
□适用 √不适用
5 Block diagram of the property rights and control relationship between the company and the
controlling shareholder
√适用 □不适用
98 / 319
2023 Annual Report
Note :
When calculating the shareholding ratio of the controlling shareholder Hengli Group, the number
of shares held indirectly through the "Hengli Group-Southwest Securities-21 Hengli E1 Guarantee
and Trust Property Account" is included.
(II) Actual controller
1 Legal person
□适用 √不适用
2 Natural person
√适用 □不适用
Name Chen Jianhua and Fan Hongwei (Spouse)
Nationality China
Whether to obtain the right of Nil
residence in other countries or regions
Main occupation and position Chen Jianhua is the chairman and general manager of Hengli
Group Co., Ltd., the controlling shareholder of the listed company;
Fan Hongwei is the current chairman of the listed company
Domestic and foreign listed companies Chen Jianhua and Fan Hongwei are the actual controllers of the
that have been controlled in the past 10 listed company Guangdong Songfa Ceramics Co., Ltd. (stock
years code: 603268) and the listed company Suzhou Wujiang Tongli
Lake Tourist Resort Co., Ltd. (stock code: 834199).
3 Special note for the absence of actual controllers in the company
□适用 √不适用
4 Explanation on changes in the company's control during the reporting period
□适用 √不适用
5 Block diagram of the property rights and control relationship between the company and the
actual controller
√适用 □不适用
99 / 319
2023 Annual Report
Note:
When calculating the shareholding ratio of Hengfeng Investment (Dalian) Co., Ltd., the number of
shares directly held through its own account "Hengfeng Investment (Dalian) Co., Ltd." (accounting
for 0.46% of the total share capital) and the number of shares indirectly held through the contractual
private equity fund account "Hainan Huayin Tianxia Private Equity Fund Management Co., Ltd. -
Huayin Xuyang No. 1 Private Equity Securities Investment Fund" (accounting for 0.58% of the total
share capital) are included.
6 The actual controller controls the company through trust or other asset management
methods
□适用 √不适用
(III) Other information on controlling shareholders and actual controllers
□适用 √不适用
V. The cumulative number of pledged shares by the company's controlling
shareholder or largest shareholder and their concerted actors accounts for more
than 80% of their total holdings in the company
□适用 √不适用
VI. Other legal person shareholders holding more than 10% of the shares
√适用 □不适用
Unit: ten thousand yuan Currency: RMB
Main
The person in
operating
charge or
Legal entity Date of Registered business or
legal Organization Code
shareholder name establishment capital management
representative
activities,
of the entity
etc.
Hengneng Fan Hongwei 2014-03-06 912102440890861452 Project
Investment investment
(Dalian) Co., Ltd. 50, 000 (excluding
special
approval)
100 / 319
2023 Annual Report
Tak Shing Li Fan Hongwei 2003-08-27 Registration number: Mainly
International 859250 engaged in
Holdings Ltd. 500 trade and
investment
business
Other information Hengneng Investment and Tak Shing Li are persons acting in concert with Hengli
Group, the controlling shareholder of the company
VII. Explanation on reduction of shareholding restriction
□适用 √不适用
VIII. Specific implementation of share repurchase during the reporting period
□适用 √不适用
101 / 319
2023 Annual Report
Chapter 8 Information of Preferred Shares
□适用 √不适用
102 / 319
2023 Annual Report
Chapter 9 Information of Bonds
I. Corporate bonds, company bonds and non-financial corporate debt financing
instruments
√适用 □不适用
(I) Corporate bonds
□适用 √不适用
(II) Company bonds
□适用 √不适用
(III) Debt financing instruments for non-financial enterprises in the inter-bank bond market
√适用 □不适用
1. Non-financial corporate debt financing instruments
Unit: hundred million yuan Currency: RMB
Tr Wheth
a er
Inves
di there is
tor
n a risk
Payment Suita
Abb C g of
Valu Bond Interes of Tradin bility
Bond revi o Issuanc Maturit M termin
e balanc t principal g Arra
name atio d e date y date ec ation
date e rate(%) and places nge
n e h of
interest ment
a listing
s (if
ni transac
any)
s tions
m
23 0 One-
2023 Hen 4 time
Phase I gli 2 repayme
China
Short- Petr 3 2023 nt of
2023- 2024- Interba
term och 8 -07- 10 3.53 principal No
07-17 07-19 nk
Financi emi 0 19 and
Market
ng cal 3 interest
Bonds CP0 9 at
01 8 maturity
The company's countermeasures against the risk of delisting and trading bonds
□适用 √不适用
Overdue Bonds
□适用 √不适用
Bond interest payment and payment during the reporting period
□适用 √不适用
2. The triggering and implementation of issuer or investor option clauses and investor
protection clauses
□适用 √不适用
103 / 319
2023 Annual Report
3. Intermediaries providing services for bond issuance and duration business
Name of
Intermediary name Office address Signing Contact person Contact number
Accountant
China Merchants Bank China Merchants Bank Cao Chong, Guo 0755-88026137 、
Co., Ltd. Building, No. 7088 Wei 0411-39853306
Shennan Avenue,
Shenzhen
Beijing Tianyuan Law Unit 509, Block A, Zhang Deren and 010-57763888
Firm International Enterprise Huang Jingya
Building, No. 35,
Financial Street, Xicheng
District, Beijing
Zhonghui Certified Room 601, Building A, Han Jian, Fang Han Jian 0571-88879999
Public Accountants Hualian Times Building, Sai
(Special General No. 8 Xinye Road,
Partnership) Jianggan District,
Hangzhou
Oriental Jincheng 45-47F, Building A, Ping Guo Zhebiao 010-62299800
International Credit An Happiness Center,
Rating Co., Ltd. No. 24, Lize Road,
Fengtai District, Beijing
China Minsheng No. 2, Fuxingmennei Shu Chang 010-56366525
Banking Corp., Ltd Street, Xicheng District,
Beijing
Changes to the above-mentioned intermediaries
□适用 √不适用
4. Use of raised funds at the end of the reporting period
√适用 □不适用
Unit: hundred million yuan Currency: RMB
Whether it is
Operation consistent with
Rectification
Total of special the purpose,
of illegal
amount Amount Unused account use plan and
Bond name use of
of funds used amount for raised other
raised funds
raised funds (if agreements
(if any)
any) promised in
the prospectus
23 Hengli
10 10 0 Yes
Petrochemical CP001
The progress and operational benefits of raising funds for construction projects
□适用 √不适用
Explanation on changing the use of funds raised from the above bonds during the reporting period
□适用 √不适用
Other note
□适用 √不适用
104 / 319
2023 Annual Report
5. Adjustments to credit rating results
□适用 √不适用
Other note
□适用 √不适用
6. The implementation and changes of guarantees, debt repayment plans and other debt
repayment guarantee measures during the reporting period and their impact
□适用 √不适用
7. Explanation on other conditions of non-financial corporate debt financing instruments
□适用 √不适用
(IV) The company incurred a consolidated net loss during the reporting period that exceeded 10%
of the net assets at the end of the previous year
□适用 √不适用
(V) Overdue interest-bearing debts other than bonds at the end of the reporting period
□适用 √不适用
(VI) The impact on bond investors' rights during the reporting period due to violations of laws,
regulations, company bylaws, provisions of information disclosure management systems, as well
as deviations from the provisions or commitments stated in the bond prospectus
□适用 √不适用
(VII) Accounting Data and Financial Indicators of the Company in the Previous Two Years by the
End of the Reporting Period
√适用 □不适用
Unit: ten thousand yuan Currency: RMB
Year-on-year Reason of
Key indicators 2023 2022
changes(%) changes
Net profit excluding 599,723.27 104,528.51 473.74
extraordinary profit or loss
Current ratio 0.53 0.61 -13.11
Quick ratio 0.21 0.25 -16.00
Debt-to-assets ratio (%) 76.98 78.08 -1.10
Total debt-to-EBITDA ratio 0.12 0.09 33.33
Interest coverage ratio 2.30 1.36 69.12
Cash flow interest coverage 4.10 5.94 -30.98
ratio
EBITDA-to-interest coverage 3.97 3.20 24.06
ratio
Loan repayment rate (%) 100.00 100.00
Interest coverage rate (%) 100.00 100.00
II. Convertible corporate bonds
□适用 √不适用
105 / 319
2023 Annual Report
Chapter 10 Financial report
I. Auditor’s Report
√适用 □不适用
To all shareholders of Hengli Petrochemical Co., Ltd.:
I. Opinion
We have audited the financial statements of Hengli Petrochemical Co., Ltd. (hereinafter "the
Company"), which comprise the consolidated and company balance sheets as at 31 December 2023,
and the consolidated and company income statements, consolidated and company cash flow
statements and consolidated and company statements of changes in equity for the year then ended,
and notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects,
the consolidated and company financial positions as at 31 December 2023, and their financial
performance and their cash flows for the year then ended in accordance with the requirements of
Accounting Standards for Business Enterprises.
II. Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing. Our
responsibilities under those standards are further described in the Auditor's Responsibilities
for the Audit of the Financial Statements section of our report. We are independent of the
Company and have fulfilled our other ethical responsibilities in accordance with the China
Code of Ethics for Certified Public Accountants. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
III. Key Audit Matter
Key audit matter is the matter that, in our professional judgment, was of most significance in
our audit of the financial statements for the year ended 31 December 2023. This matter was
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 this matter.
(I) Revenue recognition
Key audit matter Addressed in the context of our audit
Revenue recognition
As mentioned in note to the financial statements of In the audit of the financial statements for the year,
the Company, the operating revenue for the period we have implemented the following procedures for
was RMB 234. 79 billion. The primary revenue the matter of revenue recognition:
sources and recognition criteria are shown in note 1. Evaluate and test the design and operation
to the financial statements of the Company. Since effectiveness of key internal controls related to
revenue is one of the key performance indicators of revenue recognition of the Company;
the Company, there is an inherent risk that 2. Understand the various types of income of the
management will manipulate revenue recognition Company and their recognition conditions, and
in order to achieve specific goals or expectations. evaluate whether the income recognition policy
Therefore, we recognize revenue recognition as a meets the requirements of the accounting
key audit matter. standards; 3. Combined with the comparison of
gross profit margins of companies in the same
industry, an analysis procedure is performed on the
Company's revenue, costs and gross profit margins
106 / 319
2023 Annual Report
to analyze the rationality of the gross profit margin
change trend;
4. Select sample and inspect the Company's various
types of income related contracts, invoices, income
confirmation documents and other documents to
test the authenticity of income;
5. Perform a sample test on the revenue recognized
around the balance sheet date to assess whether
the sales revenue is recognized in the appropriate
accounting period;
6. Carry out confirmation procedure on the income
amount of the Company's major customers and the
balances of receivable.
Provision for decline in value of inventories
As mentioned in note to the financial statements of In the audit of the financial statements for the year,
the Company, the inventories balance as of balance we have implemented the following procedures for
sheet date is RMB 31.86 billion and the balance of the matter of Provision for decline in value of
provision for decline in value of inventories is RMB inventories:
0.59 billion, with the carrying amount of inventories 1. Evaluate and test the design and operation
of RMB31.27 billion. The carrying amount of effectiveness of key internal controls related to
inventories is a material amount. The Company's provision for decline in value of inventories of the
inventories are mainly crude oil and refining-related Company;
products, which are greatly affected by the 2. Conduct sampling inspection on the inventory of
macroeconomic and crude oil market price the Company to check whether the quantity of
fluctuations. Whether the provision for decline in inventory is accurate, and whether there are any
value of inventories is sufficient or not has a conditions such as damage, obsolescence,
significant impact on the financial statements, and obsolescence, and defects;
the Company's provision for decline in value of 3. Obtained calculation sheet of the provision for
inventories is subject to the judgment of the decline in value of inventories, prepared by the
management involved in the determination of the management of the Company, reviewed the key
net realizable value. Therefore, we recognize parameters for calculating the provision for decline
provision for decline in value of inventories as a key in value of inventories, including estimated future
audit matter. sales prices, costs to be incurred by the completion
of the project, sales expenses, and related taxes and
fees, and checked the accuracy of the calculation of
provision for decline in value of inventories;
4. Check whether the calculation and accounting
treatment of provision for decline in value of
inventories is correct, whether provision or write-
off for the year is consistent with the relevant
amount of profit or loss account.
IV. Other Information
Management is responsible for the other information. The other information comprises the
information included in the Company’s 2023 annual report, but does not include 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.
107 / 319
2023 Annual Report
If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report in this
regard.
V. Responsibilities of Management and Those Charged with Governance for the Financial
Statements
Management of the Company is responsible for the preparation of the financial statements to
achieve fair presentation in accordance with Accounting Standards for Business Enterprises, and for
the design, implementation and maintenance of such internal control as management determine is
necessary to enable the preparation of the financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, 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 management either intend 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. Auditor's Responsibilities for the Audit of the 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 auditing standards 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 auditing standards, we exercise professional judgment
and maintain professional skepticism throughout the audit. We also:
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2023 Annual Report
(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 management.
(4) Conclude on the appropriateness of the management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, 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, the auditing standards require us
to draw attention to users of the financial statements 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,
including the disclosures, and whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient 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 group 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 significant
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 to 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
109 / 319
2023 Annual Report
adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Zhonghui Certified Public Accountants Chinese Certified Public Accountant:
(special general partnership) (Engagement partner)
ChinaHangzhou Chinese Certified Public Accountant:
Report date: 9 April 2024
110 / 319
2023 Annual Report
II. Financial statements
Consolidated Balance Sheet
As at 31/12/2023
Prepared by: Hengli Petrochemical Co., Ltd.
Unit: Yuan Currency: RMB
Item Note As at 31/12/2023 As at 31/12/2022
Current assets:
Cash and bank balances 20,469,039,149.14 28,076,405,879.84
Settlement reserve
Due from banks and other
financial institutions
Financial assets held for 298,830,073.13 604,414,444.44
trading
Derivative financial assets
Notes receivable
Accounts receivable 538,415,259.33 372,445,926.69
Receivable financing 4,170,047,562.43 2,287,271,229.26
Prepayments 1,735,558,535.56 1,997,468,820.54
Insurance premium
receivables
Reinsurance premium
receivables
Reserve receivable for
reinsurance
Other receivables 809,207,973.41 701,520,929.51
Including: Interest
receivables
Dividend receivables
Financial assets purchased
under agreements to resell
Inventories 31,267,554,645.91 37,835,511,471.41
Contract assets
Assets held-for-sale
Non-current assets due
within one year
Other current assets 6,794,497,876.94 4,468,726,603.40
Total current assets 66,083,151,075.85 76,343,765,305.09
Non-current assets:
Loans and advances
Debts investment 20,427,397.26
Other debts investment
Long-term receivables
Long-term equity investments 646,000,353.85 559,215,493.16
Other equity instruments
investment
Other non-current financial
assets
Investment properties 192,405,490.57 164,271,812.80
Fixed assets 129,987,346,509.40 118,718,591,050.99
Construction in progress 48,824,137,687.45 27,287,491,499.08
Productive biological assets
Oil and gas assets
111 / 319
2023 Annual Report
Right-of-use assets 77,132,749.74 87,844,283.36
Intangible assets 9,034,820,634.08 8,924,775,668.34
Development cost
Goodwill 77,323,123.69 77,323,123.69
Long-term deferred expenses 2,017,090,197.82 2,027,293,324.85
Deferred tax assets 276,325,176.98 892,227,246.46
Other non-current assets 3,383,287,915.12 6,327,248,356.84
Total non-current assets 194,515,869,838.70 165,086,709,256.83
TOTAL ASSETS 260,599,020,914.55 241,430,474,561.92
Current Liabilities:
Short-term loans 66,995,050,481.39 69,316,898,813.08
Borrowings from central bank
Deposits and placements
from banks and other financial
institutions
Financial liabilities held for 190,324,330.67 346,020,729.70
trading
Derivative financial liabilities
Notes payable 12,002,453,588.53 20,603,775,870.27
Accounts payable 15,598,667,595.93 8,869,309,998.90
Receipts in advance
Contract liabilities 8,502,387,268.92 12,090,983,326.47
Financial assets sold under
agreements to repurchase
Due to customers and banks
Securities brokering
Securities underwriting
Employee benefits payable 500,637,516.56 476,509,780.18
Taxes payable 1,439,601,734.55 1,036,013,713.16
Other payables 416,224,941.72 382,263,173.05
Including: Interest payables
Dividends payable
Fees and commissions
payable
Reinsurance premium
payable
Liabilities held-for-sale
Non-current liabilities due 13,498,071,650.12 9,349,028,245.01
within one year
Other current liabilities 4,718,353,856.20 3,382,127,557.85
Total current liabilities 123,861,772,964.59 125,852,931,207.67
Non-current liabilities:
Claims reserve of insurance
contract
Long-term loans 70,620,906,532.26 58,347,153,350.72
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 41,516,484.45 55,750,879.91
Long-term payables 2,085,460,266.51 858,833,333.34
Long-term employee benefits
payable
Provisions
112 / 319
2023 Annual Report
Deferred income 3,949,091,884.36 3,376,501,714.84
Deferred tax liabilities 41,710,468.32 18,914,506.94
Other non-current liabilities
Total non-current liabilities 76,738,685,635.90 62,657,153,785.75
TOTAL LIABILITIES 200,600,458,600.49 188,510,084,993.42
Owners’equity (or Shareholders’equity):
Paid-in capital (or Share 7,039,099,786.00 7,039,099,786.00
capital)
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 18,763,586,176.98 18,686,516,127.76
Less: Treasury shares
Other comprehensive income -9,624,653.08 -50,052,317.06
Specific reserve 109,358,123.52 1,602,239.79
Surplus reserve 995,318,771.37 905,565,700.75
General risk reserve
Undistributed profits 33,094,662,821.91 26,279,812,029.77
Total owners’equity (or 59,992,401,026.70
shareholders’equity) 52,862,543,567.01
attributable to the parent
Minority interests 6,161,287.36 57,846,001.49
Total owners’equity (or 59,998,562,314.06 52,920,389,568.50
shareholders’equity)
Total liabilities and 260,599,020,914.55 241,430,474,561.92
owners’equity (or
shareholders’equity)
Legal representative: Fan Hongwei Person in charge of financial function: Liu Xuefen Prepared by:
Zheng Minxia
Parent Company Balance Sheet
As at 31/12/2023
Prepared by: Hengli Petrochemical Co., Ltd.
Unit: Yuan Currency: RMB
Item Note As at 31/12/2023 As at 31/12/2022
Current assets:
Cash and bank balances 14,398,907.50 31,980,728.03
Financial assets held for
trading
Derivative financial assets
Notes receivable
Accounts receivable 1,206,845.42
Receivable financing
Prepayments 171,071.66 1,271,836.74
Other receivables 164,731,382.20 811,162,769.45
Including: Interest
receivables
Dividend receivables 81,550,000.00 800,000,000.00
Inventories
Contract assets
113 / 319
2023 Annual Report
Assets held-for-sale
Non-current assets due
within one year
Other current assets 35,987,407.95 42,450,791.47
Total current assets 216,495,614.73 886,866,125.69
Non-current assets:
Debts investment
Other debts investment
Long-term receivables
Long-term equity investments 44,366,275,704.93 44,316,275,704.93
Other equity instruments
investment
Other non-current financial
assets
Investment properties 73,260,186.32 37,900,752.88
Fixed assets 2,723,712,211.22 2,852,515,397.82
Construction in progress 40,240,646.81 34,483,864.48
Productive biological assets
Oil and gas assets
Right-of-use assets
Intangible assets
Development cost
Goodwill
Long-term deferred expenses
Deferred tax assets
Other non-current assets
Total non-current assets 47,203,488,749.28 47,241,175,720.11
TOTAL ASSETS 47,419,984,364.01 48,128,041,845.80
Current Liabilities:
Short-term loans
Financial liabilities held for
trading
Derivative financial liabilities
Notes payable 3,219,218.07 20,337,770.04
Accounts payable 2,608,881.32 1,001,201.98
Receipts in advance
Contract liabilities
Employee benefits payable 600,000.00 2,400,000.00
Taxes payable 6,291,958.40 7,588,420.83
Other payables 5,584,532,670.44 6,593,083,472.18
Including: Interest payables
Dividends payable
Liabilities held-for-sale
Non-current liabilities due 1,015,294,281.98 2,030,618,280.89
within one year
Other current liabilities
Total current liabilities 6,612,547,010.21 8,655,029,145.92
Non-current liabilities:
Long-term loans
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
114 / 319
2023 Annual Report
Long-term payables
Long-term employee benefits
payable
Provisions
Deferred income
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
TOTAL LIABILITIES 6,612,547,010.21 8,655,029,145.92
Owners’equity (or Shareholders’equity):
Paid-in capital (or Share 7,039,099,786.00 7,039,099,786.00
capital)
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 24,142,978,843.34 24,142,978,843.34
Less: Treasury shares
Other comprehensive income
Specific reserve
Surplus reserve 2,813,304,057.66 2,679,861,592.27
Undistributed profits 6,812,054,666.80 5,611,072,478.27
Total owners’equity (or 40,807,437,353.80 39,473,012,699.88
shareholders’equity)
Total liabilities and 47,419,984,364.01 48,128,041,845.80
owners’equity (or
shareholders’equity)
Legal representative: Fan Hongwei Person in charge of financial function: Liu Xuefen Prepared by:
Zheng Minxia
Consolidated Income Statement
For the year ended 31 December 2023
Unit: Yuan Currency: RMB
Item Note 2023 2022
I. Total revenue from operations 234,866,125,177.52 222,372,593,675.48
Including: Revenue from operations 234,790,672,395.88 222,323,583,969.88
Interest income 35,252,401.34 26,648,486.54
Premium earned
Fees and commissions income 40,200,380.30 22,361,219.06
II. Total cost of operations 226,611,119,211.98 218,462,766,541.73
Including: Cost of operations 208,383,851,927.36 204,077,597,066.45
Interest expenses
Fees and commissions expenses
Cash surrender amount
Net expenses of claim settlement
Net provisions for insurance
contract reserves
Insurance policies dividend
expenses
Reinsurance expenses
Taxes and surcharges 9,200,633,914.43 6,631,019,180.66
Selling expenses 293,473,043.49 392,769,176.78
Administrative expenses 1,997,367,969.54 1,889,298,663.76
115 / 319
2023 Annual Report
Research and development 1,371,028,486.34 1,184,711,003.40
expenses
Financial expense 5,364,763,870.82 4,287,371,450.68
Including: Interest expenses 4,558,991,721.03 4,632,905,829.96
Interest income 455,728,555.41 332,736,566.09
Add: Other income 1,015,629,245.71 1,595,543,126.20
Investment income (”-” for loss) -36,566,983.25 -322,324.78
Including: Gains from 76,784,860.69
investments in associates and joint
ventures
Gain from derecognition of -174,694,586.97
financial assets at amortized cost
Foreign exchange gain (”-” for
loss)
Gain from net exposure of
hedging (”-” for loss)
Gains from changes of fair value 370,550,373.91 -45,679,570.72
(”-” for loss)
Credit impairment loss (”-” for -108,054,345.28 -2,373,806.12
loss)
Assets impairment loss (”-” for -593,692,020.24 -3,128,732,830.34
loss)
Gain from disposal of assets (”-” -3,063,798.81 -3,332,571.69
for loss)
III. Operating profit (”-” for loss) 8,899,808,437.58 2,324,929,156.30
Add: Non-operating income 79,815,457.88 105,330,717.22
Less: Non-operating expenses 106,391,688.27 20,681,258.19
IV. Total profit (”-” for loss) 8,873,232,207.19 2,409,578,615.33
Less: Income tax expenses 1,968,768,270.41 91,541,665.11
V. Net profit (”-” for loss) 6,904,463,936.78 2,318,036,950.22
(I) Classified by continuity of operations
1.Net profit from continuing 6,904,463,936.78 2,318,036,950.22
operations (”-” for loss)
2.Net profit from discontinued
operations (”-” for loss)
(II) Classified by attribution to ownership
1.Net profit attributable to 6,904,603,862.76
2,318,303,166.69
shareholders of the parent (”-” for loss)
2.Net profit attributable to minority -139,925.98 -266,216.47
interests (”-” for loss)
VI. Other comprehensive income - after 40,427,663.98 105,052,177.39
tax
(I) Other comprehensive income - 40,427,663.98 100,564,060.24
after tax attributable to owners of the
parent
1. Other comprehensive income not
reclassified into profit or loss
subsequently
(1)Changes in remeasurement of
defined benefit plan
(2)Share of other comprehensive
income of the equity method
investments
(3)Changes in fair value of other
equity instruments investment
116 / 319
2023 Annual Report
(4)Changes in fair value of the
Company’s own credit risks
2. Other comprehensive income 40,427,663.98 100,564,060.24
that will be reclassified into profit or loss
subsequently
(1)Share of other comprehensive
income of associates and joint ventures
under equity method
(2)Changes in the fair value of other
debt investments
(3)Reclassification of financial assets
recognised as other comprehensive
income
(4)Credit impairment loss of other
debt investments
(5)Cash flow hedging reserve 6,252,291.04 -6,398,442.57
(6)Translation of foreign currency 34,175,372.94 106,962,502.81
financial statements
(7)Others
(II) Other comprehensive income - 4,488,117.15
after tax attributable to minority
interests
VII. Total comprehensive income 6,944,891,600.76 2,423,089,127.61
(I) Total comprehensive income 6,945,031,526.74 2,418,867,226.93
attributable to owners of the parent
(II) Total comprehensive income -139,925.98 4,221,900.68
attributable to minority interests
VIII. Earnings per share:
(I) Basic earnings per share (RMB per 0.98
0.33
share)
(II) Diluted earnings per share (RMB 0.98
0.33
per share)
For the business combination under common control in this period, the net profit realized by the
acquiree before the merger is: 0 yuan, and the net profit realized by the acquiree in the previous
period is: 0 yuan.
Legal representative: Fan Hongwei Person in charge of financial function: Liu Xuefen Prepared by:
Zheng Minxia
Parent Company Income Statement
For the year ended 31 December 2023
Unit: Yuan Currency: RMB
Item Note 2023 2022
I. Revenue from operations 3,454,179.12 1,633,324.64
Less: Cost of operations 2,011,877.89 1,270,659.72
Taxes and surcharges 25,042,286.44 22,046,809.69
Selling expenses
Administrative expenses 129,668,253.01 95,862,573.23
Research and development
expenses
Financial expense 47,325,474.75 33,033,234.46
Including: Interest expenses 47,719,397.32 34,113,823.35
Interest income 417,251.35 1,099,802.78
Add: Other income 17,478,025.50 1,787,238.79
117 / 319
2023 Annual Report
Investment income (”-” for loss) 1,521,000,000.00 6,022,872,521.63
Including: Gains from
investments in associates and joint
ventures
Gain from derecognition
of financial assets at amortized cost
Gain from net exposure of
hedging (”-” for loss)
Gains from changes of fair
value (”-” for loss)
Credit impairment loss (”-” for -3,534,195.83 -102,189.08
loss)
Assets impairment loss (”-” for
loss)
Gain from disposal of assets 54,000.00
(”-” for loss)
II. Operating profit (”-” for loss) 1,334,404,116.70 5,873,977,618.88
Add: Non-operating income 20,537.22
Less: Non-operating expenses
III. Total profit (”-” for loss) 1,334,424,653.92 5,873,977,618.88
Less: Income tax expenses
IV. Net profit (”-” for loss) 1,334,424,653.92 5,873,977,618.88
(I) Net profit from continuing 1,334,424,653.92 5,873,977,618.88
operations (”-” for loss)
(II) Net profit from discontinued
operations (”-” for loss)
V. Other comprehensive income - after
tax
(I) Other comprehensive income not
reclassified into profit or loss
subsequently
1.Changes in remeasurement of
defined benefit plan
2.Share of other comprehensive
income of the equity method
investments
3.Changes in fair value of other
equity instruments investment
4.Changes in fair value of the
Company’s own credit risks
(II) Other comprehensive income
that will be reclassified into profit or
loss subsequently
1.Share of other comprehensive
income of associates and joint
ventures under equity method
2.Changes in the fair value of
other debt investments
3.Reclassification of financial
assets recognised as other
comprehensive income
4.Credit impairment loss of other
debt investments
5.Cash flow hedging reserve
118 / 319
2023 Annual Report
6.Translation of foreign currency
financial statements
7.Others
VI. Total comprehensive income 1,334,424,653.92 5,873,977,618.88
VII. Earnings per share:
(I) Basic earnings per share (RMB
per share)
(II) Diluted earnings per share
(RMB per share)
Legal representative: Fan Hongwei Person in charge of financial function: Liu Xuefen Prepared by:
Zheng Minxia
Consolidated Cash Flows Statement
For the year ended 31 December 2023
Unit: Yuan Currency: RMB
Item Note 2023 2022
I. Cash flows from operating activities:
Cash received from sales of 253,368,629,479.01 267,426,902,574.47
goods or rendering of services
Net increase in deposits from
customers and inter-banks
Net increase in due to central
bank
Net increase in fund
borrowings from other financial
institutes
Cash received from insurance
premium of original insurance
contracts
Net cash received from
reinsurance business
Net increase in insured’s
deposits and investments
Cash received from interests, 88,560,362.90 52,563,354.96
fees and commissions
Net increase of placement from
banks and other financial
institutions
Net increase in fund of
repurchase business
Net cash received in securities
brokerage agency
Tax refund received 1,733,346,941.05 5,562,889,817.74
Other cash received relating to 5,496,564,458.04 5,936,292,171.41
operating activities
Sub-total of cash inflows 260,687,101,241.00 278,978,647,918.58
Cash paid for goods and 216,905,242,986.13 234,363,054,837.45
services
Net increase in issued loans
and advance
Net increase in deposits in
central bank and inter-banks
119 / 319
2023 Annual Report
Cash paid for claims of original
insurance contracts
Net increase in due from banks
and other financial institutions
Cash paid for interest, fees and
commission
Cash paid for policy dividends
Cash paid to and on behalf of 4,127,786,612.89 3,736,263,307.53
employees
Payments of all types of taxes 13,644,805,641.55 11,290,319,184.00
Other cash paid relating to 2,473,475,871.46 3,635,039,806.17
operating activities
Sub-total of cash outflows 237,151,311,112.03 253,024,677,135.15
Net cash flows from 23,535,790,128.97 25,953,970,783.43
operating activities
II. Cash flows from investing activities:
Cash received from disposal of 5,107,392,261.85 2,882,252,002.75
investments
Cash received from returns on 10,065,585.08
investments
Net cash received from 19,140,467.53 7,064,483.56
disposal of fixed assets, intangible
assets and other long-term assets
Cash received from disposal of
subsidiaries and other business
units
Other cash received relating to 1,314,070,624.32 347,902,490.45
investing activities
Sub-total of cash inflows 6,450,668,938.78 3,237,218,976.76
Cash paid to acquire fixed 39,740,884,349.33 25,714,852,414.63
assets, intangible assets and other
long-term assets
Cash paid to acquire 4,635,580,702.27 2,503,807,796.91
investments
Net increase in pledged loans
Cash paid to acquire
subsidiaries and other business
units
Other cash paid relating to 888,703,263.24 1,315,628,697.98
investing activities
Sub-total of cash outflows 45,265,168,314.84 29,534,288,909.52
Net cash flows from -38,814,499,376.06 -26,297,069,932.76
investing activities
III. Cash flows from financing activities :
Cash received from capital 6,300,000.00
contribution
Including: Cash received from 6,300,000.00
investment by minority interests
of subsidiaries
Cash received from borrowings 105,716,625,805.89 97,969,621,917.23
Cash received relating to other 7,661,905,079.75 3,735,166,378.16
financing activities
Sub-total of cash inflows 113,378,530,885.64 101,711,088,295.39
Cash repayments of amounts 91,910,909,309.97 74,702,848,106.14
borrowed
120 / 319
2023 Annual Report
Cash payments for interest 5,772,677,855.06 12,120,673,280.05
expenses and distribution of
dividends or profits
Including: Dividend paid to
minority interests of subsidiaries
Other cash payments relating 5,785,239,564.93 4,482,150,476.99
to financing activities
Sub-total of cash outflows 103,468,826,729.96 91,305,671,863.18
Net cash flows from 9,909,704,155.68 10,405,416,432.21
financing activities
IV. Effect of foreign exchange 70,624,033.36 671,837,669.76
rate changes on cash
V. Net increase in cash and cash -5,298,381,058.05 10,734,154,952.64
equivalents
Add: Opening balance of cash 20,323,703,829.39 9,589,548,876.75
and cash equivalent
VI. Closing balance of cash and 15,025,322,771.34 20,323,703,829.39
cash equivalent
Legal representative: Fan Hongwei Person in charge of financial function: Liu Xuefen Prepared by:
Zheng Minxia
Parent Company Cash Flows Statement
For the year ended 31 December 2023
Unit: Yuan Currency: RMB
Item Note 2023 2022
I. Cash flows from operating activities:
Cash received from sales of
goods or rendering of services
Tax refund received 65,555,330.97
Other cash received relating to 110,866,078.81 993,485,513.95
operating activities
Sub-total of cash inflows 110,866,078.81 1,059,040,844.92
Cash paid for goods and services
Cash paid to and on behalf of 13,579,054.13 7,320,727.56
employees
Payments of all types of taxes 16,469,707.26 19,550,279.49
Other cash paid relating to 1,196,356,798.85 119,160,048.56
operating activities
Sub-total of cash outflows 1,226,405,560.24 146,031,055.61
Net cash flows from operating -1,115,539,481.43 913,009,789.31
activities
II. Cash flows from investing activities:
Cash received from disposal of 577,647.63
investments
Cash received from returns on 2,239,450,000.00 6,423,294,874.00
investments
Net cash received from disposal 68,535.40
of fixed assets, intangible assets
and other long-term assets
Cash received from disposal of
subsidiaries and other business
units
121 / 319
2023 Annual Report
Other cash received relating to
investing activities
Sub-total of cash inflows 2,239,518,535.40 6,423,872,521.63
Cash paid to acquire fixed 28,460,874.50 1,458,394,502.24
assets, intangible assets and other
long-term assets
Cash paid to acquire 50,000,000.00 1,000,000,000.00
investments
Cash paid to acquire subsidiaries
and other business units
Other cash paid relating to
investing activities
Sub-total of cash outflows 78,460,874.50 2,458,394,502.24
Net cash flows from 2,161,057,660.90 3,965,478,019.39
investing activities
III. Cash flows from financing activities :
Cash received from capital
contribution
Cash received from borrowings 999,000,000.00 1,998,113,207.54
Cash received relating to other 382,298,725.15
financing activities
Sub-total of cash inflows 999,000,000.00 2,380,411,932.69
Cash repayments of amounts 2,000,000,000.00
borrowed
Cash payments for interest 62,100,000.00 7,111,099,533.86
expenses and distribution of
dividends or profits
Other cash payments relating to 170,000,000.00
financing activities
Sub-total of cash outflows 2,062,100,000.00 7,281,099,533.86
Net cash flows from -1,063,100,000.00 -4,900,687,601.17
financing activities
IV. Effect of foreign exchange rate
changes on cash
V. Net increase in cash and cash -17,581,820.53 -22,199,792.47
equivalents
Add: Opening balance of cash 31,980,728.03 54,180,520.50
and cash equivalent
VI. Closing balance of cash and 14,398,907.50 31,980,728.03
cash equivalent
Legal representative: Fan Hongwei Person in charge of financial function: Liu Xuefen Prepared by:
Zheng Minxia
122 / 319
2023 Annual Report
Consolidated Statement of Changes in Equity
For the year ended 31 December 2023
Unit: Yuan Currency: RMB
Item 2023
TOTAL
Minority
Equity attributable to the parent company OWNERS’
interests
EQUITY
Gen
Paid-in Other
Less: eral
capital (or Other equity Capital compreh Specific Surplus Undistribut Oth
Treasury risk Subtotal
Share instruments reserve ensive reserve reserve ed profits ers
shares rese
capital) income
rve
Prefe Perp
rred etual Oth
share bond ers
s s
I. 7,039,099, 18,686,51 - 1,602,23 905,565, 26,279,81 52,862,54 57,846, 52,920,38
Balance 786.00 6,127.76 50,052, 9.79 700.75 2,029.77 3,567.01 001.49 9,568.50
at end of 317.06
previous
year
Add:
Changes
in
accounti
ng
policies
Cor
rection
of errors
Bus
iness
combina
tion
under
common
control
123 / 319
2023 Annual Report
Oth
ers
II. 7,039,099 18,686,51 - 1,602,23 905,565, 26,279,81 52,862,54 57,846, 52,920,38
Balance ,786.00 6,127.76 50,052, 9.79 700.75 2,029.77 3,567.01 001.49 9,568.50
in 317.06
beginnin
g of year
III. 77,070,049. 40,427,6 107,755, 89,753,0 6,814,850,7 7,129,857,4 - 7,078,172,
Moveme 22 63.98 883.73 70.62 92.14 59.69 51,684, 745.56
nt over 714.13
the year
( “- “for
decrease
)
(I) Total 40,427,6 6,904,603,8 6,945,031,5 - 6,944,891,6
compreh 63.98 62.76 26.74 139,925. 00.76
ensive 98
income
(II) 77,070,049. 77,070,049. - 25,525,26
Owner’s 22 22 51,544, 1.07
contribut 788.15
ions and
decrease
of capital
1. - -
Capital 51,544,7 51,544,788.
contribut 88.15 15
ion from
owner
2.
Increase
in
owners
’equity
resulted
from
other
equity
124 / 319
2023 Annual Report
instrume
nts
3. 77,070,049. 77,070,049. 77,070,049.
Increase 22 22 22
in
owners
’equity
resulted
from
share-
based
payment
s
4. Others
(III) 89,753,0 -
Appropri 70.62 89,753,07
ation of 0.62
profits
1. 89,753,0 -
Transfer 70.62 89,753,07
to 0.62
surplus
reserve
2.
Transfer
to
general
risk
reserve
3.
Distributi
on to
owners
(or
sharehol
ders)
4. Others
(IV)
Transfer
125 / 319
2023 Annual Report
within
equity
1.
Capital
reserve
converti
ng into
share
capital
(or Share
capital)
2.
Surplus
reserve
converti
ng into
share
capital
(or Share
capital)
3.
Surplus
reserve
cover
the
deficit
4.
Changes
of equity
from the
revaluati
on of
defined
benefit
plan
5. Other
compreh
ensive
income
126 / 319
2023 Annual Report
transfer
to
retained
earnings
6. Others
(V) 107,755,8 107,755,88 107,755,88
Specific 83.73 3.73 3.73
reserve
1. 428,804, 428,804,0 428,804,0
Appropri 002.16 02.16 02.16
ation for
the year
2. Used 321,048, 321,048,1 321,048,1
in the 118.43 18.43 18.43
year
(VI)
Others
IV. 7,039,099, 18,763,586, - 109,358, 995,318, 33,094,662, 59,992,401, 6,161,2 59,998,56
Balance 786.00 176.98 9,624,6 123.52 771.37 821.91 026.70 87.36 2,314.06
at end of 53.08
year
Item 2022
TOTAL
Minority
Equity attributable to the parent company OWNERS’
interests
EQUITY
Gen
Paid-in Other
Less: eral
capital (or Other equity Capital compreh Specific Surplus Undistribut Oth
Treasury risk Subtotal
Share instruments reserve ensive reserve reserve ed profits ers
shares rese
capital) income
rve
Prefe Perp
rred etual Oth
share bond ers
s s
127 / 319
2023 Annual Report
I. 7,039,099 18,455,84 228,626, - 139,116, 858,111, 31,118,45 57,231,38 69,336, 57,300,71
Balance ,786.00 4,491.64 593.18 150,616, 306.31 239.40 4,108.29 2,961.16 250.34 9,211.50
at end of 377.30
previous
year
Add:
Changes
in
accounti
ng
policies
Cor
rection
of errors
Bus
iness
combina
tion
under
common
control
Oth
ers
II. 7,039,099 18,455,84 228,626, - 139,116, 858,111, 31,118,45 69,336, 57,300,71
Balance ,786.00 4,491.64 593.18 150,616, 306.31 239.40 4,108.29 250.34 9,211.50
57,231,38
in 377.30
beginnin
2,961.16
g of year
III. 230,671,6 - 100,564, - 47,454,4 - - - -
Moveme 36.12 228,626, 060.24 137,514, 61.35 4,838,642, 4,368,839, 11,490, 4,380,329,
nt over 593.18 066.52 078.52 394.15 248.85 643.00
the year
( “- “for
decrease
)
(I) Total 100,564, 2,318,303, 2,418,867, 4,221,9 2,423,089,
compreh 060.24 166.69 226.93 00.68 127.61
ensive
income
128 / 319
2023 Annual Report
(II) 230,671,6 - 459,298,2 - 445,343,3
Owner’s 36.12 228,626, 29.30 13,954, 06.92
contribut 593.18 922.38
ions and
decrease
of capital
1.
Capital
contribut
ion from
owner
2.
Increase
in
owners
’equity
resulted
from
other
equity
instrume
nts
3. 77,070,04 77,070,04 77,070,04
Increase 9.00 9.00 9.00
in
owners
’equity
resulted
from
share-
based
payment
s
4. Others 153,601,5 - 382,228,1 - 368,273,2
87.12 228,626, 80.30 13,954, 57.92
593.18 922.38
(III) 47,454,4 - - - -
Appropri 61.35 7,156,945, 7,109,490, 1,757,2 7,111,248,
245.21 783.86 27.15 011.01
129 / 319
2023 Annual Report
ation of
profits
1. 47,454,4 - -
Transfer 61.35 47,454,46
to 1.35
surplus
reserve
2.
Transfer
to
general
risk
reserve
3. - - - -
Distributi 7,109,490, 7,109,490, 1,757,2 7,111,248,
on to 783.86 783.86 27.15 011.01
owners
(or
sharehol
ders)
4. Others
(IV)
Transfer
within
equity
1.
Capital
reserve
converti
ng into
share
capital
(or Share
capital)
2.
Surplus
reserve
converti
ng into
130 / 319
2023 Annual Report
share
capital
(or Share
capital)
3.
Surplus
reserve
cover
the
deficit
4.
Changes
of equity
from the
revaluati
on of
defined
benefit
plan
5. Other
compreh
ensive
income
transfer
to
retained
earnings
6. Others
(V) - - -
Specific 137,514, 137,514,0 137,514,0
reserve 066.52 66.52 66.52
1. 268,184, 268,184,1 268,184,1
Appropri 171.73 71.73 71.73
ation for
the year
2. Used 405,698, 405,698,2 405,698,2
in the 238.25 38.25 38.25
year
131 / 319
2023 Annual Report
(VI)
Others
IV. 7,039,099 18,686,51 - 1,602,23 905,565, 26,279,81 57,846, 52,920,38
Balance ,786.00 6,127.76 50,052,3 9.79 700.75 2,029.77 52,862,54 001.49 9,568.50
at end of 17.06 3,567.01
year
Legal representative: Fan Hongwei Person in charge of financial function: Liu Xuefen Prepared by: Zheng Minxia
Parent Company Statement of Changes in Equity
For the year ended 31 December 2023
Unit: Yuan Currency: RMB
Item 2023
Paid-in Other
Less: TOTAL
capital (or Capital comprehe Specific Surplus Undistribu
Other equity instruments Treasury OWNERS
Share reserve nsive reserve reserve ted profits
shares ’EQUITY
capital) income
Preferred Perpetual
Others
shares bonds
I. Balance at end of previous 7,039,099, 24,142,978 2,679,86 5,611,07 39,473,01
year 786.00 ,843.34 1,592.27 2,478.27 2,699.88
Add: Changes in accounting
policies
Correction of errors
Others
II. Balance in beginning of 7,039,099, 24,142,97 2,679,86 5,611,07 39,473,01
year 786.00 8,843.34 1,592.27 2,478.27 2,699.88
III. Movement over the year 133,442, 1,200,98 1,334,424
( “- “for decrease) 465.39 2,188.53 ,653.92
(I) Total comprehensive 1,334,42 1,334,424
income 4,653.92 ,653.92
(II) Owner’s contributions and
decrease of capital
1. Capital contribution from
owner
2. Increase in owners’equity
resulted from other equity
instruments
132 / 319
2023 Annual Report
3. Increase in owners’equity
resulted from share-based
payments
4. Others
(III) Appropriation of profits 133,442, -
465.39 133,442,
465.39
1. Transfer to surplus reserve 133,442, -
465.39 133,442,
465.39
2. Distribution to owners (or
shareholders)
3. Others
(IV) Transfer within equity
1. Capital reserve converting
into share capital (or Share
capital)
2. Surplus reserve converting
into share capital (or Share
capital)
3. Surplus reserve cover the
deficit
4. Changes of equity from the
revaluation of defined benefit
plan
5. Other comprehensive
income transfer to retained
earnings
6. Others
(V) Specific reserve
1. Appropriation for the year
2. Used in the year
(VI) Others
IV. Balance at end of year 7,039,099, 24,142,978 2,813,30 6,812,05 40,807,43
786.00 ,843.34 4,057.66 4,666.80 7,353.80
133 / 319
2023 Annual Report
Item 2022
Paid-in Other
Less: TOTAL
capital (or Capital comprehe Specific Surplus Undistribu
Other equity instruments Treasury OWNERS
Share reserve nsive reserve reserve ted profits
shares ’EQUITY
capital) income
Preferred Perpetual
Others
shares bonds
I. Balance at end of previous 7,039,099, 23,989,30 228,626,5 2,092,46 7,433,98 40,326,22
year 786.00 6,711.37 93.18 3,830.38 3,405.14 7,139.71
Add: Changes in accounting
policies
Correction of errors
Others
II. Balance in beginning of 7,039,099, 23,989,30 228,626,5 2,092,46 7,433,98 40,326,22
year 786.00 6,711.37 93.18 3,830.38 3,405.14 7,139.71
III. Movement over the year - - -
( “- “for decrease) 153,672,1 587,397,
- - - - 228,626,5 - - 1,822,91 853,214,4
31.97 761.89
93.18 0,926.87 39.83
(I) Total comprehensive 5,873,97 5,873,977
income 7,618.88 ,618.88
(II) Owner’s contributions 153,672,1 - 382,298,7
and decrease of capital 31.97 228,626,5 25.15
93.18
1. Capital contribution from
owner
2. Increase in owners’
equity resulted from other
equity instruments
3. Increase in owners’
equity resulted from share-
based payments
4. Others 153,672,1 - 382,298,7
31.97 228,626,5 25.15
93.18
134 / 319
2023 Annual Report
(III) Appropriation of profits 587,397, - -
761.89 7,696,88 7,109,490
8,545.75 ,783.86
1. Transfer to surplus reserve 587,397, -
761.89 587,397,
761.89
2. Distribution to owners (or - -
shareholders) 7,109,49 7,109,490
0,783.86 ,783.86
3. Others
(IV) Transfer within equity
1. Capital reserve converting
into share capital (or Share
capital)
2. Surplus reserve converting
into share capital (or Share
capital)
3. Surplus reserve cover the
deficit
4. Changes of equity from the
revaluation of defined
benefit plan
5. Other comprehensive
income transfer to retained
earnings
6. Others
(V) Specific reserve
1. Appropriation for the year
2. Used in the year
(VI) Others
IV. Balance at end of year 7,039,099, - 24,142,97 2,679,86 5,611,07 39,473,01
786.00 8,843.34 1,592.27 2,478.27 2,699.88
Legal representative: Fan Hongwei Person in charge of financial function: Liu Xuefen Prepared by: Zheng Minxia
135 / 319
2023 Annual Report
III. Company information
1. Company profile
√适用 □不适用
Hengli Petrochemical Co., Ltd. (hereinafter referred to as ”the Company”) is formerly known as
Dalian Rubber & Plastics Machinery Co., Ltd. (hereinafter referred to as ”DXS”), whose name was
changed on 27 May 2016. The Company was founded on 9 March 1999. The Company's shares were
listed on the Shanghai Stock Exchange on 20 August 2001 with stock name: Hengli Petrochemical
and stock code: 600346. The unified social credit code of the Company is 912102001185762674
and the registered address of the Company is OSBL Project-Public Works Office Building, No.298
Changsong Road, Lingang Industrial Zone, Changxing Island, Dalian, Liaoning Province. The legal
representative is Fan Hongwei. The Company’s registered capital is RMB 7,039,099,786.00 with total
number of shares of 7,039,099,786 shares with par value of RMB 1 each, including 7,039,099,786
shares of tradable A shares without any restricted conditions.
On 27 January 2016, China Securities Regulatory Commission approved the Company’s major
asset restructuring through document “Approval of Dalian Rubber & Plastics Machinery Co., Ltd.’ s
major asset restructuring and issue shares to Hengli Group Co., Ltd. to raise capital for assets
purchasing” (Securities Regulatory approval [2016] No.187). The major asset restructuring includes:
(1) DXS’s previous holding company Dalian State-owned Assets Investment and Operation Group
Co., Ltd. (hereinafter referred to as ”DGJ”) transferred 200,202,495 shares (29.98% of DXS’s total
capital) of DXS’s shares to Hengli Group Co., Ltd. (hereinafter referred to as ”Hengli Group”) with a
price of RMB 5.8435 per share;(2) DXS sold all assets and liabilities as of 30 June, 2015 to Dalian
Yinghui Machinery Manufacturing Co., Ltd. and received cash as consideration;(3) The Company
issued 1,906,327,800 shares by private placement to acquire 85% shares in Jiangsu Hengli Chemical
Fiber Co., Ltd. (hereinafter referred to as ”Hengli Chemical Fiber”) which were held by Hengli Group,
Dechengli International Group Co. (hereinafter referred to as the ”Dechengli”), Jiangsu Hegao
Investment Co., Ltd. (hereinafter referred to as ”Hegao Investment”) and Hailaide international
investment Ltd. (hereinafter referred to as ”Hailaide”), and paid in cash to acquire 14.99% shares of
Hengli Chemical Fiber which were held by Hegao investment. The issuance of shares mentioned
above were verified by Ruihua Certified Public Accountants (LLP) and issued capital verification
reports Ruihua YanZi No.33030006 [2016] . After the issuance of shares, the number of total
outstanding shares of the Company increased to 2,574,114,642 shares;(4) The Company issued
251,572,300 shares by private placement to Jiangsu Soho Investment Group Co. Ltd., Xiamen
Xiangyu Co. ,Ltd. and other six specific investors to raise supporting funds for this assets purchasing.
The issuance of shares in above was verified by Ruihua Certified Public Accountants (LLP) and issued
capital verification reports Ruihua Yan Zi No.33030014 [2016] . After the issuance of shares, the
number of total outstanding shares of the Company increased to 2,825,686,942 shares.
On 31 January 2018, according to the ”Approval on Purchase of Assets by issuance of shares to
Fan Hongwei and others, and Raising of Supporting Funds by Hengli Petrochemical Co., Ltd.” (Zheng
Jian Xu Ke [2018] No.235) issued by China Securities Regulatory Commission, the Company
implemented the assets restructuring which included (1) The Company issued 1,719,402,983 shares
by private placement to Fan Hongwei, Hengneng Investment (Dalian) Co., Ltd. (hereinafter referred
to as ”Hengneng Investment”) and Hengfeng Investment (Dalian) Co., Ltd. (hereinafter referred to
as ”Hengfeng Investment”) to acquire 100% shares of Hengli Investment (Dalian) Co., Ltd.
(hereinafter referred to as ”Hengli Investment”) and 100% shares of Hengli Petrochemical (Dalian)
Refining Co., Ltd. (hereinafter referred to as ”Hengli Refining”). The share issuance mentioned above
were verified by Ruihua Certified Public Accountants (LLP) and issued capital verification reports
Ruihua YanZi No.33050001 [2018] . After the issuance of shares, the number of total outstanding
shares of the Company increased to 4,545,089,925 shares; (2) The Company issued 507,700,000
shares by private placement to Ping An Asset Management Co., Ltd., Beixin Ruifeng Fund
136 / 319
2023 Annual Report
Management Co., Ltd., and other six specific investors to raise supporting funds for this assets
purchasing. The share issuance mentioned above were verified by Ruihua Certified Public
Accountants (LLP) and issued capital verification reports Ruihua Yan Zi No.33050002 [2018] . After
the issuance of shares, the number of total outstanding shares of the Company increased to
5,052,789,925 shares.
On 30 April 2019, the Company’s annual shareholders meeting of 2018 resolved the ”Proposal
of the Company’s profit distribution and conversion of capital reserve to share capital of 2018”.
Based on the total number of outstanding shares of 4,965,774,651 shares (being total shares of
5,052,789,925 shares deducted by 87,015,274 share of stock repurchased), capital reserve is
converted to share capital by issuance of 0.4 shares for each share held by all shareholders and the
total shares increased by 1,986,309,861 shares. Share registration date was 26 June 2019. After the
increment in shares, the number of total outstanding shares of the Company increased to
7,039,099,786 shares.
The primary organizational structure of the Company: In accordance with the provisions of
national laws and regulations and the Company's articles of association, a standardized multi-level
governance structure consisting of shareholders’ general meeting, the board of directors, the board
of supervisors and the management has been established; the board of directors has strategy
committee, audit committee and remuneration committee, nomination committee and the board
office. The Company has sales department, purchasing department, general manager's office,
personnel department, production department, quality control department, finance department,
securities department and other major functional departments.
The Company engages in petrochemical industry. The business scope is: production and sales
of chemical fibers (excluding chemical dangerous goods); sales of purified terephthalic acid (PTA);
import and export of goods. The main products are oil refining products, chemical products, PTA,
polyester chips, polyester fibers and films, etc.
The financial statements and notes to the financial statements have been approved to issue
by the Board of Directors on 8 April 2024.
Iv. Basis of preparation of financial statements
1. Basis of preparation
The financial statements of the Company are prepared on going concern basis and in
compliance with Accounting Standards for Business Enterprises and guidelines, interpretations and
other related provisions promulgated by the Ministry of Finance (collectively,” Accounting
Standards for Business Enterprises”). In addition, the Company also discloses relevant financial
information according to Information Disclosures Regulations for Companies that Offering Shares in
Public No.15 - General Provision of Preparing Financial Report (revised in 2014) issued announced
by China Securities Regulatory Commission.
2. Going concern
The Company has no events or circumstances that have caused significant doubts about the
assumption of going concern within 12 months after the end of the reporting period.
III. Significant accounting policies and accounting estimates
Specific accounting policies and accounting estimates:
√适用 □不适用
The Company and its subsidiaries determines certain specific accounting policies and
accounting estimates for impairment of receivables, depreciation of fixed assets, amortization of
137 / 319
2023 Annual Report
intangible assets and revenue recognition according to the characteristics of the production and
operation. Specific accounting policies refer to the note to financial statements.
1. Statement of compliance with Accounting Standards for Business Enterprises
The financial statements have been prepared in compliance with the Accounting Standard for
Business Enterprises to truly and completely reflect the Company’s financial positions, operating
results and cash flows.
2. Accounting period
The financial year of the Company is from 1 January to 31 December of each calendar year.
3. Operating cycle
√适用 □不适用
The normal business cycle refers to the period from the purchase of assets for processing to
the realization of cash or cash equivalents. The Company considers 12 months as an operating cycle
and apply it as a standard for the liquidity of assets and liabilities.
4. Functional currency
The Company and domestic subsidiaries use Renminbi (“RMB”) as functional currency.
Overseas subsidiaries of the Company determine its functional currency as US dollar in accordance
with its primary economic environment of the business location and converted into RMB in
preparation of consolidated financial statements.
The financial statements of the Company have been prepared in RMB.
5. Method for determining the importance criteria and the basis for selection
√适用 □不适用
Item Importance criteria
Important construction in progress The book value at the end of the accounting period
is more than 1% of the total assets
Important non-wholly-owned subsidiaries Net assets account for more than 0.5% of the
consolidated net assets
important investment The amount incurred exceeds 500 million yuan
6． Business combinations
√适用 □不适用
A business combination is a transaction or event that brings together two or more separate
entities into one reporting entity. Business combinations are classified into business combinations
involving enterprises under common control and business combinations not involving enterprises
under common control.
1．Business combinations involving enterprises under common control
A business combination involving enterprises under common control is a business combination
in which all of the combining enterprises are ultimately controlled by the same party or parties both
before and after the combination, and that control is not transitory.
Assets acquired and liabilities assumed by acquirer in the business combination are measured
at their carrying amounts of the acquiree in the consolidated financial statements of the ultimate
controlling party at the combination date, except for adjustments due to different accounting
policies. The difference between the carrying amount of the consideration paid for the combination
(or total par value of shares issued) and the carrying amount of the net assets acquired is adjusted
138 / 319
2023 Annual Report
to capital reserve. If the capital reserve is not sufficient to absorb the difference, any excess is
adjusted to retained earnings.
Business combinations involving entities under common control achieved in stages and
involved multiple transactions, the difference between the carrying amount of the net assets
acquired and the sum of carrying amount of investment prior to combination date and carrying
amount of new considerations paid for the combination at the combination date is adjusted to
capital reserve. If the capital reserve is not sufficient to absorb the difference, any excess is adjusted
against retained earnings. The profit or loss, other comprehensive income and changes in other
owner’s equity recognized by the acquirer during the period from the later of initial investment date
and the date that the acquirer and acquiree both under common ultimate control to the
combination date are offset the opening retained earnings or profit for loss for the current period
in the comparative statements, except for other comprehensive income arising from the
remeasurement of the net benefit or net asset change of the defined benefit plan by the investee.
2．Business combinations involving enterprises not under common control
A business combination involving enterprises not under common control is a business
combination in which all of the combining enterprises are not ultimately controlled by the same
party or parties both before and after the business combination.
Where the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’s
identifiable net assets, the difference is recognized as goodwill. Where the cost of combination is
less than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, firstly the
acquirer shall reassess the measurement of the fair values of the acquiree’s identifiable assets,
liabilities and contingent liabilities and measurement of the cost of combination, and then if the cost
of combination is still less than the acquirer’s interest in the fair values of the acquiree’s identifiable
net assets after that reassessment, the acquirer shall recognize the remaining difference
immediately in profit or loss for the current period.
If, at the date of combination or the end of the current period, due to various factors, the fair
value of each asset paid as consideration for the combination or the fair value of the identifiable
assets and liabilities of the purchased party is obtained during the combination cannot be
reasonably determined, the Company calculates the value of business combination based on the
temporarily determinable value. If, within the 12 months after acquisition, additional information
can prove the existence of related information at acquisition date and the contingent consideration
need to be adjusted, it is deemed to happen on the date of combination and retrospectively
adjusted. Any adjustment of consideration for the combination or value of identifiable assets or
liabilities made after 12 months of combination, the adjustment should follow Accounting Standard
for Business Enterprise No.28 – Changes in accounting policies, accounting estimates and correction
of error.
Where the temporary difference obtained by the acquirer was not recognized due to
inconformity with the conditions applied for recognition of deferred income tax, if, within the 12
months after acquisition, additional information can prove the existence of related information at
acquisition date and the expected economic benefits on the acquisition date arising from deductible
temporary difference by the acquiree can be achieved, relevant income tax assets can be recognized,
and goodwill can be adjusted accordingly. If the goodwill is not sufficient, the difference is
recognized as profit or loss for the current period. Apart from above, the differences is taken into
profit or loss of the current period if the recognition of deferred income tax assets is related to the
business combination.
For business combinations involving entities not under common control achieved in stages that
involves multiple transactions, the Company determine whether the multiple transactions belongs
to a single transactions in accordance with accounting standards. If the terms, conditions and
economic impact of the disposal comply with any cases as following, the multiple transactions
should be accounted as if a single transaction. ① These transactions are concluded simultaneously
or affected by each other. ② To reach a complete business results, these transactions is as a whole.
139 / 319
2023 Annual Report
③ Whether one transaction happening or not is up to another transaction. ④ To assess one
transaction separately is not economical but assess along with other transactions, they are
economically justified.
In a business combination achieved in stages and considered as a single transaction, the
transactions should be regard all as one acquisition. For those cannot be considered as a single
transaction, the combination cost is the sum of consideration paid at acquisition date and fair value
of the acquiree's equity investment held prior to acquisition date; the cost of equity of the acquiree
held prior to acquisition date shall be re-measured at the fair value at acquisition date, the
difference between the fair value and the carrying amount shall be recognized as investment
income or loss for the current period. Other comprehensive income and changes of investment
equity related with acquiree's equity held prior to acquisition date shall be transferred to
investment profit or loss for current period at acquisition date, besides there is other
comprehensive income incurred by the changes of net assets or net liabilities due to the
remeasurement of defined benefit plan.
3．Transaction costs for business combination
The overhead for the business combination, including the expenses for audit, legal services,
valuation advisory, and other administrative expenses, are recorded in profit or loss for the current
period when incurred. The transaction costs of equity or debt instruments issued as the
considerations of business combination are included in the initial recognition amount of the equity
or debt instruments.
7. Judgment criteria for contro and basis of preparation of consolidated financial statements
√适用 □不适用
1．Scope of consolidated financial statements
The scope of consolidated financial statements is determined on the basis of control. Control
exists when the Company has power over the investee; is exposed, or has rights to variable returns
from its involvement with the investee; and has the ability to use its power to affect its returns. A
subsidiary is an entity that is controlled by the Company (including enterprise, a portion of an
investee as a deemed separate entity, and structured entity controlled by the enterprise).
2．Preparation of the consolidated financial statements
The consolidation scope of consolidated financial statements is determined on the basis of
control, including the financial statements of the Company and all of its subsidiaries. In preparing
consolidated financial statements, subsidiaries adopt the same accounting period and accounting
policies as those of the Company.
All assets, liabilities, interests, income, fees and cash flows resulting from intra-group
transactions are eliminated on consolidation in full.
Where a subsidiary or business has been acquired through a business combination involving
enterprises under common control in the reporting period, the subsidiary or business is deemed to
be included in the consolidated financial statements from the date they are controlled by the
ultimate controlling party. Their operating results and cash flows are included in the consolidated
income statement and consolidated cash flow statement respectively from the date they are
controlled by the ultimate controlling party. During the reporting period, the opening balance of the
consolidated balance sheet was being adjusted, and the related items of the comparative statement
were being adjusted as if the reporting entity has exercised control since the time when the ultimate
controlling party began to control.
Where a subsidiary has been acquired through a business combination involving entities not
under common control, the opening balances of the consolidated balance sheet shall not be
adjusted for the subsidiary or the business, the subsidiary's revenue, expenses and profit shall be
included in the consolidated income statement, and cash flows shall be included in the consolidated
cash flow statement from the acquisition date to the end of the reporting date.
140 / 319
2023 Annual Report
The shareholders’ equity of the subsidiaries that is not attributable to the Company is
presented under shareholders’ equity in the consolidated balance sheet as minority interest. The
portion of net profit or loss of subsidiaries for the period attributable to minority interest is
presented in the consolidated income statement under the profit or loss attributable to minority
interest. When the amount of loss attributable to the minority shareholders of a subsidiary exceeds
the minority shareholders’ portion of the opening balance of owners’ equity of the subsidiary, the
excess amount shall be allocated against minority interest.
3．Acquiring minority interests of subsidiary and disposal of interests in subsidiary without
losing control
Where the Company acquires a minority interest from a subsidiary’s minority shareholders or
disposes of a portion of an interest in a subsidiary without a change in control, the transaction is
treated as equity transaction, and the book value of shareholder’s equity attributed to the Company
and to the minority interest is adjusted to reflect the change in the Company’s interest in the
subsidiaries. The difference between the proportion interests of the subsidiary’s net assets being
acquired or disposed and the amount of the consideration paid or received is adjusted to the capital
reserve (share premium) in the consolidated balance sheet, with any excess adjusted to retained
earnings.
4．Losing control over the subsidiary
When the Company disposes of a subsidiary, the income, expenses, and profit of the subsidiary
from the beginning of current period to the disposal date are included in the consolidated income
statement; the cash flows of the subsidiary from the beginning of current period to the disposal
date is included in the consolidated cash flow statement. For the loss of control over a subsidiary
due to disposal of a portion of the equity investment or other reasons, the remaining equity is
measured at fair value on the date when the control is lost. The difference arising from the sum of
consideration received for disposal of equity interest and the fair value of remaining equity interest
over the share of net assets of the former subsidiary calculated continuously since the purchase
date based on the shareholding percentage before disposal are recognised as investment income in
the period when the control is lost. Other comprehensive income related to equity investment in
the subsidiary is accounted for on the same accounting treatment as direct disposal of relevant asset
or liability by the acquiree at the time when the control is lost (i. e. to be transferred to investment
income, except for the changes arising from remeasuring net assets or net liabilities of defined
benefit plan of the subsidiary using the equity method). The remaining equity interests are
measured subsequently according to ”Accounting Standard for Business Enterprises No.2 – Long-
term Equity Investments” or ”Accounting Standard for Business Enterprises No.22 – Recognition and
Measurement of Financial Instruments”. See ”Long-term equity investments” or ”Financial
instruments” for details.
5．Disposal of equity investment by stage-up until losing control
When the Company disposes of equity investment in a subsidiary by a stage-up approach with
multiple transactions until the control over the subsidiary is lost, it shall determine whether these
multiple transactions related to the disposal of equity investment in a subsidiary until the control
over the subsidiary is lost belong to ”A single transaction”.
For those arrangements qualified as a single transaction, the carrying amount of long-term
equity investments relating to each transaction of disposal is derecognized, the difference between
the consideration received and the carrying amount of disposed long-term equity investments is
recognized as other comprehensive income, and finally is recognized in profit or loss for the current
period at the date of losing control.
For those arrangements are not regarded as a single transaction, the accounting treatment
shall follow “disposal of interests in subsidiary without losing control” and “for the loss of control
over a subsidiary due to disposal of a portion of the equity investment or other reasons” as
appropriate. The difference between each consideration received and the share of carrying value of
net assets in proportion to disposed portion of shareholding percentage in the subsidiary is
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recognized in capital reserve as an equity transaction. Capital reserve is not transferred to profit or
loss for the current period when losing control.
8. Classification of joint arrangements and accounting treatment of joint operations
□适用 √不适用
9. Recognition criteria of cash and cash equivalents
Cash as presented in cash flow statement refers to cash on hand and deposit on demand for
payment. Cash equivalents refer to short-term (generally refers to the expiration within 3 months
from the purchase date), highly liquid investments that can be readily converted to cash and that
are subject to an insignificant risk of changes in value.
10. Foreign currency transactions and translation of financial statements prepared in foreign
currencies
√适用 □不适用
1．Foreign currency transactions
Foreign currency transactions are translated into the functional currency of the Company at
the spot exchange rates (as announced by the People’s Bank of China) on the dates of the
transactions. However, the Company’s foreign currency exchange business or transactions involving
foreign currency conversion are converted into the amount of the recording currency according to
the actual exchange rate.
2．Translation method for foreign currency monetary and non-monetary items
At the balance sheet date, Items in foreign currencies are translated using the spot exchange
rates at the balance sheet date. All the resulting exchange differences are taken to profit or loss,
except for (1) those relating to foreign currency borrowings specifically for acquisition and
construction of assets qualified for capitalisation, which are capitalised in accordance with the
principle of capitalisation of borrowing costs; (2) non-monetary foreign currency items are
designated as part of the hedge of the Company’s net investment of a foreign operation are
recognised in other comprehensive income until the net investment is disposed of, at which the
cumulative amount is reclassified to the profit or loss for the current period; and (3) non-monetary
foreign currency items measured at historical cost shall still be translated at the spot exchange rates
prevailing on the transaction dates, while the amounts denominated in the functional currencies do
not change.
Non-monetary foreign currency items measured at historical cost shall still be translated at the
spot exchange rates prevailing on the transaction dates, while the amounts denominated in the
functional currencies do not change. Non-monetary foreign currency items measured at fair value
are translated at the spot exchange rates prevailing on the date on which the fair values are
determined. The resulting exchange differences are recognised in profit or loss or as other
comprehensive income for the current period, depending on the nature of the non-monetary item.
3．Translation of foreign currency financial statements
The financial statements denominated in foreign currency of a foreign operation are translated
to RMB in compliance with the following requirements: assets and liabilities on the balance sheet
are translated at the spot exchange rate prevailing at the balance sheet date; owner’s equity items
except for “undistributed profits” are translated at the spot exchange rates at the dates on which
such items arose; income and expenses items in the income statement are translated at the average
exchange rate for the period in which the transaction occurred. The undistributed profits brought
forward are reported at the prior year’s closing balance; the undistributed profits as at the end of
the year are presented after translated the profit appropriation items; differences between the
aggregate of asset and liability items and owners’ equity items are recognised as ”translation
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differences arising on the translation of financial statements denominated in foreign currencies” in
other comprehensive income. On disposal of foreign operations and loss of control, exchange
differences arising from the translation of financial statements denominated in foreign currencies
related to the disposed foreign operations which has been included in owners’ equity in the balance
sheet, shall be transferred to profit or loss in whole or in proportionate share in the period in which
the disposal took place.
The cash flow statement is translated at the average exchange rate on the date of cash flow.
The impact of exchange rate changes on cash is presented separately as "Effect of changes in
exchange rates on cash and cash equivalents” in the cash flow statement.
11. Financial instruments
√适用 □不适用
A financial instrument is any contract that gives rise to a financial asset of one enterprise and
a financial liability or equity instrument of another enterprise. Financial instruments include
financial assets, financial liabilities and equity instruments.
1．Classification, recognition and measurement of financial assets
(1) Recognition and initial measurement of financial assets and liabilities
Financial asset or financial liability will be recognised when the Company became one of the
parties under a financial instrument contract. For the purchase or sale of financial assets in a
conventional way, the Company recognizes the assets received and liabilities assumed on the
transaction day.
Financial assets and liabilities are measured at fair value upon initial recognition. For financial
assets measured at fair value through profit or loss, relevant transaction costs are directly
recognised in profit or loss for the period. For other categories of financial assets and liabilities,
relevant transaction costs are included in the amount initially recognised. Accounts receivable
without significant financing component are initially recognised based on the transaction price
expected to be entitled by the Company.
(2) Classification and measurement of financial assets
The Company classifies the financial assets according to the business model for managing the
financial assets and characteristics of the contractual cash flows as follows: financial assets
measured at amortised cost, financial assets measured at fair value through other comprehensive
income, and financial assets measured at fair value through profit or loss.
1) Financial assets measured at amortised cost
A financial asset is measured at amortised cost if it meets both of the following conditions: ①
The Company’s business model for managing such financial assets is to collect contractual cash flows;
② The contractual terms of the financial asset stipulate that cash flows generated on specific dates
are solely payments of principal and interest on the principal amount outstanding.
Subsequent to initial recognition, such financial assets are measured at amortised cost using
the effective interest method. A gain or loss on a financial asset that is measured at amortised cost
shall be recognised in profit or loss for the current period when the financial asset is derecognised,
amortised using the effective interest method or with impairment recognised.
For financial assets at amortized costs, it is recognized on the initially recognized amount
adjusted by: (1) after deducting the already paid principal; (2) after multiplying or subtracting the
accumulative amount of amortization incurred from amortizing the balance between the initially
recognized amount and the amount of the maturity date by employing the actual interest rate
method; and (3) after deducting the impairment losses that have actually incurred (applicable to
financial assets only).
The effective interest method refers to the method whereby the post-amortization costs and
the interest incomes of different installments or interest expenses are calculated according to the
effective interests of the financial asset or financial liabilities (including a set of financial assets or
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financial liabilities). The effective interest refers to the interest rate used to cash the future cash
flow of a financial asset or financial liability within the predicted term of existence or within a shorter
applicable term into the current carrying amount of the financial asset or financial liability. When
determining the effective interest, the future cash flow shall be predicted on the basis of taking into
account all the contractual stipulations concerning the financial asset or financial liability (including
the right to repay the loans ahead of schedule, call options, similar options, etc.), but the future
credit losses shall not be taken into account.
The Company recognizes interest income based on the calculation of financial asset book
balance multiplied by the effective interest rate, except for the following circumstances: ① For
purchased or originated financial assets that have incurred credit impairment, from the initial
recognition, their interest income is determined on the financial asset amortization costs and credit-
adjusted effective interest rates; ② For the purchased or originated financial assets without credit
impairment, but become credit impaired in the subsequent period, the interest income is
determined according to the amortized cost and effective interest rate of the financial asset. If the
financial instrument has no credit impairment due to the improvement of its credit risk in the
subsequent period, and this improvement can be objectively related to an event that occurs after
the application of the above regulations, interest income should be determined by multiplying the
effective interest rate and the financial asset book balance.
2) Financial assets measured at fair value through other comprehensive income
Financial asset is classified as measured at fair value through other comprehensive income if it
meets both of the following conditions: ①The Company’s business model for managing such
financial assets is achieved both by collecting collect contractual cash flows and selling such financial
a. ② The contractual terms of the financial asset stipulate that cash flows generated on specific
dates are solely payments of principal and interest on the principal amount outstanding.
Subsequent to initial recognition, such financial assets are subsequently measured at fair value.
Interest calculated using the effective interest method, impairment losses or gains and foreign
exchange gains and losses are recognised in profit or loss for the current period, and other gains or
losses are recognised in other comprehensive income. On derecognition, the cumulative gain or loss
previously recognised in other comprehensive income is reclassified from other comprehensive
income to profit or loss.
For non-trading equity instrument investment, the Company can irrevocably designate the
financial assets measured at fair value through other comprehensive income. Such designation is
made on individual basis of each non-trading equity instrument investment which also qualified as
equity instruments in the issuer’s perspective. Subsequent to such designation, dividend (except for
return of portion of investment costs) is recognized as profit or loss for the current period, other
gains or losses (including exchange gain or loss) are recognized in other comprehensive income. On
derecognition, the cumulative gain or loss previously recognised in other comprehensive income is
reclassified from other comprehensive income to profit or loss.
3) Financial assets measured at fair value through profit or loss
The Company classifies the financial assets other than those measured at amortised cost and
measured at fair value through other comprehensive income as financial assets measured at fair
value through profit or loss. Upon initial recognition, the Company irrevocably designates certain
financial assets that are required to be measured at amortised cost or at fair value through other
comprehensive income as financial assets measured at fair value through profit or loss in order to
eliminate or significantly reduce accounting mismatch.
Subsequent to initial recognition, such financial assets are subsequently measured at fair value,
any differences are gains or losses recorded in profit or loss for the current year.
(3) Classification and measurement of financial liabilities
The Company’s financial liabilities includes financial liabilities measured at fair value through
profit or loss, financial liabilities that arise when a transfer of a financial asset does not qualify for
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derecognition or continuing involvement, financial guarantee contracts and financial liabilities at
amortized cost.
1) Financial liabilities measured at fair value through profit or loss
Financial liabilities measured at fair value through profit or loss includes trading financial
liabilities (including financial liabilities with embedded derivatives) and designated financial
liabilities measured at fair value through profit or loss. In a business combination involving
enterprises not under common control, if the Company, as a buyer, recognizes a financial liability
from the contingent consideration, the financial liability shall be accounted for at fair value through
profit or loss.
After initial recognition, financial liabilities measured at fair value through profit or loss are
subsequently measured at fair value. Any gains or losses generated are recognized in profit or loss
for the current period.
The amount of change in fair value of designated financial liabilities measured at fair value
through profit or loss due to changes in the Company’s own credit risk is included in other
comprehensive income unless the treatment causes or expands accounting mismatches in profit or
loss. Other changes in fair value of this financial liability are included in profit or loss for the current
period. Upon derecognition, the accumulated gains or losses previously included in other
comprehensive income are transferred out of other comprehensive income and included in retained
earnings.
2) Financial liabilities that arise when a transfer of a financial asset does not qualify for
derecognition or continuing involvement
Such financial liabilities are measured in according to the accounting policies of Transfer of
financial assets.
3) Financial guarantee contracts
Financial guarantee contracts are contracts that require the issuer to make specified payments
to reimburse the contract holder for a loss the holder incurs because a specified debtor fails to make
payment when due in accordance with the terms of a debt instrument.
Financial guarantee contracts are not belonging to the above 1) or 2), they are subsequently
measured at the higher of the following: ① the amount of loss provision determined according to
the impairment method of financial instruments; ② the balance of the initial recognition amount
after deducting the accumulated amortization amount determined in accordance with the income
recognition method.
4) Financial liabilities at amortized cost
Apart from the above 1), 2) or 3), the Company classifies the remaining financial liabilities as
financial liabilities at amortized cost.
Such financial liabilities are measured at amortized cost using the effective interest rate
method after initial recognition, and the resulting gains or losses are included in profit or loss for
the current period when they are derecognized or amortized in accordance with the effective
interest rate method.
(4) Equity instruments
Equity instruments refer to contracts that can prove the ownership of the Company's
remaining equity in assets after deducting all liabilities. The Company issues (including refinancing),
repurchases, sells or cancels Equity instruments as a change in equity. Transaction costs related to
equity transactions are deducted from equity. The Company's various distributions to equity
instruments holders (excluding stock dividends) reduce shareholder equity. The Company does not
recognise the fair value changes of equity instruments.
The distinction between financial liabilities and equity instruments
Financial liabilities refer to liabilities that meet one of the following conditions:
1) A contractual obligation to deliver cash or other financial assets to other parties.
2) A contractual obligation to exchange financial assets or financial liabilities with another party
under potentially adverse conditions.
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3) A non-derivative contract that has to be settled with or can be settled with the firm's own
equity instruments in the future, under which the firm will deliver a variable number of its own
equity instruments.
4) A derivative contract that has to be settled with or can be settled with the firm's own equity
instruments in the future, except for a derivative contract in which a fixed number of its own equity
instruments are to be exchanged for a fixed amount of cash or other financial assets.
If the Company cannot unconditionally avoid fulfilling a contractual obligation by delivering
cash or other financial assets, such contractual obligation meets the definition of a financial
liability.If a financial instrument has to be settled with or can be settled with the Company's own
equity instruments in the future, consideration needs to be given to whether the Company's own
equity instruments used to settle the instrument is to be used as a substitute for cash or other
financial assets, or to give the holder of the instrument the remaining interest in the issuer's assets
after deduction of all liabilities. If it is the former, the instrument is a financial liability of the
Company; if it is the latter, the instrument is an equity instrument of the Company.
(5) Derivative instruments and embedded derivative instruments
Derivative financial instruments include forward exchange contract, currency exchange rate
swap agreement, interest rate swap agreement and foreign currency option contract etc. Derivative
financial instruments are initially measured at the fair value of the date a derivative contract entered
into and subsequently measured at their fair value. Any gains or losses arising from changes in fair
value are directly recognized to profit or loss for the current period.
Embedded derivatives refer to derivatives embedded in non-derivatives (ie, host contracts).
For the hybrid contract composed of embedded derivatives and the host contract, if the host
contract is a financial asset, the Company does not split the embedded derivative from the hybrid
contract, but applies the hybrid contract as a whole to the Company's accounting policies in
classification of financial assets. If the host contract included in the hybrid contract is not a financial
asset and meets the following conditions at the same time, the Company will split the embedded
derivative from the hybrid contract and treat it as a separate derivative:
1) The economic characteristics and risks of embedded derivatives are not closely related to
the economic characteristics and risks of the host contract.
2) A separate instrument with the same terms as the embedded derivative meets the definition
of derivative.
3) The hybrid contract is not measured at fair value and its changes are included in profit or
loss for the current period for accounting treatment.
If the embedded derivative is split from the hybrid contract, the Company will account for the
host contract of the hybrid contract in accordance with the applicable accounting standards. If the
Company cannot reliably measure the fair value of the embedded derivative according to the terms
and conditions of the embedded derivative, the fair value of the embedded derivative is determined
based on the difference between the fair value of the hybrid contract and the fair value of the host
contract. After using the above method, if the fair value of the embedded derivative on the
acquisition date or the subsequent balance sheet date cannot be measured separately, the
Company designates the hybrid contract as a whole as financial assets at fair value through profit
or loss.
2．Recognition and measurement of transfer of financial assets
Transfer of financial assets refers to the transference or deliverance of financial assets (or its
cash flows) to the other party (the transferee) other than the issuer of financial assets. The
derecognition of financial assets means that the Company transfers the previously recognized
financial assets from its balance sheet.
The financial assets that meet one of the following conditions will be derecognized by the
Company: (1) the contractual right to receive cash flows of the financial asset is expired; (2) the
financial asset has been transferred, and almost all risks and rewards of ownership of the financial
asset transferred to the transferee; (3) the financial asset has been transferred by the Company
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foregone the control of the financial assets although the Company has neither transferred nor
retained almost all the risks and rewards of ownership of the financial asset.
If the Company neither transfers nor retains almost all the risks and rewards of ownership of
financial assets, and retains control of the financial assets, it will continue to recognize the relevant
financial assets to the extent that they are continuing to be involved in the transferred financial
assets and recognises the relevant liabilities. The degree of continuing involvement in the
transferred financial assets refers to the level of risk on the exposed impact in changes in value of
financial asset to the Company.
If the transfer of an entire financial asset satisfies the conditions for derecognition, the
difference between the amounts of the following two items are included in profit or loss: (1) the
carrying amount of the transferred financial asset as of the date of derecognition; (2) the sum of
consideration received from the transfer of the financial asset, and the accumulative amount of the
changes of the fair value originally included in other comprehensive income proportionate to the
transferred financial asset (financial assets transferred refer to debt instrument investments at fair
value through other comprehensive income). If the transfer of financial asset partially satisfies the
conditions to derecognition, the entire carry amount of the transferred financial asset is, between
the portion which is derecognized and the portion which is not, apportioned according to their
respective relative fair value, and the difference between the amounts of the following two items
are included into profit or loss: (1) the carrying amount of the portion which is derecognized; (2)
the sum of consideration of the portion which is derecognized, and the portion of the accumulative
amount of the changes in the fair value originally included in other comprehensive income which is
corresponding to the portion which is derecognized (financial assets transferred refer to debt
instrument investments at fair value through other comprehensive income). For non-trading equity
instruments designated by the Company to be measured at fair value and whose changes are
included in other comprehensive income, if the whole or part of the transfer meets the conditions
for derecognition, the difference calculated according to the above method is included in retained
earnings.
3．Conditions for derecognition of financial liabilities
If the current obligation of a financial liability (or part of it) has been discharged, the Company
derecognizes the financial liability (or part of it). If the Company (borrower) and the lender sign an
agreement to replace the original financial liability by assuming a new financial liability, and the
contract terms of the new financial liability and the original financial liability are substantially
different, the original financial liability is derecognized and a new financial liability is recognized
simultaneously. If the Company makes substantial amendments to the original financial liabilities
(or part of them) contract terms, the original financial liabilities shall be derecognized, and a new
financial liability shall be recognized in accordance with the revised terms.
If the financial liability (or part of it) is derecognized, the Company shall include the difference
between its book value and the consideration paid (including non-cash assets transferred out or
liabilities assumed) into profit or loss for the current period. If the Company repurchases part of its
financial liabilities, the book value of the financial liabilities as a whole will be allocated according to
the proportion of their respective fair values at the repurchase date and the total fair value at the
repurchase date. The difference between the book value allocated to the derecognized portion and
the consideration paid (including non-cash assets transferred out or liabilities assumed) is included
in profit or loss for the current period.
4. Determination of the fair value of financial instruments
For the method for determining the fair value of financial assets and financial liabilities, see
notes to the financial statements.
5. Impairment of financial instruments
The Company accounts for impairment of financial assets at amortised cost, contract assets,
debt instrument investment at fair value through other comprehensive income, lease receivables
and financial guarantee contracts as mentioned in this note. ECLs are the weighted average of credit
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2023 Annual Report
losses of financial instruments weighted by the risk of default. Credit losses refer to the difference
between all contractual cash flows receivable according to the contract and discounted according
to the original effective interest rate and all cash flows expected to be received, i. e. the present
value of all cash shortages.
For purchased or originated financial assets that have suffered credit impairment, the
Company only recognizes the cumulative changes in expected credit losses for the entire duration
of the period since initial recognition as loss provisions on the balance sheet date.
For receivables or contract assets formed by transactions regulated by “Accounting Standards
for Business Enterprises No. 14 – Revenue” and lease receivables regulated by “Accounting
Standards for Business Enterprises No. 21 – Leases”, the Company uses a simplified measurement
method to measure the loss allowance based on the expected credit loss during the lifetime period.
For receivables or contract assets recognized on transactions under "Accounting Standards for
Business Enterprises No. 14 - Revenue" without significant financing components, the Company
uses simplified measurement methods to calculate the expected credit loss equivalent to the
lifetime period.
For financial instruments other than the above measurement methods, the Company measures
loss allowance in accordance with the general method and assesses on each balance sheet date
whether its credit risk has increased significantly since initial recognition. If the credit risk has not
significantly increased since initial recognition and is in the first stage, the company measures the
loss provision based on the expected credit loss amount of the financial instrument for the next 12
months. If the credit risk has significantly increased since initial recognition but has not yet
experienced credit impairment, it is in the second stage, and the company measures the loss
provision based on the expected credit loss amount for the entire duration. If the financial asset has
experienced credit impairment since initial recognition, it is in the third stage, and the company
measures the loss provision based on the expected credit loss amount for the entire duration.
The expected credit loss for lifetime period refers to the expected credit loss caused by all
possible default events during the entire expected duration of the financial instrument. Expected
credit loss in the next 12 months refers to the event of financial instrument default that may occur
within 12 months after the balance sheet date (if the expected duration of the financial instrument
is less than 12 months, then the expected duration) which is a portion of expected credit losses for
the entire duration.
The Company considers all reasonable and reliable information, including forward-looking
information, by comparing the risk of default of a financial instrument on the balance sheet date
with the risk of default on the initial recognition date to determine the relative changes in default
risk of the financial instrument during the expected lifetime and to assess whether the credit risk of
financial instruments has increased significantly since initial recognition. For financial instruments
that cannot obtain sufficient evidence of a significant increase in credit risk at a reasonable cost at
the level of individual instruments, the Company considers whether the credit risk has increased
significantly on a portfolio basis. If the Company determines that a financial instrument has only a
low credit risk on the balance sheet date, it is assumed that the credit risk of the financial instrument
has not increased significantly since initial recognition.
The Company remeasures the expected credit losses on each balance sheet date, and the
resulting increase or reversal of the loss allowance is included in profit or loss for the current period
as an impairment loss or gain. For financial assets measured at amortised cost, the loss allowance
offsets the book value of the financial asset presented in the balance sheet; for debt instrument
investments measured at fair value through other comprehensive income, the Company recognises
loss allowance in other comprehensive income and does not offset the book value of the financial
asset presented in the balance sheet.
6. Offset of financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount reported in the balance sheet
when there is a legally enforceable right to offset the recognized amounts and there is an intention
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to settle on a net basis or realize the asset and settle the liability simultaneously. Otherwise, financial
assets and financial liabilities are separately shown in the balance sheet and not allowed to offset.
12. Notes receivables
√适用 □不适用
Recognition and accounting treatment of expected credit loss of notes receivable
√适用 □不适用
The Company determines the expected credit losses of notes receivable and conducts
accounting treatment in accordance with the simplified measurement method described in this
note. On the balance sheet date, the credit losses of notes receivable are measured based on the
present value of the difference between the contractual cash flow receivable and the expected cash
flow receivable. The Company conducts separate impairment tests on notes receivable with
significantly different credit risk characteristics and estimates the expected credit losses. The
remaining notes receivable are divided into several portfolios based on their credit risk
characteristics. With reference to historical credit loss experience, combined with current
conditions and considering forward-looking information, the expected credit losses are estimated
on a portfolio basis.
The categories and determination basis for the combination of bad debt provisions based on credit
risk characteristics
√适用 □不适用
Name of group Determination basis
Bank acceptance bills group Acceptors are banks with low credit risk
Commercial acceptance bills group Acceptors are enterprises with high credit risk
A method for calculating the aging of credit risk characteristics based on aging
□适用 √不适用
Judgment criteria for single provision for bad debt reserves
□适用 √不适用
13. Accounts receivable
√适用 □不适用
Determination method and accounting treatment of expected credit loss of accounts
receivable
√适用 □不适用
Determination method and accounting treatment of expected credit loss of accounts receivable
The Company determines the expected credit losses of accounts receivable and makes accounting
treatment in accordance with the simplified measurement method described in this note. On the
balance sheet date, the Company measures the credit losses of accounts receivable based on the
present value of the difference between the contractual cash flow that should be received and the
cash flow expected to be received. The Company will conduct separate impairment tests on
accounts receivable with significantly different credit risk characteristics and estimate expected
credit losses. The remaining accounts receivable are divided into several portfolios based on credit
risk characteristics, and expected credit losses are estimated on a portfolio basis, taking into account
historical credit loss experience, current conditions, and forward-looking information.
Name of group Determination basis
Ageing group Accounts receivable with similar credit risk characteristics by ageing
Group of related parties in the Receivables from related parties within the scope of consolidation have
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2023 Annual Report
scope of consolidation similar credit risk characteristics
Group of high credit rating Accounts receivable of Fortune 500 clients within credit term
A method for calculating the aging of credit risk characteristics based on aging
√适用 □不适用
The company counts and calculates the aging of accounts receivable based on the principle of first-
in, first-out.
Judgment criteria for single provision for bad debt reserves
√适用 □不适用
The Company will conduct separate impairment tests for accounts receivable with significantly
different credit risk characteristics, such as significantly deteriorating credit conditions of the debtor,
low probability of future payment, and credit impairment that have already occurred.
14. Receivables financing
√适用 □不适用
Method for determining expected credit losses in receivables financing and accounting treatment
√适用 □不适用
The Company determines the expected credit losses of receivables financing and makes accounting
treatment in accordance with the general method described in this note. On the balance sheet date,
the Company measures the credit loss of receivables financing based on the present value of the
difference between the contractual cash flow due and the expected cash flow received. When the
expected credit loss information of a single item of receivables financing cannot be assessed at a
reasonable cost, the Company divides receivables financing into several groups based on the
characteristics of credit risk. On the basis of referring to historical credit loss experience, combining
the current situation and considering forward-looking information, the Company estimates the
expected credit losses on group basis.
The categories and determination basis for the combination of bad debt provisions based on
credit risk characteristics
√适用 □不适用
Name of group Determination basis
Group of low credit Including bank acceptance bills with low credit risk, letters of credit and other
risk receivables financing with low credit risk characteristics
A method for calculating the aging of credit risk characteristics based on aging
□适用 √不适用
Judgment criteria for single provision for bad debt reserves
√适用 □不适用
The Company will conduct separate impairment tests for accounts receivable with significantly
different credit risk characteristics, such as significantly deteriorating credit conditions of the
debtor, low probability of future payment, and credit impairment that have already occurred.
15. Other receivables
Determination method and accounting treatment of expected credit loss of other
receivables
√适用 □不适用
The Company determines the expected credit losses of other receivables and performs accounting
treatment according to the general method described in this note. On the balance sheet date, the
credit losses of other receivables are measured based on the present value of the difference
between the contractual cash flow receivable and the expected cash flow receivable. The Company
conducts separate impairment tests on other receivables with significantly different credit risk
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characteristics and estimates the expected credit losses. The remaining other receivables are
divided into several portfolios based on credit risk characteristics, and the expected credit losses
are estimated on a portfolio basis by referring to historical credit loss experience, considering
current conditions, and taking into account forward-looking information. The categories and
determination basis for the combination of bad debt provisions based on credit risk characteristics
√适用 □不适用
Name of group Determination basis
Ageing group Other receivables with similar credit risk characteristics by ageing
Group of related parties in Receivables from related parties within the scope of consolidation have
the scope of consolidation similar credit risk characteristics
Group of related parties
Receivables from related parties outside the scope of consolidation have
outside the scope of
similar credit risk characteristics
consolidation
Group of government Other receivables such as government grants receivable and various tax
receivables refunds have similar credit risk characteristics
A method for calculating the aging of credit risk characteristics based on aging
√适用 □不适用
The company counts and calculates the aging of accounts other receivable based on the principle
of first-in, first-out.
Judgment criteria for single provision for bad debt reserves
√适用 □不适用
The Company will conduct separate impairment tests for accounts other receivable with
significantly different credit risk characteristics, such as significantly deteriorating credit conditions
of the debtor, low probability of future payment, and credit impairment that have already
occurred.
16. Inventories
√适用 □不适用
Inventory category, issue pricing method, inventory system, amortization method for low-value
consumables and packaging materials
√适用 □不适用
(1) Inventories include finished products or commodities held for sale in daily activities, in-
process products in the production process, materials and materials consumed in the production
process or the provision of labor services, in-transit materials and subcontracting processing
materials.
(2) The inventory obtained by the Company is measured at actual cost. (1) The cost of
purchased inventory is the purchase cost of the inventory, and the inventory cost obtained through
further processing is composed of the purchase cost and processing cost. (2) The book value of
inventory obtained in settlement under debt restructuring is determined on the fair value of the
forfeited creditor's rights and the relevant taxes and fees that can be directly attributed to the
inventory when the inventory reaches the current position and status. (3) Under the presumption
that the exchange of non-monetary assets has commercial substance and the fair value of the assets
swapped in or out can be reliably measured, the book value of inventory swapped in the exchange
of non-monetary assets is usually determined on the basis of the fair value of the assets swapped
out, unless there is strong evidence that the fair value of the swapped assets is more reliable; for
non-monetary asset exchanges that do not meet the above presumption, the book value of the
swapped assets and related taxes payable are used as the cost of swapped in inventory. (4) The
inventory acquired by the combination of enterprises under common control is determined based
on the book value of the acquiree; the inventories acquired by the combination of enterprises not
under common control are determined by the fair value.
(3) The cost of inventories issued by enterprises is measured by the weighted average method.
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(4). Amortization method for low-value consumables and packaging materials
Low-value consumables are one-off amortized when taken for use.
Packaging materials are one-off amortized when taken for use.
(5) The inventory system is a perpetual inventory system.
Recognition criteria and accrual method for the provision for decline in value in inventory
On the balance sheet date, inventory is measured at the lower of cost and net realizable value.
The net realizable value of inventories is the amount after the estimated selling price of inventories
minus the estimated costs to be incurred to completion, the estimated selling expenses and related
taxes. When determining the net realizable value of inventories, based on the reliable evidence
obtained, taking into account the purpose of holding the inventory and the impact of events after
the balance sheet date, except for clear evidence that the market price on the balance sheet date
is abnormal, the net realizable value of inventory items at the end of the current period is
determined on the basis of the market price on the balance sheet date, of which:
(1) The inventory of finished goods, commodities and materials used for sale, such as
commodities directly used for sale, is determined by the amount of the estimated selling price of
the inventory minus the estimated selling expenses and related taxes during normal production and
operation ;
(2) For the inventory of materials that need to be processed, in the normal production and
operation process, the net realizable value is determined based on the estimated selling price of the
finished product minus the estimated cost at the time of completion, the estimated selling expenses
and related taxes. On the balance sheet date, if a part of the same inventory has a contract price
agreement and other parts do not have a contract price, the net realizable value is determined
separately and compared with its corresponding cost to determine the amount of provision for or
reversal of decline in value of inventory.
At end of period, the provision for decline in value is calculated according to a single inventory
item; but for a large number of inventories with low unit prices, the provision for decline in value is
calculated according to the inventory category; For the product series produced and sold in the
same region, has the same or similar end user, and difficult to measure the inventory separately
from other items, the provision for the decline in value in inventory is combined.
After accruing the provision for decline in value in inventory, if the factors that previously
reduced the value of the inventory have disappeared and the net realizable value of the inventory
is higher than its book value, it will be reversed within the original provision for decline in value, and
reversal amount is included in profit or loss for the current period.
The category and basis for determining the combined inventory falling price reserves, as well as
the basis for determining the net realizable value of different types of inventory
□适用 √不适用
The calculation method and basis for determining the net realizable value of inventory based on
the combination of inventory age and confirmed net realizable value
□适用 √不适用
17. Contract assets
□适用 √不适用
18. Assets held for sale
□适用 √不适用
Recognition criteria and accounting treatment methods for non-current assets or disposal
groups classified as held for sale
□适用 √不适用
Recognition criteria and presentation method for discontinued operations
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□适用 √不适用
19. Long-term equity investments
√适用 □不适用
Long-term equity investments referred to in this section refer to Long-term equity investments
that the Company has control, joint control or significant influence over the investee, including
equity investments in subsidiaries, joint ventures and associates.
1. Judgment criteria for joint control and significant influence
Joint control refers to the common control of an arrangement in accordance with the relevant
agreement, and related activities of the arrangement must be agreed upon by the parties sharing
control rights before they can make decisions. If the Company and other joint venturers jointly
exercise joint control over the investee and jointly control the investee and have rights to the net
assets of the investee, the investee is a joint venture of the Company. When judging whether there
is joint control, the protective rights enjoyed are not considered.
Significant influence refers to the power to participate in the decision-making of an enterprise's
financial and operating decisions, but it cannot control or jointly control the formulation of these
policies with other parties. If the Company can exert significant influence on the investee, the
investee is an associate of the Company. When determining whether it can exert significant
influence on the invested unit, consider that the investor directly or indirectly holds the voting
shares of the invested unit and the current executable potential voting rights held by the investor
and other parties are assumed to be converted into the investee, the impact includes the current
convertible warrants, stock options and convertible corporate bonds issued by the investee.
2. Determination of investment cost of long-term equity investments
(1) If the combination is formed under a business combination under common control, the
merger party pays cash, transfers non-cash assets, assumes debt or issues equity securities as the
acquisition consideration, and the share of owner’s equity of the acquiree on the consolidated
financial statements of the ultimate controlling party on the acquisition date as its initial investment
cost. The difference between the initial investment cost of long-term equity investments and the
cash paid, non-cash assets transferred, the book value of the debt assumed or the total face value
of the shares issued adjusts the capital reserve; if the capital reserve is insufficient to offset, the
retained earnings are adjusted. Step by step acquisition of the equity of the acquiree under common
control through multiple transactions, and ultimately forming a business combination under
common control, it should be treated separately as whether ”single transaction”: if it belongs to a ”
single transaction”, each transaction is treated collectively as a single transactions on obtaining
control rights. If it does not belong to a ”single transaction”, the initial investment costs of long-
term equity investments is the share of the book value of the owner’s equity in the acquiree’s
consolidated financial statements. The difference between the cost and the book value of long-term
equity investments before the combination plus the book value of the new consideration paid for
the shares on the acquisition date is adjusted to the capital reserve; if the capital reserve is
insufficient to offset, the retained earnings are adjusted. The equity investment held before the
acquisition date by equity method or other comprehensive income recognized for other equity
instruments investment is temporarily not subject to accounting treatment.
(2) If a business combination is not formed under common control, the Company determines
the combination cost as the initial investment cost of long-term equity investments according to the
purchase date. The combination cost is the fair value of the assets paid, liabilities incurred or
assumed by the purchaser to obtain control of the purchased party on the purchase date, and the
equity securities issued. Overhead expenses such as auditing, legal services, evaluation and
consulting and other related Administrative expenses incurred by the purchaser for the business
merger are included in profit or loss for the current period; The transaction cost of the equity
securities or debt securities issued by the purchaser as the combination consideration is included in
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the initial recognition amount of equity securities or debt securities. The Company regards the
contingent consideration stipulated in the acquisition agreement as part of the transfer
consideration for the business combination, and it is included in the cost of the business
combination according to its fair value on the date of purchase. For a business combination not
under common control that is realized step-by-step through multiple transactions, it is determined
whether the multiple transactions belong to a ”single transaction” in accordance with the
accounting standards for the enterprise. In the case of a ”single transaction”, each transaction is
treated as a whole transaction that obtains control. If it does not belong to a ”single transaction”,
the initial investment cost of long-term equity investments calculated based on the cost method
shall be the sum of the original holding equity amount of the acquiree’s equity investment plus the
newly added investment cost; If the equity is accounted for using the equity method, the relevant
other comprehensive income will not be accounted for temporarily; if the original equity investment
is invested by other equity instruments, the difference between the fair value and the carrying
amount, and the cumulative change in fair value originally included in other comprehensive income,
are transferred to directly to retained earnings.
(3) Except for long-term equity investments formed by business combination, other equity
investments are initially measured at cost: if they are obtained by paying cash, the actual purchase
price is used as their initial investment cost; if they are obtained by issuing equity securities, they
are stated at the fair value of equity securities as its initial investment cost. The expenses directly
related to the issuance of equity securities are determined in accordance with the relevant
provisions of Accounting Standards for Enterprises No.37-Presentation of Financial Instruments. On
the presumption that the fair value of the commercial substance and swapped-in assets or
swapped-out assets can be reliably measured, the initial investment cost of long-term equity
investments swapped in for non-monetary assets are based on the fair value of swapped assets and
related taxes payable, unless there is solid evidence that the fair value of the swapped assets is more
reliable; for non-monetary asset exchanges that do not meet the above presumption, the carrying
amount of the swapped assets and related taxes payable shall be used as the Initial investment cost
of long-term equity investments. The initial investment cost of long-term equity investments
obtained through debt restructuring is determined on the basis of the fair value of the waived claims.
The expenses, taxes and other necessary expenses directly related to the acquisition of long-term
equity investments are also included in the investment cost.
For the additional investment that can exert significant influence on the invested unit or
implement joint control but does not constitute control, the cost of long-term equity investments
is the original holding determined in accordance with ”Accounting Standards for Business
Enterprises No.22-Recognition and Measurement of Financial Instruments”. The sum of the fair
value of equity investment plus the newly added investment cost is used as the initial investment
cost under equity method. If the originally held equity investment is classified as other equity
instruments investment, the difference between its fair value and carrying amount, and the
cumulative fair value change originally included in other comprehensive income should be
transferred to directly to retained earnings.
3. Subsequent measurement and recognition of profit or loss of long-term equity investments
(1) Long-term equity investments measured at cost
The Company uses the cost method to account for long-term equity investments in subsidiaries.
Apart from the cash dividends or profits declared but not yet paid that included in the acquisition
of the investment, the Company recognizes the investment income in accordance with the cash
dividends or profits declared to be issued by the investee in the current period.
(2) Long-term equity investments under equity method
For long-term equity investments in associates and joint ventures, the equity method is used.
If the initial investment cost of long-term equity investments calculated by the equity method
is greater than the fair value share of the identifiable net assets of the investee when investing, the
initial investment cost of long-term equity investments will not be adjusted; the initial investment
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2023 Annual Report
cost of long-term equity investments is less than the fair value share of the investee’s identifiable
net assets at the time of purchase, the difference should be included in profit or loss for the current
period, while adjusting the cost of long-term equity investments. After acquiring long-term equity
investments, if the accounting policy and accounting period adopted by the investee are
inconsistent with the Company, the financial statements of the investee shall be adjusted according
to the Company's accounting policies and accounting period, and recognize the investment gain or
loss and other comprehensive income etc. The investment income and other comprehensive
income shall be the share of the net profit or loss and other comprehensive income of the investee,
and the carrying amount of long-term equity investments is adjusted; The Company recognizes its
share of the investee’s net profits or losses based on the fair values of the investee’s individual
separately identifiable assets at the time of acquisition, after making appropriate adjustments
thereto in conformity with the accounting policies and accounting periods of the Company.
According to the profits or cash dividends declared to be distributed by the investee, the carrying
amount of long-term equity investments is reduced accordingly; adjust the carrying amount of long-
term equity investments and include in owners' equity. The unrealized internal transaction gains
and losses that occur between the Company and associates and joint ventures are calculated based
on the ratio enjoyed by the Company and are offset, and investment income is recognized on this
basis. Unrealized internal transaction losses with the investee that belong to assets impairment loss
are fully recognized.
When the Company confirms that it should share the losses of the investee, it will be processed
in the following order: First, offset the carrying amount of Long-term equity investments. Secondly,
if the carrying amount of long-term equity investments is not enough to offset, continue to
recognise the investment loss and offset the carrying amount of long-term receivable items to the
limit of carrying amounts of other long-term equity that substantially constitute net investment in
the investee. After the above-mentioned treatment, if the Company still undertakes additional
obligations according to the investment contract or agreement, the estimated liabilities shall be
recognized according to the obligations assumed and included in the current investment losses. If
the investee realizes a net profit in a later period, the Company resumes the recognition of the profit
sharing amount after the income makes up for the unrecognized loss sharing amount.
During the period of holding the investment, the investee is included in the consolidated
financial statements based on the amount attributable to the investee in the consolidated financial
statements' net profit, other comprehensive income and changes in other owners ‘equity.
If the Company’s assets invested in joint ventures and associates constitute a business, and the
investor acquires long-term equity investments but does not obtain control, the fair value of the
investment business is used as the initial basis for the new investment cost of long-term equity
investments. The difference between the initial investment cost and the carrying amount of the
invested business is included in profit or loss for the current period. If the assets sold by the
Company to a joint venture or an associate constitute a business, the difference between the
consideration received and the carrying amount of the business shall be included in profit or loss
for the current period. If the assets purchased by the Company from associates and joint ventures
constitute business, they shall be accounted for in accordance with the provisions of ”Accounting
Standards for Business Enterprises No.20-Business Combinations”, and the profits or losses related
to the transaction shall be fully recognised.
4. Disposal of long-term equity investments
For the disposal of Long-term equity investments, the difference between the Carrying amount
and the actual consideration received shall be included in profit or loss for the current period.
(1) Disposal of long-term equity investments under equity method
For long-term equity investments that are accounted for using the equity method, if the
remaining equity after disposal is still accounted for using the equity method, when disposing of the
investment, the same basis as the investee directly disposes of related assets or liabilities shall be
used and the relevant share of other comprehensive income in the accounting treatment. Owners
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2023 Annual Report
‘equity confirmed by the investee in addition to changes in net profit or loss, other comprehensive
income and profit distribution, and owners’ equity are carried forward to profit or loss for the
current period according to the sharing.
If the joint control or significant influence on the investee is lost due to the disposal of part of
the equity investment, etc., the remaining equity after disposal shall be accounted according to the
financial instrument recognition and measurement standards. The difference between the fair value
and carrying of the day when the joint control or significant influence is lost the amount is included
in profit or loss for the current period. The other comprehensive income of the original equity
investment confirmed by the equity method of accounting shall be accounted for on the same basis
as the investee ‘s direct disposal of related assets or liabilities when the equity method of accounting
is terminated. Owners ‘equity confirmed by the investee in addition to changes in Owners’ equity
other than net profit or loss, Other comprehensive income and profit distribution, all transferred to
profit or loss for the current period when the equity method of accounting is terminated.
(2) Disposal of long-term equity investments under cost method
Long-term equity investments that are accounted for using the cost method, and the remaining
equity is still accounted for using the cost method after disposal. Other comprehensive income
recoginsed by adopting equity method accounting or financial instrument recognition and
measurement standard accounting before obtaining control of the investee is treated on the same
basis as the invested unit directly disposes of related assets or liabilities, and is treated according to
share of profit or loss for the current period. Changes in owners’ equity other than net profit or loss,
other comprehensive income and net profit distribution in the investee’s net assets recognized by
the equity method of accounting are carried forward to profit or loss for the current period
according to the share.
When the Company can no longer exercise control over an investee due to dilution of
shareholding by issuance of new shares to other investors by the investee but the Company can still
exercise joint control of or significant influence on the investee, the difference between the
Company’s share of the increment of net assets in investee by the new shareholding percentage
after new share issuance and the pro-rata portion of carrying value of long term equity investment
for the decreased shareholding percentage is recognized in profit or loss in the current period. The
remaining equity investment is accounted for equity method as if it was acquired since initial
acquisition.
When the Company can no longer exercise control over an investee due to partial disposal of
equity investment or other reasons and the remaining equity investment after disposal can exercise
joint control of or significant influence over an investee, the remaining equity investment is
accounted for under equity method and re-measured by equity method as if it has been acquired
since date of acquisition. Where the remaining equity investment can no longer exercise joint
control of or significant influence over an investee, the remaining equity investment is accounted
for in accordance with Accounting Standard for Business Enterprises No.22-Recognization and
Measurement of Financial Instruments and the difference between the fair value and the carrying
amount at the date of the loss of control is charged to profit or loss for the current period.
The Company's control over an investee is lost through multiple disposals and the multiple
disposals shall be viewed as one single transaction, the multiple disposals is accounted for one single
transaction which result in the Company's loss of control over the investee. Each difference between
the consideration received and the book value of the investment disposed is recognized in other
comprehensive income and reclassified in full to profit or loss at the time when control over the
investee is loss.
20. Investment properties
(1). If the measurement of cost model is adopted:
Depreciation or Amortization Method
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1. Investment properties refer to real estate held to earn rent or capital appreciation, or both.
Including land use rights that have been leased, land use rights that are held and ready to be
transferred after value-added, leased buildings (including buildings used for rent after self-
construction or development activities are completed, and future use during construction or
development of leased buildings).
2. Investment properties are initially measured according to cost, and subsequent
measurement is made using the cost model. For subsequent expenditures related to Investment
properties, if the economic benefits related to the asset are likely to flow in and their costs can be
reliably measured, then they are included in the cost of Investment properties. Other subsequent
expenditures are included in profit or loss for the current period when they occur.
3. For Investment Properties measured by the cost model, depreciation or amortization is
provided using the same method as fixed assets and intangible assets.
4. When the purpose of Investment properties is changed to self-use, from the date of change,
the Investment properties are converted into fixed assets or intangible assets, and the carrying
amount before conversion is used as the credit value after conversion. When the purpose of self-
used real estate or Inventories is changed to earn rent or capital appreciation, from the date of
change, the Fixed assets or Intangible assets are converted into Investment properties and
converted into Investment properties measured by the cost model to the carrying amount before
conversion As the booked value after conversion; when converted to Investment properties
measured by fair value model, the fair value on the conversion date is used as the booked value
after conversion.
5. When Investment Properties are disposed of, or permanently withdrawn from use and it is
expected that no financial benefits can be obtained from their disposal, the recognition of the
investment properties is terminated. Investment properties sold, transferred, scrapped or damaged
are deducted from their carrying amount and related taxes and are included in profit or loss for the
current period.
21. Fixed assets
(1). Recognition conditions
√适用 □不适用
Fixed assets refer to tangible assets fulfill the following characteristics: (1) held for the
production of goods, provision of labor services, lease or operation and (2) the service life exceeds
one fiscal year.
Fixed assets are recognized if it meet the following conditions: (1) The economic benefits
related to the fixed assets are likely to flow into the enterprise and (2) The cost of the fixed assets
can be measured reliably. Subsequent expenditures related to fixed assets, if they meet the above
recognition conditions, are included in the cost of fixed assets; those that do not meet the above
recognition conditions are included in profit or loss for the current period when incurred.
(2). Depreciation method
√适用 □不适用
Annual
Depreciation Estimate residual
Category Useful life (years) depreciation rate
method value (%)
(%)
Property and Straight line 10-30 5-10 3.00-9.50
buildings method
Specific Straight line 3-20 5-10 4.50-31.67
equipment method
General Straight line 3-15 5-10 6.00-31.67
equipment method
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2023 Annual Report
Transportation Straight line 2-15 5-10 6.00-47.50
equipment method
25 Light Displacement 3.07
Straight line Tonnage x
Ship
method Expected scrap
price
Note:
(1) The renovation costs of the fixed assets that meet the capitalization conditions will be
accrued separately in the shorter period of the two renovation periods and the useful life of the
fixed assets.
(2) For the fixed assets that have been impaired, the cumulative impairment provision of fixed
assets shall be deducted from the calculation of depreciation rate.
(3) The Company shall review the useful life, estimated net residual value and depreciation
method of the fixed assets at least at the end of the year.
22. Construction in progress
√适用 □不适用
1. Construction in progress while satisfying economic benefits is likely to flow in, and costs can
be reliably measured are recognised. Construction in progress is measured at the actual cost
incurred before the construction of the asset reaches its intended status of uses.
2. When Construction in progress reaches the intended status of uses, it will be transferred to
fixed assets according to the actual cost of the project. If it has reached the expected usable status
but has not yet completed the settlement of completion, it will first be transferred to fixed assets
at the estimated value. After the completion of the final settlement, the original provisional
valuation will be adjusted according to the actual cost, but the original depreciation will not be
adjusted.
3. The specific criteria and timing for the transfer of construction in progress to fixed assets are
as follows:
Item Criteria and time point for conversion to fixed assets
Property and buildings (1) The main construction project and supporting projects have been
substantially completed; (2) The construction project has met the
predetermined design requirements and has been inspected, designed,
constructed, and supervised by various units; (3) If the construction project
has reached the predetermined usable state but has not yet undergone
completion settlement, it will be transferred to fixed assets based on the
estimated value of the actual construction cost from the date of reaching the
predetermined usable state.
(1) The relevant equipment and other supporting facilities have been installed;
Machine equipment (2) The equipment that needs to be commissioned or trial-produced can
maintain normal and stable operation for a period of time after
commissioning; (3) The production equipment can stably produce qualified
products; (4) The equipment has been accepted by the relevant departments
of asset management.
23. Borrowing costs
√适用 □不适用
Borrowing costs, including interest on borrowings, amortization of discounts or premiums,
other relevant expenses, and exchange differences due to foreign currency borrowings.
1. Principle of borrowing costs capitalization
Borrowing costs incurred by the Company, which can be directly attributed to the acquisition,
construction or production of assets that meet the capitalization conditions, are capitalized and
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included in the cost of related assets. Other Borrowing costs are recognized as expenses based on
the amount incurred when they occur, and are included in profit or loss for the current period.
2. Capitalization period of borrowing costs
(1) When the following conditions are met at the same time, capitalization begins: 1) Asset
expenditure has occurred; 2) Borrowing costs have occurred; 3) The purchase, construction or
production activities necessary to make the asset reach the intended use or sale state have begun.
(2) Suspension of capitalization: If an asset that meets the conditions of capitalization is
abnormally interrupted during the acquisition, construction or production process, and the
interruption lasts for more than 3 months, the capitalization of Borrowing costs is suspended;
Borrowing costs incurred during the interruption are recognized as current expenses, until the
purchase or construction of assets or production activities restart. If the interruption is the
necessary procedure for the acquisition or construction or production of assets that meet the
capitalization conditions to reach the intended status of uses or status of sale, borrowing costs will
continue to be capitalized.
(3) Cessation of capitalization: Borrowing costs cease to be capitalized when the assets
purchased or constructed or produced that meet the capitalization conditions reach the intended
use or sale. When part of the assets in the acquisition, construction or production of capitalized
assets are completed separately and can be used separately, the capitalization of borrowing costs
of the partial assets will be ceased. If each part of the purchased or constructed asset is completed
separately, but it cannot be used until it is completed or sold externally, the capitalization of
borrowing costs shall be ceased when the asset is completed.
3. Borrowing costs capitalization rate and calculation method of capitalization amount
If specific loans are borrowed for the purchase or construction or production of assets that
meet the capitalization conditions, the interest expenses actually incurred in the current period of
the specific loans (including the amortization of discounts or premiums determined in accordance
with the effective interest rate method), minus the amount of interest income obtained from the
bank or the investment income obtained by making a temporary investment by the unused
borrowing loans, is the amount of interest that should be capitalized; if the general borrowings are
occupied for the purchase or construction or production of assets that meet the capitalization
conditions, the weighted average amount of asset expenditures on the amount of cumulative asset
expenditure exceeding the specific loans is multiplied by the capitalization rate (weighted average
interest rate) of the general borrowing to calculate and determine the amount of interest that
should be capitalized for the general borrowing. During the capitalization period, the amount of
interest capitalized in each accounting period shall not exceed the amount of interest actually
incurred by the relevant borrowings in the current period. The exchange differences on the principal
and interest of foreign currency special borrowings shall be capitalized during the capitalization
period. Other relevant expenses incurred by special borrowings occur before the assets eligible for
capitalization purchased or constructed or produced reach the intended status of use or sale, they
are capitalized; Other relevant expenses incurred in general borrowings are included in profit or loss
for the current period when incurred. If there is a discount or premium on the loans, the amount of
discount or premium that should be amortized in each accounting period is determined according
to the effective interest rate method, and the amount of interest in each period is adjusted.
24. Biological assets
□适用 √不适用
25. Oil and gas assets
□适用 √不适用
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2023 Annual Report
26. Intangible assets
(1). Measurement, useful life, impairment test
√适用 □不适用
1. Initial measurement of intangible assets
Intangible assets are initially measured at cost. The cost of externally purchased intangible
assets includes the purchase price, related taxes and other expenses directly attributable to the
asset for its intended use. If the payment for the purchase of intangible assets is delayed beyond
the normal credit conditions and is essentially of a financing nature, the cost of the intangible assets
is determined on the basis of the present value of the purchase price. Debt restructuring acquires
the intangible assets used by the debtor to pay off debts, and the book value is determined on the
basis of the fair value of the waived claims and other costs that can be directly attributed to the tax
and other costs incurred in bringing the asset to its intended use. Intangible assets obtained from
debtor to pay off debts under debt restructuring, its book value is determined on the basis of the
fair value of the waived claims and other costs that can be directly attributed to the tax and other
costs incurred in bringing the asset to its intended use. Under the presumption that the exchange
of non-monetary assets has commercial substance and the fair value of the assets exchanged in or
out can be reliably measured, the intangible assets exchanged in the swap of non-monetary assets
are stated at fair value of the assets swapped and related taxes as the cost of swapping intangible
assets, unless there is strong evidence that the fair value of the swapped assets is more reliable; for
non-monetary asset exchanges that do not meet the above presumption, the book value of the
swapped assets and related taxes payable are used as the cost of intangible assets, and there is no
recognition of any profit or loss.
Expenses related to intangible assets are included in the cost of intangible assets if the related
economic benefits are likely to flow into the Company and the costs can be reliably measured.
Expenditures for other items other than these are included in profit or loss for the current period
when they occur.
The acquired land use rights are usually accounted for as intangible assets. For self-
development and construction of buildings and other buildings, related land use rights expenditures
and building construction costs are accounted for as intangible assets and fixed assets, respectively.
In the case of purchased properties and buildings, the relevant price will be allocated between the
land use rights and the buildings. If it is difficult to allocate them reasonably, all of them will be
treated as fixed assets.
2. Intangible asset useful life, the basis for its determination, estimation, amortization method
or review procedures
According to the contract rights or other legal rights, industry, history experience, and other
relevant experts to determine a combination of factors, reasonably determine the intangible asset
can bring economic benefits for the Company, as intangible assets with limited useful life; not
Where the intangible assets are reasonably determined to bring economic benefits to the Company,
they are regarded as intangible assets with uncertain service life.
For intangible assets with a finite useful life, the following factors are usually considered when
estimating the useful life: (1) the usual life cycle of the products produced using the asset and the
information available on the service life of similar assets; (2) technology, process, etc. The current
situation of the country and the estimation of the future development trend; (3) the market demand
for the products produced by the asset or the provision of labor services; (4) the expected actions
of current or potential competitors; (5) the maintenance of the asset Expected maintenance
expenditures that bring economic benefits, and the Company's ability to pay for related
expenditures; (6) Relevant legal regulations or similar restrictions on the asset's control period, such
as concession periods, lease periods, etc . ; (7) There is correlation of the useful life of other assets.
The estimated useful life of intangible assets with finite useful life:
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Basis of estimated useful
Item Period (years)
life
Software Expected benefit period 5 years
Special technology Expected benefit period 10 years
Registered useful life of land
Land use rights 50 years
use rights
Intangible assets with a finite useful life are amortized systematically and rationally within the
useful life according to the expected realization method of the economic benefits related to the
intangible asset. If the expected realization method cannot be reliably determined, the straight-line
method is used. Intangible assets with uncertain useful life are not amortized, but the useful life of
the intangible assets is reviewed every year and an impairment test is conducted.
At the end of each year, the Company reviews the useful life and amortization method of
intangible assets with a finite useful life. If it is different from the previous estimate, the original
estimate is adjusted and the accounting estimate is changed; it is estimated that an intangible asset
can no longer be given if the enterprise brings future economic benefits, the book value of this
intangible asset will be transferred to profit or loss for the current period.
(2). Accounting policy for internal research and development expenditures
√适用 □不适用
The expenditures of internal research and development projects are divided into expenditures
in the research phase and expenditures in the development phase. Criteria for dividing research
stage and development stage: the planned investigation stage for acquiring new technologies and
knowledge should be determined as the research stage, which has the characteristics of planning
and exploration; The application of research results or other knowledge to a plan or design before
commercial production or use to produce new or substantially improved materials, devices,
products and other stages should be determined as the development stage, which is targeted and
likely to produce results characteristics.
Expenditures for the research phase of internal research and development projects are
included in profit or loss for the current period when they occur. Expenses during the development
phase of an internal research and development project that meet the following conditions are
recognized as intangible assets: (1) it is technically feasible to complete the intangible asset so that
it can be used or sold; (2) it is Intention to use or sell; (3) The way in which intangible assets generate
economic benefits, including the ability to prove that the products produced using the intangible
assets exist in the market or the intangible assets themselves exist in the market, and the intangible
assets will be used internally, can prove their usefulness; (4) sufficient technical, financial resources
and other resources support to complete the development of the intangible asset and the ability to
use or sell the intangible asset; (5) The expenditure attributable to the development stage of the
intangible asset can be reliably measured. If the above conditions are not met, it will be included in
profit or loss for the current period when it occurs; if there is no way to distinguish between research
phase expenditure and development phase expenditure, all research and development expenditure
incurred will be included in profit or loss for the current period.
If the company sells products or by-products produced during the research and development
process (hereinafter referred to as trial operation sales), it shall conduct accounting treatment for
the related income and costs of trial operation sales in accordance with the provisions of
“Accounting Standards for Business Enterprises No. 14 – Revenue” and “Accounting Standards for
Business Enterprises No. 1 – Inventory”, and include them in the current profit or loss. Before selling
the products or by-products produced during the trial operation, they shall be recognized as
inventory in accordance with the provisions of “Accounting Standards for Business Enterprises No.
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1 – Inventory”, and they shall be recognized as related assets in accordance with the asset
recognition conditions in other relevant accounting standards for business enterprises.
27. Long-term asset impairment
√适用 □不适用
Long-term equity investments, investment property and productive biological assets measured
using the cost model, fixed assets, construction in progress, oil and gas assets, right-of-use assets,
intangible assets, goodwill and other long-term assets are subject to impairment if there are
indication of the following:
1. The market price of assets has fallen sharply in the current period, and the decline is
significantly higher than the expected decline due to the passage of time or normal use;
2. The economic, technical or legal environment in which the enterprise operates and the
market in which the assets are located will undergo major changes in the current period or in the
near future, thereby adversely affecting the enterprise;
3. The market interest rate or other market investment return rate has increased in the current
period, which affects the discount rate of the enterprise's calculation of the present value of the
expected future cash flow, resulting in a substantial reduction in the asset's recoverable amount;
4. There is evidence that the asset has become obsolete or its physical has been damaged;
5. Assets have been or will be idle, terminated or planned to be disposed of in advance;
6. Evidence from internal reports of the Company indicates that the economic performance of
the asset has been or will be lower than expected, such as the net cash flow created by the asset or
the realized operating profit (or loss) is far below (or higher than) the expected amount, etc . ;
7. Other indications that assets may have been impaired.
If there is any indication of impairment of the above-mentioned long-term assets on the
balance sheet date, an impairment test shall be conducted. If the result of the impairment test
indicates that the recoverable amount of the asset is lower than its book value, the impairment
provision shall be made according to the difference and included in the impairment loss. The
recoverable amount is the higher of the net value of the asset's fair value minus disposal costs and
the present value of the asset's expected future cash flow. The method for determining the fair
value is detailed in this note; the disposal expenses include legal expenses related to the disposal of
assets, related taxes, handling fees, and direct expenses incurred to bring the asset to a saleable
status; the expected future cash flow of the asset is determined according to the present value of
expected future cash flow generated during the continuous use of the asset and at the time of final
disposal, and an appropriate discount rate is selected to determine the discounted amount.
The asset impairment provision is calculated and determined on the basis of individual assets.
If it is difficult to estimate the recoverable amount of an individual asset, the asset group to which
the asset group belongs determines the recoverable amount of the asset group. An asset group is
the smallest asset portfolio that can independently generate cash inflows.
The goodwill presented separately in the financial statements will be allocated to the asset
group or combination of asset groups that is expected to benefit from the synergy effect of the
business combination during the impairment test. If the test results indicate that the recoverable
amount of the asset group or combination of asset groups containing the allocated goodwill is lower
than its book value, the corresponding impairment loss is recognized. The amount of impairment
loss is offset against the book value of goodwill allocated to the asset group or combination of asset
groups, and then proportionally based on the proportion of the book value of other assets in the
asset group or combination of asset groups other than goodwill.
Goodwill and intangible assets with indefinite useful life are tested for impairment at least at
the end of each year.
Once assets impairment loss is recognised, it will not be reversed in the future period.
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28. Long-term deferred expenses
√适用 □不适用
Long-term deferred expenses are accounted for based on actual expenditures and amortized
evenly over the benefit period or the prescribed period. If the long-term deferred expense item
cannot benefit the future accounting period, all the amortized value of the item that has not been
amortized shall be transferred to profit or loss for the current period, of which:
Improvement expenditures incurred on leased fixed assets shall be amortized evenly over the
remaining useful life of the leased assets if it can be reasonably determined that the ownership of
the leased assets will be obtained at the expiration of the lease term. If it cannot be reasonably
determined that the ownership of the leased asset can be obtained at the expiration of the lease
term, it shall be amortized equally over the shorter of the remaining lease term and the remaining
useful life of the leased asset.
The decoration costs incurred by the leased fixed assets, if it can be reasonably determined
that the ownership of the leased assets will be obtained at the expiration of the lease term, shall be
amortized equally between the interval between two decorations and the shorter period of the
remaining useful life of the leased assets. If it cannot be reasonably determined that the ownership
of the leased asset can be obtained at the expiration of the lease term, the leased asset shall be
amortized equally over the shorter of the interval between two decorations, the remaining lease
term and the remaining useful life of the leased asset.
29. Contract liabilities
√适用 □不适用
Contract liabilities is the Company's obligation to transfer goods to customers for the
consideration that has been received or receivable from customers. The Company presented the
net amount of contract assets offsetting with contract liabilities when they are aroused in the same
contract.
30. Employee benefits
(1). Accounting treatment of short-term employee benefits
√适用 □不适用
Employee benefits refer to all forms of consideration or compensation given by the Company
in exchange for service rendered by employees or for the termination of employment relationship.
Employee benefits include short-term employee benefits, post-employment benefits, termination
benefits and other long-term employee benefits. Benefits provided to the employee’s spouse,
children, dependents, family members of deceased employees, or other beneficiaries are also
employee benefits.
According to their liquidities, employee benefits are presented as ”employee benefits payable”
and “long-term employee benefits payable” on the balance sheet.
In the accounting period in which employees have rendered services, the Company recognized
the employee wages, bonus, social security contributions according to regulations such as medical
insurance, work injury insurance and maternity insurance as well as housing funds as liability, and
charged to profit or loss for the current period or cost of relevant assets. If employee benefits are
non-monetary benefits, if they can be measured reliably, they shall be measured at fair value. If the
liability is not expected to be settled wholly in twelve months after the balance sheet date, and the
amount is significant, the liability is measured at the discounted amount.
(2). Accounting treatment of Post-employment benefits
√适用 □不适用
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Post-employment benefit plan includes defined contribution plans and defined benefit plans.
Defined contribution plans are post-employment benefit plans under which a corporate pays fixed
contributions into an escrow fund and will have no further obligation. Defined benefit plans are
post-employment benefit plans other than defined contribution plans.
(1) Defined contribution plans
The Company pays basic pension insurance and unemployment insurance for employees in
accordance with the relevant regulations of the current government. In the accounting periods
which employees rendered services, the amount of defined contribution plan is recognized as
liability and charged to profit or loss for the current period or cost of relevant assets.
(3). Accounting treatment of employee termination benefits
√适用 □不适用
Termination benefits is recognized on the earlier of either the Company cannot unilaterally
withdraw the termination benefits provided by the labor relationship cancellation plan or the
redundancy proposal, and the Company recognises the costs or expenses related to the
restructuring related to the payment of the termination benefits. Termination benefits expenses
are included in profit or loss for the current period. However, if the termination benefits are not
expected to be fully paid within twelve months after the end of this reporting period, it is treated
as other long-term employee benefits.
Employee internal retirement plans are handled on the same principle as the above dismissal
benefits. The Company will include the salary and social insurance contribution of early retired
personnel from the date when the employee ceases to provide services to the normal retirement
date, and shall be included in profit or loss for the current period (termination benefits) when the
conditions for recognising the estimated liabilities are met. Financial compensation after the official
retirement date (such as the normal pension pension) will be treated as post-employment benefits.
(4). Accounting treatment of other long-term employee benefits
√适用 □不适用
Other long-term employee benefits provided by the Company to the employees satisfied the
conditions for classifying as a defined contributions plan; those benefits are accounted for in
accordance with the above requirements relating to defined contribution plan, but the movement
of net liabilities or assets in re-measurement of defined benefit plan is recorded in profit or loss for
the current period or cost of relevant assets.
31. Provision of liabilities
√适用 □不适用
A provision is recognized as a liability when an obligation related to a contingency satisfied all
of the following conditions: (1) The obligation is a present obligation of the Company; (2) It is
probable that an outflow of economic benefits will be required to settle the obligation; (3) The
amount of the obligation can be measured reliably.
Provisions are initially measured at the best estimate of the payment to settle the associated
obligations and consider the relevant risk, uncertainty and time value of money. If the impact of
time value of money is significant, the best estimate is determined as its present value of future
cash outflow. The Company reviews the carrying amount of provisions at the balance sheet date
and adjusts the carrying amount to reflect the best estimate.
The best estimates are divided into the following situations: If the required expenditure exists
in a continuous range (or interval), and the probability of various results in the range is the same,
the best estimate is based on the middle value of the range: namely The average of the lower limit
amount is determined. The required expenditure does not exist in a continuous range (or interval),
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or although there is a continuous range, but the possibility of various results in this range is not the
same, if contingencies involve a single item, the best estimate is based on the amount most likely
to occur; if contingencies involve multiple items, the best estimate is calculated and determined
based on various possible results and related probabilities.
If all or part of the expenses required to pay off the provisions of the Company are expected to
be compensated by a third party, when the compensation amount is basically determined to be
received, it is separately recognized as an asset, and the recognized compensation amount does not
exceed the carrying amount of the provisions.
Carrying amount of the provisions are reviewed on each balance sheet date. If there is solid
evidence that the carrying amount cannot reflect the current best estimate, the carrying amount
shall be adjusted according to the current best estimate.
32. Share-based payments
√适用 □不适用
1. Category of share-based payment
The Company's share-based payment is a transaction that grants equity instruments or
assumes liabilities determined on the basis of equity instruments in order to obtain services
provided by employees (or other parties). Includes Share-based payment settled with equity and
share-based payment settled with cash.
2. Determination method of fair value of equity instruments
(1) If there is an active market, it shall be determined according to the quoted price the active
market; (2) If there is no active market, it shall be determined by using valuation techniques,
including reference to the prices used in recent market transactions conducted by parties who are
familiar with the situation and voluntarily trade, reference to the current fair value, discounted cash
flow method and option pricing model of other financial instruments that are substantially the same.
3. Basis in determination of best estimate of exercisable equity instruments
On each balance sheet date during the vesting period, the Company makes the best estimate
based on the latest information on the number of employees with exercisable rights and other
follow-up information, and corrects the number of equity instruments expected to exercise. On the
exercise date, the number of equity instruments expected to be exercised should be consistent with
the actual exercisable amount.
4. Accounting treatment of share-based payment
(1) Share-based payment settled by equity
If the equity-settled share-based payment is exchanged for employees to provide services, and
the right is available immediately after the grant, the relevant cost or expense will be included in
the fair value of equity instruments on the grant date, and the capital reserve will be adjusted
accordingly. If the exercise right is available only after completing the service within the vesting
period or meeting the prescribed performance conditions, on each balance sheet date during the
vesting period, based on the best estimate of the number of available rights Equity instruments and
the fair value of the equity instruments on its grant date, the services obtained in the current period
are included in the relevant costs or expenses, and the capital reserve is adjusted accordingly. After
the exercisable date, no adjustment will be made to the recognised costs or expenses and the total
owner’s equity.
For the equity-settled Share-based payment is exchanged for the services of the other party, if
the fair value of the services of the other party can be reliably measured, it is measured according
to the fair value of the service of the other party. If the fair value of the other party’s services cannot
be measured reliably but the equity value of equity instruments can be measured reliably, it is
measured in accordance with the fair value of equity instruments on the date of service acquisition,
included in the relevant costs or expenses, and the owners ‘equity is increased accordingly.
(2) Share-based payment settled in cash
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Share-based payment settled in cash in exchange for employee services, and the right to
exercise immediately after the grant, the Company’s fair value of the liabilities assumed are included
in the relevant costs or expenses on the grant date, and the liabilities are increased accordingly.
Share-based payment settled in cash that can be exchanged for employee services after completing
the services within the waiting period or meeting the prescribed performance conditions, based on
the best estimate of the right to exercise on each balance sheet date during the vesting period and
the fair value of the Company’s liabilities, the services obtained in the current period are included
in the relevant costs or expenses and corresponding liabilities. On each balance sheet date and
settlement date before the settlement of the relevant liabilities, the fair value of the liabilities is
remeasured, and the changes are included in profit or loss for the current period.
(3) Modify and terminate share-based payment plan
If the modification increases the fair value of equity instruments granted, the Company will
recognise the increase in the cost of services obtained in accordance with the increase in fair value
of equity instruments. If the modification increases the number of equity instruments awarded, the
Company will recognize the increase in the fair value of equity instruments accordingly as an
increase in access to services. If the Company revises the conditions of exercise rights in a manner
beneficial to employees, the Company considers the revised conditions of exercise rights when
dealing with the conditions of exercise rights.
If the modification reduces the fair value of the equity instruments granted, the Company
continues to recognize the services based on amount of fair value of the equity instruments on the
grant date, regardless of the decrease in the fair value of the equity instruments. If the modification
reduces the number of granted equity instruments, the Company treats the reduction as a
cancellation of the granted equity instruments. If the vesting conditions are modified in a way that
is unfavorable to the employees, the modified vesting conditions shall not be considered when
dealing with the vesting.
If the share-based payment settled by equity is cancelled, it will be treated as an accelerated
exercise on the cancellation date, and the unrecognized amount will be recognised immediately
(Amount that should be recognised in the remaining vesting period is immediately included in profit
or loss for the current period, and capital reserve is also recognised). Employees or other parties
can choose to meet the non-feasible rights conditions but not met within the waiting period, as a
cancellation of equity settlement of share-based payment. However, if a new Equity instrument is
awarded, and the equity instruments granted on the grant date of the new equity instruments are
deemed to replace the equity instruments that were cancelled, then the authorized replacement
equity instruments are processed in the same way as the modification of terms and conditions of
the original equity instruments.
5 ． Involving share-based payment transactions between companies within the scope of
consolidation of the Company, between the Company and the actual controlling party or other
shareholders of the Company, or between the Company and other companies in the group to which
the Company belongs, it is accounted in accordance with the relevant provisions of Article 7 of intra-
group share-based payment of "Interpretation No. 4 of Accounting Standards for Business
Enterprises".
33. Preferred shares, perpetual bonds and other financial instruments
□适用 √不适用
34. Revenue
(1). Accounting policies adopted for revenue recognition and measurement
√适用 □不适用
1. General principles of revenue recognition
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Under the new revenue standard, the Company determine the timing of revenue recognition
on the basis of transfer of control. The Company recognises revenue when it satisfies a performance
obligation in the contract, i.e. when the customer obtains control of the relevant goods or services.
If one of the following conditions is fulfilled, the Company performs its performance obligation
within a certain period; otherwise, it performs its performance obligation at a point of time: (1)
when the customer simultaneously receives and consumes the benefits provided by the Company
when the Company performs its obligations under the contract; (2) when the customer is able to
control the goods in progress in the course of performance by the Company under the contract; (3)
when the goods produced by the Company under the contract are irreplaceable and the Company
has the right to receive payment for performance completed to date during the whole contract term.
For performance obligations performed within a certain period, the Company recognises
revenue by measuring the progress towards complete of that performance obligation within that
certain period. When the progress of performance cannot be reasonably determined, if the costs
incurred by the Company are expected to be compensated, the revenue shall be recognised at the
amount of costs incurred until the progress of performance can be reasonably determined.
For performance obligation performed at a point of time, the Company recognises revenue at
the point of time at which the customer obtains control of relevant goods or services. To determine
whether a customer has obtained control of goods or services, the Company considers the following
indications: (1) the Company has the current right to receive payment for the goods, which is when
the customer has the current payment obligations for the goods; (2) the Company has transferred
the legal title of the goods to the customer, which is when the client possesses the legal title of the
goods; (3) the Company has transferred the physical possession of goods to the customer, which is
when the customer obtains physical possession of the goods; (4) the Company has transferred all of
the substantial risks and rewards of ownership of the goods to the customer, which is when the
customer obtain all of the substantial risks and rewards of ownership of the goods to the customer;
(5) the customer has accepted the goods; (6) other information indicates that the customer has
obtained control of the goods.
When a contract contains two or more performance obligations, the Company will allocate the
transaction price to each individual performance obligation in accordance with the relative
proportion of the stand-alone selling price of the goods promised by each individual performance
obligation on the commencement date of the contract. Revenue is recognised on the transaction
price allocated to each individual performance obligation. The transaction price is the amount of
consideration that the Company expects to be entitled to receive due to the transfer of goods to
customers. The amount collected by the Company on behalf of a third party and the amount that
the Company expects to return to the customer are accounted for as a liability and not included in
the transaction price. For contracts that contain variable consideration, the Company estimates the
amount of consideration to which it will be entitled using either the expected value method or the
most likely amount. The estimated amount of variable consideration is included in the transaction
price only to the extent that it is highly probable that such an inclusion will not result in a significant
revenue reversal in the future when the uncertainty associated with the variable consideration is
subsequently resolved. For contracts that contain significant financing components, the Company
determines the transaction price based on the amount payable under the assumption that the
customer pays that amount payable in cash when the control of goods or services is transferred to
the customer. The difference between the transaction price and the contract consideration shall be
amortised within the contract period using effective interest rate. For contracts where the period
between payment and transfer of the associated goods or services is less than one year, the Group
applies the practical expedient of not adjusting the transaction price for any significant financing
component.
2. Specific revenue recognition principle
Based on actual situation, the Company recognizes revenue when the following conditions are
met:
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(1) Sales of product: Domestic sales revenue is recognised when the control of the product has
been transferred to the purchaser, the continued management and control of the product is no
longer implemented, the payment has been recovered or the evidence for payment has been
obtained and the relevant economic benefits are likely to flow in, and the cost of the product can
be reliably measured. Export sale revenue is recognised on the export date shown on the export
declaration of the goods after the goods are shipped according to the customer's requirements, the
payment has been recovered or the receipt of the payment has been obtained and the relevant
economic benefits are likely to flow in, the cost of the product can be reliably measured.
(2) Futures brokerage business: The net transaction fee charged by the Company from the
customers (deducting the transaction fee payable by the Company to exchange company) is
recognized as the net fee income when the daily payment is settled with the customer.
(2). Differences in accounting policies for revenue recognition due to the
adoption of different business models for similar businesses
□适用 √不适用
35. Contract cost
□适用 √不适用
35. Government grants
√适用 □不适用
1. Category of government grants
Government grants refer to the Company's obtain of monetary or non-monetary assets from
the government without consideration. It is divided into government grants related to assets and
government grants related to income.
Government grants related to assets refer to government grants acquired by the Company and
used to purchase or construct or form long-term assets, including financial grants for the purchase
of fixed assets or intangible assets, and financial discounts for dedicated loans for fixed assets, etc . ;
Government grants related to income refer to government grants other than government grants
related to assets. Government grants should be distinguished between that related to assets and
related to income and apply different accounting treatment. If it is difficult to distinguish, the overall
classification is classified as government grants related to income
The specific standards adopted by the Company in the classification of government grants are:
(1) The grant objects specified in the Government grants document are used to purchase or
construct or form long-term assets, or the expenditures of the subsidies are mainly used to purchase
or construct or form long-term assets, they are classified as government grants related to assets.
(2) The government grants obtained according to the government documents that are all or
mainly used to compensate the expenses or losses in the future period or the government grants
that have occurred, and are classified as government grants related to income.
(3) If the government document does not clearly specify the target of the grant, the
Government grants will be divided into Government grants of Related to assets or Government
grants of Related to income in the following ways: 1) Government documents specify the specific
project targeted by the grant, the expenditure amount is divided by relative ratio of that forming
the asset and the expenditure amount included in the expense according to the budget of this
particular project. The ratio needs to be reviewed on each balance sheet date and changed if
necessary.2) Government documents only use general expressions and do not indicate specific
items, it is regarded as government grants related to income.
2. Timing of recognition of government grants
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The Company usually recognises and measures the government grants according to the actual
amount received when they are actually received. However, for the end of the period, there is solid
evidence that it can meet the relevant conditions stipulated by the financial support policy. It is
expected that the financial support funds can be received, and it is measured according to the
Amount receivable. Government grants measured according to Amount receivable should also meet
the following conditions:
(1) It is based on the financial support item officially released by the local financial department
and proactively disclosed in accordance with the “Government Information Disclosure Regulations”
and its financial fund administrative methods, and its administrative methods should be inclusive
(any enterprise that meets the prescribed conditions can apply), not specifically for specific
enterprises;
(2) The Amount of the subsidy receivable has been confirmed by the authority government
department, or it can be reasonably calculated according to the relevant regulations of the officially
released financial fund management method, and it is expected that there will be no significant
uncertainty in its amount;
(3) The relevant grant approval has clearly promised the payment period, and the payment is
guaranteed by the corresponding financial budget, so it can be reasonably guaranteed that it can
be received within the specified period;
(4) According to the specific situation of the Company and the subsidy, other relevant
conditions (if any) that should be met.
3. Accounting treatment of government grants
Government grants are monetary assets, measured by the amount received or receivable; non-
monetary assets, measured by the fair value; if the fair value of non-monetary assets cannot be
reliably obtained, measured by the nominal amount. Government grants measured in nominal
amount are directly included in profit or loss for the current period.
The Company adopts the gross method for Government grants, the specific accounting
treatment is as follows:
Government grants related to assets are recognized as deferred income, and are included in
profit or loss for the current period in a reasonable and systematic way within the useful life of the
relevant assets. When related assets are sold, transferred, scrapped or damaged before the end of
the useful life, the relevant deferred income balance is transferred to the profit or loss of the asset
disposal period.
Government grants related to income, which are used to compensate the related cost or loss
of the Company in the future period, are recognized as deferred income, and are included in profit
or loss for the current period during the period when the related cost or loss is recognized. The
compensation for the related costs or losses incurred by the enterprise is directly included in profit
or loss for the current period.
The policy discount loans obtained by the Company are divided into the following two
situations and are separately accounted for:
(1) if the government makes the payment of subsidy to the bank offering the loan, the actual
amount of money received by the loan is recorded as the book amount, and the borrowing costs
are calculated according to the loan principle and the preferential interest rate of the policy.
(2) If the government makes the payment of subsidy directly to the Company, the interest
subsidy is reducing the borrowing costs.
If the recoginsed government grants need to be returned, the returned will be accounted in
the current period for in the following situations:
(1) that initially deducted the carrying amount of the asset, is recognized by increasing the
carrying amount of the asset;
(2) if there exists of the related deferred income balance, then the deferred income balance is
reduced by the amount repayable, any excess is charged to profit or loss for the current period.
(3) In other cases, it is directly included in profit or loss for the current period.
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The distinguishing principles of government grants included in different profit or loss items are:
Government grants related to the daily activities of the Company, included in other income or
offsetting related costs according to the economic business substance; Government grants not
related to the daily activities of the Company, included in non-operating income and expenses.
37. Deferred tax assets and deferred tax liabilities
√适用 □不适用
1. Recognition and measurement of deferred tax assets and deferred tax liabilities
The Company uses the balance sheet liability method to recognize deferred income tax based
on the temporary difference between the carrying amount of assets, liabilities, and the balance
sheet date and the tax base. The Company's current income tax and deferred income tax are
included in profit or loss for the current period as income tax expenses or credit, but excluding
income tax arising from: (1) business combination; (2) transactions or matter recognised directly in
owners' equity; (3) according to the "Accounting Standards for Business Enterprises No. 37 -
Presentation of Financial Instruments" and other regulations, the dividend payment of financial
instruments classified as equity instruments can be deducted before corporate income tax
according to tax policies and the distributed profits come from transactions or matters previously
recognized in owners’ equity.
The Company recognizes a deferred tax asset for the carry forward of deductible temporary
differences, deductible losses and tax credits to subsequent periods, to the extent that it is probable
that future taxable profits will be available against which the deductible temporary differences,
deductible losses and tax credits can be utilized, except for those incurred in the following
transactions:
(1) This transaction is not a business combination, and neither affects accounting profits nor
affects taxable income (or deductible losses) when it occurs. Additionally, the initially recognized
assets and liabilities do not generate equal taxable temporary differences and deductible temporary
differences;
(2) The deductible temporary differences associated with investments in subsidiaries,
associates and joint ventures, the corresponding deferred tax asset is recognized when both of the
following conditions are satisfied: it is probable that the temporary difference will reverse in the
foreseeable future and it is probable that taxable profits will be available in the future against which
the temporary difference can be utilized.
All the taxable temporary differences are recognized as deferred tax liabilities except for those
incurred in the following transactions:
(1) Initial recognition of goodwill, or initial recognition of assets or liabilities arising from
transactions with the following characteristics: the transaction is not a business combination, and
neither affects accounting profits nor affects taxable income (or deductible losses) at the time of
the transaction, and the initially recognized assets and liabilities do not generate equal taxable
temporary differences and deductible temporary differences;
(2) The taxable temporary differences associated with investments in subsidiaries, associates
and joint ventures, and the Company is able to control the timing of the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The difference between the carrying amount of assets and liabilities and their tax base (If the
items that have not been recognized as assets and liabilities can be determined in accordance with
the provisions of the tax law, the tax base, the difference between the tax base and the book
amount), is calculate and recognized deferred tax assets or deferred tax liabilities according to the
applicable tax rate during the period when the assets are expected to be recovered or the liabilities
are paid off.
For individual transactions that are not business combinations and do not affect accounting
profits or taxable income (or deductible losses) at the time of transaction, and the initial recognition
of assets and liabilities results in equal taxable temporary differences and deductible temporary
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differences, the company recognizes the corresponding deferred income tax liabilities and deferred
income tax assets at the time of transaction for the taxable temporary differences and deductible
temporary differences arising from the initial recognition of assets and liabilities in the transaction.
Deferred tax assets recognsied are limited to the amount of taxable income that is likely to be
used to offset the deductible temporary differences. On the balance sheet date, if there is solid
evidence that it is likely to obtain sufficient taxable income in the future period to offset the
deductible temporary difference, the deferred tax assets that have not been recognized in the
previous accounting period are recognized. The carrying amount of deferred tax assets is reviewed
regularly. If it is likely that sufficient taxable income cannot be obtained in the future to offset the
benefits of deferred tax assets, the carrying amount of deferred tax assets will be written down.
When it is likely to obtain sufficient taxable income, the amount written down will be reversed.
2. When the Company has the legal right to settle on a net basis and intends to settle on a net
basis or acquire assets and settle liabilities simultaneously, the Company's current income tax assets
and current income tax liabilities are presented in net amounts after offset.
When the Company have the legal right to settle the current income tax assets and current
income tax liabilities in net, and the deferred tax assets and deferred tax liabilities are related to the
income tax levied by the same tax collection department on the same taxpayer or different
taxpayers, but in each future period of significant deferred tax assets and liabilities reversal, the
taxpayer involved intends to settle the current income tax assets and liabilities in net amount or
obtain assets and settle liabilities at the same time and deferred tax liabilities are presented in net
amount after offset.
38. Leases
√适用 □不适用
Leasing refers to a contract in which the lessor transfers the right to use an asset to the lessee
for a certain period of time in exchange for consideration.
On the contract commencement date, the Company assesses whether the contract is a lease
or contains a lease. If one party in the contract transfers the right to control the use of one or more
identified assets for a certain period of time in exchange for consideration, then the contract is a
lease or contains a lease.
If the contract includes multiple separate leases, the lessee and lessor will split the contract
and perform accounting for each separate lease separately. If the contract includes both leases and
non-leases, the lessee and lessor will split the leases and non-leases.
As a lessee, the basis for determining and accounting for simplified processing of short-term
leases and low-value asset leases
√适用 □不适用
(1) Right-of-use assets
At the commencement date of lease term, the Company recognizes right-of-use assets for
leases (excluding short-term leases and leases of low-value assets). Right-of-use assets are
measured initially at cost. Such cost comprises: the amount of the initial measurement of lease
liability; lease payments made at or before the inception of the lease less any lease incentives
already received (if there is a lease incentive); initial direct costs incurred by the Company; the costs
of the Company expected to be incurred for dismantling and removing the leased asset, restoring
the site on which the leased asset is located or restoring it to the condition as agreed in the terms
of the lease.
The Company accrues depreciation for the right-of-use assets on straight-line method. If there
is reasonable certainty that the Company will obtain the ownership of a leased asset at the end of
the lease term, the Company depreciates the right-of-use asset from the commencement date to
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the end of the useful life of the underlying asset; otherwise, the Company depreciates the leased
asset from the commencement date to the earlier of the end of the useful life of the right-of-use
asset or the end of the lease term.
(2) Lease liabilities
At the commencement date of lease term, the Company recognizes lease liabilities for leases
(excluding short-term leases and leases of low-value assets). Lease liabilities are initially measured
based on the present value of outstanding lease payment. Lease payment include: fixed payments
(including in-substance fixed payments), less any lease incentives (if there is a lease incentive);
variable lease payment that are based on an index or a rate; amounts expected to be payable under
the guaranteed residual value provided by the Company; the exercise price of a purchase option if
the Company is reasonably certain to exercise that option; payments of penalties for terminating
the lease option, if the lease term reflects that the Company will exercise that option. The Company
adopts the interest rate implicit in the lease as the discount rate. If that rate cannot be determined
reasonably, the Company’s incremental borrowing rate is used.
The Company shall calculate the interest expenses of lease liabilities over the lease term at the
fixed periodic interest rate, and include it into profit or loss in the period or cost of relevant assets.
Variable lease payments not included in the measurement of lease liabilities are charged to profit
or loss in the period or cost of relevant assets in which they actually arise.
After the commencement date of lease term, if the following circumstances occur, the
Company re-measures the lease liability in accordance with the lease payments after modification:
when the assessment results of the purchase, extension or termination option or the actual exercise
condition changes, or the actual exercise of the lease renewal option or the lease termination option
is inconsistent with the original assessment result; Changes in the expected payable amount based
on guaranteed residual value; Changes in the index or ratio used to determine lease payments. For
the lease modification that cause the lease liabilities to be remeasured, the Company adjusts the
carrying value of the right-of-use assets accordingly. If the carrying value of the right-of-use asset
has been reduced to zero, but the lease liability still needs to be further reduced, the Company will
include the remaining amount in the profit or loss for the current period.
(3) Short-term leases and leases of low-value assets
The right-of-use asset and lease liability are not recognized by the Company for short-term
leases and leases of low-value assets, and the relevant lease payments are included in profit or loss
in the period or costs of relevant assets in each period of the lease term on a straight-line basis.
Short-term leases are defined as leases with a lease term of not more than 12 months from the
commencement date and excluding a purchase option. Leases of low-value assets are defined as
leases with underlying low value when new. Where the Company subleases or expects to sublease
a leased asset, the original lease shall not belong to a lease of low-value asse
(4) Lease modification
The Company will account for the lease modification as a separate lease if the lease changes
and meets the following conditions: the lease change expands the scope of lease by increasing the
rights to use one or more leased assets; the increased consideration and the individual price of the
expanded part of the lease are equivalent to the amount adjusted for the contract.
If the lease change is not accounted for as a separate lease, the Company shall re-allocate the
consideration of a changed contract, re-determine the lease term, and remeasure the lease
liabilities by the present value calculated from the changed lease payments and revised discount
rate on the effective date of the lease change.
Lease classification criteria and accounting treatment methods for lessors
√适用 □不适用
At the commencement date of lease term, the Company classifies leases as financing leases
and operating leases. A financing lease is a lease that transfers substantially all the risks and rewards
incidental to ownership of a leased asset, irrespective of whether the ownership of the asset is
eventually transferred. An operating lease is a lease other than a finance lease.
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As a sub-leasing lessor, the Company classifies the sub-leases based on the right-of-use assets
of the original leases. If the original lease is a short-term lease and the Company chooses not to
recognize the right-of-use asset and lease liability for the original lease, the Company classifies the
sublease as an operating lease.
(1) Accounting treatment of operating leases
The lease payments derived from operating leases are recognized as rental income on a
straight-line basis over the respective lease terms. Initial direct costs relating to operating leases to
be incurred by the Company shall be capitalized and then included in the current income by stages
at the same base as the recognition of rental income over the lease term. The variable lease
payments not included in the measurement of lease payments shall be recognized in profit or loss
in the period in which they are occurred.
(2) Accounting treatment of financing leases
At the commencement date of lease term, the Company recognizes financing lease receivable
and derecognizes the underlying assets. The Company initially measures financing lease receivable
in the amount of net investment in the lease. Net investment in the lease is the sum of present value
of unguaranteed residual value and the lease payments receivable at the commencement date of
lease term, discounted at the interest rate implicit in the lease.
The Company calculates and recognizes interest income in each period during the lease term,
based on a constant periodic interest rate. The derecognition and impairment losses of financing
lease receivable are accounted for in accordance with this note. Variable lease payments not
included in the measurement of the net investment in the lease are included in profit or loss in the
period in which they are occurred.
3. Sale and leaseback transactions
The Company determines whether the asset transfer in the sale and leaseback transaction is a
sale in accordance with principles described in this note.
(1) As a lessee
If the asset transfer in the sale and leaseback transaction is a sale, the Company, as a lessee,
measures the right-of-use assets formed by the sale and leaseback based on the part of the book
value of the original assets related to the use rights obtained from the leaseback, and recognize
relevant gains or losses only for the right to transfer to the lessor; if the transfer of assets in the sale
and leaseback transaction is not a sale, the Company, as a lessee, continues to recognize the
transferred assets and recognizes a financial liability equal to the transfer income. For details of
accounting treatment for financial liabilities, please see this note.
(2) As a lessor
If the transfer of assets in the sale and leaseback transaction is a sale, the Company, as a lessor,
accounts for asset purchase, and accounts for asset lease in accordance with policies in the
aforementioned “2. The Company as a lessor”; if the transfer of assets in the sale and leaseback
transaction is not a sale, the Company, as a lessor, does not recognize the transferred assets, but
recognizes a financial asset equal to the transfer income. For details of accounting treatment for
financial assets, please see this note.
39. Other significant accounting policies and accounting estimates
√适用 □不适用
(1)Fair value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The Company measures
related assets or liabilities at fair value assuming the assets or liabilities are exchanged in an orderly
transaction in the principal market; in the absence of a principal market, assuming the assets or
liabilities are exchanged in an orderly transaction in the most advantageous market. Principal
market (or the most advantageous market) is the market that the Company can normally enter into
a transaction on measurement date.
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The Company uses valuation techniques that are appropriate in the circumstances and for
which sufficient data are available to measure fair value, considering the ability of a market
participant to generate an economic benefit from the best use of the asset, or the ability to generate
an economic benefit from the sale of the asset to another market participant who can put it to the
best use, maximizing the use of relevant observable inputs, and using unobservable inputs only if
the observable inputs aren’t available or impractical.
Fair value level for assets and liabilities measured or disclosed at fair value in the financial
statements are determined according to the significant lowest level input to the entire
measurement: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets
or liabilities that the Company can access at the measurement date; Level 2 inputs are inputs other
than quoted prices included within Level 1 that are observable for the assets or liabilities, either
directly or indirectly; Level 3 inputs are unobservable inputs for the assets or liabilities, including
interest rates that cannot be directly observed or verified by observable market data, stock volatility,
future cash flows of disposal obligations assumed in business combinations, financial forecasts
made using own data, etc. On each balance sheet date, the company reassesses the assets and
liabilities that are continuously measured at fair value recognized in the financial statements to
determine whether there is a conversion between the fair value measurement levels.
(2) Share repurchase
If the shares of the company are purchased for reasons such as reducing registered capital or
rewarding employees, the actual amount paid shall be treated as treasury shares. If the repurchased
shares are canceled, the difference between the total face value of the shares calculated based on
the par value of the canceled shares and the number of canceled shares and the actual amount paid
for the repurchase shall be used to offset the capital reserve, if the capital reserve is insufficient for
offsetting, and offset against retained earnings. If rewarding the repurchased shares to the
employees of the company belongs to equity-settled share payment, when the employees exercise
their rights to purchase the company's shares and receive the price, the cost of the treasury shares
delivered to the employees will be transferred out of the capital reserve (other capital reserve)
cumulative recorded during the waiting period.
(3)Hedging
1. Hedging includes fair value hedging / cash flow hedging / overseas operating net investment
hedging.
2. For hedging instruments that meet the following conditions, hedging accounting methods
are used: (1) The hedging relationship consists only of eligible hedging instruments and hedged
instruments; (2) At the beginning of hedging, the Company formally designated hedging instrument
and hedged items, and prepared written documents on the hedging relationship and the Company's
risk management strategy and risk management objectives for hedging; (3) The hedging relationship
meets the hedging validity requirement.
When the hedging meets the following conditions at the same time, the Company determines
that the hedging relationship meets the requirements for hedging effectiveness: (1) There is an
economic relationship between the hedged item and the hedging instrument; (2) Among the
changes in value caused by the economic relationship between hedged items and hedging
instruments, 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 of the Company to the actual
number of hedging instruments, but does not reflect the imbalance of the relative weight of the
hedged items and hedging instruments.
The Company continuously evaluates whether the hedging relationship meets the
requirements of hedging effectiveness on the hedging start date and later. The hedging relationship
no longer meets the hedging effectiveness requirements due to the hedging ratio, but if the risk
management objectives of the designated hedging relationship have not changed, the Company will
rebalance the hedging relationship.
3. Accounting treatment of hedging
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(a) Fair value hedge
1) Gains or losses from hedging instruments are included in profit or loss for the current period.
If hedging instruments are hedged against non-tradable equity instruments (or their components)
that are selected to be measured at fair value and whose changes are included in other
comprehensive income, the gains or losses generated by the hedging instruments are included in
other comprehensive income.
2) Profit or loss for the current period of the hedged item due to risk exposure is calculated as
profit or loss for the current period, while adjusting the carrying amount of the confirmed hedged
item not measured at fair value. Hedged items are debt instruments (or their components) that are
measured at fair value and whose changes are included in other comprehensive income. The gains
or losses resulting from the hedged risk exposure are included in profit or loss for the current period,
without adjustment its carrying amount; If the hedged item is a non-tradable equity instrument
investment (or its component) measured at fair value and its changes are included in other
comprehensive income, the gain or loss resulting from the hedged risk exposure is included in other
comprehensive income, not adjusting its carrying amount.
If the hedged item is an unrecognized commitment (or its component), the cumulative change
in fair value due to the hedged risk after the hedge relationship is designated is recognized as an
asset or liability, and the relevant gains or losses are included profit or loss for each relevant period.
When fulfilling the definite commitment to obtain assets or assume liabilities, the initial recognition
amount of the asset or liability is adjusted to include the cumulative change in the fair value of the
confirmed hedged item.
If the hedged item is a financial instrument (or a component thereof) measured at amortized
cost, the adjustment made by the Company to the carrying amount of the hedged item will be
amortized at the actual interest rate recalculated on the amortization date and included in profit or
loss for the current period. If the hedged item is a debt instrument measured at fair value and its
changes are included in other comprehensive income (components thereof), the accumulated
recognized hedging gains or losses are amortized in the same manner and included in profit or loss
for the current period, but does not adjust the carrying amount of the debt instrument (or its
components).
(b) Cash flow hedge
1) The part of the hedging instrument gains or losses that belongs to the effective hedging is
included in other comprehensive income as a cash flow hedge reserve, and the invalid part is
included in profit or loss for the current period. The amount of cash flow hedge reserve is recognised
according to the lower of the absolute value of the following two items: ①Accumulated gains or
losses of hedging instruments since hedging;②The cumulative change in the present value of the
expected future cash flow of the hedged item since hedging.
2) The hedged item is an expected transaction, and the expected transaction causes the
Company to subsequently recognize a non-financial asset or non-financial liability, or the expected
transaction of non-financial assets and non-financial liabilities forms a certain commitment
applicable to fair value hedge accounting, the Company transfers out the cash flow hedging reserve
amount originally recognized in other comprehensive income and includes it in the initial
recognition amount of the asset or liability.
3) Other cash flow hedges, the amount of cash flow hedge reserves originally included in other
comprehensive income, are transferred out during the same period when the hedged expected
transaction affects profit or loss, and are included in profit or loss for the current period.
(c) Net investment hedges for overseas operations
The portion of the gains or losses formed by hedging instruments that are effective hedges is
included in other comprehensive income, and when disposing of overseas operations, they are
transferred out and included in profit or loss for the current period The part of the loss that belongs
to the invalid hedge is included in profit or loss for the current period.
(4) Restricted shares
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In the equity incentive plan, the Company grants restricted stock to the motivated employee.
The motivated employee subscribes for the stock first. If the unlocking conditions specified in the
equity incentive plan are not subsequently met, the Company repurchases the stock at the price
agreed in advance. If the restricted stock issued to employees has completed the capital increase
procedures such as registration according to relevant regulations, on the grant date, the Company
will recognise the share capital and capital reserve (Share capital premium) based on the
subscription paid by the employees. Treasury shares and other payables are recognize for the
repurchase obligations.
(5) Significant accounting judgments and estimates
In the process of applying the accounting policy of the Company, due to the inherent
uncertainty of the operating activities, the Company needs to make judgments, estimates and
assumptions on the carrying amount of the report items that cannot be accurately measured. These
judgments, estimates and assumptions are based on the Company's management's past historical
experience and made on the basis of considering other relevant factors. These judgments, estimates
and assumptions will affect the reported amount of income, expenses, assets and liabilities and the
disclosure of contingent liabilities on the balance sheet date. However, the actual results caused by
the uncertainty of these estimates may be different from the current estimates of the Company's
management, which will cause significant adjustments to the carrying amount of assets or liabilities
affected in the future. The Company regularly reviews the aforementioned judgments, estimates
and assumptions on the basis of continuous operation. If the changes in accounting estimates only
affect the current period of change, the number of impacts will be recognised in the current period
of change. If the changes affect both the current period and the future period, the number of
impacts will be confirmed in the current period and future period of change. As of the balance sheet
date, the Company needs to make judgments, estimates and assumptions on the financial
statement items as follows:
1. Classification of lease
When the company acts as a lessor, according to the provisions of the Accounting Standards
for Business Enterprises No. 21 - Leases, leases are classified as operating leases and financial leases.
When determining the classification, management needs to make analysis and judgment on
whether all risks and rewards related to the ownership of leased assets have been substantially
transferred to the lessee.
2. Impairment of financial instruments
The Company uses the expected credit loss model to assess impairment of receivables and debt
investments measured at amortized cost, receivables financing measured at fair value and changes
included in other comprehensive income, and other debt investments. The use of the expected
credit loss model involves significant management judgments and estimates. The key parameters
of expected credit loss measurement include default probability, default loss rate and default risk
exposure. The Company considers the quantitative analysis of historical statistical data and forward-
looking information to establish default probability, default loss rate and default risk exposure
model. The difference between the actual financial instrument impairment result and the original
estimate will affect the carrying amount of the financial instrument and the accrual or reversal of
credit impairment losses during the period when the estimate is changed.
3. Provision for decline in value in inventories
According to Inventories accounting policy, the Company measures according to the lower of
cost and net realizable value. For inventories whose cost is higher than net realizable value and
obsolete and unsalable, provision for decline in value of inventories is recognized. Impairment to
net realizable value is based on the assessment of the marketability of Inventories and its net
realizable value. Appraisal of Inventories impairment requires management to make judgments and
estimates based on factors such as the purpose of holding Inventories and the impact of events after
the balance sheet date. The difference between the actual result and the original estimate will affect
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2023 Annual Report
the carrying amount of Inventories and the accrual of Inventory Provision for decline in value or
return during the period when the estimate is changed.
4. Impairment of non-financial non-current assets
On the balance sheet date, the Company judges whether there is any sign of possible
impairment of Non-current assets other than financial assets. For intangible assets with uncertain
service life, in addition to the annual impairment test, when there are signs of impairment, an
impairment test is also conducted. Non-current assets other than financial assets are tested for
impairment when there are signs that their book amount is not recoverable.
When the carrying amount of an asset or asset group is higher than the recoverable amount,
which is the higher of the fair value minus the disposal cost and the present value of the expected
future cash flow, it indicates that an impairment has occurred.
The net value of fair value minus disposal expenses is determined by referring to the sales
agreement price or observable market price of similar assets in fair transactions, minus the
incremental costs that can be directly attributed to the disposal of the asset. When predicting the
present value of future cash flows, it is necessary to make a significant judgment on the output,
selling price, related operating costs of the asset (or asset group), and the discount rate used in
calculating the present value. When estimating the recoverable amount, the Company will use all
relevant information that can be obtained, including the prediction of production, selling price and
related operating costs based on reasonable and supportable assumptions.
The Company assesses whether goodwill is impaired at least annually and requires an estimate
of the use value of the asset group to which goodwill is allocated. When estimating the value in use,
the Company needs to estimate the future cash flow from the asset group, and at the same time
choose an appropriate discount rate to calculate the present value of the future cash flow.
5. Depreciation and amortization
After considering the residual value of the investment properties measured at cost model, fixed
assets and Intangible assets, the Company depreciates and amortizes it according to the straight-
line method during the service life. The Company regularly reviews the service life to determine the
amount of depreciation and amortization expenses to be included in each reporting period. The
service life is determined by the Company based on the previous experience of similar assets and
the expected technical update. If the previous estimates change significantly, the depreciation and
amortization expenses will be adjusted in the future.
6. Deferred tax assets
To the extent that there is likely to be enough taxable profits to offset losses, the Company
recognizes deferred tax assets for all unutilized tax losses. This requires the Company's management
to use a lot of judgment to estimate the time and amount of future taxable profits, combined with
tax planning strategies to determine the amount of deferred tax assets that should be recognised.
7. Income tax
In the normal business activities of the Company, there are certain uncertainties in the final tax
treatment and calculation of some transactions. Whether certain items can be paid before taxes
requires the approval of the tax authorities. If the final determination result of these tax matters is
different from the originally estimated amount, the difference will have an impact on the current
income tax and deferred income tax during the final determination period.
8. Fair value measurement
Certain assets and liabilities of the Company are measured at fair value in the financial
statements. When estimating the fair value of an asset or liability, the Company uses the observable
market data available; if the Level 1 input value is not available, a third-party qualified assessment
agency is employed for valuation. The Company's management works closely with it to determine
the appropriate valuation techniques and input values for related models. Relevant information
about the valuation techniques and input values used in the process of determining the fair value
of various assets and liabilities are disclosed in this note.
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40. Changes in significant accounting policies and accounting estimates
(1). Changes in significant accounting policies
√适用 □不适用
Unit: Yuan Currency: RMB
Name of the
report item that is Affected
The content and reason of accounting policy changes
significantly amount
affected
The Ministry of Finance issued the "Accounting Standards for
Business Enterprises Interpretation No. 16" (Cai Kuai [2022]
No. 31, hereinafter referred to as "Interpretation No. 16") on
November 30, 2022. The company will implement the
provisions of "The accounting treatment of deferred income
tax related to assets and liabilities arising from a single
transaction that is not applicable to initial recognition
exemption" from January 1, 2023.
Unless otherwise specified, the data listed in this section are in RMB yuan.
【Note1】The accounting treatment of deferred income tax related to assets and liabilities arising
from a single transaction that does not apply to the exemption from initial recognition is explained
in the 16th provision. For a single transaction that is not a business combination and does not affect
accounting profits or taxable income (or deductible losses) at the time of the transaction, and the
initial recognition of assets and liabilities results in equal taxable temporary differences and
deductible temporary differences, the provisions of Accounting Standards for Business Enterprises
No. 18 - Income Tax regarding the exemption from initial recognition of deferred income tax
liabilities and deferred income tax assets do not apply. The enterprise recognizes the corresponding
deferred income tax liabilities and deferred income tax assets separately at the time of the
transaction for the taxable temporary differences and deductible temporary differences arising
from the initial recognition of assets and liabilities in the transaction.
The Company will implement the provisions of Interpretation No. 16, "Accounting Treatment for
Deferred Income Tax Not Applicable to Initial Recognition Exemption for Assets and Liabilities
Arising from a Single Transaction," starting from January 1, 2023. The initial implementation of this
interpretation will have no significant impact on the financial statements.
(2). Changes in significant accounting estimates
□适用 √不适用
(3). From 2023, the first implementation of new accounting standards or
interpretations of standards involving adjustments to the financial
statements at the beginning of the year of initial implementation
□适用 √不适用
41. Others
□适用 √不适用
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VI. Taxation
1. Major taxes and their tax rates
Major taxes and their tax rates
√适用 □不适用
Taxes Tax basis Tax rate %
Value-added tax Value-added generated during Calculated and paid according to tax
the sale of goods or provision rates of 3%, 5%, 6%, 9%, and 13%. The
of taxable services export goods implement the tax policy
of "exemption, credit and refund", and
the tax refund rate is 13%.
Consumption tax taxable sales volume Gasoline: 1.52 yuan/liter
Diesel: 1.20 yuan / liter
Aviation kerosene: 1.20 yuan / liter
Naphtha: 1.52 yuan/liter
Solvent oil：1.52 yuan/liter
lubricating oil: 1.52 yuan/liter
Fuel oil: 1.20 yuan / liter[note1]
Urban maintenance and Turnover tax payable 7%, 5%, etc.
construction tax
Education surcharge Turnover tax payable 3%
Local education surcharges Turnover tax payable 2%
Enterprise income tax Subject to taxable profit [note2]
[note1]From July 1, 2023, according to the provisions of the Announcement on the Implementation
of the Consumption Tax Policy for Some Refined Oil Products (Announcement No. 11 of the Ministry
of Finance and the State Administration of Taxation) issued by the Ministry of Finance and the State
Administration of Taxation, (1) alkylate oil (isooctane) will be subject to consumption tax in
accordance with gasoline; (2) petroleum ether, crude white oil, light white oil, and some industrial
white oil (No. 5, No. 7, No. 10, No. 15, No. 22, No. 32, No. 46) will be subject to consumption tax in
accordance with solvent oil; (3) mixed aromatic hydrocarbons, heavy aromatic hydrocarbons, mixed
C8, stable light hydrocarbons, light oil, and light coal tar will be subject to consumption tax in
accordance with naphtha; (4) aerospace kerosene will be temporarily exempted from consumption
tax with reference to aviation kerosene.
[note2] Description of the income tax rate for enterprises with different tax rates
If there are different taxpayers of enterprise income tax rate, disclosure description
√适用 □不适用
Entity Income tax rate(%)
Jiangsu Hengli Chemical Fiber Co., Ltd. 15%
Jiangsu Hengke Advanced Materials Co. Ltd. 15%
Nantong Teng'an Logistics Co., Ltd 20%
Jiangsu Xuanda Polymer Materials Co., Ltd 15%
Jiangsu Deli Chemical Fiber Co., Ltd. 15%
Suzhou Hengli Chemical New Material Co., Ltd. 20%
Suzhou Binglin Trading Co., Ltd. 20%
Kanghui New Material Technology Co., Ltd. 15%
Suqian Kanghui New Material Co., Ltd. 20%
Shenzhen Ganghui Trading Co., Ltd. 20%
Hengli Logistics (Dalian) Co., Ltd. 20%
Hengli Petrochemical (Hainan) Co., Ltd. 15%
Hengli Energy (Hainan) Co., Ltd. 15%
Suzhou Hengli Energy Chemical Import & Export Co., Ltd. 20%
Hengli Aviation Oil Co., Ltd. 20%
179 / 319
2023 Annual Report
Hengli Logistics (Dalian) Co., Ltd. 20%
Suzhou Textile Group Network E-commerce Co., Ltd 20%
Hengli Chemical (Suqian) Co., Ltd. 20%
Hengli Oil (Suqian) Co., Ltd. 20%
Hengli Tongshang New Energy Co., Ltd. 20%
Hengli Energy Import and Export Co., Ltd. 20%
Hengli New Energy (Shanghai) Co., Ltd. 20%
Hengli Yuanshang Technology (Suzhou) Co., Ltd. 20%
Suzhou Hengli Jinshang Energy Technology Co., Ltd. 20%
Hengli Petrochemical Sales (Haikou) Co., Ltd. 20%
Hengli Energy Chemical (Sanya) Co., Ltd. 15%
Dalian Henglixing Gemstone Chemical Trading Co., Ltd. 20%
Dalian Hengli Gaoyuan Sales Co., Ltd. 20%
Nantong Hengli Maoyuan Petrochemical Trading Co., Ltd. 20%
Hengli Petrochemical Sales (Shenzhen) Co., Ltd. 20%
Hengli Fuel Oil (Hainan) Co., Ltd 20%
Shanghai Hengli Fuel Oil Co., Ltd 20%
Huizhou Hengli Chemical Sales Co., Ltd 20%
Hengli (Zhoushan) Energy and Chemical Co., Ltd 20%
Dalian Hengli New Energy Sales Co., Ltd 20%
HENGLI PETROCHEMICAL CO., LIMITED 16.50%
HENGLI PETROCHEMICAL INTERNATIONAL PTE. LTD. 5%
HENGLI OILCHEM PTE. LTD. 17%
HENGLI SHIPPING INTERNATIONAL PTE. LTD. 0%
Others taxpayers other than the above 25%
2. Tax incentive
√适用 □不适用
1．Consumption tax incentive
According to “Notice on Continuing the Implementation of Part of the Consumption Tax Policy
for Naphtha Fuel Oil” (Cai Shui [2011] No. 87) issued by the Ministry of Finance, the People's Bank
of China and the State Administration of Taxation, "Notice on Improving the Consumption Tax
Rebate Policy for the Production of Vinyl Aromatic Chemical Products from Naphtha Fuel Oil" (Cai
Shui [2013] No. 2) issued by Ministry of Finance, People's Bank of China, General Administration of
Customs and State Administration of Taxation, "Interim Measures for Consumption Tax Refund
(Exemption) for Naphtha and Fuel Oil Used in the Production of Ethylene and Aromatic Chemical
Products" (Announcement of the State Administration of Taxation [2012] No. 36) issued by the State
Administration of Taxation, and "Announcement on Consumption Tax Refund of Naphtha Fuel Oil
Production of Vinyl Aromatic Chemical Products" (Announcement No. 29 [2013] of the State
Administration of Taxation and the General Administration of Customs) issued by State
Administration of Taxation and General Administration of Customs, production enterprises that
implement the fixed-point direct supply plan, sell naphtha and fuel oil within the planned quantity
limit, and issue a special invoice for the value-added tax of the Chinese character anti-counterfeiting
version with the "DDZG" logo, are exempt from consumption tax. Hengli Petrochemical (Dalian)
Refining Co., Ltd. is eligible for tax rebate and enjoys the preferential policy of consumption tax
rebate paid for the procurement process. At the same time, the implementation of the fixed-point
direct supply plan meets the above conditions and enjoys the preferential policy of exempting
consumption tax from the sales process.
According to the "Notice on Continuing to Increase Consumption Tax of Refined Oils" (Cai Shui
[2015] No. 11) issued by the Ministry of Finance and the State Administration of Taxation,
consumption tax for diesel, aviation kerosene and fuel oil has been increased from RMB 1.1 per liter
180 / 319
2023 Annual Report
to RMB 1.2 per liter, and aviation kerosene continued to suspend the collection of consumption tax.
Hengli Petrochemical (Dalian) Refining Co., Ltd. enjoys the preferential policy of suspending the
collection of consumption tax for the sale of aviation kerosene.
2. Enterprise income tax incentive to high-tech enterprises
Jiangsu Hengli Chemical Fiber Co., Ltd. obtained the "High-tech Enterprise Certificate" (No.:
GR202132007328) issued by Jiangsu Provincial Department of Science and Technology, Jiangsu
Provincial Department of Finance, and Jiangsu Provincial Taxation Bureau of the State
Administration of Taxation on 30 November 2021. The validity period is three years, and the
enterprise income tax rate for the current year is calculated at a reduced rate of 15%.
Jiangsu Hengke Advanced Materials Co. Ltd. obtained the "High-tech Enterprise Certificate"
(No.: GR202232005286) issued by the Jiangsu Provincial Department of Science and Technology,
the Jiangsu Provincial Department of Finance, and the Jiangsu Provincial Taxation Bureau of the
State Administration of Taxation on 22 November 2022. The validity period is three years, and the
enterprise income tax rate for the current year is calculated at a reduced rate of 15%.
Jiangsu Deli Chemical Fiber Co., Ltd. obtained the "High-tech Enterprise Certificate" (No.:
GR202032006951) issued by the Jiangsu Provincial Department of Science and Technology, the
Jiangsu Provincial Department of Finance, and the Jiangsu Provincial Taxation Bureau of the State
Administration of Taxation on 2 December 2020. The validity period is three years, and the
enterprise income tax rate for the current year is calculated at a reduced rate of 15%.
Jiangsu Xuanda Polymer Materials Co., Ltd. obtained the High-tech Enterprise Certificate (No.
GR202332019613) issued by the Jiangsu Provincial Department of Science and Technology, the
Jiangsu Provincial Department of Finance, and the Jiangsu Provincial Taxation Bureau of the State
Administration of Taxation on December 13, 2023。 The validity period is three years, and the
enterprise income tax rate for the current year is calculated at a reduced rate of 15%.
Kanghui New Material Technology Co., Ltd. obtained the "High-tech Enterprise Certificate" (No.:
GR202121000541) issued by the Liaoning Provincial Department of Science and Technology, the
Liaoning Provincial Department of Finance, and the Liaoning Provincial Taxation Bureau of the State
Administration of Taxation on 24 September 2021. The validity period is three years, and the
enterprise income tax rate for the current year is calculated at a reduced rate of 15%.
3．Enterprise income tax incentive to small and low-profit enterprises
Suzhou Hengli Chemical Fiber New Material Co., Ltd. and other 26 companies meet the
identification standards of small low-profit enterprises. The portion of taxable income not exceeding
3 million yuan is reduced by 25% and included in the taxable income, and the enterprise income tax
is paid at a rate of 20%.
4．Other enterprise income tax incentive
HENGLI PETROCHEMICAL INTERNATIONAL PTE. LTD. is registered in Singapore, and the income
tax rate is 17%. It was approved to enter the Singapore Global Trader Project on 1 September 2018,
and enjoys a 5% income tax rate this year.
HENGLI OILCHEM PTE. LTD. is registered in Singapore, and the income tax rate is 17%. It was
approved to enter the Singapore Global Trader Project on 1 May 2020, and enjoys a 10% income tax
rate this year.
HENGLI SHIPPING INTERNATIONAL PTE. LTD. is registered in Singapore, and the income tax rate
is 17%. It received a tax incentive called Maritime Sector Incentive (MSI) on 22 January 2020, and
enjoys a 0% income tax rate for this year.
Hengli Petrochemical (Hainan) Co., Ltd., Hengli Energy (Hainan) Co., Ltd. and Hengli Energy
Chemical (Sanya) Co., Ltd. are encouraged industrial enterprises registered and operating in Hainan
Free Trade Port. According to the "Notice of the Ministry of Finance and the State Administration of
Taxation on the Preferential Policies for Enterprise Income Tax in Hainan Free Trade Port" (Cai Shui
[2020] No. 31), the enterprise income tax is levied at a reduced tax rate of 15% this year.
181 / 319
2023 Annual Report
3. Others
□适用 √不适用
VII. Notes to the items of consolidated financial statements
1. Cash and bank balances
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Cash on hand 609,377.49 1,305,525.78
Cash at bank 13,557,873,658.60 19,815,265,793.15
Other monetary funds 6,910,556,113.05 8,256,950,806.64
Interest receivables not 2,883,754.27
yet due
Deposit in financial
company
Total 20,469,039,149.14 28,076,405,879.84
Including: Total 1,690,168,335.12 6,512,853,828.05
amount of money
deposited abroad
Other note:
For details of funds with limited ownership or use rights such as mortgage, pledge, seizure,
freezing, and attachment, see the note " Ownership or using rights of assets subject to restriction "
in this section.
For details of cash and bank balances in foreign currency, please refer to the description of “Items in
foreign currencies” in this note.
2.Financial assets held for trading
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance Specify the reason
and basis
Financial assets measured at fair 298,830,073.13 604,414,444.44 /
value and the changes of which are
included in the current profit and
loss
Including：
Derivative financial assets 48,652,243.29 490,430,590.59 /
Investment in debt /
131,265,471.64 2,000,000.00
instruments
Bank wealth management /
37,890,000.00 65,000,000.00
and structured deposits
Fund trust and asset /
81,022,358.20 46,983,853.85
management products
Financial assets designated to be
measured at fair value with
changes recognized in current
profit and loss
Including：
Total 298,830,073.13 604,414,444.44 /
182 / 319
2023 Annual Report
3. Derivative financial assets
□适用 √不适用
4. Notes receivable
(1). Notes receivable by category
□适用 √不适用
(2). Notes receivable pledged by the company at the end of the period
□适用 √不适用
(3). At the end of the period, the company has endorsed or discounted notes receivable
on the Balance sheet date Not yet expiry
□适用 √不适用
(4). Disclosure by method of provision for bad debts
□适用 √不适用
Provision for bad debts on individual basis:
□适用 √不适用
Provision for bad debts on portfolio basis:
□适用 √不适用
According to the expected credit loss general model to accrual provision for bad debts:
□适用 √不适用
Basis for dividing each stage and proportion of bad debt provision：
□适用 √不适用
Explanation of the significant change in the book balance of notes receivable due to changes in
provisions for losses incurred during the current period:
□适用 √不适用
(5). Provision for bad debts
□适用 √不适用
The amount of bad debt provision recovered or reversed in the current period is important:
□适用 √不适用
Other note
□适用 √不适用
(6). Notes receivable actually written off in this period
□适用 √不适用
183 / 319
2023 Annual Report
The important write-off of notes receivable:
□适用 √不适用
Notes for write-off of notes receivable:
□适用 √不适用
Other note
□适用 √不适用
5. Accounts receivable
(1). Disclosure by ageing
√适用 □不适用
Unit: Yuan Currency: RMB
Ageing Closing balance Beginning balance
Within one year
Including: Within one year
Within one year 555,164,763.19 385,851,852.51
Subtotal of within one year 555,164,763.19 385,851,852.51
1 to 2 years 178.36 2,206,917.74
2 to 3 years 59.26 178.30
Over 3 years
3 to 4 years 168.29 43.09
4 to 5 years 31.24 1,398,627.09
Over 5 years 3,333,868.92 1,935,251.49
Total 558,499,069.26 391,392,870.22
(2). Disclosure by method of provision for bad debts
√适用 □不适用
Unit: Yuan Currency: RMB
Categ
Closing balance Beginning balance
ory
Provision for Carrying Provision for Carrying
Book balance Book balance
bad debts amount bad debts amount
Provi Provi
Rati Rati
sion sion
Amount o Amount Amount o Amount
ratio ratio
(%) (%)
(%) (%)
Provi
sion
for
bad
debts
on
indivi
dual
basis
Including:
184 / 319
2023 Annual Report
Provi 558,499, 100 20,083, 3.60 538,415, 391,392, 100 18,946, 4.84 372,445,
sion 069.26 .00 809.93 259.33 870.22 .00 943.53 926.69
for
bad
debts
on
portf
olio
basis
Including:
558,499, / 20,083, / 538,415, 391,392, / 18,946, / 372,445,
Total
069.26 809.93 259.33 870.22 943.53 926.69
Provision for bad debts on individual basis:
□适用 √不适用
Provision for bad debts on portfolio basis:
√适用 □不适用
Provision for bad debts on portfolio basis: Ageing analysis portfolio, High credit rating portfolio
Unit: Yuan Currency: RMB
Name Closing balance
Accounts receivable Provision for bad debts Provision ratio (%)
Ageing analysis
338,328,746.30 20,083,809.93 5.94
portfolio
High credit rating
220,170,322.96 - -
portfolio
Total 558,499,069.26 20,083,809.93 3.60
Confirmation criteria and notes for bad debt provision by portfolio:
√适用 □不适用
Provision for bad debts by ageing portfolio is as below:
Provision for bad
Ageing Book balance Provision ratio (%)
debts
Within one 334,994,440.23 16,749,722.03 5.00
year(including one
year)
1-2 years 178.36 35.66 20.00
2-3 years 59.26 23.70 40.00
3-4 years 168.29 134.63 80.00
4-5 years 31.24 24.99 80.00
Over 5 years 3,333,868.92 3,333,868.92 100.00
Subtotal 338,328,746.30 20,083,809.93 5.94
According to the expected credit loss general model to accrual provision for bad debts:
□适用 √不适用
185 / 319
2023 Annual Report
(3). Provision for bad debts
√适用 □不适用
Unit: Yuan Currency: RMB
Beginning
Category Movement in the year Closing balance
balance
Transfer
Recovery
or Other
Accrual or
written- movement
reversal
off
Provision - - - - - -
for bad
debts on
individual
basis
Provision 18,946,943.53 1,136,866.40 20,083,809.93
for bad
debts on
portfolio
basis
Total 18,946,943.53 1,136,866.40 20,083,809.93
Including significant amount of recovery or reversal of provision for bad debts:
□适用 √不适用
Other note
□适用 √不适用
(4). Accounts receivable written-off during the year
□适用 √不适用
The important write-off of accounts receivable:
□适用 √不适用
Notes for write-off of accounts receivable:
□适用 √不适用
(5). Accounts receivable due from the top five debtors
√适用 □不适用
The Company’s top five year-end balances for accounts receivable in total of
RMB409,614,545.47, accounting for 73.34% of the total account balance of year-end balances of
accounts receivable, and the corresponding year-end balance of provision for bad debts is
RMB10,370,302.09.
Other note
√适用 □不适用
For details of accounts receivable in foreign currency at year end, please refer to the “Items
in foreign currencies” in this note.
186 / 319
2023 Annual Report
6. Contract assets
(1). Information of contract assets
□适用 √不适用
(2). The amount and reasons for major changes in the carrying amount during the reporting
period
□适用 √不适用
(3). Disclosure by method of provision for bad debts
□适用 √不适用
Provision for bad debts on individual basis:
□适用 √不适用
Provision for bad debts on portfolio basis:
□适用 √不适用
According to the expected credit loss general model to accrual provision for bad debts:
□适用 √不适用
Basis for dividing each stage and proportion of bad debt provision：
□适用 √不适用
Explanation of the significant change in the book balance of notes receivable due to changes in
provisions for losses incurred during the current period:
□适用 √不适用
(4) Provision for impairment of contract assets in the period
□适用 √不适用
The important write-off of contract assets:
□适用 √不适用
Notes for write-off of contract assets:
□适用 √不适用
Other note:
□适用 √不适用
7. Receivables financing
(1) Classification of receivables financing
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Bank acceptance bills 3, 574, 549, 065.24 2, 168, 347, 608.90
Letter of credit 595, 498, 497.19 118, 923, 620.36
Letter of guarantee
187 / 319
2023 Annual Report
Total 4, 170, 047, 562.43 2, 287, 271, 229.26
(2) Pledged receivables financing at year end
Unit: Yuan Currency: RMB
Item Amount pledged at year end
Bank acceptance bills 2, 873, 535, 149.86
Subtotal 2, 873, 535, 149.86
(3) Receivables financing that the Company has endorsed or discounted at the end of the period
and has not yet expired on the balance sheet date
Unit: Yuan Currency: RMB
Amount not derecognized at year
Item Amount derecognized at year end
end
Bank acceptance bills 4, 951, 960, 275.83 -
Letter of credit 81, 350, 000.00 -
Subtotal 5, 033, 310, 275.83 -
(4) Disclosure by classification of provision for bad debts
Unit: Yuan Currency: RMB
Catego
Closing balance Beginning balance
ry
Carryi
Provision for Carrying Provision for ng
Book balance Book balance
bad debts amount bad debts amou
nt
Provisi Provisi
Rati Rati
Amo on Amo Amo on
Amount o o
unt ratio unt unt ratio
(%) (%)
(%) (%)
Provisi
on for
bad
debts
on
individ
ual
basis
Including:
Provisi 4,170,047,5 100. - - 4,170,047,5 2, 100. - - 2,
on for 62.43 00 62.43 287, 00 287,
bad 271, 271,
debts 229.2 229.2
on 6 6
portfol
io
basis
Including:
Low 2, 2,
risk 287, 287,
4, 170, 047, 4, 170, 047,
group - - 271, 271,
562.43 562.43
229.2 229.2
6 6
188 / 319
2023 Annual Report
4, 170, 047, / / 4, 170, 047, 2, / / 2,
562.43 562.43 287, 287,
Total 271, 271,
229.2 229.2
6 6
Provision for bad debts on individual basis:
□适用 √不适用
Notes for bad debts on individual basis:
□适用 √不适用
Provision for bad debts on portfolio basis:
√适用 □不适用
Changes and fair value changes of receivables financing:
√适用 □不适用
Provision for bad debts on portfolio basis: low risk group
Unit: Yuan Currency: RMB
Closing balance
Portfolio
Receivable financing Provision for bad debts Provision ratio (%)
Low risk group 4, 170, 047, 562.43 - -
Total 4, 170,047, 562.43
According to the expected credit loss general model to accrual provision for bad debts:
□适用 √不适用
Basis for dividing each stage and proportion of bad debt provision：
□适用 √不适用
Explanation of the significant change in the book balance of receivables financing due to changes
in provisions for losses incurred during the current period:
□适用 √不适用
(5) Provision for bad debts
□适用 √不适用
The significant amount of provision for bad debt recovered or reversed in the current period:
□适用 √不适用
Other note:
√适用 □不适用
(6). Receivable financing written-off during the year
□适用 √不适用
The important write-off of receivables financing:
□适用 √不适用
Notes for write-off of receivables financing:
□适用 √不适用
189 / 319
2023 Annual Report
(7) Changes in the increase or decrease of receivables financing and fair value during the year:
Changes in
Change in cost in
Item Beginning balance Fair value Closing balance
current period
for the year
Bank acceptance
2, 168, 347, 608.90 1, 406, 201, 456.34 - 3, 574, 549, 065.24
bills
Letter of credit 118, 923, 620.36 476, 574, 876.83 - 595, 498, 497.19
Total 2, 287, 271, 229.26 1, 882, 776, 333.17 - 4, 170, 047,562.43
Continued
Accumulated loss
allowance
Cumulative
Cost in beginning of recognized in
Item Cost at year end fair value
year other
change
comprehensive
income
Bank acceptance
2, 168, 347, 608.90 3, 574, 549, 065.24 - -
bills
Letter of credit 118, 923, 620.36 595, 498, 497.19 - -
Total 2, 287, 271, 229.26 4, 170, 047, 562.43 - -
Other note:
√适用 □不适用
For details of receivables financing in foreign currency at year end, please refer to the “Items in
foreign currencies” in this note.
8. Prepayments
(1). Prepayments by ageing
√适用 □不适用
Unit: Yuan Currency: RMB
Ageing Closing balance Beginning balance
Amount Ratio (%) Amount Ratio (%)
Within one 1, 732, 994, 594.34 99.85 1, 995, 497, 560.96 99.90
year
1 to 2 years 1, 454, 511.64 0.08 914, 039.58 0.05
2 to 3 years 139, 039.58 0.01 60, 900.00 0.00
Over 3 years 970, 390.00 0.06 996, 320.00 0.05
Total 1, 735, 558, 535.56 100.00 1, 997, 468, 820.54 100.00
Note to significant prepayment was ageing over 1 year but not settled:
At the end of the period, there was no significant prepayments with aging over 1 year.
(2). Prepayments due from the top five debtors
√适用 □不适用
The top five of the Company's prepayments balance at year end is in total of RMB1, 186, 879,
318.84, which accounted for 68.39% of the prepayments balance.
Other note:
√适用 □不适用
No obvious signs of impairment were found in the prepayments at the end of the period, so no
provision for bad debts was made.
190 / 319
2023 Annual Report
9. Other receivables
Presented by item
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Interest receivable
Dividends receivable
Other receivables 809, 207, 973.41 701, 520, 929.51
Total 809, 207, 973.41 701, 520, 929.51
Other note:
□适用 √不适用
Interest receivable
(1). Interest receivable by category
□适用 √不适用
(2). Significant overdue interest
□适用 √不适用
(3). Information of provision for bad debts
□适用 √不适用
Provision for bad debts on individual basis:
□适用 √不适用
Notes for provision for bad debts on individual basis:
□适用 √不适用
Provision for bad debts on portfolio basis:
□适用 √不适用
(4). Provision for bad debts based on the general model of expected credit losses
□适用 √不适用
Basis for dividing each stage and proportion of provision for bad debt:
None
Explanation of the significant change in the book balance of interest receivable due to changes in
provisions for losses incurred during the current period:
□适用 √不适用
(5)Provision for bad debts Provision for bad debts
□适用 √不适用
The significant amount of provision for bad debt recovered or reversed in the current period:
□适用 √不适用
Other note:
□适用 √不适用
191 / 319
2023 Annual Report
(6)Interest receivable written-off during the year
□适用 √不适用
The important write-off of Interest receivable:
□适用 √不适用
Notes for write-off of Interest receivable:
□适用 √不适用
Dividends receivable
(1). Dividends receivable
□适用 √不适用
(2). Dividends receivable for ageing over 1 year
□适用 √不适用
(3). Information of provision for bad debts
□适用 √不适用
Provision for bad debts on individual basis:
□适用 √不适用
Notes for provision for bad debts on individual basis:
□适用 √不适用
Provision for bad debts on portfolio basis:
□适用 √不适用
(4). Provision for bad debts based on the general model of expected credit losses
□适用 √不适用
Basis for dividing each stage and proportion of provision for bad debt:
None
Explanation of the significant change in the book balance of interest receivable due to changes in
provisions for losses incurred during the current period:
□适用 √不适用
(5)Provision for bad debts Provision for bad debts
□适用 √不适用
The significant amount of provision for bad debt recovered or reversed in the current period:
□适用 √不适用
Other note:
□适用 √不适用
(6)Dividends receivable written-off during the year
□适用 √不适用
The important write-off of dividends receivable:
□适用 √不适用
Notes for write-off of dividends receivable:
□适用 √不适用
Other note:
□适用 √不适用
Other receivables
(1). Disclosure by ageing
√适用 □不适用
192 / 319
2023 Annual Report
Unit: Yuan Currency: RMB
Book balance in beginning of
Ageing Book balance at year end
year
Within one year
Including: Within one year
Within a year 401, 459, 574.96 165, 840, 417.30
Subtotal of within one year 401, 459, 574.96 165, 840, 417.30
1 to 2 years 4, 799, 022.80 5, 246, 567.23
2 to 3 years 3, 284, 016.04 549, 209, 336.49
Over 3 years
3 to 4 years 525, 933, 831.04 162, 125.09
4 to 5 years - 61, 949.45
Over 5 years 617, 660.15 969, 186.65
Total 936, 094, 104.99 721, 489, 582.21
(2). Disclosure by nature
√适用 □不适用
Unit: Yuan Currency: RMB
Book balance in beginning of
Nature Book balance at year end
year
Deposits and security deposits 273, 009, 259.42 173, 905, 111.33
Petty cash 389, 094.11 214, 479.92
Tax refund receivable 555, 809, 007.74 525, 512, 156.24
Others 106, 886, 743.72 21, 857, 834.72
Total 936, 094, 104.99 721, 489, 582.21
(3). Information of provision for bad debts
√适用 □不适用
Unit: Yuan Currency: RMB
Provision for bad
First stage Second stage Third stage Total
debts
Expected Expected credit loss Expected credit loss
credit loss for lifetime (no for lifetime (credit
within next 12 credit impairment impairment has
months occurred) occurred)
Balance of 1
19, 968, 652.70 19, 968, 652.70
January 2023
Balance of 1
January 2023
movement in the
year
--transfer to
second stage
--transfer to third
stage
--Reverse to
second stage
--Reverse to first
stage
Provision for the 106, 917, 478.88 - 106, 917, 478.88
year
Reversal in the
year
193 / 319
2023 Annual Report
Transfer in the
year
Write-off in the
year
Other movement
Balance of 31 126, 886, 131.58 - 126, 886, 131.58
December 2023
Basis for dividing each stage and proportion of bad debt provision:
The basis for dividing each stage is detailed in the note "Impairment of Financial Instruments".
Note on the significant changes in other receivables book balance that have changed the loss provision
in the current period:
□适用 √不适用
Basis for accruing bad debt provision for the current period and assessing whether the credit risk of
financial instruments has increased significantly:
√适用 □不适用
The basis, input values, assumptions and other information used to determine the provision for bad
debts amount and the assessment of whether the credit risk of financial instruments have increased
significantly since initial confirmation are detailed in the note “Credit Risk”.
(4). Provision for bad debts
√适用 □不适用
Unit: Yuan Currency: RMB
Beginning
Category Movement in the year Closing balance
balance
Transfer
Recovery
or Other
Accrual or
written- movement
reversal
off
Provision 105, 102, 105, 102,
for bad 431.25 431.25
debts on
individual
basis
Provision 19, 968, 652.70 1, 815, 047.63 21, 783, 700.33
for bad
debts on
portfolio
basis
Total 19, 968, 652.70 106, 917, 126, 886,
478.88 131.58
Including significant amount of recovery or reversal of provision for bad debts:
□适用 √不适用
Other note
□适用 √不适用
(5). Other receivables written-off during the year
□适用 √不适用
The important write-off of other receivables:
□适用 √不适用
194 / 319
2023 Annual Report
Notes for write-off of other receivables:
□适用 √不适用
(6). Other receivables due from the top five debtors
√适用 □不适用
The Company’s top five year-end balances for other receivables in total of RMB883, 444,
127.13, accounting for 94.38% of the total account balance of year-end balances of other
receivables, and the corresponding year-end balance of provision for bad debts is RMB121, 560,
806.28.
(7). Other receivables reported due to centralized management of funds
□适用 √不适用
Other note
√适用 □不适用
For details of other receivables in foreign currency at year end, please refer to the “Items in
foreign currencies” in this note.
10. Inventories
(1). Inventories by category
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Provision for Provision for
decline in decline in
value of value of
inventories/ inventories/
Book Carrying Book Carrying
Provision for Provision for
balance amount balance amount
impairment impairment
of contract of contract
performance performance
cost cost
Raw materials 20, 470, 293, 925, 20, 176, 26, 646, 2, 049, 373, 24, 597,
206, 061.43 021.84 281, 039.59 539, 686.49 134.60 166, 551.89
Work-in-
progress
Finished goods 9, 396, 210, 161, 038, 9, 235, 172, 8, 998, 161, 580, 505, 8, 417, 656,
938.49 212.47 726.02 737.10 207.54 529.56
Reusable 24, 541, - 24, 541, 29, 606, - 29, 606,
materials 576.36 576.36 740.62 740.62
Consumptive
biological
assets
Contract
performance
cost
Semi-finished 1, 802, 418, 138, 728, 1, 663, 689, 4, 966, 032, 498, 854, 4, 467, 177,
goods 715.55 785.93 929.62 363.76 488.20 875.56
Subcontracting 323, 903, 323, 903,
167, 869, 167, 869,
processing - 773.78 773.78
374.32 374.32
materials
Total 31, 861, 593, 692, 31, 267, 40, 964, 3, 128, 732, 37, 835,
246, 666.15 020.24 554, 645.91 244, 301.75 830.34 511, 471.41
195 / 319
2023 Annual Report
[Note] At the end of the period, the carrying amount of inventories subject to restriction is nil.
(2). Provision for decline in value of inventories and provision for impairment of contract
performance cost
√适用 □不适用
Unit: Yuan Currency: RMB
Beginning Closing
Item Increase Decrease
balance balance
2, 049, 293, 925, - 2, 049, 373, - 293, 925,
373, 021.84 134.60 021.84
134.60
Raw materials
Work-in-progress 580, 505, 161, 038, - 580, 505, - 161, 038,
207.54 212.47 207.54 212.47
Finished goods -
Reusable materials
Consumptive
biological assets
Contract
performance cost
Semi-finished goods 498, 854, 138, 728, 498, 854, 138, 728,
488.20 785.93 488.20 785.93
Issued goods -
Total 3, 128, 593, 692, 3, 128, 732, 593, 692,
732, 020.24 830.34 020.24
830.34
Reasons for reversal of provision for decline in value of inventories in the current period
√适用 □不适用
Category Specific basis for determining net Reasons for reversal of provision for decline
realizable value in value of inventories and impairment of
contract performance cost
Raw materials The estimated selling price of the The products produced have been sold in the
product produced minus the current period
estimated cost to completion,
estimated selling expenses and
related custom duty
Finished goods Estimated selling price minus Sold in current period
estimated selling expenses and
related custom duty
Semi-finished goods The estimated selling price of the The products produced have been sold in the
product produced minus the current period
estimated cost to completion,
estimated selling expenses and
related custom duty
(3). Capitalization of borrowing costs amount in closing balance of inventories
□适用 √不适用
(4). Contract performance cost amortization amount
□适用 √不适用
196 / 319
2023 Annual Report
11. Assets held-for-sale
□适用 √不适用
12. Non-current assets due within one year
□适用 √不适用
Debt investment due within one year
□适用 √不适用
Other debt investment due within one year
□适用 √不适用
Notes for non-current assets due within one year:
None
13. Other current assets
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Costs of obtaining a contract
Receivables of returned goods
VAT carry forward 3, 646, 315, 465.30 1, 751, 009, 054.30
VAT input tax pending for verification 83, 407, 970.83 114, 550, 349.25
Prepaid enterprise income tax 1, 128, 660, 218.80 1, 784, 931, 735.30
Receivable settlement guarantee 10, 049, 604.49 10, 049, 607.23
Receivable of monetary security 702, 583, 473.71
1, 773, 531, 217.52
deposits
Receivable of pledged security 88, 252, 384.00
27, 533, 400.00
deposits
Treasury bond reverse repurchase 125, 000, 000.00 17, 349, 000.00
Others 999.61
Total 6, 794, 497, 876.94 4, 468, 726, 603.40
Other note
None
14. Debts investment
(1). Information of debts investment
√适用 □不适用
Unit: Yuan Currency: RMB
Closing balance
Item Beginning balance
197 / 319
2023 Annual Report
Provision
for
impairment
Provision
Carrying Book Carrying
Book balance for
amount balance amount
impairment
Corporate 20, 427, 20, 427,
bonds 397.26 397.26
20, 427, 20, 427,
Total -
397.26 397.26
Changes in the provision for impairment of debt investment in the current period:
□适用 √不适用
(2). Important debts investment at the end of the period
□适用 √不适用
(3). Information of provision for impairment
□适用 √不适用
Basis for dividing each stage and proportion of bad debt provision:
None
Note on the significant changes in debt investment book balance that have changed the loss provision in
the current period:
□适用 √不适用
Basis for accruing bad debt provision for the current period and assessing whether the credit risk of
financial instruments has increased significantly:
□适用 √不适用
Other note
□适用 √不适用
(4) Debt investment written-off during the year
□适用 √不适用
The important write-off of debt investment:
□适用 √不适用
Notes for write-off of debt investment:
□适用 √不适用
Other note
□适用 √不适用
15. Other debt investments
(1). Information of other debt investments
□适用 √不适用
(2). Important other debt investments at the end of the period
□适用 √不适用
(3). Information of provision for impairment
□适用 √不适用
Note on the significant changes in other investment book balance that have changed the loss provision
in the current period:
□适用 √不适用
198 / 319
2023 Annual Report
Basis for accruing bad debt provision for the current period and assessing whether the credit risk of
financial instruments has increased significantly
□适用 √不适用
(4) Other debt investment written-off during the year
□适用 √不适用
The important write-off of other investment:
□适用 √不适用
Notes for write-off of other debt investment:
□适用 √不适用
Other note
□适用 √不适用
16. Long-term receivables
(1). Information of long-term receivables
□适用 √不适用
(2). Information of provision for bad debts
□适用 √不适用
Provision for bad debts on individual basis:
□适用 √不适用
Notes for provision for bad debts on individual basis:
□适用 √不适用
Provision for bad debts on portfolio basis:
□适用 √不适用
(3). Information of provision for impairment
□适用 √不适用
Basis for dividing each stage and proportion of bad debt provision:
None
Note on the significant changes in debt investment book balance that have changed the loss provision in
the current period:
□适用 √不适用
Basis for accruing bad debt provision for the current period and assessing whether the credit risk of
financial instruments has increased significantly:
□适用 √不适用
Other note
□适用 √不适用
(4) Long-term receivables written-off during the year
□适用 √不适用
The important write-off of Long-term receivables:
□适用 √不适用
Notes for write-off of Long-term receivables:
□适用 √不适用
Other note
□适用 √不适用
Other note
199 / 319
2023 Annual Report
□适用 √不适用
17. Long-term equity investment
(1) Long-term equity investment
√适用 □不适用
Unit: Yuan Currency: RMB
Closin
g
balan
Beginni Closin
ce of
Invest ng g
Movement in the year provis
ee balanc balanc
ion
e e
for
impai
rment
Invest
ment Adjus Annou
incom tmen nced
Addi Decr Chan
e/loss t of distrib
tion ease ges Provisi
recog other ution
al in of on for Other
nized comp of
inve inves other impair s
under rehe cash
stme tmen equit ment
the nsive divide
nt t y
equity inco nd or
metho me profit
d
I. Joint ventures
Subtot
al
II. Associates
Wuxi 559, 77, 636,
Xishan 215, 638, 853,
g Bank 493.16 436.1 929.2
Co., 2 8
Ltd.
Chenju 10, -853, 9,
(Suzho 000, 575.4 146,
u) 000. 3 424.5
Scienc 00 7
e and
Techn
ology
Innova
tion
Develo
pment
Co.,
Ltd
Subtot 559, 10, 76, 646,
al 215, 000, 784, 000,
493.16 000. 860.6 353.8
00 9 5
200 / 319
2023 Annual Report
559, 10, 76, 646,
215, 000, 784, 000,
Total
493.16 000. 860.6 353.8
00 9 5
(2) Impairment test of long-term equity investment
√适用 □不适用
Other note
At the end of the period, there was no obvious sign of impairment of long-term equity
investment, so no Provision for impairment.
The recoverable amount is determined by the net amount of fair value less disposal expenses
□适用 √不适
The recoverable amount is determined by the present value of the expected future cash flows
□适用 √不适
The reasons for the significant inconsistencies between the aforementioned information and the
information used in previous years' impairment tests or external information
□适用 √不适
The reasons for the discrepancies between the information used in the company's previous
annual impairment test and the actual situation in the current year
□适用 √不适
Other notes:
None
18. Other equity instruments investment
(1). Information of other equity instruments investment
□适用 √不适用
(2). Description of the circumstances of derecognition in the current period
□适用 √不适用
Other note:
□适用 √不适用
19. Other non-current financial assets
□适用 √不适用
Other note:
□适用 √不适用
20. Investment properties
Investment properties measurement model
(1). Investment properties measured at cost model
Unit: Yuan Currency: RMB
Housing and Construction
Item Land use rights Total
buildings in progress
I. Book value
1.Beginning balance 179, 089, 223.35 34, 797, 725.56 213, 886,
948.91
2.Increase 40, 124, 407.39 40, 124, 407.39
(1)Purchase
(2)Inventories\Fixed 40, 124, 407.39 40, 124, 407.39
assets\Transfer from
construction in progress
201 / 319
2023 Annual Report
(3)Addition by business
combination
3.Decrease
(1)Disposal
(2)Other decrease
4.Closing balance 219, 213, 630.74 34, 797, 725.56 254, 011,
356.30
II. Accumulated depreciation and amortisation
1.Beginning balance 42, 797, 752.57 6, 817, 383.54 49, 615, 136.11
2.Increase 11, 294, 774.91 695, 954.71 11, 990, 729.62
(1)Amortisation for the 8, 541, 678.85 695, 954.71 9, 237, 633.56
year
(2)Inventories/Fixed 2, 753, 096.06 - 2, 753, 096.06
assets/Transfer from
construction in progress
3.Decrease
(1)Disposal
(2)Other decrease
4.Closing balance 54, 092, 527.48 7, 513, 338.25 61, 605, 865.73
III. Provision for impairment
1.Beginning balance
2.Increase
(1) Provision
3.Decrease
(1)Disposal
(2)Other decrease
4.Closing balance
IV. Carrying amount
1.Carrying value at year 165, 121, 103.26 27, 284, 387.31 192, 405,
end 490.57
2.Carrying value at 136, 291, 470.78 27, 980, 342.02 164, 271,
beginning of year 812.80
(2). Information of investment properties without property certificate
□适用 √不适用
(3) Impairment test of investment real estate using cost measurement model
□适用 √不适用
Other note :
□适用 √不适用
21. Fixed assets
Presented by item
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Fixed assets 129, 987, 346, 509.40 118, 718, 591, 050.99
Fixed assets for disposal
202 / 319
2023 Annual Report
Total 129, 987, 346, 509.40 118, 718, 591, 050.99
Other note:
□适用 √不适用
Fixed assets
(1). Details of fixed assets
√适用 □不适用
Unit: Yuan Currency: RMB
Machi
Housing nery Transport General
Special
Item and and ation equipme Ship Total
equipment
buildings equip tools nt
ment
I. Book value:
1.Begi
33, 086, 123, 986, 492, 140, 552, 130, 559, 634, 158, 676,
nning
356, 269.20 255, 776.62 359.38 256.65 194.27 516, 856.12
balance
2.Incre 3, 940, 910, 16, 393, 46, 242, 307, 897, 20, 688,
ase 259.83 731, 747.02 755.20 243.56 782, 005.61
(1)P 40, 485, 46, 242, 104, 086, 190, 814,
urchase 195.47 755.20 239.08 189.75
(2)Tr
ansfer from
3, 940, 910, 15, 960, 19, 901,
constructio
259.83 323, 381.98 233, 641.81
n in
progress
(3)A
ddition by
business
combinatio
n
(4)O 783,784,267 97,377.6 1,082,11 784,963,758
thers .00 8 4.19 .87
3.Decr 65,824,167. 10,449,7 13,942,0 91,002,730.
786,746.20
ease 78 55.43 60.98 39
(1)Di
65,824,167. 10,449,7 13,942,0 91,002,730.
sposal or 786,746.20
78 55.43 60.98 39
scrap
(2)O
thers
4.Closi 33,086,356, 123,986,255 492,140, 552,130, 559,634, 158,676,516
ng balance 269.20 ,776.62 359.38 256.65 194.27 ,856.12
II. Accumulated depreciation
1.Begi
6, 965, 049, 32, 134, 338, 937, 384, 990, 134, 810, 39, 957,
nning
388.03 137, 981.45 353.86 317.48 764.31 925, 805.13
balance
2.Incre 1, 469, 773, 7, 569, 103, 59, 429, 245, 715, 17, 190, 9, 361, 212,
ase 021.82 970.10 357.93 207.40 622.32 179.58
(1) 1, 469, 773, 7, 272, 476, 59, 429, 57, 778, 17, 190, 8, 876, 647,
Provision 021.82 668.13 357.93 030.54 622.32 700.75
2)Bu 296, 627, 187, 937, 484, 564,
siness 301.97 176.86 478.83
203 / 319
2023 Annual Report
combinatio
n
3.Decr 7, 987, 29, 481, 14, 584, 10, 931, 62, 984,
ease 087.64 499.20 596.51 174.34 357.69
(1)Di
5, 233, 29, 481, 14, 584, 10, 931, 60, 231,
sposal or
991.58 499.20 596.51 174.34 261.63
scrap
(2)O 2, 753, 2, 753,
thers 096.06 096.06
4.Closi 8, 426, 835, 39, 673, 383, 782, 619, 774, 152, 001, 49, 256,
ng balance 322.21 760, 452.35 115.28 350.54 386.63 153, 627.02
III. Provision for impairment
1.Begi
nning
balance
2.Incre
ase
(1)
Provision
3.Decr
ease
(1)Di
sposal or
scrap
4.Closi
ng balance
IV. Carrying amount
1.Carry
28, 551, 100, 665, 133, 936, 228, 508, 407, 632, 129, 987,
ing value at
561, 070.50 707, 162.54 989.45 479.28 807.64 346, 509.40
year end
2.Carry
ing value at 26, 121, 91, 852, 153, 203, 167, 139, 424, 823, 118, 718,
beginning 306, 881.17 117, 795.17 005.52 939.17 429.96 591, 050.99
of year
[Note ] At the end of the period, fixed assets with cost of RMB8, 508, 444, 797.05 had been fully
depreciated and still in use.
(2). Fixed assets with temporary idle
□适用 √不适用
(3). Fixed assets held under Operating lease rent-out
□适用 √不适用
(4). Fixed assets without property certificate
√适用 □不适用
Unit: Yuan Currency: RMB
Reasons for not completing the
Item Carrying amount
certificate of title
Housing and buildings 1, 926, 567, 405.83 Still in application process
Other note:
□适用 √不适用
(5). Impairment test of fixed assets
□适用 √不适用
204 / 319
2023 Annual Report
Fixed assets for disposal
□适用 √不适用
22. Construction in progress
Presented by item
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Construction in progress 47, 030, 792, 783.72 25, 624, 425, 938.86
Construction materials 1, 793, 344, 903.73 1, 663, 065, 560.22
Total 48, 824, 137, 687.45 27, 287, 491, 499.08
Other note:
□适用 √不适用
Construction in progress
(1). Information of construction in progress
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Pr
Pr
o
o
vi
vi
si
si
o
o
n
n
fo
fo
r
Book balance r Carrying amount Book balance Carrying amount
i
i
m
m
p
pa
ai
ir
r
m
m
en
e
t
nt
Annual
output of
1.6 million
tons of
high- 14, 273, 491, 14, 273, 491, 1, 368, 039, 1, 368, 039,
performanc 274.08 274.08 931.40 931.40
e resin and
new
material
projects
Annual
output of 5
5, 038, 408, 5, 038, 408, 8, 624, 681, 8, 624, 681,
million tons
887.77 887.77 423.33 423.33
of PTA
project
205 / 319
2023 Annual Report
Project with
an annual
output of
800,000
tons of 3, 590, 326, 3, 590, 326, 1, 769, 790, 1, 769, 790,
functional 402.15 402.15 066.84 066.84
polyester
film and
functional
plastics
Annual
production
of 600,000
tons of
functional
polyester
film,
functional 3, 324, 025, 3, 324, 025,
157, 195, 108.43 157, 195, 108.43
film and 3 442.09 442.09
billion
square
meters of
lithium
battery
diaphragm
project
New
Material
3, 918, 297, 3, 918, 297,
Industrial 77, 845, 538.17 77, 845, 538.17
921.06 921.06
Park Phase
II Project
Other
16, 886, 242, 16, 886, 242, 13, 626, 873, 13, 626, 873,
sundry
856.57 856.57 870.69 870.69
projects
47, 030, 792, 47, 030, 792, 25, 624, 425, - 25, 624, 425,
Total
783.72 783.72 938.86 938.86
206 / 319
2023 Annual Report
(2). Changes in significant construction in progress
√适用 □不适用
Unit: Yuan Currency: RMB
Proport
ion of
Cumulativ Including
Transf cumula Capitalizati
Other e amount : interest
Beginning Increa er to Closing tive Progress on rate for Source of
Item Budget decrea of interest capitalise
balance se fixed balance input % the year fund
se capitalisati d in the
assets to (%)
on year
budget
(%)
Annual output 19.988 1, 368, 039, 14, 1, 675, 14, 273, 79.79 Equipme 218, 219, 216, 066, 4.20 Self-
of 1.6 million billion 931.40 581, 802, 491, nt 461.95 711.95 financing
tons of high- 253, 571.77 274.08 installati and Loans
914.45
performance on and
resin and new partial
material trial
projects producti
on
Annual output 11.45bill 8, 624, 681, 2, 147, 5, 734, - 5, 038, 408, 94.08 Project 393, 090, 291, 069, 3.74 Self-
of 5 million ion 423.33 738, 011, 887.77 construct 172.29 491.60 financing
tons of PTA 924.59 460.15 ions and Loans
project
Project with 11.125 1, 769, 790, 2, 854, 1, 033, - 3, 590, 326, 41.57 Equipme 128, 151, 100, 554, 3.82 Self-
an annual billion 066.84 236, 700, 402.15 nt 450.53 944.67 financing
output of 629.76 294.45 installati and Loans
800,000 tons on and
of functional partial
polyester film trial
and functional producti
plastics on
207 / 319
2023 Annual Report
Annual 12.494 157, 195, 3, 166, 3, 324, 025, 26.60 Construc 27, 987, 27, 574, 3.20 Self-
production of billion 108.43 830, 442.09 tion and 427.76 094.42 financing
600,000 tons 333.66 equipme and Loans
of functional nt
polyester film, installati
functional film on
and 3 billion
square meters
of lithium
battery
diaphragm
project
New Material 7.868 77, 845, 3, 840, 3, 918, 297, 49.80 Construc 54, 516, 53, 814, 4.11 Self-
Industrial Park billion 538.17 452, 921.06 tion and 112.49 993.99 financing
Phase II 382.89 equipme and Loans
Project nt
installati
on
62.925 11, 997, 26, 8, 443, 30, 144, / / 821, 964, 689, 080, / /
billion 552, 590, 514, 549, 625.02 236.63
Total
068.17 512, 326.37 927.15
185.35
208 / 319
2023 Annual Report
(3). Provision for impairment of construction in progress
□适用 √不适用
(4). Impairment test of construction in progress
□适用 √不适用
Other note
√适用 □不适用
Construction materials
(4). Information of construction materials
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Provision Provision
Carrying Book Carrying
Book balance for for
amount balance amount
impairment impairment
Special 1, 557, 731, 1, 557, 731, 1, 662, 714, 1, 662, 714,
materials 537.32 537.32 399.07 399.07
Special 235, 613, 235, 613, 351, 161.15 351, 161.15
equipment 366.41 366.41
1, 793, 344, 1, 793, 344, 1, 663, 065, 1, 663, 065,
Total
903.73 903.73 560.22 560.22
Other note:
At the end of the period, there were no obvious indication of impairment of construction in
progress, so no provision for impairment was provided.
23. Productive biological assets
(1). Productive biological assets using cost measurement model
□适用 √不适用
(2). Impairment test of productive biological assets using cost measurement model
□适用 √不适用
The recoverable amount is determined by the net amount of fair value less disposal expenses:
□适用 √不适用
The recoverable amount is determined based on the present value of the expected future cash
flow:
□适用 √不适用
The reasons for the significant inconsistencies between the aforementioned information and the
information used in previous years' impairment tests or external information:
□适用 √不适用
The reasons for the significant discrepancy between the information used in the company's
previous year's impairment test and the actual situation in the current year:
□适用 √不适用
(3). Productive biological assets using the fair value measurement model
□适用 √不适用
209 / 319
2023 Annual Report
Other note
□适用 √不适用
24. Oil and gas assets
(1) Information of oil and gas assets:
□适用 √不适用
(2). Impairment test of oil and gas assets:
□适用 √不适用
Other notes:
None
The recoverable amount is determined by the net amount of fair value less disposal expenses:
□适用 √不适用
The recoverable amount is determined based on the present value of the expected future cash
flow:
□适用 √不适用
The reasons for the significant inconsistencies between the aforementioned information and the
information used in previous years' impairment tests or external information:
□适用 √不适用
The reasons for the significant discrepancy between the information used in the company's
previous year's impairment test and the actual situation in the current year:
□适用 √不适用
Other notes:
None
25. Right-of-use assets
(1) Information of right-of-use-assets
√适用 □不适用
Unit: Yuan Currency: RMB
Item Housing and buildings Others Total
I. Book value
1.Beginning balance 161, 773, 372.63 7, 106, 282.50 168, 879, 655.13
2.Increase 25, 513, 870.05 25, 513, 870.05
Leases 24, 494, 067.04 24, 494, 067.04
Others 1, 019, 803.01 1, 019, 803.01
3.Decrease 3, 089, 090.98 3, 089, 090.98
Disposal 3, 089, 090.98 3, 089, 090.98
4.Closing balance 184, 198, 151.70 7, 106, 282.50 191, 304, 434.20
II. Accumulated depreciation
1.Beginning balance 80, 857, 714.71 177, 657.06 81, 035, 371.77
2.Increase 35, 672, 178.43 177, 657.06 35, 849, 835.49
(1) Provision 35, 044, 718.81 177, 657.06 35, 222, 375.87
(2)Others 627, 459.62 627, 459.62
3.Decrease 2, 713, 522.79 2, 713, 522.79
(1)Disposal 2, 713, 522.79 2, 713, 522.79
4.Closing balance 113, 816, 370.34 355, 314.12 114, 171, 684.46
210 / 319
2023 Annual Report
III. Provision for impairment
1.Beginning balance
2.Increase
(1) Provision
3.Decrease
(1)Disposal
4.Closing balance
IV. Carrying amount
1.Carrying value at year end 70, 381, 781.36 6, 750, 968.38 77, 132, 749.74
2.Carrying value at beginning 80, 915, 657.92 6, 928, 625.44 87, 844, 283.36
of year
Other note:
None
(2). Impairment test of right-of-use-assets:
□适用 √不适用
Other notes:
At the end of the period, there were no obvious indication of impairment of right-of –use assets,
so no provision for impairment was provided.
The recoverable amount is determined by the net amount of fair value less disposal expenses:
□适用 √不适用
The recoverable amount is determined based on the present value of the expected future cash
flow:
□适用 √不适用
The reasons for the significant inconsistencies between the aforementioned information and the
information used in previous years' impairment tests or external information:
□适用 √不适用
The reasons for the significant discrepancy between the information used in the company's
previous year's impairment test and the actual situation in the current year:
□适用 √不适用
Other notes:
None
26. Intangible assets
(1). Details of intangible assets
√适用 □不适用
Unit: Yuan Currency: RMB
Non-
Paten patent
Land use Patent Software
Item t ed Total
rights technology usage rights
rights technol
ogy
I. Book value
1.Beginning 8, 973, 407, 1, 297, 936, 188, 481, 10, 459, 824,
balance 576.68 126.76 292.75 996.19
434, 998, 7, 868, 343, 170.34 443, 209,
2.Increase
316.14 380.07 866.55
434, 998, 7, 868, 328, 171.64 443, 194,
(1)Purchase
316.14 380.07 867.85
211 / 319
2023 Annual Report
(2)In-house
research and
development
(3)Addition
by business
combination
(4)Others 14, 998.70 14, 998.70
2, 842, 4, 436, 317.00 7, 278, 850.00
3.Decrease
533.00
2, 842, 4, 436, 317.00 7, 278, 850.00
(1)Disposal
533.00
9, 405, 563, 1, 305, 804, 184, 388, 10, 895, 756,
4.Closing balance
359.82 506.83 146.09 012.74
II. Accumulated amortisation
1.Beginning 974, 068, 460, 056, 100, 924, 1, 535, 049,
balance 535.98 741.08 050.79 327.85
187, 482, 107, 915, 35, 634, 331, 033,
2.Increase
613.70 858.18 529.18 001.06
187, 482, 107, 915, 35, 628, 331, 026,
(1) Provision
613.70 858.18 198.02 669.90
(2)Others 6, 331.16 6, 331.16
3.Decrease 710, 633.25 4, 436, 317.00 5, 146, 950.25
(1)Disposal 710, 633.25 4, 436, 317.00 5, 146, 950.25
4.Closing 1, 160, 840, 567, 972, 132, 122, 1, 860, 935,
balance 516.43 599.26 262.97 378.66
III. Provision for impairment
1.Beginning
balance
2.Increase
(1) Provision
3.Decrease
(1)Disposal
4.Closing
balance
IV. Carrying amount
1.Carrying value 8, 244, 722, 737, 831, 52, 265, 9, 034, 820,
at year end 843.39 907.57 883.12 634.08
2.Carrying value 7, 999, 339, 837, 879, 87, 557, 8, 924, 775,
at beginning of year 040.70 385.68 241.96 668.34
At the end of the period, the intangible assets formed through the Company's internal research
and development accounted for 0% of the balance of intangible assets.
(2). Land use rights pending for ownership certificates
□适用 √不适用
Other note:
√适用 □不适用
(2). Impairment test of intangible assets:
□适用 √不适用
212 / 319
2023 Annual Report
Other notes:
27. Goodwill
(1). Book value of goodwill
√适用 □不适用
Unit: Yuan Currency: RMB
Investee or matters Beginning Closing
Increase Decrease
formed the goodwill balance balance
Formation
by business
Others Disposal Others
combinatio
n
Hengli Futures Co., 77,323,123 77,323,123
Ltd. .69 .69
77,323,123 77,323,123
Total
.69 .69
(2). Provision for impairment of goodwill
□适用 √不适用
(3). Information about goodwill's Assets group or Assets group Portfolio
√适用 □不适用
Whether the
assets group or
the assets
group portfolio
is consistent
Determination method of assets group Operating segment and
Item with the assets
or assets group portfolio basis
group or the
assets group
portfolio
determined on
previous year
Hengli Hengli Futures Co., Ltd. is mainly Headquarters and other Yes
Futures Co., engaged in futures brokerage business, business divisions
Ltd. and there is an active market which can
bring independent cash flow and can be
identified as a separate assets group.
Changes in assets group or the assets group portfolio:
□适用 √不适用
Other notes:
□适用 √不适用
(4). Determination method and basis of recoverable amount
(1) Important assumptions and basis
①Assumption of relatively stable macroeconomic environment: The value of any asset is
directly related to its macroeconomic environment. In this evaluation, it is assumed that the social
industrial policy, tax policy and macro environment remain relatively stable, and there are no major
213 / 319
2023 Annual Report
changes in interest rates and exchange rates, so as to ensure that the evaluation conclusion has a
reasonable period of use.
②Continuing operation assumption; it is assumed that the operating business of the assets
group portfolio business entity is legal and can maintain its continuous operation status in the future.
③Assuming that the current and future operators of the assets group portfolio business entity
are responsible, and their company management has the ability to assume their duties, steadily
promote the company's development plan, and maintain a good business situation.
④ Assuming that there are no significant changes in interest rates, exchange rates, tax
benchmarks, tax rates, and policy-related fees.
⑤Assuming that the enterprise's business scope, business model, and business scale do not
undergo significant changes based on its existing management methods and management level.
The recoverable amount is determined by the net amount of fair value less disposal expenses：
√适用 □不适用
Unit: Yuan Currency: RMB
Determination
Basis for
methods of
Recoverable Impairment key determining
Item Book value fair value and
amount amount parameter key
disposal
parameters
expenses
Hengli 825, 028, 880, 647, NOTE NOTE NOTE
Futures 603.31 513.91
Co., Ltd.
Total 825, 028, 880, 647, / / /
603.31 513.91
The recoverable amount of the asset group of Hengli Futures Co., Ltd. is determined based on
the fair value estimated using the market method. Due to the difficulty in collecting complete data
related to transaction cases and the inability to understand whether there are non-fair value factors
involved, this valuation is not suitable for using the transaction case comparison method. There are
mature listed companies in the futures industry in China that can be selected for analysis and
comparison, so the listed company comparison method can be used.
Specifically, the listed company comparison method generally first selects listed companies
that are in the same industry as the assets group portfolio and that are actively traded as
comparable companies, and then calculate the market value of the comparable companies based
on the trading stock prices. Secondly, select one or several value ratio parameters of comparable
companies (usually including profitability, assets, revenue and other specific parameters) as
"analysis parameters", Then calculate the Ratio relationship between the Market price value of
comparable companies and the selected analysis parameters - called the ratio multiplier (Multiples).
The ratio multiplier needs to be adjusted before being applied to the corresponding analysis
parameters of the Assets group portfolio to reflect the difference between the comparable
company and the assets group portfolio. Apply the above-mentioned adjusted ratio multiplier to
the corresponding analysis parameters of the assets group portfolio to obtain the fair value of the
evaluation object. Expressed in the formula as follows:
Fair value of assets group portfolio＝Analysis Parameters × Modified Ratio Multiplier
Including: Adjusted ratio multiplier = ratio multiplier of comparable companies ×
comprehensive correction factor
The recoverable amount is determined based on the present value of the expected future cash flow:
□适用 √不适用
214 / 319
2023 Annual Report
The reasons for the significant inconsistencies between the aforementioned information and the
information used in previous years' impairment tests or external information:
□适用 √不适用
The reasons for the significant discrepancy between the information used in the company's
previous year's impairment test and the actual situation in the current year:
□适用 √不适用
(5). Performance commitments and corresponding goodwill impairment.
There is a performance commitment when forming goodwill, and the reporting period or the
previous reporting period is within the performance commitment period
□适用 √不适用
Other notes:
√适用 □不适用
Calculation process of goodwill impairment loss:
Item Hengli Futures Co., Ltd.
Carrying amount of goodwill ① 77, 323, 123.69
Balance of provision for impairment of goodwill② -
Carrying amount of goodwill ③＝①-② 77, 323, 123.69
Value of goodwill attributable to minority interests
-
not recognised ④
Goodwill that not include the value attributable to
77, 323, 123.69
minority interests not recognised ⑤=④+③
Goodwill that not include the value attributable to
minority interests not recognized apportioned to each 77, 323, 123.69
assets group ⑥
Carrying amount of the assets group⑦ 747, 705, 479.62
Carrying amount of the Assets group that contains
825, 028, 603.31
the overall Goodwill ⑧=⑥+⑦
Recoverable amount of assets group or assets group
880, 647, 513.91
portfolio ⑨
Impairment loss of goodwill(⑩ is larger than zero)
-
⑩=⑧-⑨
Impairment loss of goodwill attributable to the
-
Company
28. Long-term deferred expenses
√适用 □不适用
Unit: Yuan Currency: RMB
Item Beginning balance Increase Amortization Other Decrease Closing balance
Catalyst 2, 006, 246, 987.84 680, 813, 893.77 605, 671, 957.63 90, 878, 073.01 1, 990, 510, 850.97
Renovation
13, 258, 839.53 1, 150, 156.54 4, 568, 883.00 9, 840, 113.07
costs
Others 7, 787, 497.48 19, 305, 638.84 10, 353, 902.54 16, 739, 233.78
Total 2, 027, 293, 324.85 701, 269, 689.15 620, 594, 743.17 90, 878, 073.01 2, 017, 090, 197.82
Other note:
None
29. Deferred tax assets/ Deferred tax liabilities
(1). Deferred tax assets before offsetting
√适用 □不适用
215 / 319
2023 Annual Report
Unit: Yuan Currency: RMB
Closing balance Beginning balance
Item Deductible Deferred income Deductible Deferred income
temporary tax temporary tax
differences Assets differences Assets
Provision for
impairment of assets
Unrealized profit of
412, 690, 533.91 78, 137, 133.59 409, 148, 379.92 82, 162, 633.20
internal transactions
Deductible tax loss
Provision for bad debts 141, 521, 467.34 32, 321, 835.61 37, 255, 045.83 6, 467, 483.08
Provision for decline in 3, 098, 438,
593, 692, 020.24 148, 000, 080.83 771, 996, 515.83
value of inventories 279.83
Changes in fair value
included in current profit 2, 236, 900.00 357, 706.00 35, 555, 513.32 5, 428, 978.62
or loss (decrease)
Non-deducted tax losses - - 102, 511, 722.17 15, 376, 758.33
Government grants 108, 569, 721.67 17, 112, 458.25 62, 610, 844.67 10, 218, 626.70
1, 258, 710, 3, 745, 519,
Total 275, 929, 214.28 891, 650, 995.76
643.16 785.74
(2). Deferred tax liabilities before offsetting
√适用 □不适用
Unit: Yuan Currency: RMB
Closing balance Beginning balance
Item Taxable Deferred income Taxable Deferred income
temporary tax temporary tax
difference liabilities difference liabilities
Increase in value by
assets appraisal of
business combination not
under common contract
Changes in fair value of
other debt investments
Changes in fair value of
other equity instrument
investments
Changes in fair value 7, 154, 954.88 1, 073, 243.23 1, 275, 910.00 144, 415.50
included in current profit
or loss (increase)
Initial investment cost of 79, 415, 493.16 11, 912, 323.97 79, 415, 493.16 11, 912, 323.97
long-term equity
investment calculated by
equity method is less
than the share of the
owner's equity of the
investee
Fixed assets accelerated 175, 094, 282.97 28, 724, 901.12 27, 431, 069.87 6, 857, 767.47
depreciation
Total 261, 664, 731.01 41, 710, 468.32 108, 122, 473.03 18, 914, 506.94
216 / 319
2023 Annual Report
(3). Net amount of deferred tax assets or liabilities after offsetting
√适用 □不适用
Beginning
Closing offset Closing balance
Beginning offset balance of
amount of of deferred
amount of deferred
deferred income tax
Item deferred income income tax
income tax assets or
tax assets and assets or
assets and liabilities after
liabilities liabilities after
liabilities offsetting
offsetting
Deferred tax assets 767, 665, 395, 962.70 597, 699, 655.87 576, 250.70
496.49
Deferred tax liabilities 767, 665, 597, 699, 655.87
496.49
(4). Details of unrecognized deferred tax assets
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Deductible temporary
differences
Deductible tax loss
Provision for bad debts 5, 448, 474.18 1, 660, 550.40
Provision for decline in value of
30, 294, 550.51
inventories
Changes in fair value included
in current profit or loss 19, 398, 032.46 2, 211, 972.77
(decrease)
Non-deducted tax losses 517, 363, 979.05 643, 594, 926.11
Provisions
Lease contracts 749, 826.22 169, 949.22
Unrealized profit of internal
29, 407, 240.29
transactions
Total 572, 367, 552.20 677, 931, 949.01
(5). Deductible tax loss of unrecognized deferred income tax assets will expire in the
following year
√适用 □不适用
Unit: Yuan Currency: RMB
Amount in beginning
Year Amount at year end Note
of year
2023 3, 756, 883.17
2024 141, 469.44 7, 265, 192.25
2025 8, 658, 531.46 12, 852, 807.92
2026 11, 028, 640.97 305, 271, 327.23
2027 114, 109, 282.66 201, 662, 394.07
2028 193, 742, 534.41
2032 189, 683, 520.11 112, 786, 321.47
Total 517, 363, 979.05 643, 594, 926.11 /
217 / 319
2023 Annual Report
Other note:
□适用 √不适用
30. Other non-current assets
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Book balance Pr Book balance Pr
ovi ov
sio isi
n on
for fo
im r
Carrying amount Carrying amount
pai im
rm pa
en ir
t m
en
t
Costs
of
obtai
ning
a
contr
act
Contr
act
perfo
rman
ce
cost
Retur
n cost
recei
vable
Contr
act
asset
s
Prepa 3, 381, 887, 915.12 3, 381, 887, 915.12 6, 212, 936, 138.56 6, 212, 936, 138.56
ymen
t for
purch
ase of
long-
term
asset
s
Unre 112, 912, 218.28 112, 912, 218.28
alized
gains
and
losses
on
218 / 319
2023 Annual Report
sale
and
lease
back
Futur 1, 400, 000.00 1, 400, 000.00 1, 400, 000.00 1, 400, 000.00
es
mem
bersh
ip
Inves
tmen
t
Total 3, 383, 287, 915.12 3, 383, 287, 915.12 6, 327, 248, 356.84 - 6, 327, 248, 356.84
Other note:
None
31. Ownership or using rights of assets subject to restriction
√适用 □不适用
Unit: Yuan Currency: RMB
Closing balance Beginning balance
Book Carrying Type of Restricted Book Carryi Type Restricted
Item value amount restriction situation value ng of situation
amount restrict
ion
Cash and 5, 252, 5, 252, Pledge Pledge 7, 617, 7, 617, Pledge Pledge cash
bank 895, 895, cash and 632, 632, and bank
balances 794.26 794.26 bank 104.18 104.18 balances to
balances obtain
to obtain financing
financing credit from
credit financial
from institutions
financial
institution
s
Cash and 70, 269, 70, 269, Pledge Security 12, 12, Pledge Security
bank 522.55 522.55 deposits 586, 586, deposits for
balances for trading 192.00 192.00 trading in
in futures futures and
and financial
financial derivatives
derivative
s
Cash and Freezing 119, 119, Freezing
bank funds 600, 600, funds
119, 600, 119, 600, Freezin
balances Freezing involved 000.00 000.00 involved in
000.00 000.00 g
in litigation
litigation
Financia Pledge
l assets financial
10, 10,
held for assets held
000, 000, Pledge
trading for trading
000.00 000.00
to obtain
financing
219 / 319
2023 Annual Report
credit from
financial
institutions
Receiva Pledge Pledge
bles notes notes
financin receivable receivable
g to obtain to obtain
2, 873, 2, 873, 1, 469, 1, 469,
financing financing
535, 535, Pledge 571, 571, Pledge
credit credit from
149.86 149.86 971.78 971.78
from financial
financial institutions
institution
s
Fixed 108, 294, 80, 505, Mortgage Mortgage 107, 85, Mortga Mortgage
assets 533, 745, fixed 498, 436, ge fixed assets
612.66 109.76 assets to 280, 371, to obtain
obtain 667.52 528.20 financing
financing credit from
credit financial
from institutions
financial
institution
s
Fixed 4, 647, 1, 649, Mortgage Mortgage 2, 798, 1, 546, Mortga Mortgage is
assets 436, 966, is used to 943, 266, ge used to
155.66 499.72 provide 881.83 735.52 provide
security security for
for the sale the sale and
and leaseback
leaseback contract
contract
Intangibl 5, 067, 4, 492, Mortgage Mortgage 4, 263, 3, 781, Mortga Mortgage
e assets 120, 197, intangible 597, 381, ge intangible
570.14 052.63 assets to 293.43 873.08 assets to
obtain obtain
financing financing
credit credit from
from financial
financial institutions
institution
s
Construc Mortgage Mortgage
tion in constructi construction
progress on in in progress
progress to to obtain
24, 014, 24, 014, obtain 675, 675, financing
Mortga
095, 095, Mortgage financing 737, 737, credit from
ge
335.45 335.45 credit 980.77 980.77 financial
from institutions
financial
institution
s
150, 339, 118, 978, / / 124, 100, / /
486, 304, 465, 669,
Total
140.58 464.23 950, 148,
091.51 385.53
220 / 319
2023 Annual Report
Other note:
None
32. Short-term loans
(1). Short-term loans by category
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Pledge loans 2, 776, 068, 898.60 1, 222, 816, 658.22
Mortgage loans 4, 684, 217, 467.66 5, 151, 321, 326.22
Guaranteed loans 22, 362, 489, 683.61 24, 740, 778, 066.47
Unsecured loans 10, 932, 592, 766.04 5, 017, 843, 728.97
Discount of commercial 26, 239, 681, 665.48 33, 184, 139, 033.20
acceptance bills
Total 66, 995, 050, 481.39 69, 316, 898, 813.08
Note to short-term loans by category:
The reason for the discrepancy between the disclosure of the beginning balance of short-term
loans and the 2022 annual report is that the item of accrued interest was allocated to the item of
pledge loans, mortgage loans, guaranteed loans, and unsecured loans.
(2). Short-term loans that have been overdue and not repaid
□适用 √不适用
Including important short-term loans that have been overdue and not repaid are as follows:
□适用 √不适用
Other notes:
□适用 √不适用
33. Financial liabilities held for trading
√适用 □不适用
Unit: Yuan Currency: RMB
Specified reasons
Item Beginning balance Closing balance
and basis
Financial liabilities held for 346, 020, 729.70 190, 324, 330.67 /
trading
Including:
Derivative financial 346, 020, 729.70 190, 324, 330.67 /
liabilities
Designated as financial
liabilities at fair value through
profit or loss
Including:
Total 346, 020, 729.70 190, 324, 330.67 /
Other note:
□适用 √不适用
221 / 319
2023 Annual Report
34. Derivative financial liabilities
□适用 √不适用
35. Notes payable
(1). Notes payable presented by item
√适用 □不适用
Unit: Yuan Currency: RMB
Category Closing balance Beginning balance
Commercial acceptance 8, 134, 202, 672.24 8, 848, 668, 508.73
bills
Bank acceptance bills 1, 584, 564, 190.99 1, 250, 537, 334.72
Letter of credit 2, 283, 686, 725.30 10, 504, 570, 026.82
Total 12, 002, 453, 588.53 20, 603, 775, 870.27
Bills payable overdue but still unpaid at year end is RMB 0.
36. Accounts payable
(1). Accounts payable presented by item
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Within 1 year 13, 746, 679, 951.78 7, 538, 599, 735.57
1 to 2 years 1, 223, 853, 715.40 574, 101, 327.24
2 to 3 years 176, 810, 898.80 404, 729, 363.36
Over 3 years 451, 323, 029.94 351, 879, 572.73
Total 15, 598, 667, 595.93 8, 869, 309, 998.90
(2). Significant accounts payable aging over 1 year
□适用 √不适用
Other note
√适用 □不适用
For details of accounts payable in foreign currencies, see the note “Items in foreign
currencies”.
37. Advances from customers
(1). Advance from customers presented by item
□适用 √不适用
(2). Significant advance from customers with ageing over one year
□适用 √不适用
(3). Amount and reason for significant changes in the carrying amount during the
reporting period
□适用 √不适用
Other note
222 / 319
2023 Annual Report
□适用 √不适用
38. Contract liabilities
(1). Information of contract liabilities
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Within 1 year 8, 474, 131, 199.60 12, 042, 290, 821.83
1 to 2 years 12, 597, 237.07 34, 506, 243.07
2 to 3 years 3, 887, 634.70 11, 816, 872.03
Over 3 years 11, 771, 197.56 2, 369, 389.54
Total 8, 502, 387, 268.92 12, 090, 983, 326.47
(2). Significant contract liabilities with ageing over one year
□适用 √不适用
(3). The amount and reasons for significant changes in the carrying amount during the
reporting period
□适用 √不适用
Other note:
□适用 √不适用
39. Employee benefits payables
(1). Employee benefits payable
√适用 □不适用
Unit: Yuan Currency: RMB
Item Beginning balance Increase Decrease Closing balance
I. Short-term employee 475, 189, 408.73 4, 796, 253, 4, 771, 785, 499, 657, 479.17
benefits 622.35 551.91
II. Post-employment 1, 320, 371.45 302, 721, 303, 061, 980, 037.39
benefits -Defined 307.14 641.20
contribution plans
III. Termination benefits
IV. Others benefits due
within one year
476, 509, 780.18 5, 098, 974, 5, 074, 847, 500, 637, 516.56
Total
929.49 193.11
(2). Short-term employee benefits
√适用 □不适用
Unit: Yuan Currency: RMB
Beginning
Item Increase Decrease Closing balance
balance
I. Salaries, bonus and 474, 799, 762.21 4, 413, 290, 4, 389, 199, 498, 890, 853.28
allowances 623.14 532.08
II. Staff welfare 29, 713.49 79, 710, 337.46 79, 726, 036.54 14, 014.41
III. Social insurances 259, 417.88 165, 307, 165, 391, 175, 203.09
581.53 796.32
223 / 319
2023 Annual Report
Including: Medical 236, 762.93 136, 710, 136, 775, 172, 382.92
insurance 995.53 375.54
Work injury 12, 114.62 17, 576, 330.33 17, 585, 624.78 2, 820.17
insurance
Maternity insurance 10, 540.33 11, 020, 255.68 11, 030, 796.01
IV. Housing fund 81, 456.00 105, 076, 104, 580, 577, 408.40
746.30 793.90
V. Union funds and staff 19, 059.15 32, 798, 917.26 32, 817, 976.41
education
VI. Vocation leave
VII. Short-term profit
sharing plan
VIII. Compensation for 54, 206.24 54, 206.24
termination of labor
relations
IX. Others 15, 210.42 15, 210.42
475, 189, 408.73 4, 796, 253, 4, 771, 785, 499, 657, 479.17
Total
622.35 551.91
(3). Defined contribution plans
√适用 □不适用
Unit: Yuan Currency: RMB
Beginning Closing
Item Increase Decrease
balance balance
1.Basic pension insurance 1, 275, 512.09 292, 861, 888.98 293, 172, 157.94 965, 243.13
2.Unemployment insurance 44, 859.36 9, 859, 418.16 9, 889, 483.26 14, 794.26
3.Corporate annuity plan
Total 1, 320, 371.45 302, 721, 307.14 303, 061, 641.20 980, 037.39
Other note:
√适用 □不适用
The Company participates in the pension insurance and unemployment insurance plans
established by government agencies in accordance with the regulations. Apart from this, the
Company no longer undertakes further payment obligations, and the corresponding expenditures
are included in the current profit or loss or the cost of related assets when incurred.
40. Taxes payable
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Value-added tax 266, 538, 160.39 12, 771, 830.29
Consumption tax 557, 275, 099.44 709, 805, 522.32
Business tax
Enterprise income tax 370, 596, 086.66 106, 928, 407.84
Individual income Tax
Urban maintenance and 57, 017, 069.39 49, 277, 199.63
construction tax
Property tax 34, 240, 076.04 31, 071, 196.33
Stamp duty 79, 049, 841.45 59, 377, 203.13
Land use tax 18, 747, 915.44 16, 817, 664.16
Education surcharge 24, 457, 717.74 21, 118, 876.28
Local education surcharges 16, 305, 145.15 14, 079, 250.85
224 / 319
2023 Annual Report
Withholding individual income 11, 642, 729.83 11, 736, 272.81
Tax
Withholding value-added tax
Environmental protection tax 3, 731, 893.02 3, 030, 289.52
Total 1, 439, 601, 734.55 1, 036, 013, 713.16
Other note:
None
41. Other payables
Presented by item
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Interest payable
Dividends payable
Other payables 416, 224, 941.72 382, 263, 173.05
Total 416, 224, 941.72 382, 263, 173.05
Other note:
□适用 √不适用
(2)Interest payable
Presented by category:
□适用 √不适用
Overdue significant interest payable：
□适用 √不适用
Other note:
□适用 √不适用
(3) Dividends payable
Presented by category:
□适用 √不适用
(4) Other payables
Other payables by nature
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Security deposits 141, 520, 538.30 135, 894, 155.27
Current accounts 250, 137, 634.54 223, 906, 378.05
Others 24, 566, 768.88 22, 462, 639.73
Total 416, 224, 941.72 382, 263, 173.05
(2). Significant other payables aging over 1 year
□适用 √不适用
Other note:
225 / 319
2023 Annual Report
√适用 □不适用
For details of other payables in foreign currencies, see the note “Items in foreign currencies”.
42. Liabilities held-for-sale
□适用 √不适用
43. Non-current liabilities due within one year
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Long-term loans due within one 12, 022, 605, 362.19 7, 054, 740, 475.94
year
Bonds payable due within one 1, 015, 294, 281.98 2, 030, 618, 280.89
year
Long-term payables due within 421, 574, 624.56 228, 838, 610.93
one year
Lease liabilities due within one 38, 597, 381.39 34, 830, 877.25
year
Total 13, 498, 071, 650.12 9, 349, 028, 245.01
Other note:
1．Long-term loans due within one year
Category Closing balance Beginning balance
Unsecured loans 2, 038, 956, 504.33 907, 763, 820.68
Guaranteed loans 2, 550, 943, 972.65 518, 367, 019.77
Mortgage loans 7, 432, 704, 885.21 5, 628, 609, 635.49
Subtotal 12, 022, 605, 362.19 7, 054, 740, 475.94
2．Bonds payable due within one year
Bond name Face value Coup Issuance Ter Issuance amount Beginning
on date m balance
rate(
%)
22 Hengli
1yea 1, 017, 281,
Petrochemical 1, 000, 000, 000.00 3.03 2022/6/1 1, 000, 000, 000.00
r 918.22
CP001
22 Hengli
1yea 1, 013, 336,
Petrochemical 1, 000, 000, 000.00 3.18 2022/7/25 1, 000, 000, 000.00
r 362.67
CP002
23 Hengli
1yea
Petrochemical 1, 000, 000, 000.00 3.53 2023/7/19 1, 000, 000, 000.00
r
CP001
Subtotal 2, 030, 618,
3, 000, 000, 000.00 - - - 3, 000, 000, 000.00
280.89
Continued:
Bond Accrued Amortizati Closing Def
name Bonds issued in interest for on of Current balance ault
this period the current excess repayment or
period discount not
22
13, 018, 1, 030, 300,
Hengli NO
081.78 000.00
Petroche
226 / 319
2023 Annual Report
mical
CP001
22
Hengli
18, 463, 1, 031, 800,
Petroche NO
637.33 000.00
mical
CP002
23
Hengli
1, 000, 000, 16, 237, -943, 1, 015, 294,
Petroche NO
000.00 678.21 396.23 281.98
mical
CP001
Subtotal 1, 000, 000, 47, 719, -943, 2, 062, 100, 1, 015, 294,
-
000.00 397.32 396.23 000.00 281.98
3．Long-term payables due within one year
Item Closing balance Beginning balance
Lease payment 509, 232, 241.76 267, 373, 159.72
Less: Unrecognized financing
87, 657, 617.20 38, 534, 548.79
expenses
Subtotal 421, 574, 624.56 228, 838, 610.93
4．For details of non-current liabilities in foreign currencies, see the note “Items in foreign
currencies”.
44. Other current liabilities
Information of other current liabilities
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Short-term bonds payable
Payables of returned goods
Output VAT pending for 1, 098, 844, 994.24 1, 564, 174, 590.75
transfer
Notes receivable not
derecognised
Payable of monetary security 3, 575, 114, 707.32 1, 714, 584, 516.80
deposits
Payable of pledged security 27, 533, 400.00 88, 252, 384.00
deposits
Futures risk reserve 16, 792, 003.62 15, 076, 976.64
Payable of Futures Investor 68, 751.02 39, 089.66
Protection Fund
Total 4, 718, 353, 856.20 3, 382, 127, 557.85
Increase and decrease of short-term bonds payable:
□适用 √不适用
Other note:
□适用 √不适用
227 / 319
2023 Annual Report
45. Long term loans
(1). Long term loans by category
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Pledge loans -
Mortgage loans 60, 400, 028, 956.12 46, 526, 719, 607.47
Guaranteed loans 3, 477, 610, 377.93 5, 344, 182, 213.19
Unsecured loans 6, 743, 267, 198.21 6, 476, 251, 530.06
Total 70, 620, 906, 532.26 58, 347, 153, 350.72
Note to long term loans by category:
None.
Other notes:
√适用 □不适用
For details of long term loans in foreign currencies, see the note “Items in foreign currencies”.
46. Bonds payable
(1). Bonds payable
□适用 √不适用
(2). Specific information of bonds payable: (Excluding preferred stocks, perpetual
bonds and other financial instruments classified as financial liabilities)
□适用 √不适用
(3). Note to convertible corporate bonds:
□适用 √不适用
Accounting treatment and judgment basis for equity transfer:
□适用 √不适用
(4). Notes on other financial instruments classified as financial liabilities
Basic information on preferred shares, perpetual bonds and other financial instruments issued at
the end of the period
□适用 √不适用
Table of changes in financial instruments such as preferred shares and perpetual bonds issued at
the end of the period
□适用 √不适用
Explanation of the basis for the classification of other financial instruments into financial liabilities:
□适用 √不适用
Other note:
□适用 √不适用
228 / 319
2023 Annual Report
47. Lease liabilities
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
1 to 2 years 24, 232, 615.59 26, 859, 744.59
2 to 3 years 9, 681, 451.08 16, 863, 368.50
3 to 4 years 3, 863, 081.41 6, 737, 278.38
4 to 5 years 77, 023.76 2, 688, 301.03
Over 5years 3, 662, 312.61 2, 602, 187.41
Total 41, 516, 484.45 55, 750, 879.91
Other note:
None
48. Long-term payables
Presented by item
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Long-term payables 2, 079, 460, 266.51 852, 833, 333.34
Specific payables 6, 000, 000.00 6, 000, 000.00
Total 2, 085, 460, 266.51 858, 833, 333.34
Other note:
□适用 √不适用
Long-term payables
(1). Long-term payables by nature
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Finance lease payables 2, 673, 505, 087.92 1, 163, 373, 159.72
Less: Unrecognized financing -81, 701, 215.45
-172, 470, 196.85
expenses
Less: Long-term payables due -228, 838, 610.93
-421, 574, 624.56
within one year
Subtotal 2, 079, 460, 266.51 852, 833, 333.34
Other note:
For details of long-term payables in foreign currencies, see the note “Items in foreign currencies”.
Specific payables
(2). Specific payables by nature
√适用 □不适用
Unit: Yuan Currency: RMB
Beginning balance Increase Decrease Closing Reason of
Item
balance formation
229 / 319
2023 Annual Report
R&D and 6, 000, 000.00 - 6,000,000.00 Funds
industrialization appropriated by
of ultra-high- the government
strength creep- need to be
resistant confirmed after
polyester acceptance
industrial fibers
Total 6, 000, 000.00 - 6,000,000.00 /
Other note:
None
49. Long-term employee benefits payable
□适用 √不适用
(1). Table of long-term employee benefits payables
□适用 √不适用
(2). Changes in defined benefit plans
Present value of defined benefit plan obligation：
□适用 √不适用
Plan assets：
□适用 √不适用
Net liabilities (net assets) of defined benefit plans:
□适用 √不适用
Description of the content of the defined benefit plan and its associated risks, as well as its impact
on the company's future cash flow, timing, and uncertainty:
□适用 √不适用
Description of major actuarial assumptions and sensitivity analysis results for defined benefit
plans:
□适用 √不适用
Other notes：
□适用 √不适用
50. Provision for liabilities
□适用 √不适用
51. Deferred income
Deferred income
√适用 □不适用
Unit: Yuan Currency: RMB
Beginning Reason of
Item Increase Decrease Closing balance
balance formation
Government 3, 376, 501, 877, 850, 305, 260, 3, 949, 091,
-
grants 714.84 492.50 322.98 884.36
230 / 319
2023 Annual Report
3, 376, 501, 877, 850, 305, 260, 3, 949, 091, /
Total
714.84 492.50 322.98 884.36
Other note:
√适用 □不适用
Please refer to the description of "Government Subsidy" for details of the projects involving
government subsidy and the apportionment method.
52. Other non-current liabilities
□适用 √不适用
53. Share capital
√适用 □不适用
Unit: Yuan Currency: RMB
Beginning
Increase or decrease (+, -) Closing balance
balance
Capital
Issuance
Bonus reserve
New Others Subtotal
shares converted
shares
to shares
Total 7,039,099,786.00 7,039,099,786.00
shares
Other note:
None
54. Other equity instruments
(1). Basic information on preferred shares, perpetual bonds and other financial
instruments issued at the end of the period
□适用 √不适用
(2). Table of changes in financial instruments such as preferred shares and perpetual
bonds issued at the end of the period
□适用 √不适用
Changes of other equity instruments in the current period, reasons for the changes, and basis for
relevant accounting treatment:
□适用 √不适用
Other note:
□适用 √不适用
55. Capital reserve
√适用 □不适用
Unit: Yuan Currency: RMB
Item Beginning balance Increase Decrease Closing balance
Capital 18, 604, 956, 168.08 18, 604, 956, 168.08
premium(Capital
premium)
231 / 319
2023 Annual Report
Other capital 81, 559, 959.68 77, 070, 049.22 158, 630, 008.90
reserve
Total 18, 686, 516, 127.76 77, 070, 049.22 18, 763, 586, 176.98
Other note, including the increase and decrease in the current period, and the reason for the
change:
In this period, due to the recognition of share payment expenses in the employee stock ownership
plan, the company increased the capital reserve by RMB77, 070, 049.22.
56. Treasury shares
□适用 √不适用
232 / 319
2023 Annual Report
57. Other comprehensive income
√适用 □不适用
Unit: Yuan Currency: RMB
Item Beginning balance Movement during the period Closing balance
Less: Included
in other
Less: comprehensive
Amount
transferred income in the Less: Amount
attributable to
Amount before to profit or previous Income attributable to
minority
tax loss in period and tax parent company
interests after
current transferred to expenses after tax
tax
year retained
earnings in the
current period
I. Other
comprehensive
income not
reclassified into
profit or loss
subsequently
Including:
Changes in
amount on
remeasurement
of defined
benefit plan
Other
comprehensive
income not
reclassified to
profit or loss
under equity
method
233 / 319
2023 Annual Report
Changes in fair
value of other
equity
instrument
investments
Changes in the
fair value of the
enterprise’s own
credit risk
II. Other -50, 052, 317.06 40, 427, 663.98 40, 427, 663.98 -9, 624, 653.08
comprehensive
income that will
be reclassified
into profit or loss
subsequently
Including: Other
comprehensive
income that will
be transferred to
profit or loss
under equity
method
Changes in fair
value of other
debt investments
Reclassification
of financial assets
recognized in
other
comprehensive
income
Provision for
credit loss of
other debt
investments
234 / 319
2023 Annual Report
Cash flows -54, 062, 644.32 6, 252, 291.04 6, 252, 291.04 -47, 810, 353.28
hedge reserve
Translation 4, 010, 327.26 34, 175, 372.94 34, 175, 372.94 38, 185, 700.20
difference of
foreign currency
financial
statements
Total other -50, 052, 317.06 40, 427, 663.98 40, 427, 663.98 -9, 624, 653.08
comprehensive
income
Other note, including the adjustment of the initial recognition amount of the hedged item for the effective part of the cash flow hedging profit or loss:
None.
235 / 319
2023 Annual Report
58. Special reserve
√适用 □不适用
Unit: Yuan Currency: RMB
Item Beginning balance Increase Decrease Closing balance
Safety 1, 602, 239.79 428, 804, 002.16 321, 048, 118.43 109, 358, 123.52
production fee
Total 1, 602, 239.79 428, 804, 002.16 321, 048, 118.43 109, 358, 123.52
Other note , including the increase and decrease in the current period, and the reason for the
change:
None
59. Surplus reserve
√适用 □不适用
Unit: Yuan Currency: RMB
Item Beginning balance Increase Decrease Closing balance
Statutory surplus 905, 565, 700.75 89, 753, 070.62 995, 318, 771.37
reserve
Discretionary
surplus reserve
Reserve funds
Enterprise
expansion fund
Others
Total 905, 565, 700.75 89, 753, 070.62 995, 318, 771.37
Note , including the increase and decrease in the current period, and the reason for the change:
The Company appropriates the statutory surplus reserve at 10% of its net profit in accordance
with the “Company Law” and the Company's articles of association. If the accumulated amount of
the statutory surplus reserve reaches more than 50% of the Company's registered capital, the
appropriation will cease.
60. Undistributed profits
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Closing balance of prior year 26, 279, 812, 029.77 31, 118, 454, 108.29
Add: adjustments on beginning
balance of undistributed profits
Beginning balance after adjustment 26, 279, 812, 029.77 31, 118, 454, 108.29
Add: Net profit attributable to parent
6, 904, 603, 862.76 2, 318, 303, 166.69
company for the current year
Less: Appropriation of statutory 89, 753, 070.62 47, 454, 461.35
surplus reserve
Appropriation of discretionary
surplus reserve
Appropriation of general risk
reserve
Appropriation for dividends to 7, 109, 490, 783.86
ordinary shares
Dividend to ordinary shares
converted to share capital
236 / 319
2023 Annual Report
Closing balance of undistributed 33, 094, 662, 821.91 26, 279, 812, 029.77
profits
Adjustment of undistributed profits at the beginning of the period:
1.Due to the retroactive adjustment of the "Accounting Standards for Business Enterprises" and its
related new regulations, the Undistributed profits at the beginning of the period was affected RMB0.
2.Due to changes in accounting policies, the undistributed profit at the beginning of the period was
affected RMB 0.
3. Due to the correction of major accounting errors, the undistributed profit at the beginning of the
period was affected RMB 0.
4.Changes in the scope of consolidation under common control, affecting the undistributed profit
at the beginning of the period RMB 0.
5.Total impact of other adjustments on undistributed profit at the beginning of the period RMB 0.
61. Operating income and operating cost
(1). Operating income and operating cost
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Revenue Cost Revenue Cost
Primary 233, 199, 632, 207, 605, 430, 221, 683, 819, 203, 871, 767,
operations 798.64 263.55 060.46 587.67
Other
1, 591, 039, 597.24 778, 421, 663.81 639, 764, 909.42 205, 829, 478.78
operations
234, 790, 672, 208, 383, 851, 222, 323, 583, 204, 077, 597,
Total
395.88 927.36 969.88 066.45
237 / 319
2023 Annual Report
(2).Information of operating income and operating costs
√适用 □不适用
Unit: Yuan Currency: RMB
Current year Total
Contract
operating
classification operating revenue operating costs operating revenue
costs
Product type
Refining 119, 961, 394, 97, 736, 740, 119, 961, 394, 97, 736, 740,
products 781.18 789.33 781.18 789.33
PTA 72, 607, 325, 755.38 73, 593, 225, 72, 607, 325, 755.38 73, 593, 225,
397.55 397.55
Polyester 34, 115, 424, 080.06 30, 568, 324, 34, 115, 424, 080.06 30, 568, 324,
products 767.59 767.59
Others 6, 515, 488, 182.02 5, 707, 139, 6, 515, 488, 182.02 5, 707, 139,
309.08 309.08
Classified by
geographical
region
Domestic 217, 520, 294, 192, 952, 054, 217, 520, 294, 192, 952,
831.77 100.03 831.77 054, 100.03
Overseas 15, 679, 337, 966.87 14, 653, 376, 15, 679, 337, 966.87 14, 653, 376,
163.52 163.52
Total 233, 199, 632, 207, 605, 430, 233, 199, 632, 207, 605,
798.64 263.55 798.64 430, 263.55
Other notes:
□适用 √不适用
(3). Note on performance obligations :
□适用 √不适用
(4). Description of apportionment to remaining performance obligations:
□适用 √不适用
(5) Major contract changes or major transaction price adjustments:
□适用 √不适用
Other note:
1. The total operating revenue of the top five customers of the Company this year was RMB21,
284, 161, 483.40, which accounted for 9.07% of the total operating revenue.
2. Relevant revenue and cost of trial sales
Product name Current year Prior year
Revenue of trial sales 9, 277, 198, 784.14 315, 105, 406.95
Cost of trial sales 9, 165, 652, 787.68 283, 157, 002.19
The trial operation sales in this period are the external sales of products before the fixed assets
reach the intended usable state.
238 / 319
2023 Annual Report
62. Taxes and surcharges
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Consumption tax 7, 677, 485, 422.84 5, 424, 150, 546.27
Business tax
Urban maintenance and 566, 340, 116.73 418, 477, 747.17
construction tax
Education surcharge 242, 762, 663.24 179, 555, 517.95
Resource tax
Property tax 145, 837, 535.56 130, 772, 143.92
Land use tax 80, 522, 979.26 72, 788, 042.28
Vehicle and vessel use tax
Stamp duty 307, 783, 577.26 271, 455, 396.57
Local education surcharge 161, 841, 775.49 119, 701, 395.73
Environmental protection tax 17, 236, 683.01 13, 321, 650.94
Security for the disabled
Others 823, 161.04 796, 739.83
Total 9, 200, 633, 914.43 6, 631, 019, 180.66
Other note:
Please refer to the explanation of “Taxation” for details of the payment standard.
63. Selling expenses
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Logistics transportation fee
Staff salaries 171, 749, 149.81 177, 239, 467.21
Travel expenses 4, 046, 898.34 4, 163, 862.29
Warehousing related costs 89, 354, 564.98 180, 463, 279.95
Business entertainment expenses 1, 920, 017.46 1, 227, 474.04
Office expenses 17, 366, 721.02 22, 468, 241.55
Other expenses 9, 035, 691.88 7, 206, 851.74
Total 293, 473, 043.49 392, 769, 176.78
Other note:
None
64. Administrative expenses
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Staff salaries 833, 916, 942.06 849, 247, 603.21
Depreciation and amortization 633, 265, 117.08 587, 247, 400.89
Office expenses 424, 368, 720.48 368, 450, 540.43
Travel expenses 47, 548, 901.05 39, 577, 984.82
Business entertainment expenses 20, 965, 070.22 18, 400, 622.78
Other expenses 37, 303, 218.65 26, 374, 511.63
Total 1, 997, 367, 969.54 1, 889, 298, 663.76
Other note:
None
239 / 319
2023 Annual Report
65. Research and development expenses
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Staff salaries 426, 960, 232.93 383, 500, 164.71
Direct materials 668, 829, 148.62 512, 323, 117.51
Fuel and power 136, 857, 584.58 137, 112, 098.62
Depreciation and amortization 103, 301, 638.38 112, 721, 585.17
Others 35, 079, 881.83 39, 054, 037.39
Total 1, 371, 028, 486.34 1, 184, 711, 003.40
Other note:
None
66. Financial expenses
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Interest expenses 5, 836, 304, 435.57 5, 182, 887, 891.00
Including: Interest expenses on lease 4, 137, 699.03 5, 022, 089.58
liabilities
Less: Interest capitalized -1, 264, 460, 002.56 -549, 982, 061.04
Less: Interest income -468, 581, 267.39 -332, 736, 566.09
Less: Fiscal interest discount -4, 347, 712.06
Net exchange gain or loss 976, 349, 386.10 -333, 939, 778.59
Handling fees and others 289, 499, 031.16 321, 141, 965.40
Total 5, 364, 763, 870.82 4, 287, 371, 450.68
Other note:
None
67. Other income
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Government grants received in 1, 277, 081, 247.00
630, 488, 011.59
current period
Amortization of deferred income 302, 860, 322.98 314, 769, 087.30
Receive Tax Withholding Fee 3, 295, 205.93 3, 692, 791.90
Tax reduction and exemption 78, 985, 705.21
Total 1, 015, 629, 245.71 1, 595, 543, 126.20
Other note:
None.
68. Investment income
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Income from long-term equity 76, 784, 860.69
investment by equity method
240 / 319
2023 Annual Report
Gain from disposal of long-term equity
investment
Investment income of financial assets
held for trading during the holding
period
Investment income of other equity
investment instruments during the
holding period
Interest income from debts investment
during the holding period
Interest income from other debt
investments during the holding period
Gain from disposal of Financial assets 61, 342, 743.03 -322, 324.78
held for trading
Investment income from disposal of
other equity instruments investment
Gains from disposal of debts investment
Gain from disposal of other debt
investments
Gains from debt restructuring
Gains from disposal of receivables -174, 694, 586.97
financing
Total -36, 566, 983.25 -322, 324.78
Other note:
1. Important items of long-term equity investment income accounted for using the equity method
Reasons for the increase
or decrease in this
Investee Current year Prior year
period compared to the
previous year
Wuxi Xishang Bank Changes in the profit of
77, 638, 436.12 -
Co., Ltd. the investee
Chenju(Suzhou)
Science and Changes in the profit of
-853, 575.43 -
Technology Innovation the investee
Development Co., Ltd
Total 76, 784, 860.69 - -
2. The company does not have significant restrictions on the repatriation of investment income.
69. Gain from net exposure of hedging
□适用 √不适用
70. Gains from changes in fair value
√适用 □不适用
Unit: Yuan Currency: RMB
Source of gains from changes in fair
Current year Prior year
value
Financial assets held for trading 558, 832, 667.08 454, 544, 350.02
Including: Gains from changes in fair 559, 183, 971.69 456, 756, 322.79
value arising from derivative financial
instruments
241 / 319
2023 Annual Report
Gains from changes in fair value of -351, 304.61 -2, 211, 972.77
non-derivative financial instruments
Financial liabilities held for trading -188, 282, 293.17 -500, 223, 920.74
Investment properties measured at
fair value
Total 370, 550, 373.91 -45, 679, 570.72
Other note:
None
71. Credit impairment loss
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Bad debts of notes receivable
Bad debts of accounts receivable -1, 136, 866.40 3, 803, 043.71
Bad debts of other receivables -106, 917, 478.88 -6, 176, 849.83
Impairment loss of debts investment
Impairment loss of other debt
investments
Bad debt of long-term receivables
Impairment losses related to financial
guarantees
Total -108, 054, 345.28 -2, 373, 806.12
Other note:
None
72. Assets impairment loss
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
I. Bad debt loss
II. Impairment loss on decline in value -593, 692, 020.24 -3, 128, 732, 830.34
of inventories and contract
performance cost
III. Impairment loss of long-term
equity investment
IV. Impairment loss of investment
properties
V. Impairment loss of fixed assets
VI. Impairment loss of construction
materials
VII. Impairment loss of construction in
progress
VIII. Impairment loss of productive
biological assets
IX. Impairment loss of oil and gas
assets
X. Impairment loss of intangible
assets
XI. Impairment loss of goodwill
XII. Others
Total -593, 692, 020.24 -3, 128, 732, 830.34
242 / 319
2023 Annual Report
Other note:
None
73. Gains from disposal of assets
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Gains from disposal of non-
current assets not classified as -3, 063, 798.81 -3, 332, 571.69
held for sale
Including: Fixed assets -869, 904.40 -3, 494, 458.02
Right-of-use assets -111, 362.80 161, 886.33
Intangible assets -2, 082, 531.61
Total -3, 063, 798.81 -3, 332, 571.69
Other note:
None
74. Non-operating income
Information of non-operating income
√适用 □不适用
Unit: Yuan Currency: RMB
Amount included in non-
Item Current year Prior year recurring gains and
losses
Total gains on disposal 54, 459.02 2, 016, 853.08 54, 459.02
of non-current assets
Including: Gain from 54, 459.02 2, 016, 853.08 54, 459.02
disposal of fixed
assets
Gain from
disposal of intangible
assets
Gains on barter trade
of non-monetary
assets
Accept donation
Government grants
Indemnity income 14, 739, 212.12 10, 523, 745.24 14, 739, 212.12
Carbon emissions 56, 603, 773.59 56, 603, 773.59
trading revenue
Initial investment cost 79, 415, 493.16
of the long-term
equity investment
calculated by the
equity method is less
than the share of the
owner's equity of the
investee
Others 8, 418, 013.15 13, 374, 625.74 8, 418, 013.15
Total 79, 815, 457.88 105, 330, 717.22 79, 815, 457.88
Other note:
243 / 319
2023 Annual Report
□适用 √不适用
75. Non-operating expenses
√适用 □不适用
Unit: Yuan Currency: RMB
Amount included in non-
Item Current year Prior year recurring gains and
losses
Total losses on 1, 555, 570.10 7, 478, 374.56 1, 555, 570.10
disposal of non-
current assets
Including: Loss on 1, 555, 570.10 7, 478, 374.56 1, 555, 570.10
disposal of fixed
assets
Loss on
disposal of intangible
assets
Losses on barter
trade of non-
monetary assets
External donation 102, 003, 000.00 939, 000.00 102, 003, 000.00
Fines payment 399, 000.00 14, 125.81 399, 000.00
Compensation, 142, 433.50 306, 000.00 142, 433.50
liquidated damages
Tax late fee 616, 116.01 9, 966, 608.00 616, 116.01
Provision for
litigation losses
Others 1, 675, 568.66 1, 977, 149.82 1, 675, 568.66
Total 106, 391, 688.27 20, 681, 258.19 106, 391, 688.27
Other note:
None
76. Income tax expenses
(1). Income tax expenses
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Current income tax 1, 330, 070, 239.55 776, 954, 787.70
Deferred income tax 638, 698, 030.86 -685, 413, 122.59
Total 1, 968, 768, 270.41 91, 541, 665.11
(2). Reconciliation between income tax expenses and accounting profit
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year
Profits before tax 8, 873, 232, 207.19
Expected income tax expenses at applicable tax 2, 218, 308, 051.80
rates
Effect of different tax rates applied by -328, 913, 138.60
subsidiaries
244 / 319
2023 Annual Report
Adjustment for income tax in previous years 14, 155, 493.36
Effect of non-taxable income -60, 452, 218.84
Effect of non-deductible costs, expenses and 311, 668, 825.62
losses
Effect of using the deductible temporary -135, 675, 028.70
differences or deductible losses for which no
deferred tax asset was recognized in previous
period
Effect of deductible temporary differences or 47, 987, 369.72
deductible losses for which no deferred tax asset
was recognized this year
The impact of additional deduction of research
-98, 324, 540.76
and development expenses
Effect of tax rates adjustment 13, 456.81
Income tax expenses 1, 968, 768, 270.41
Other note:
□适用 √不适用
77. Other comprehensive income
√适用 □不适用
For details of other comprehensive income, please refer to the description of “Other comprehensive
income” in note 57.
78. Notes to cash flow statement
(1). Cash related to operating activities
Cash received from other operating activities
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Recover of bank security deposits 2, 487, 038, 979.97 2, 717, 429, 397.12
Interest income received 457, 661, 248.69 329, 903, 553.79
Revenue from labor services and 115, 117, 600.04 82, 592, 034.32
rental services received
Government grants income received 1, 512, 686, 216.15 1, 974, 073, 764.50
Security deposit received 50, 093, 354.25 155, 476, 221.27
Receive the emissions trading 60, 000, 000.00
revenue
Receive the customer’s futures 757, 796, 509.61 622, 380, 717.69
transaction reserve fund
Net amount received from others 56, 170, 549.33 54, 436, 482.72
payments and current accounts
Total 5, 496, 564, 458.04 5, 936, 292, 171.41
Note to cash received from other operating activities:
None
Cash paid for other operating activities
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Payment of security deposit to banks 1, 282, 883, 169.62 2, 487, 038, 979.97
245 / 319
2023 Annual Report
Expenses paid in cash 925, 939, 345.05 1, 067, 439, 713.14
Payment of security deposits 55, 930, 165.11 39, 943, 686.24
Net amount paid for others payments 208, 723, 191.68 40, 617, 426.82
and current accounts
Total 2, 473, 475, 871.46 3, 635, 039, 806.17
Note to Cash paid for other operating activities:
None
(2).Cash related to investment activities
Cash received from major investing activities
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Receipts of the redemption of
910, 000, 000.00 39, 000, 000.00
financial products
Receipts of margin deposit for futures
1, 002, 917, 428.98 230, 197, 278.69
contract
Withdrawal of treasury bond reverse
1, 063, 238, 000.00 1, 547, 438, 000.00
repurchase investment
Receipts of other investments such as
1, 496, 165, 096.54 433, 517, 745.71
bond funds
Total 4, 472, 320, 525.52 2, 250, 153, 024.40
Note to Cash received from other investing activities:
None
Cash paid for major investing activities
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Payment of investment in financial 855, 000, 000.00 94, 000, 000.00
products
Payment of treasury bond reverse 1, 220, 389, 000.00 1, 409, 925, 000.00
repurchase investment
Payment of other investments such 1, 618, 046, 706.05 433, 517, 745.71
as bond funds
Total 3, 693, 435, 706.05 1, 937, 442, 745.71
Note to Cash paid for major nvesting activities:
None
Other cash received relating to investing activities:
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Withdraw the bank guarantee 1, 165, 527, 839.07 273, 421, 460.73
Margin received for commodity
129, 638, 118.47
futures contracts 65, 358, 947.08
Net other receipts and current
18, 904, 666.78
accounts 9, 122, 082.64
Total 1, 314, 070, 624.32 347, 902, 490.45
246 / 319
2023 Annual Report
Note to cash received related to investment activities:
None
Other cash paid relating to investing activities
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Margin paid for commodity futures
contracts 242, 207, 168.35 129, 114, 882.39
Bank guarantee deposit paid 634, 499, 614.62 1, 165, 527, 839.07
Other payments and net current
accounts 11, 996, 480.27 20, 985, 976.52
Total 888, 703, 263.24 1, 315, 628, 697.98
(3) Cash related to financing activities
Cash received for other financing activities
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Recover of bank security deposits 4, 118, 655, 079.75 3, 352, 867, 653.01
Recover security deposits of financing
23, 250, 000.00
leases
Received financing lease payments 3, 520, 000, 000.00
Net amount of cash received from
the sale of treasury shares 382, 298, 725.15
Total 7, 661, 905, 079.75 3, 735, 166, 378.16
Note to Cash received for other financing activities:
None
Cash paid for other financing activities
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Payment of principal and interest of 170, 000, 000.00
Hengli Group’s borrowings
Payment of security deposit to banks 3, 525, 382, 532.58 4, 118, 655, 079.75
Payment related to leases 2, 234, 645, 253.91 193, 495, 397.24
Cash paid for other financing 25, 211, 778.44
activities
Total 5, 785, 239, 564.93 4, 482, 150, 476.99
Note to Cash paid for other financing activities:
None
247 / 319
2023 Annual Report
Changes in liabilities arising from financing activities
√适用 □不适用
Unit: Yuan Currency: RMB
Increase Decrease
Item Beginning balance Closing balance
Cash changes Non-cash changes Cash changes Non-cash changes
134, 718, 792, 104, 717, 625, 16, 445, 116, 95, 381, 893, 10, 861, 079, 149, 638, 562,
Bank loans
639.74 805.89 890.30 382.68 577.41 375.84
Other payables -
34, 003.40 34, 003.40
dividends payable
Bonds payable
(including those 2, 030, 618, 280.89 999, 000, 000.00 48, 719, 397.32 2, 062, 100, 000.00 943, 396.23 1, 015, 294, 281.98
within one year)
Lease liabilities
(including those
90, 581, 757.16 62, 188, 913.57 39, 137, 220.23 33, 519, 584.66 80, 113, 865.84
within one year)
[Note]
Long-term payables
(including those 1, 081, 671, 944.27 3, 520, 000, 000.00 307, 067, 582.44 2, 193, 524, 919.48 214, 179, 716.16 2, 501, 034, 891.07
within one year)
Total 137, 921, 664, 109, 236, 625, 16, 863, 126, 99, 676, 689, 11, 109, 722, 153, 235, 005,
622.06 805.89 787.03 525.79 274.46 414.73
[Note] The VAT related to the payment of rental is RMB1, 983, 114.21
248 / 319
2023 Annual Report
(4) Note to Presenting Cash Flow on a Net Basis :
□适用 √不适用
(5) Significant activities and financial impacts that do not involve current cash receipts
and payments but affect the financial status of the enterprise or may affect the cash flow
of the enterprise in the future
√适用 □不适用
Item Current year Prior year
Bill endorsement transfer for
3, 105, 895, 310.18 3, 814, 448, 539.56
payment of goods
79. Supplement to cash flow statement
(1). Supplement to cash flow statement
√适用 □不适用
Unit: Yuan Currency: RMB
Supplement information Current year Prior year
1．Reconciliation of net profit to cash flow from operating activities:
Net profit 6, 904, 463, 936.78 2, 318, 036, 950.22
Add: Provision for impairment of 593, 692, 020.24 3, 128, 732, 830.34
assets
Credit impairment loss 108, 054, 345.28 2, 373, 806.12
Depreciation of fixed assets, depletion 8, 825, 594, 625.40 8, 567, 512, 312.81
of oil and gas assets, and depreciation
of productive biological assets
Amortization of right-of-use assets 32, 918, 601.09 33, 675, 038.15
Amortization of intangible assets 254, 303, 592.07 261, 164, 423.95
Amortization of long-term deferred 617, 798, 491.85 680, 489, 913.08
expenses
Losses on disposal of fixed assets, 3, 063, 798.81 3, 332, 571.69
intangible assets and other long-term
assets (Gain as in “-”)
Loss on retirement of fixed assets 1, 501, 111.08 5, 461, 521.48
(Gain as in “-”)
Losses on changes in fair value (Gain -370, 550, 373.91 45, 679, 570.72
as in “-”)
Financial expenses (Gain as in “-”) 4, 640, 958, 566.54 4, 444, 197, 476.00
Investment losses (Gain as in “-”) -138, 127, 603.72 322, 324.78
Decrease in deferred tax assets 615, 902, 069.48 -703, 400, 163.02
(Increase as in “-”)
Increase in deferred tax liabilities 22, 795, 961.38 17, 987, 040.43
(Decrease as in “-”)
Decrease in inventories (Increase as in 5, 972, 116, 203.83 -7, 090, 734, 574.98
“-”)
Decrease in operating receivables -366, 059, 086.40 5, 237, 905, 008.94
(Increase as in “-”)
Increase in operating payables -4, 369, 558, 472.13 9, 119, 876, 604.91
(Decrease as in “-”)
Others 186, 922, 341.30 -118, 641, 872.19
Net cash flows from operating 23, 535, 790, 128.97 25, 953, 970, 783.43
activities
249 / 319
2023 Annual Report
2．Significant investment or finance activities not involving cash:
Conversion of debt into capital
Convertible bonds mature within one
year
Right-of-use assets formed by leasing 24, 494, 067.04 27, 164, 265.16
3．Net increase / (decrease) in cash and cash equivalents:
Cash and bank balance as at end of 15, 025, 322, 771.34 20, 323, 703, 829.39
year
Less: cash and bank balance at
20, 323, 703, 829.39 9, 589, 548, 876.75
beginning of year
Add: cash equivalents at end of year
Less: cash equivalents at beginning of
year
Net increase in cash and cash -5, 298, 381, 058.05 10, 734, 154, 952.64
equivalents
(2). Net cash paid for acquisition of subsidiaries during the year
□适用 √不适用
(3). Net cash received from disposal of subsidiaries during the year
□适用 √不适用
(4). Details of cash and cash equivalents
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
I. Cash 15, 025, 322, 771.34 20, 323, 703, 829.39
Including: Cash on hand 609, 377.49 1, 305, 525.78
Cash at bank readily available for 12, 956, 437, 868.43 18, 837, 045, 793.15
payment
Other monetary fund readily 2, 068, 275, 525.42 1, 485, 352, 510.46
available for payment
Cash at central bank available on
demand
Deposits with banks and other
financial institutions
Interbank lending
II. Cash equivalents
Including: bonds investment mature
within 3 months
III. Cash and cash equivalents as at 15, 025, 322, 771.34 20, 323, 703, 829.39
closing balance
Including: Restricted cash and cash
equivalents held by the Company or
subsidiaries of the Group
(5) Situation where the using rights of cash and bank balances subject to restriction is still
listed as cash and cash equivalents
□适用 √不适用
250 / 319
2023 Annual Report
(6) Monetary funds not classified as cash and cash equivalents
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year Reason of restriction
Loan guarantee
3, 525, 382, 532.57 3, 838, 471, 603.38 Not to be used casually
deposit
Bank acceptance
296, 007, 837.30 506, 369, 384.04 Not to be used casually
deposit
Letter of credit
948, 463, 593.21 2, 414, 021, 116.76 Not to be used casually
deposit
Bond guarantee 2, 157, 102.00 150, 000.00 Not to be used casually
Forward foreign
10, 586, 192.00 Not to be used casually
exchange margin
Futures trading
70, 269, 522.55 2, 000, 000.00 Not to be used casually
restricted margin
restricted time
480, 884, 729.18 858, 620, 000.00 Not to be used casually
deposit certificate
Other restricted
119, 600, 000.00 119, 600, 000.00 Not to be used casually
bank deposits
Unexpired interest
951, 060.99 2, 883, 754.27 Not to be used casually
receivable
Total 5, 443, 716, 377.80 7, 752, 702, 050.45 /
Other notes:
□适用 √不适用
80. Notes to Items in the Statement of Changes in Owner's Equity
Explain the "other" items and the adjustment amount for the adjustment of the balance at the
end of the previous year:
□适用 √不适用
81. Items in foreign currencies
(1). Items in foreign currencies
√适用 □不适用
Unit: Yuan
Converted into RMB
Closing balance in
Item Conversion rate at year end
foreign currency
balance
Cash and bank balances - -
Including: US Dollar 228, 745, 260.41 7.0827 1, 620, 134, 055.93
Euro 1, 459, 206.53 7.8592 11, 468, 195.96
Hong Kong dollars 8, 062, 199.64 0.90622 7, 306, 126.56
Japanese Yen 3, 697.00 0.050213 185.64
Singapore dollar 2, 765, 282.79 5.3772 14, 869, 478.61
Swiss Franc 0.09 8.4184 0.76
British pounds 72.21 9.0411 652.86
Korean won 1, 600.00 0.005513 8.82
Accounts receivable - -
Including: US Dollar 32, 453, 150.29 7.0827 229, 855, 927.54
Euro 1, 433, 004.36 7.8592 11, 262, 267.86
Receivables financing - -
251 / 319
2023 Annual Report
Including: US Dollar 108, 989, 669.64 7.0827 772, 043, 132.63
Other receivables - -
Including: US Dollar 36, 120, 161.88 7.0827 255, 828, 270.54
Notes payable - -
Including: US Dollar 297, 081, 634.04 7.0827 2, 104, 140, 089.42
Euro 13, 938, 649.72 7.8592 109, 546, 635.88
Accounts payable - -
Including: US Dollar 526, 205, 342.04 7.0827 3, 726, 954, 576.07
Euro 150, 206, 369.36 7.8592 1, 180, 501, 898.07
Swiss Franc 1, 783, 610, 991.94 0.050213 89, 560, 458.74
Other payables - -
Including: US Dollar 23, 814, 259.44 7.0827 168, 669, 255.34
Non-current liabilities due - -
within one year
Including: US Dollar 54, 269, 231.75 7.0827 384, 372, 687.71
Euro 5, 659, 424.16 7.8592 44, 478, 546.36
Long term loans - -
Including: US Dollar 850, 000, 000.00 7.0827 6, 020, 295, 000.00
Euro 33, 936, 458.48 7.8592 266, 713, 414.49
Other note:
None
(2). Explanation of overseas operating entities, including for important overseas
operating entities, the main overseas business location, bookkeeping functional
currency and selection basis should be disclosed, and the reasons for changes in
bookkeeping functional currency should also be disclosed
√适用 □不适用
Name Place of business Reporting currency Selection basis
HENGLI China Hong Kong US Dollar The currency of the
PETROCHEMICAL primary economic
CO., LIMITED environment in which
the business operates is
US Dollar
HENGLI Singapore US Dollar The currency of the
PETROCHEMICAL primary economic
INTERNATIONAL environment in which
PTE. LTD. the business operates is
US Dollar
HENGLI OILCHEM Singapore US Dollar The currency of the
PTE. LTD. primary economic
environment in which
the business operates is
US Dollar
HENGLI SHIPPING Singapore US Dollar The currency of the
INTERNATIONAL primary economic
PTE. LTD. environment in which
the business operates is
US Dollar
252 / 319
2023 Annual Report
82. Lease
(1) As leasee
√适用 □不适用
Variable lease payments not included in the measurement of lease liabilities
□适用 √不适用
Simplify the processing of short-term leases or rental fees for low-value assets
√适用 □不适用
Item Current year
Short-term leases 4, 968, 272.71
Rental fees for low-value assets -
Total 4, 968, 272.71
After-sale leaseback transaction and judgment basis
√适用 □不适用
In the after-sale leaseback transaction business of the company, the leased property belongs to the
company at the end of the lease term and does not meet the criteria for sale. The company uses
after-sale leaseback transactions for financing, which is not a common business practice for
companies.
Total cash outflow related to leasing 2, 234, 645, 253.91(Unit: Yuan Currency: RMB )
(2) As leasor
Operating lease as a lessor
√适用 □不适用
Unit: Yuan Currency:RMB
Including: income related to
variable lease payments not
Item Rental income
included in the lease receipt
amoun
Houses and buildings 12, 306, 376.38 -
Total 12, 306, 376.38 -
Financial leasing as a lessor
□适用 √不适用
Adjustment table of undiscounted lease receipts and net lease investment
□适用 √不适用
Undiscounted lease receipts in the next five years
√适用 □不适用
Unit: Yuan Currency: RMB
Annual undiscounted lease receipts
Item
Closing balance Beginning balance
First year 10, 845, 440.54 11, 011, 481.76
Second year 2, 177, 766.12 8, 667, 674.42
Third year 544, 441.53 -
253 / 319
2023 Annual Report
The fourth year - -
Fifth year - -
Total undiscounted lease - -
receipts after five years
(3) Confirm the profit or loss of financial leasing sales as a manufacturer or distributor
□适用 √不适用
Other notes:
None.
83. Others
□适用 √不适用
VIII Research and Development Expenditures
(1). Listed by nature of expenses
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Staff salaries 426, 960, 232.93 383, 500, 164.71
Direct materials 668, 829, 148.62 512, 323, 117.51
Fuel and power 136, 857, 584.58 137, 112, 098.62
Depreciation and amortization 103, 301, 638.38 112, 721, 585.17
Others 35, 079, 881.83 39, 054, 037.39
Total 1, 371, 028, 486.34 1, 184, 711, 003.40
Including: Expensed R&D expenditure 1, 371, 028, 486.34 1, 184, 711, 003.40
Capitalized R&D expenditure -
Other notes：
None
(2). Expenditure of research and development projects meet capitalized conditions
□适用 √不适用
Important capitalized research and development projects
□适用 √不适用
Provision for impairment of development expenditure
□适用 √不适用
Other notes：
None
Important outsourcing projects in research
□适用 √不适用
IX. Changes in scope of consolidation
1. Business combination not under common control
□适用 √不适用
254 / 319
2023 Annual Report
2. Business combination under common control
□适用 √不适用
3. Reverse acquisition
□适用 √不适用
255 / 319
2023 Annual Report
4. Disposal of subsidiaries
Whether there are transactions or events that result in the loss of control over subsidiaries in the
current period :
□适用 √不适用
Other note:
□适用 √不适用
Whether there are situations that the investment in a subsidiary is disposed of through multiple
transactions and control is lost in the current period:
□适用 √不适用
Other note:
□适用 √不适用
5. Changes in the scope of consolidation for other reasons
Explain the changes in the scope of consolidation caused by other reasons (such as the
establishment of new subsidiaries, liquidation of subsidiaries, etc.) and related situations:
√适用 □不适用
1． Increase in scope of consolidation
Company name Mode of Equity acquisition Contribution Contribution
acquisition date amount ratio
of equity
Luzhou Hengli Energy Sales Co., New 10000 ten
2023/04/27 100%
Ltd established thousand yuan
Hengli Fuel Oil (Hainan) Co., New 10000 ten
2023/05/17 100%
Ltd established thousand yuan
Shanghai Hengli Fuel Oil Co., New 10000 ten
2023/05/30 100%
Ltd established thousand yuan
Hengli (Zhoushan) Energy and New 10000 ten
2023/03/28 100%
Chemical Co., Ltd established thousand yuan
Hengli Petrochemical Trading New 10000 ten
2023/04/24 100%
Co., Ltd established thousand yuan
Huizhou Hengli Jinshang New 10000 ten
2023/08/28 100%
Trading Co., Ltd established thousand yuan
Huizhou Hengli Chemical Sales New 5000 ten
2023/11/15 100%
Co., Ltd established thousand yuan
Hengli International Trade Co., New 10000 ten
2023/10/08 100%
Ltd established thousand yuan
2. Decrease in scope of consolidation for other reasons
Company name Disposal Disposal date of Net assets on Net profit from the
method equity disposal date beginning of the
period to date of
disposal
Kanghui Kunshan New Material Deregistered 2023/06/26
- 5.6
Technology Co., Ltd
Hengli Logistics (Dalian) Co., Deregistered 2023/06/27
- -
Ltd
Hengli Chemical (Suqian) Co., Deregistered 2023/01/10
- -
Ltd
Hengli Oil Products (Suqian) Deregistered 2023/01/10
- -
Co., Ltd
Suzhou Baocheng Weiye Deregistered 2023/01/20 - -
256 / 319
2023 Annual Report
Petrochemical Trading Co., Ltd
Suzhou Jinzhan Hengyuan Deregistered 2023/01/03
- -
Petrochemical Trading Co., Ltd
3. Absorption merger
There is no merger or acquisition in this period.
6. Others
□适用 √不适用
257 / 319
2023 Annual Report
X. Interests in other entities
1. Interests in subsidiaries
(1). Group structure
√适用 □不适用
Shareholding
Name of Place of Registered Place of Nature of (%) Acquisitio
subsidiary business capital registration business Direc Indire n method
t ct
Jiangsu 220800 No. 1, Hengli Manufacturi 99.99 0.01 Business
Hengli ten Road, Nanma ng combinati
Chemical thousand Industrial Zone, on not
China
Fiber Co., yuan Shengze Town, under
Ltd. Wujiang City, common
Jiangsu Province control
Jiangsu 278000 Hengli Textile Manufacturi 100.0 Business
Hengke ten New Material ng 0 combinati
Advanced thousand Industrial Park, on under
Materials yuan Binjiang New common
China
Co. Ltd. District (Wuji control
Town), Tongzhou
City, Nantong
City
Nantong 50 ten No. 1, Kaisha Transportati 100.0 Establishe
Teng’an thousand Road, Binjiang on industry 0 d by
Logistics Co., China yuan New District, investmen
Ltd. Tongzhou City, t
Nantong City
Jiangsu 205000 Textile New Manufacturi 100.0 Establishe
Xuanda ten Material ng 0 d by
Polymer thousand Industrial Park, investmen
Material Co., China yuan Wujie Town, t
Ltd. Tongzhou
District, Nantong
City
Jiangsu Deli 75073.87 No. 599, Manufacturi 100.0 Business
Chemical ten Huanghe South ng 0 combinati
Fiber Co., thousand Road, Sucheng on not
China
Ltd. yuan Economic under
Development common
Zone, Suqian City control
Hengli 75000 ten 02, 03, 04, Floor Other 100.0 Business
Futures Co., thousand 7, No. 308, financial 0 combinati
Ltd. yuan Jinkang Road, industry on not
China
China (Shanghai) under
Pilot Free Trade common
Zone control
Hengli 20000 ten Floor 7, No. 308, Wholesale 100.0 Establishe
Hengxin thousand Jinkang Road, and retail 0 d by
Industry and yuan China (Shanghai) investmen
Trade China Pilot Free Trade t
(Shanghai) Zone (nominal
Co., Ltd. floor, actual floor
6th floor) 01
258 / 319
2023 Annual Report
Suzhou 26700 ten Manufacturi 100.0 Business
Susheng thousand Tanqiu Village, ng 0 combinati
Thermal China yuan Shengze Town, on under
Power Co., Wujiang common
Ltd. control
Suzhou 500 ten Room 202, Wholesale 100.0 Establishe
Binglin thousand Building 8, No. 1, and retail 0 d by
Trading Co., yuan Hengli Road, investmen
Ltd. China Nanma Industrial t
Zone, Shengze
Town, Wujiang
District, Suzhou
Sichuan 10000 ten No. 10, Section 2, Manufacturi 100.0 Establishe
Hengli New thousand Lingang Avenue, ng 0 d by
Material Co., yuan South Sichuan investmen
China
Ltd. Lingang Area, t
Sichuan Free
Trade Zone
Hengli New 100000 No. 88, Manufacturi 100.0 Establishe
Materials ten Gangcheng Road, ng 0 d by
(Suqian) Co., China thousand Yangbei Street, investmen
Ltd. yuan Sucheng District, t
Suqian City
Suzhou 10000 ten Room 203, Wholesale 100.0 Establishe
Hengli thousand Building 8, No. 1, industry 0 d by
Chemical yuan Hengli Road, investmen
New Nanma Industrial t
Material Co., China Zone, Shengze
Ltd. Town, Wujiang
District, Suzhou
City, Jiangsu
Province
Kanghui 167796.58 Yingkou Manufacturi 66.33 33.67 Business
New 02 ten Xianrendao ng combinati
Material China thousand Energy and on under
Technology yuan Chemical common
Co., Ltd. Industry Zone control
Comfort 5000 ten Room 201, Wholesale 100.0 Establishe
Internationa thousand Building 8, No. 1, and retail 0 d by
l Trade yuan Hengli Road, investmen
(Jiangsu) China Nanma Industrial t
Co., Ltd. Zone, Shengze
Town, Wujiang
District
Suqian 50000 ten Shop 125, Manufacturi 100.0 Establishe
Kanghui thousand Property 77, ng 0 d by
New yuan Huaihai Property investmen
Material Co., Material t
Ltd. Decoration City,
China
Suqian Economic
and
Technological
Development
Zone
259 / 319
2023 Annual Report
Kanghui 64000 ten Complex Building Manufacturi 100.0 Establishe
Dalian New thousand No. 298, ng 0 d by
Material yuan Changsong Road, investmen
Technology China Changxing IsLand t
Co., Ltd. Economic Zone,
Dalian, Liaoning
Province
Jiangsu 250000 The Yangtze River Manufacturi 100.0 Establishe
Kanghui ten Delta Ecological ng 0 d by
New thousand Green Integration investmen
Material yuan Development t
Technology Demonstration
China
Co., Ltd. Zone (No.558
Fenhu Avenue,
Lili Town,
Wujiang District,
Suzhou City)
Kanghui 200000 Hengli Textile Manufacturi 100.0 Business
Nantong ten New Material ng 0 combinati
New thousand Industrial Park, on under
Material China yuan Wujie Town, common
Technology Tongzhou control
Co., Ltd. District, Nantong
City
Hengli 627000 Former Xingang Industrial 100.0 Business
Investment ten Primary School, Investment 0 combinati
(Dalian) Co., thousand Xingang Village, on under
Ltd. China yuan Changxing IsLand common
Economic Zone, control
Dalian, Liaoning
Province
Hengli 589000 Former Xingang Manufacturi 100.0 Establishe
Petrochemic ten Primary School, ng 0 d by
al (Dalian) thousand Xingang Village, investmen
Co., Ltd. China yuan Changxing IsLand t
Economic Zone,
Dalian, Liaoning
Province
Hengli 2000 ten Xingang Village, Transportati 100.0 Business
Shipping thousand Changxing IsLand on industry 0 combinati
(Dalian) Co., yuan Economic Zone, on not
Ltd. China Dalian, Liaoning under
Province common
(formerly Xingang control
Primary School)
Hengli 1000 ten Flat 1906, 19/F, Wholesale 100.0 Establishe
Petrochemic China thousand Harbour Centre, and retail 0 d by
al Hong Hong Kong 25 Harbour Road, investmen
Co.,Limited Kong dollars Wanchai, Hong t
Kong
Shenzhen 10000 ten Unit 6101-03, Wholesale 100.0 Business
Ganghui thousand Block A, Kingkey and retail 0 combinati
Trading Co., yuan 100 Property, on under
China
Ltd. 5016 Shennan common
East Road, control
Guiyuan Street,
260 / 319
2023 Annual Report
Luohu District,
Shenzhen
Hengli 1000 ten No. 298, Transportati 100.0 Establishe
Storage and thousand Changsong Road, on industry 0 d by
Transportati yuan Changxing Island investmen
China
on (Dalian) Economic Zone, t
Co., Ltd Dalian, Liaoning
Province
Hengli 2000 ten Xingang Village, Manufacturi 100.0 Business
Concrete thousand Changxing IsLand ng 0 combinati
(Dalian) Co., yuan Economic Zone, on under
Ltd. China Dalian, Liaoning common
Province control
(formerly Xingang
Primary School)
Hengli 227740 No. 26, Xiayong Manufacturi 100.0 Establishe
Petrochemic ten Petrochemical ng 0 d by
al (Huizhou) thousand Avenue Middle, investmen
China
Co., Ltd. yuan Daya Bay, t
Huizhou (Plant
No. 2 (R&D))
Hengli 1759633 No. 298, Manufacturi 100.0 Business
Petrochemic ten Changsong Road, ng 0 combinati
al (Dalian) thousand Changxing IsLand on under
China
Refining Co., yuan Economic Zone, common
Ltd. Dalian, Liaoning control
Province
Hengli 3035.6844 9 STRAITS VIEW Wholesale 100.0 Establishe
Petrochemic ten #08-11 MARINA and retail 0 d by
al Singapo thousand ONE WEST investmen
Internationa re U.S dollar TOWER t
l Pte. Ltd. SINGAPORE(0189
37)
Hengli 2500 ten 9 STRAITS VIEW Wholesale 79.00 Establishe
Oilchem Pte. thousand #08-11 MARINA and retail d by
Ltd. Singapo Singapore ONE WEST investmen
re Dollar TOWER t
SINGAPORE(0189
37)
Hengli 50 ten 9 STRAITS VIEW Transportati 100.0 Establishe
Shipping thousand #08-11 MARINA on industry 0 d by
Internationa Singapo U.S dollar ONE WEST investmen
l Pte. Ltd. re TOWER t
SINGAPORE(0189
37)
Hengli 15000 ten Room 801, Wholesale 100.0 Establishe
Energy thousand Building A, and retail 0 d by
(Hainan) U.S dollar Sunshine investmen
Co., Ltd. China Financial Plaza, t
Jiyang District,
Sanya City,
Hainan Province
Hengli 10000en Room 205-1328, Wholesale 100.0 Establishe
Petrochemic thousand No.181 Xingyang and retail 0 d by
China
al (Hainan) U.S dollar Avenue, investmen
Co., Ltd. Jiangdong New t
261 / 319
2023 Annual Report
District, Haikou
City, Hainan
Province
Suzhou 11000 ten No. 1801, Pangjin Wholesale 100.0 Establishe
Hengli thousand Road, Wujiang and retail 0 d by
Chemical U.S dollar Economic and investmen
Import & Technological t
China
Export Co., Development
Ltd. Zone, Suzhou
City, Jiangsu
Province
Suzhou 5000 ten Room 301, Wholesale 100.0 Establishe
Hengli thousand Building 5, No. and retail 0 d by
Energy U.S dollar 1518, Linhu investmen
Chemical China Avenue, Lili t
Import & Town, Wujiang
Export Co., District, Suzhou
Ltd. City
Shenzhen 5000 ten No. 5016, Wholesale 100.0 Business
Shengang thousand Shennan East and retail 0 combinati
Trading Co., yuan Road, Guiyuan on under
Ltd. Street, Luohu common
China District, control
Shenzhen ,Unit
6101-03B, Block
A, Kingkey 100
Building
Hengli 10000 ten OSBL Project - Wholesale 100.0 Establishe
Refining thousand Public Works and retail 0 d by
Products yuan Office Building investmen
Sales No. 298, t
(Dalian) Co., China Changsong Road,
Ltd. Changxing IsLand
Economic Zone,
Dalian, Liaoning
Province
Hengli 1000 ten No. 298, Wholesale 100.0 Establishe
Aviation Oil thousand Changsong Road, and retail 0 d by
Co., Ltd. yuan Changxing IsLand investmen
China
Economic Zone, t
Dalian, Liaoning
Province
Hengli 10000 ten 2302, Property Wholesale 100.0 Establishe
Oilchem thousand 88, Suzhou and retail 0 d by
(Suzhou) yuan Central Plaza, investmen
Co., Ltd. Suzhou Industrial t
China
Park, Suzhou
Area, China
(Jiangsu) Pilot
Free Trade Zone
Hengli 10000 ten Room 2301, Wholesale 100.0 Establishe
Energy thousand Property 88, and retail 0 d by
(Suzhou) yuan Suzhou Central investmen
China
Co., Ltd. Plaza, Suzhou t
Industrial Park,
Suzhou Area,
262 / 319
2023 Annual Report
China (Jiangsu)
Pilot Free Trade
Zone
Suzhou 10360 ten Wholesale 100.0 Establishe
East side of East
Hengli thousand and retail 0 d by
Bridge, Lili Town,
Chemical China yuan investmen
Wujiang District,
Polymer Co., t
Suzhou City
Ltd.
Hengli 457495 No. 298, Manufacturi 100.0 Establishe
Petrochemic ten Changsong Road, ng 0 d by
al (Dalian) thousand Changxing IsLand investmen
China
Chemical yuan Economic Zone, t
Co., Ltd. Dalian, Liaoning
Province
Hengli 650000 Complex Building Manufacturi 100.0 Establishe
Petrochemic ten No. 298, ng 0 d by
al (Dalian) thousand Changsong Road, investmen
New China yuan Changxing IsLand t
Material Economic Zone,
Technology Dalian, Liaoning
Co., Ltd. Province
Hengli 30000 ten Complex Building Manufacturi 100.0 Establishe
Petrochemic thousand No. 298, ng 0 d by
al Utilities yuan Changsong Road, investmen
(Dalian) Co., China Changxing IsLand t
Ltd. Economic Zone,
Dalian, Liaoning
Province
Dalian 1800 ten Dispatching Manufacturi 65.00 Establishe
Hengzhong thousand Center, No. 3 ng d by
Special yuan Renshan Street, investmen
Materials China Changxing Island t
Co., Ltd. Economic Zone,
Dalian, Liaoning
Province
Suzhou 500 ten Wholesale 100.0 Establishe
No. 1, Hengli
Textile thousand and retail 0 d by
Road, Nanma
Group yuan investmen
China Industrial Zone,
Network E- t
Shengze Town,
commerce
Wujiang District
Co., Ltd.
Hengli 5000 ten Room 1688, Wholesale 100.0 Establishe
Petrochemic thousand Property 2, No. and retail 0 d by
al Sales Co., China yuan 215, Lianhe North investmen
Ltd. Road, Fengxian t
District, Shanghai
Hengli 5000 ten Wholesale 100.0 Establishe
2401, No. 3099,
(Eastern thousand and retail 0 d by
Chang’an Road,
China) yuan investmen
China Songling Town,
Petrochemic t
Wujiang District,
al Sales Co.,
Suzhou City
Ltd.
Hengli 20000 ten 3202, Luohu Wholesale 100.0 Establishe
(Southern thousand Business Center, and retail 0 d by
China
China) yuan 2028 Shennan investmen
Petrochemic East Road, t
263 / 319
2023 Annual Report
al Sales Co., Chengdong
Ltd. Community,
Dongmen Street,
Luohu District,
Shenzhen
Hengli 5000 ten Window 1, West Wholesale 100.0 Establishe
(Northern thousand Side of the and retail 0 d by
China) yuan Approval Hall, investmen
Petrochemic R&D Property, t
al Sales Co., China Xianrendao
Ltd. Economic
Development
Zone, Yingkou,
Liaoning Province
Yuehai 20000 ten Room 1401, Main Wholesale 100.0 Business
Petrochemic thousand Tower Building, and retail 0 combinati
al yuan Ocean Shipping on not
(Shenzhen) Center, No. 59, under
Co., Ltd. Linhai Avenue, common
Nanshan Street, control
China
Qianhai
Shenzhen-Hong
Kong
Cooperation
Zone, Shenzhen
14002-14003
Hengli Oil 10000 ten 2303, Property Wholesale 100.0 Establishe
Sales thousand 88, Suzhou and retail 0 d by
(Suzhou) yuan Central Plaza, investmen
Co., Ltd. Suzhou Industrial t
China
Park, Suzhou
Area, China
(Jiangsu) Pilot
Free Trade Zone
Hengli 10000 ten 2304, Property Wholesale 100.0 Establishe
Chemical thousand 88, Suzhou and retail 0 d by
Sales yuan Central Plaza, investmen
(Suzhou) Suzhou Industrial t
China
Co., Ltd. Park, Suzhou
Area, China
(Jiangsu) Pilot
Free Trade Zone
Hengli North 10000 ten No. 3, Unit 1, Wholesale 100.0 Establishe
Energy Sales thousand 21st Floor, Office and retail 0 d by
Co., Ltd. yuan Property B, investmen
Victoria Plaza, t
China No.56 Gangxing
Road, Zhongshan
District, Dalian
City, Liaoning
Province
Hengli 10000 ten Room 813, Free Wholesale 100.0 Establishe
Tongshang thousand Trade Building, and retail 0 d by
New Energy China yuan Dalian Free Trade investmen
Co., Ltd. Zone, Liaoning t
Province
264 / 319
2023 Annual Report
Hengli 10000 ten Service Wholesale 100.0 Establishe
Tongshang thousand Apartment, and retail 0 d by
New yuan Building 14, investmen
Material Co., Suzhou Bay View t
Ltd. Garden, No. 777,
Fengqing Street,
China
East Taihu Lake
Ecotourism
Resort (Taihu
New Town),
Wujiang District,
Suzhou City
Hengli 10000 ten Room F1-A-1026, Wholesale 100.0 Establishe
Energy thousand Building A2, No. and retail 0 d by
Import and yuan 8, Qicun Road, investmen
Export Co., China Suzhou Area, t
Ltd. China (Jiangsu)
Pilot Free Trade
Zone
Hengli 10000 ten Wholesale 100.0 Establishe
Room 702-7, No.
Nenghua thousand and retail 0 d by
719 Shengui
(Shanghai) China yuan investmen
Road, Minhang
Trading Co., t
District, Shanghai
Ltd.
Hengli 20000 ten Room 101, Floor Wholesale 100.0 Establishe
Hengyuan thousand 1, Building 1, No. and retail 0 d by
Supply Chain yuan 99, Shuanghui investmen
(Shanghai) China Road, Lingang t
Co., Ltd. New Area, China
(Shanghai) Pilot
Free Trade Zone
Hengli New 10000 ten Room 502, No. Wholesale 100.0 Establishe
Energy thousand 99, Huangpu and retail 0 d by
China
(Shanghai) yuan Road, Hongkou investmen
Co., Ltd. District, Shanghai t
Hengli 10000 ten Room 2507, Wholesale 100.0 Establishe
Yuanshang thousand Building 88, and retail 0 d by
Technology yuan Suzhou Central investmen
(Suzhou) Plaza, Suzhou t
Co., Ltd. China Industrial Park,
Suzhou Area,
China (Jiangsu)
Pilot Free Trade
Zone
Suzhou 10000 ten Room 2506, Wholesale 100.0 Establishe
Hengli thousand Building 88, and retail 0 d by
Jinshang yuan Suzhou Center investmen
Energy Plaza, Suzhou t
Technology China Industrial Park,
Co., Ltd. Suzhou Area,
China (Jiangsu)
Pilot Free Trade
Zone
Dalian 10000 ten No. 5, 21st Floor, Wholesale 100.0 Establishe
Hengli Fine China thousand No. 52, Gangxing and retail 0 d by
Chemical yuan Road, Zhongshan
265 / 319
2023 Annual Report
Sales Co., District, Dalian investmen
Ltd. City, Liaoning t
Province
Hengli 10000 ten Hefeng Wholesale 100.0 Establishe
Petrochemic thousand Homeland, and retail 0 d by
al Sales yuan Meilan District, investmen
(Haikou) Co., Haikou City, No. t
Ltd. 63-1, Qiongshan
China
Avenue,
Jiangdong New
District, Haikou
City, Hainan
Province-5449
Hengli 10000 ten Room 805, Wholesale 100.0 Establishe
Energy thousand Building A, Yahua and retail 0 d by
Chemical yuan Xiangxie, Sanya investmen
(Sanya) Co., China Bay Road, Tianya t
Ltd. District, Sanya
City, Hainan
Province
Dalian 10000 ten No. 4, 21st Floor, Wholesale 100.0 Establishe
Hengli thousand No. 52, Gangxing and retail 0 d by
Petrochemic yuan Road, Zhongshan investmen
China
al Sales Co., District, Dalian t
Ltd. City, Liaoning
Province
Dalian 10000 ten No. 62, Wholesale 100.0 Establishe
Hengli Gold thousand Changxing Road, and retail 0 d by
Merchant yuan Changxing Island investmen
China
Sales Co., Economic Zone, t
Ltd. Dalian, Liaoning
Province
Dalian 10000 ten No. 62, Wholesale 100.0 Establishe
Hengli New thousand Changxing Road, and retail 0 d by
Energy Sales yuan Changxing Island investmen
China
Co., Ltd. Economic Zone, t
Dalian, Liaoning
Province
Dalian 10000 ten No. 6, 21st Floor, Wholesale 100.0 Establishe
Henglixing thousand No. 52, Gangxing and retail 0 d by
Gemstone yuan Road, Zhongshan investmen
China
Chemical District, Dalian t
Trading Co., City, Liaoning
Ltd. Province
Dalian 10000 ten Office Dormitory Wholesale 100.0 Establishe
Hengli thousand Building, No. 6, and retail 0 d by
Gaoyuan yuan No. 76, Jinghai investmen
Sales Co., China Street, Changxing t
Ltd. Island Economic
Zone, Dalian,
Liaoning Province
Hengli 10000 ten Room 3201, Wholesale 100.0 Establishe
Energy thousand Luohu Business and retail 0 d by
Chemical China yuan Center, No. 2028, investmen
(Shenzhen) Shennan East t
Co., Ltd. Road, Chengdong
266 / 319
2023 Annual Report
Community,
Dongmen Street,
Luohu District,
Shenzhen
Nantong 1000 ten Room 101, Wholesale 100.0 Establishe
Hengli thousand Building 5, Kaisha and retail 0 d by
Maoyuan yuan Village, Wujie investmen
Petrochemic China Town, Tongzhou t
al Trading District, Nantong
Co., Ltd. City, Jiangsu
Province
Suzhou 10000 ten Room 501-04, Wholesale 100.0 Establishe
Hengli New thousand Building A, and retail 0 d by
Energy Sales yuan Building 1, Taihu investmen
Co., Ltd. East Bank t
Business Center,
China
No. 4088 Kaiping
Road, Wujiang
District, Suzhou
City, Jiangsu
Province
Suzhou 10000 ten Room 501-3, Wholesale 100.0 Establishe
Hengli Fine thousand Building A, and retail 0 d by
Chemical yuan Building 1, Taihu investmen
Sales Co., East Bank t
Ltd. Business Center,
No. 4088 Kaiping
China
Road, East Taihu
Lake Eco-tourism
Resort (Taihu
New Town),
Wujiang District,
Suzhou City
Hengli 10000 ten No. 1406, Main Wholesale 100.0 Establishe
Petrochemic thousand Tower, Ocean and retail 0 d by
al Sales yuan Shipping Center, investmen
(Shenzhen) No. 59, Linhai t
Co., Ltd. Avenue, Nanshan
China Street, Qianhai
Shenzhen-Hong
Kong
Cooperation
Zone, Shenzhen-
14057, 14058
Luzhou China No. 1, 2nd Floor, Wholesale 100.0 Establishe
Hengli Building 19, and retail 0 d by
Energy Sales Yingtian investmen
Co., Ltd 10000 ten Intelligent t
thousand Terminal
yuan Industrial Park,
Luzhou
Comprehensive
Bonded Zone
Hengli Fuel China 10000 ten Room G003, No. Wholesale 100.0 Establishe
Oil (Hainan) thousand 2 Office Building, and retail 0 d by
Co., Ltd yuan Bonded Port
267 / 319
2023 Annual Report
Area, Xinying Bay investmen
District, Yangpu t
Economic
Development
Zone, Hainan
Province
Shanghai China Room A-522, No. Wholesale 100.0 Establishe
Hengli Fuel 188, Yesheng and retail 0 d by
10000 ten
Oil Co., Ltd Road, Lingang investmen
thousand
New Area, China t
yuan
(Shanghai) Pilot
Free Trade Zone
Hengli China Room 402-76, Wholesale 100.0 Establishe
(Zhoushan) Warehouse 1, and retail 0 d by
Energy and Area B, No. 86, investmen
Chemical Dacheng 4th t
Co., Ltd 10000 ten Road, High-tech
thousand Industrial Park,
yuan Dinghai District,
Zhoushan City,
China (Zhejiang)
Pilot Free Trade
Zone
Hengli China Room 2602, Wholesale 100.0 Establishe
Petrochemic Building 88, and retail 0 d by
al Trading Suzhou Central investmen
Co., Ltd 10000 ten Square, Suzhou t
thousand Industrial Park,
yuan Suzhou Area,
China (Jiangsu)
Pilot Free Trade
Zone
Huizhou China No. 26, Xianong Wholesale 100.0 Establishe
Hengli Petrochemical and retail 0 d by
10000 ten
Jinshang Avenue, Daya investmen
thousand
Trading Co., Bay, Huizhou (No. t
yuan
Ltd 2 factory building
(R&D))
Huizhou China No. 26 Xiachong Wholesale 100.0 Establishe
Hengli Petrochemical and retail 0 d by
5000 ten
Chemical Avenue Central, investmen
thousand
Sales Co., Daya Bay, t
yuan
Ltd Huizhou (Building
2 (R&D))
Hengli China Room 501-2606, Wholesale 100.0 Establishe
Internationa Building 88, and retail 0 d by
l Trade Co., Suzhou Central investmen
Ltd 10000 ten Plaza, Suzhou t
thousand Industrial Park,
yuan Suzhou Area,
China (Jiangsu)
Pilot Free Trade
Zone
Reason of difference between shareholding ratio and voting right ratio in the subsidiary:
There are no subsidiaries with a shareholding ratio different from the voting right ratio.
268 / 319
2023 Annual Report
Basis for holding half or less of the voting rights but still controlling the investee:
There were no subsidiaries in the current period that the parent company had half or less of the
voting rights and was included in the scope of the consolidated financial statements.
Basis of control in structured entity included in the scope of the consolidation:
There are no important structured entity included in the scope of the consolidation in this period.
Basis for determining whether a company is an agent or a principal:
None
Other note:
In this period, there was no equity investment in which the parent company had more than half of
the voting rights but failed to exercise control.
(2). Significant non-wholly-owned subsidiaries
□适用 √不适用
(3). Key financial information of important non-wholly owned subsidiaries
□适用 √不适用
(4). Significant restrictions on the use of corporate group assets and the settlement of
corporate group debts
□适用 √不适用
(5). Financial support or other support provided to structured entities included in the
scope of consolidated financial statements
□适用 √不适用
Other note:
□适用 √不适用
2. Transactions in which the share of ownership interest in a subsidiary
changes and the subsidiary is still controlled
□适用 √不适用
3. Interests in joint ventures or associates
□适用 √不适用
4. Significant joint venture
□适用 √不适用
5. Interests in structured entities not included in the scope of consolidated financial
statements
Explanation on structured entities not included in the scope of consolidated financial statements:
269 / 319
2023 Annual Report
√适用 □不适用
On 31 December 2023, the structured entities related to the Company but not included in the
scope of this financial statement are mainly engaged in asset management business, manage
client assets and provide clients with investment management services for securities, futures and
other financial products. The total assets of such structured entities on 31 December 2023 were
RMB738.5488 million.
6. Others
□适用 √不适用
XI. Government grants
1、 Government grants recognized based on the receivable amount at the end of the reporting
period
□适用 √不适用
Reasons for not receiving the expected amount of government grant at the expected time
□适用 √不适用
2、 Liability items involving government grants
√适用 □不适用
Unit: Yuan Currency: RMB
Amount
Increase included
Transferre Other
d grants in non- Closing Related to
Financial Beginnin d to other change
amount operatin balanc assets/revenue
statemen g balance income in s in this
in this g income e s
t items this period period
period in this
period
3, 376, 3, 949, Related to
877, 850, 305, 260,
Deferred 501, - - 091, assets
492.50 322.98
income 714.84 884.36
3、 Government grants included in the current profit or loss
√适用 □不适用
Unit: Yuan Currency: RMB
Type Current year Prior year
Related to assets 302, 860, 322.98 315, 654, 639.40
Related to revenues 637, 235, 723.65 1, 278, 595, 694.90
Total 940, 096, 046.63 1, 594, 250, 334.30
Other notes：
None
XII. Risk of financial instruments
√适用 □不适用
270 / 319
2023 Annual Report
1. Risk of financial instruments
(I) Various risks arising from financial instruments
The Company faces risks of various financial instruments in its daily activities, mainly including
credit risk, market risk and liquidity risk. The Company's main financial instruments include cash and
bank balances, equity investment, debt investment, loans, accounts receivable, accounts payable,
etc. For details of each financial instrument, please refer to the relevant items in this Note. The risks
associated with these financial instruments and the risk management policies adopted by the
Company to reduce these risks are as follows:
The board of directors is responsible for planning and establishing the Company's risk
management structure, formulating the Company's risk management policies and related guidelines,
and supervising the implementation of risk management measures. The Company has formulated
risk management policies to identify and analyze the risks faced by the Company. These risk
management policies specify specific risks and cover many aspects such as market risk, credit risk
and liquidity risk management. The Company regularly assesses changes in the market environment
and the Company's operating activities to determine whether to update 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 related risks through close cooperation with the Company’s other
business departments. The Company's internal audit department conducts regular audits on risk
management controls and procedures, and reports the audit results to the Company's audit
committee.
The Company diversifies the risk of financial instruments through appropriate diversified
investments and business portfolios, and reduces risk concentrated on a single industry, a specific
region, or a specific counterparty by formulating appropriate risk management policies.
1. Market risk
Market risk of financial instruments refers to the risk that the fair value or future cash flow of
financial instruments will fluctuate due to changes in market price, including foreign exchange rate
risk, interest rate risk and other price risk.
(1). Foreign exchange rate risk
Exchange rate risk refers to the risk that the fair value of financial instruments or future cash
flows will fluctuate due to changes in foreign exchange rates. The Company's main operations are
located in China, Hong Kong, Singapore, domestic business is settled in RMB, export business is
mainly settled in US dollar, and overseas operating companies are settled in US dollar, so the
Company's determined foreign currency assets and liabilities and future foreign currency
transactions (Foreign currency assets and liabilities and foreign currency transactions are mainly
denominated in US dollar.) were exposed to foreign exchange rate risk. Related foreign currency
assets and foreign currency liabilities include: Cash and bank balances, Accounts receivable,
Receivable financing, Other receivables, Accounts payable, Notes payable, Other payables, Short-
term loans, and Non-current liabilities due within one year. Amount of financial assets and foreign
currency financial liabilities dominated in foreign currency and converted into RMB can be found in
“Items in foreign currencies” in this note.
The Company pays close attention to the impact of exchange rate changes on the Company's
exchange rate risk, and matches foreign currency income with foreign currency expenditure as
much as possible to reduce foreign exchange risk. In addition, the Company also signed forward
foreign exchange contracts to prevent the exchange risk of the Company's revenue settled in US
dollars. At the end of the current period, the foreign exchange risks faced by the Company mainly
originated from financial assets and liabilities denominated in US dollar. Amount of foreign currency
financial assets and foreign currency financial liabilities converted into RMB is shown in “Items in
foreign currencies” in this note.
If all the other variables remain unchanged, the impact of a 5% appreciation or depreciation of
the RMB against the US dollar on the company's net profit is as follows:
271 / 319
2023 Annual Report
Impact on Net profit (RMB ten thousand)
Exchange rate changes
Current year Prior year
Up5% -41, 759.98 -48, 908.58
Down5% 41, 759.98 48, 908.58
The management believes that 5% reasonably reflects the reasonable range of possible
changes in the RMB against the US dollar.
(2). Interest rate risk
Interest rate risk refers to the risk that the fair value of financial instruments or future cash
flows will fluctuate due to changes in market interest rates. The risks faced by the Company in
changing market interest rates are mainly related to the Company's borrowings with floating
interest rates. The Company's interest rate risk mainly arises from long-term interest-bearing debts
such as long-term bank loans and bonds payable. Floating interest rate financial liabilities expose
the Company to cash flow interest rate risk, while fixed interest rate financial liabilities expose the
Company to fair value interest rate risk. The Company determines the relative ratio of fixed rate and
floating rate contracts according to the market environment at that time, and maintains an
appropriate combination of fixed and variable rate instruments through regular review and
monitoring.
When other variables remain unchanged, if the borrowing rate calculated at floating interest
rates increases or decreases by 50 basis points, the impact on the company's net profit is as follows:
Impact on Net profit (RMB ten thousand)
Interest rate changes
Current year Prior year
Up 50 basis points -41, 340.58 -29, 996.98
Down 50 basis points 41, 340.58 29, 996.98
Management believes that 50 basis points reasonably reflects a reasonable range of possible
changes in interest rates over the next year.
(3). Other price risks
The Company does not hold equity investments in other listed companies, and there is no other
price risk.
2. Credit risk
Credit risk refers to the risk that the counterparty of a transaction fails to perform its
contractual obligations, resulting in financial losses to the Company. The Company's credit risk
mainly arises from Cash at bank and Receivables.
The Company's cash at bank is mainly deposited in state-owned banks and other large and
medium-sized listed banks. The Company does not expect cash at bank to have significant credit
risk.
For Receivables, the Company sets relevant policies to control credit risk exposure in
accordance with the concentration of customer management credit risk. The Company evaluates
the debtor's credit qualifications based on the debtor's financial status, external ratings, possibility
of obtaining guarantees from third parties, credit history and other factors such as current market
conditions, and sets the corresponding arrearage amount and credit period. The Company will
regularly monitor the credit history of the debtor. For debtors with poor credit records, the
Company will use written reminders, shorten the credit period or cancel the credit period to ensure
that the Company's overall credit risk is within control. Since the Company's Receivables customers
are widely dispersed in different regions and industries, there is no significant concentration of
credit risk in the Company.
The Company does not provide any other guarantees that may subject the Company to credit
risk. The largest credit risk exposure undertaken by the Company is the carrying amount of each
financial asset in the balance sheet.
(1). Judgment basis for significant increase in credit risk
272 / 319
2023 Annual Report
The Company assesses on each balance sheet date whether the credit risk of relevant financial
instruments has increased significantly since initial recognition. When determining whether the
credit risk has increased significantly since the initial recognition, the Company considers that it can
obtain reasonable and evidence-based information without unnecessary extra cost or effort,
including qualitative and quantitative analysis based on the Company's historical data, external
credit risk rating and forward-looking information. When one or more of the following quantitative
and qualitative standards are met, the Company believes that credit risk has increased significantly:
1) The contract payment has been overdue for more than 30 days.
2) According to the results of external public credit ratings, the debtor’s credit rating dropped
significantly.
3) There are serious problems in the debtor's production or operation, and the actual or
expected results of the operation have dropped significantly.
4) Significantly adverse changes have occurred in the debtor’s regulatory, economic or
technological environment.
5) It is expected that the debtor’s business, financial or economic conditions that will meet its
debt-servicing capacity will undergo significant adverse changes.
6) Other objective evidence shows that financial assets have significantly increased credit risk.
(2). Basis of credit impairment
When evaluating whether the debtor has suffered credit impairment, the Company mainly
considers the following factors:
1) The issuer or debtor has significant financial difficulties.
2) The debtor violates the contract, such as interest payment or principal default or overdue,
etc.
3) Due to economic or contractual considerations related to the debtor’s financial difficulties,
the creditor gives the debtor a concession that would not be made under any other circumstances.
4) The debtor is likely to go bankrupt or undergo other financial restructuring.
5) The issuer or debtor's financial difficulties caused the active market for the financial asset to
disappear.
6) Purchase or source a financial asset at a substantial discount, the discount reflects the fact
that credit losses have occurred.
(3). Parameters of measurement of expected credit loss
The parameters of expected credit loss measurement are based on whether there has been a
significant increase in credit risk and whether credit impairment has occurred. The Company
measures the loss provision for different assets with 12 months or the expected lifetime of the
entire credit period. The key parameters of expected credit loss measurement include default
probability, default loss rate and default risk exposure. The Company considers the quantitative
analysis of historical statistical data and forward-looking information to establish default probability,
default loss rate and default risk exposure model. The relevant definitions are as follows:
1) The probability of default refers to the possibility that the debtor will not be able to meet its
repayment obligations in the next 12 months or throughout the remaining duration.
2) The default risk exposure refers to the amount that the Company should be reimbursed
when a default occurs in the next 12 months or throughout the remaining duration.
3) The default loss rate refers to the Company's expectation of the degree of loss in default
exposure. Depending on the type of counterparty, the method and priority of recourse, and the
availability of collateral or other credit support, the rate of default loss varies.
The Company determines the expected credit loss by predicting the default probability, default
loss rate and default risk exposure of individual exposures or asset portfolios in the coming months.
During the reporting period, there have been no major changes in the expected credit loss
estimation techniques or key assumptions.
(4). Forward-looking information included in the expected credit loss model
273 / 319
2023 Annual Report
The assessment of a significant increase in credit risk and the calculation of expected credit
losses involve forward-looking information. Through historical data analysis, the Company has
identified relevant information that affects the credit risk and expected credit losses of each asset
portfolio, such as GDP growth rate and other macroeconomic conditions, and industry development
stages such as industry cycle stage. The Company predicts the impact of this information on the
probability of default and the rate of default loss on the basis of considering changes in the
Company's future sales strategy or credit policy.
3.Liquidity risk
Liquidity risk refers to the risk of a shortage of funds when an enterprise performs its obligation
to settle cash or other financial assets. Liquidity risk is centrally controlled by the Company's
financial department. The finance department monitors cash balances, securities that can be cashed
at any time, and rolling forecasts of cash flows over the next 12 months to ensure that the Company
has sufficient funds to repay debts under all reasonable forecasts, meet the Company’s operating
needs, and reduce the impact of cash flow fluctuations.
The financial liabilities and off-balance sheet guarantee items held by the company are
analyzed according to the maturity period of the undiscounted remaining contractual cash flow (unit:
RMB):
Item Closing balance
Within a year 1 to 2 years 2 to 3 years Over three Total
years
Bank 8, 816, 488.06 1, 166, 222.44 1, 308, 678.55 6, 010, 008.31 17, 301, 397.36
borrowing
Financial 19, 032.43 - - - 19, 032.43
liabilities
held for
trading
Notes 1, 200, 245.36 - - - 1, 200, 245.36
payable
Accounts 1, 559, 866.76 - - - 1, 559, 866.76
payable
Other 41, 622.49 - - - 41, 622.49
payables
Lease 4, 188.18 2, 577.97 1, 009.84 1, 055.12 8, 831.11
liabilities
Long- 50, 923.22 88, 241.72 109, 148.72 19, 036.84 267, 350.51
term
payables
Bonds 103, 530.00 - - - 103, 530.00
payable
Total 10, 099, 557.28 1, 257, 042.13 1, 418, 837.11 6, 030, 100.26 18, 805, 536.79
financial
liabilities
and
contingent
liabilities
Continued
Item Beginning balance
Within a year 1 to 2 years 2 to 3 years Over three Total
years
Bank 7, 995, 908.34 1, 442, 535.62 982, 147.48 4, 578, 830.32 14, 999, 421.76
borrowing
Financial 34, 602.07 - - - 34, 602.07
liabilities
held for
trading
274 / 319
2023 Annual Report
Notes 2, 060, 377.59 - - - 2, 060, 377.59
payable
Accounts 886, 931.00 - - - 886, 931.00
payable
Other 38, 226.32 - - - 38, 226.32
payables
Lease 3, 727.65 3, 164.20 1, 545.50 1, 630.60 10, 067.95
liabilities
Long- 26, 731.55 38, 100.00 51, 500.00 - 116, 331.55
term
payables
Bonds 203, 061.83 - - - 203, 061.83
payable
Total 11, 249, 566.35 1, 483, 799.82 1, 035, 192.98 4, 580, 460.92 18, 349, 020.07
financial
liabilities
and
contingent
liabilities
The financial liability amounts disclosed in the table above represent undiscounted contractual
cash flows and may therefore differ from the carrying amount in the balance sheet.
(IV) Capital management
The goal of the Company's capital management policy is to ensure that the Company can
continue to operate, so as to provide returns for shareholders and benefit other stakeholders, while
maintaining the optimal capital structure to reduce the cost of capital. In order to maintain or adjust
the capital structure, the Company may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce debt. The Company monitors the
capital structure on the basis of the asset-liability ratio (ie total liabilities divided by total assets). As
of 31 December 2023, the Company's asset-liability ratio was 76.98% (31 December 2022: 78.08%).
2. Hedging
(1) The company carries out hedging business for risk management
□适用 √不适用
Other notes:
□适用 √不适用
(2) The company carries out eligible hedging business and applies hedge accounting
□适用 √不适用
Other notes:
□适用 √不适用
(3) The company conducts hedging business for risk management, and expects to achieve
risk management objectives but has not applied hedge accounting:
□适用 √不适用
Other notes:
□适用 √不适用
275 / 319
2023 Annual Report
3. Transfer of financial assets
(1) Classification of Transfer Methods
□适用 √不适用
(2) Financial assets derecognized due to transfer
□适用 √不适用
(3) Transfer of financial assets that continue to be involved
□适用 √不适用
Other notes:
□适用 √不适用
XIII. Disclosure of fair value
1. Fair value of assets and liabilities measured at fair value at the end of the period
√适用 □不适用
Unit: Yuan Currency: RMB
Item Fair value at year end
Level 1 fair value Level 2 fair value Level 3 fair value
Total
measurement measurement measurement
I. Recurring fair
value
measurement
(I) Financial assets 48, 652, 243.29 250, 177, 829.84 - 298, 830, 073.13
held for trading
1.Financial assets 48, 652, 243.29 250, 177, 829.84 - 298, 830, 073.13
at fair value
through profit or
loss
(1)Debt - 131, 265, 471.64 - 131, 265, 471.64
instruments
investment
(2)Equity - 81, 022, 358.20 - 81, 022, 358.20
instruments
investment
(3)Derivative 48, 652, 243.29 - - 48, 652, 243.29
financial assets
(4)Wealth - 37, 890, 000.00 - 37, 890, 000.00
management
products and
structured deposits
2. Financial assets
designated at fair
value through
profit or loss
(1)Debt
instruments
investment
(2)Equity
instruments
investment
276 / 319
2023 Annual Report
(II) Other debt
investments
(III) Other equity
instruments
investment
(IV) Investment
properties
1.Land use rights
for rental
2.Leased buildings
3.Land use rights
that are held and
ready to be
transferred after
appreciation
(V) Biological assets
1.Consumptive
biological assets
2.Productive
biological assets
(VI) Receivables - - 4, 170, 047, 562.43 4, 170, 047, 562.43
financing
Total assets 48, 652, 243.29 250, 177, 829.84 4, 170, 047, 562.43 4, 468, 877, 635.56
measured at fair
value on recurring
basis
(VI) Financial 190, 324, 330.67 - - 190, 324, 330.67
liabilities held for
trading
1.Financial 190, 324, 330.67 - - 190, 324, 330.67
liabilities at fair
value through profit
or loss
Including: Issued - - - -
trading bonds
Derivative 190, 324, 330.67 - - 190, 324, 330.67
financial liabilities
Others
2.Designated as
financial liabilities
at fair value
through profit or
loss
Total liabilities 190, 324, 330.67 - - 190, 324, 330.67
measured at fair
value on recurring
basis
II. Non-recurring
fair value
measurement
(I) Assets held-for-
sale
277 / 319
2023 Annual Report
Total assets
measured at fair
value on a non-
recurring basis
Total liabilities
measured at fair
value on a non-
recurring basis
2. The basis for determining the market value of the continuous and non-continuous Level 1 fair
value measurement
√适用 □不适用
For futures contracts with an active market price, the fair value is determined based on the
quotation on the balance sheet date.
3. Continuous and non-continuous Level 2 fair value measurement using valuation techniques
and qualitative and quantitative information on important parameters
√适用 □不适用
For debt instrument investments, wealth management products, structured deposits, fund
trusts, and asset management products held by the company, valuation techniques are used to
determine their fair value. The valuation model used is the discounted cash flow model/market
quotes or dealer quotes for similar instruments.
4. Continuous and non-continuous Level 3 fair value measurement using valuation techniques
and qualitative and quantitative information on important parameters
√适用 □不适用
For receivables financing that is not traded in an active market, the carrying amount is similar
to the fair value, and the carrying amount is used as the fair value.
5. Continuous third-level fair value measurement items, reconciliation information between
book value at the beginning and end of the period and sensitivity analysis of unobservable
parameters
□适用 √不适用
6. Continuing fair value measurement items, conversions between levels during the current
period, reasons for the conversions and policies for determining the timing of the conversions
□适用 √不适用
7. Valuation technology changes during the period and reasons for the changes
□适用 √不适用
8. Fair value of financial assets and financial liabilities not measured at fair value
√适用 □不适用
278 / 319
2023 Annual Report
The Company's financial assets and financial liabilities measured at amortised cost mainly
include: Cash and bank balances, Note receivables, Accounts receivable, Other receivables, Short-
term loans, Notes payable, Accounts payable, Other payables, Non-current liabilities due within
one year, Long term loans, etc. The difference between the carrying amount of the financial assets
and financial liabilities that the Company does not measure at fair value and their fair value are
immaterial.
9. Others
□适用 √不适用
XIV. Related party and related party transactions
1. Information of parent company
√适用 □不适用
Unit: ten thousand yuan Currency: RMB
Shareholding
Name of Parent company's
Place of Nature of Registered ratio of parent
parent voting right ratio
registration business capital company to the
company (%)
Company (%)
Hengli Group Wujiang, Industrial
200,200.00 29.84 29.84
Co., Ltd. Jiangsu Investment
Description of the parent company of the company
The Company’s ultimate controlling party is the couple of Chen Jianhua and Fan Hongwe. Chen
Jianhua and Fan Hongwei directly held 11.24% shares of the Company and through Hengli Group
Co., Ltd. and other 5 companies to hold 64.21% of shares of the Company, and totally held75.45%
of shares of the Company.
The ultimate controlling party of this enterprise is Chen Jianhua and his wife Fan Hongwei.
Other note:
None
2. The Company's subsidiaries
For the details of the subsidiaries of the company, please refer to the notes
√适用 □不适用
For details of the Company's subsidiaries, please refer to “Interests in subsidiaries”.
3. The Company's joint ventures and associates
For the important Joint ventures or associates of the company, please refer to the notes
□适用 √不适用
The situation of other joint ventures or associates that had related party transactions with the
company in the current period, or had balances with the company in the previous period is as
follows
□适用 √不适用
Other note
□适用 √不适用
4. Other related party
√适用 □不适用
279 / 319
2023 Annual Report
Name of other related party Other related party and its relationship with the Company
Companies controlled by the actual controlling party of
Dalian Henghan Investment Co., Ltd.
the Company
Guangdong Songfa Ceramics Co., Ltd. Entity controlled by our parent company
Suzhou Wujiang Tongli Lake Tourist Resort Entity controlled by our parent company
Co., Ltd.
Suzhou Hengli Real Estate Co., Ltd. Entity controlled by our parent company
Hengli Industrial Investment (Suzhou) Co., Entity controlled by our parent company
Ltd.
Suzhou Gufeng Asset Management Co., Ltd. Entity controlled by our parent company
Hengli Cloud Business Technology Co., Ltd. Entity controlled by our parent company
Wujiang Huajun Textile Co., Ltd. Entity controlled by our parent company
Jiangsu Boyada Textile Co., Ltd. Entity controlled by our parent company
Jiangsu Deshun Textile Co., Ltd. Entity controlled by our parent company
Jiangsu Dehua Textile Co., Ltd. Entity controlled by our parent company
Hengli (Suzhou) Textile Sales Co., Ltd. Entity controlled by our parent company
Sichuan Hengli Smart Textile Technology Co., Entity controlled by our parent company
Ltd.
Hengli (Guizhou) Textile Intelligent Entity controlled by our parent company
Technology Co., Ltd.
Jiangsu Pejie Textile Intelligent Technology Entity controlled by our parent company
Co., Ltd.
Suqian Lishun Property Co., Ltd. Hengli Hotel Companies controlled by the actual controlling party of
Branch the Company
Companies controlled by the actual controlling party of
Suqian Bailong Garden Technology Co., Ltd.
the Company
Companies controlled by the actual controlling party of
Hengli Real Estate (Dalian) Co., Ltd.
the Company
Companies controlled by the actual controlling party of
Dalian Victoria Property Service Co., Ltd.
the Company
Companies controlled by the actual controlling party of
Dalian Kangjia Property Service Co., Ltd.
the Company
Companies controlled by the actual controlling party of
Suzhou Tongli Red Wine Co., Ltd.
the Company
Suzhou Tonglihong Electronic Commerce Companies controlled by the actual controlling party of
Co., Ltd. the Company
Suzhou Hengli Intelligent Technology Co., Companies controlled by the actual controlling party of
Ltd. the Company
Companies controlled by the actual controlling party of
Suzhou Hengli System Integration Co., Ltd.
the Company
Companies controlled by the actual controlling party of
Jiangsu Changshun Textile Co., Ltd.
the Company
Companies controlled by the actual controlling party of
Nantong Deji Concrete Co., Ltd.
the Company
Hengli Import and Export Co., Ltd. Entity controlled by our parent company
Jiangsu Wu Jiangsu Zhouwan Hengli Entity controlled by our parent company
International Hotel Co., Ltd.
Companies controlled by the actual controlling party of
Hengli Engine (Dalian) Co., Ltd.
the Company
Companies controlled by the actual controlling party of
Hengli Precision Casting (Dalian) Co., Ltd.
the Company
Hengli Green Building Materials (Dalian) Co., Companies controlled by the actual controlling party of
Ltd. the Company
280 / 319
2023 Annual Report
Companies controlled by the actual controlling party of
Hengli Shipbuilding (Dalian) Co., Ltd.
the Company
Hengli Equipment Manufacturing (Dalian) Companies controlled by the actual controlling party of
Co., Ltd. the Company
Hengli Comprehensive Service (Dalian) Co., Companies controlled by the actual controlling party of
Ltd. the Company
Hengli Energy Management Service (Dalian) Companies controlled by close family members of the
Co., Ltd. Yingkou Hehai Bridge Gas Station actual controlling party of the Company
Branch
Hengli International Hotel (Suqian) Co., Ltd Companies controlled by the actual controlling party of
the Company
Hengli Marine Engineering (Dalian) Co., Ltd Companies controlled by the actual controlling party of
the Company
Hengli Energy Management Service (Jiangsu) Companies controlled by close family members of the
Co., Ltd. Nantong Yangkou Port Gas Station actual controlling party of the Company
Hengli Energy Management Service (Suzhou) Companies controlled by close family members of the
Co., Ltd actual controlling party of the Company
Hengli Heavy Industry Group Co., Ltd Companies controlled by the actual controlling party of
the Company
Jiangsu Hengli Charity Foundation Entity controlled by our parent company
Wujiang Sunan Rural Micro-credit Co., Ltd Entity controlled by our parent company
Other note
None
5. Related party transactions
(1). Purchase and sale of goods, acceptance and provision of labor services
Procurement of goods / acceptance of labor services
√适用 □不适用
Unit: Yuan Currency: RMB
Whether the
Approved
transaction
Related Nature of transaction
Current year limit is Prior year
party transaction amount (if
exceeded (if
applicable)
applicable)
Jiangsu 23, 951.15 100, 000.00 139, 598.21
Boyada
Others No
Textile Co.,
Ltd.
Suzhou 88, 874.00 1, 950, 32, 656.90
Wujiang 000.00
Tongli Lake
Others No
Tourist
Resort Co.,
Ltd.
Hengli - - 1, 058, 490.57
Technology
Others No
(Dalian)
Co., Ltd.
Jiangsu 1, 636, 122.16 3, 000, 1, 348, 731.38
Deshun 000.00
Others No
Textile Co.,
Ltd.
281 / 319
2023 Annual Report
Jiangsu 1, 533, 394.95 2, 000, -
Deshun 000.00
Steam
Textile Co.,
Ltd.
Jiangsu 5, 847, 923.57 7, 000, 7, 728, 404.83
Dehua 000.00
Others
Textile Co.,
Ltd.
Suqian 329, 392.72 500, 000.00 326, 001.41
Lishun
Property
Co., Ltd. Others No
Hengli
Hotel
Branch
Suqian 1, 583, 934.00 1, 600, 940, 980.00
Bailong 000.00
Garden Fixed assets No
Technology
Co., Ltd.
Dalian 4, 922, 687.31 5, 500, 8, 067, 922.44
Kangjia 000.00
Property Others No
Service Co.,
Ltd.
Nantong - - 72, 415.65
Jinchuan
Others No
Logistics
Co., Ltd.
Suzhou - - 5, 998, 351.85
Taihu
Others No
Brewing
Co., Ltd.
Suzhou 147, 847.00 1, 272, 160, 796.46
Tongli Red 000.00
Others No
Wine Co.,
Ltd.
Suzhou 45, 985, 849.08 55, 000, 21, 655, 660.40
Hengli 000.00
Intelligent Others No
Technology
Co., Ltd.
Suzhou 13, 087, 680.39 24, 000, 15, 183, 078.76
Hengli 000.00
Fixed assets,
System No
etc
Integration
Co., Ltd.
Nantong 24, 250, 531.57 45, 000, 149, 444, 036.86
Deji Concrete 000.00 No
Concrete mortar
Co., Ltd.
Suzhou 3, 011, 539.56 4, 000, 3, 398, 870.13
Tonglihong 000.00
Electronic Others No
Commerce
Co., Ltd.
282 / 319
2023 Annual Report
Guangdong 80, 009.64 200, 000.00 42, 175.22
Songfa
Others No
Ceramics
Co., Ltd.
Jiangsu 991, 728.43 1, 200, 1, 620, 797.94
Pejie Textile 000.00
Intelligent Others No
Technology
Co., Ltd.
Suzhou 2, 185, 917.88 3, 500, 2, 317, 278.91
Gufeng 000.00
Asset Others No
Manageme
nt Co., Ltd.
Suzhou Oak - - 10, 847.00
Bay No. 9
Others No
Catering
Co., Ltd.
Suqian - - 299, 311.93
Kangtai
Others No
Investment
Co., Ltd.
Hengli 169, 939.00 600, 000.00 191, 091.30
Import and
Others No
Export Co.,
Ltd.
Hengli - - 513, 274.34
Energy
Manageme
Others No
nt Service
(Jiangsu)
Co., Ltd.
Jiangsu Wu 970, 549.48 1, 500, 299, 685.91
Jiang Su 000.00
Zhou Wan
Hengli Others No
Internation
al Hotel
Co., Ltd.
Sichuan 1, 752, 691.69 2, 000, 5, 962, 003.40
Hengli 000.00
Smart
Others No
Textile
Technology
Co., Ltd.
Suzhou - - 10, 088.50
Tongzui
Others No
Trading Co.,
Ltd.
Dalian 5, 979, 302.45 6, 500, 1, 624, 223.77
Victoria 000.00
Property Others No
Service Co.,
Ltd.
283 / 319
2023 Annual Report
Hengli 533, 366.81 600, 000.00 5, 781, 546.55
(Guizhou)
Textile
Others No
Intelligent
Technology
Co., Ltd.
Hengli 1, 464, 159.29 1, 600, -
(Guizhou) 000.00
Textile Machine
Intelligent equipment
Technology
Co., Ltd.
Hengli Others 89, 895.45 150, 000.00 No -
Internation
al Hotel
(Suqian)
Co., Ltd
Hengli Others 3, 495, 575.23 3, 550, No -
Marine 000.00
Engineering
(Dalian)
Co., Ltd
Hengli Engineering 11, 597, 337.37 11, 650, No -
Green materials, etc 000.00
Building
Materials
(Dalian)
Co., Ltd
Yingkou Finished oil 260, 495.44 300, 000.00 No -
Hehai
Bridge Gas
Station
Branch of
Hengli
Energy
Manageme
nt Service
(Dalian)
Co., Ltd
Hengli Others 1, 752, 212.38 1, 800, No -
Shipbuildin 000.00
g (Dalian)
Co., Ltd
Hengli Others 486, 716.81 500, 000.00 No -
Heavy
Industry
Group Co.,
Ltd
Hengli Engineering 189, 866, 254.91 292, 500, No -
Equipment materials, etc 000.00
Manufactur
ing (Dalian)
Co., Ltd
284 / 319
2023 Annual Report
Jiangsu Others 38, 400.00 100, 000.00 No -
Hengli
Charity
Foundation
Sales of goods / provision of services
√适用 □不适用
Unit: Yuan Currency: RMB
Related party Nature of transaction Current year Prior year
Jiangsu Boyada Textile Polyester Yarn
208, 640, 252.11 87, 580, 730.31
Co., Ltd.
Jiangsu Boyada Textile Steam
8, 965, 416.13 10, 558, 594.50
Co., Ltd.
Jiangsu Boyada Textile Others
198, 723.96 189, 354.31
Co., Ltd.
Jiangsu Boyada Textile Refined oil
305, 975.57 -
Co., Ltd.
Wujiang Huajun Textile Steam
40, 103.35 83, 788.97
Co., Ltd.
Wujiang Huajun Textile Others
1, 599.24 358.11
Co., Ltd.
Wujiang Huajun Textile Polyester Yarn
663.97 -
Co., Ltd.
Jiangsu Deshun Textile Polyester Yarn
124, 149, 644.53 82, 864, 669.02
Co., Ltd.
Jiangsu Deshun Textile Others
153, 641.73 158, 503.41
Co., Ltd.
Jiangsu Dehua Textile Co., Polyester Yarn
63, 867, 811.29 53, 775, 042.74
Ltd.
Jiangsu Dehua Textile Co., Others
86, 418.82 45, 185.47
Ltd.
Sichuan Hengli Smart Polyester Yarn
Textile Technology Co., 398, 169, 463.06 178, 975, 907.35
Ltd.
Jiangsu Pejie Textile Polyester Yarn
Intelligent Technology 371, 255, 430.92 162, 430, 422.95
Co., Ltd.
Jiangsu Pejie Textile Others
Intelligent Technology 36, 617.69 13, 602.01
Co., Ltd.
Nantong Deji Concrete Others
- 95, 650.09
Co., Ltd.
Jiangsu Changshun Polyester Yarn
- 915, 276.11
Textile Co., Ltd.
Hengli (Guizhou) Textile Polyester Yarn
Intelligent Technology 231, 835, 864.48 86, 349, 012.89
Co., Ltd.
Hengli Cloud Business Refined oil
22, 575, 772.03 -
Technology Co., Ltd.
Hengli Cloud Business Others
8, 952.38 8, 616.29
Technology Co., Ltd.
Hengli Engine (Dalian) Refined oil and Others
504, 719.29 1, 987, 528.30
Co., Ltd.
Hengli Precision Casting Refined oil and Others
925, 895.93 1, 729, 444.34
(Dalian) Co., Ltd.
285 / 319
2023 Annual Report
Hengli Green Building Refined oil and Others
Materials (Dalian) Co., 2, 604, 414.46 1, 061, 766.91
Ltd.
Hengli Shipbuilding Refined oil and Others
2, 760, 539.05 14, 294, 980.10
(Dalian) Co., Ltd.
Hengli Equipment Refined oil and Others
Manufacturing (Dalian) 857, 751.11 1, 552, 929.25
Co., Ltd.
Hengli Comprehensive Others
126, 431.79 2, 271, 070.75
Service (Dalian) Co., Ltd.
Hengli Energy Refined oil
Management
(Guangdong) Co., Ltd. - 1, 477, 353.99
Guangzhou Huadu Gas
Station
Hengli (Suzhou) Textile Others
153.73 -
Sales Co., Ltd
Hengli Marine Refined oil
Engineering (Dalian) Co., 1, 776, 720.23 -
Ltd
Hengli Import and Export Others
1, 567, 666.90 -
Co., Ltd
Yingkou Hehai Bridge Gas Refined oil
Station Branch of Hengli
869, 823.72 -
Energy Management
Service (Dalian) Co., Ltd
Yingkou Hehai Bridge Gas Others
Station Branch of Hengli
24, 145.14 -
Energy Management
Service (Dalian) Co., Ltd
Hengli Energy Refined oil
Management Service 1, 029, 223.01 -
(Suzhou) Co., Ltd
Suzhou Hengli Real Estate Others
57, 335.61 -
Co., Ltd
Note to purchase and sale of goods, acceptance and provision of labor services
□适用 √不适用
(2). Related entrusted management/contracting and entrusted management/contracting
The company's entrusted management/contracting situation table:
□适用 √不适用
Note to custodian/contracting situation with related party
□适用 √不适用
The company's entrusted management/outsourcing situation
√适用 □不适用
Unit: Yuan Currency: RMB
Custody
Pricing
Name of Name of fee/outsou
Entrustment/Outs Start date of Entrustment/Outs basis for
entrusting entrusted rcing fee
ourced Assets Entrustment/Outs ourcing custody
party/contra party/subcont included in
Type ourced termination Date fee/pack
cting party ractor current
age fee
period
Hengli Hengli Energy Other assets 2022-09-15 2042-09-14 Market 1, 834,
(Northern Management custodian price 862.39
286 / 319
2023 Annual Report
China) Service
Petrochemic (Dalian) Co.,
al Sales Co., Ltd. Yingkou
Ltd. Hehai Bridge
Gas Station
Branch
Hengli East Hengli Energy Other assets 2023-04-01 2043-03-31 Market 1, 376,
China Management custodian price 146.79
Petrochemic Service
al Sales Co., (Jiangsu) Co.,
Ltd Ltd. Nantong
Yangkou Port
Gas Station
Note to entrusted management/outsourcing with related party
□适用 √不适用
(3). Rental with related party
The Company’s as lessor:
√适用 □不适用
Unit: Yuan Currency: RMB
Category of lease Rental income included in Rental income recognised in
Tenant
assets current period prior year
Nantong Jinchuan Transportation - 147, 492.62
Logistics Co., Ltd. equipment
Hengli (Suzhou) Property and real 1, 705, 275.24 1, 705, 275.19
Textile Sales Co., estate
Ltd.
Hengli Real Estate Property and real 2, 183, 815.52 1, 633, 324.64
(Dalian) Co., Ltd. estate
Hengli Heavy Property and real 7, 128, 440.37 -
Industry Group estate
Co., Ltd
Wujiang Sunan Property and real 18, 481.65 -
Rural Microfinance estate
Co., Ltd
Hengli Property and real 1, 270, 363.60 -
Shipbuilding estate
(Dalian) Co., Ltd
287 / 319
2023 Annual Report
The Company’s as leasee:
√适用 □不适用
Unit: Yuan Currency: RMB
Variable
lease
payment
Cat
s not
ego
Rental charge of short- included
ry
term leases and low-value in the
of Interest expense of lease
Landlord asset leases under measure Rent paid Increase of Right-of-use assets
leas liabilities
simplified method (if ment of
e
applicable) lease
asse
liabilities
ts
(if
applicabl
e)
Pr
Cur
io
Current rent
Prior year r Current year Prior year Current year Prior year Current year Prior year
year yea
ye
r
ar
Pro
pert
Jiangsu
y
Deshun 3, 163, 3, 163,
and 114, 285.71 - - 114, 285.71 - -4, 913, 558.14
Textile 259.60 259.60
real
Co., Ltd.
esta
te
Pro
pert
Jiangsu
y
Boyada 1, 805, 1, 805,
and 1, 026, 248.88 - - 1, 026, 248.88 - -5, 429, 649.95
Textile 013.11 013.11
real
Co., Ltd.
esta
te
288 / 319
2023 Annual Report
Pro
Hengli
pert
Industrial
y
Investme 11, 859,
and - - - - 10, 965, 782.42 792, 391.95 1, 261, 139.54 -
nt 286.39
real
(Suzhou)
esta
Co., Ltd.
te
Note to rental with related party
□适用 √不适用
289 / 319
2023 Annual Report
(4). Guarantee with related parties
The Company as a guarantor
□适用 √不适用
The company as the guaranteed party
√适用 □不适用
Unit: Yuan Currency: RMB
Guaranteed Start date of Guarantee expiry Whether the guarantee
Guarantor
Amount guarantee date has been fulfilled
Chen Jianhua, Fan 11, 319, 990, 991.77 2021/8/20 2031/8/20
No
Hongwei
Chen Jianhua, Fan 2, 770, 902, 552.03 2023/3/10 2024/11/22
No
Hongwei [Note 1]
Chen Jianhua, Fan 996, 595, 126.62 2023/5/29 2038/5/21
No
Hongwei [Note 2]
Chen Jianhua, Fan 430, 000, 000.00 2023/11/14 2024/11/15
No
Hongwei [Note 3]
Chen Jianhua, Fan 894, 800, 000.00 2023/1/17 2025/12/31
No
Hongwei [Note 4
Chen Jianhua, Fan 2, 674, 084, 333.98 2023/5/24 2038/5/16
No
Hongwei[Note 5]
Chen Jianhua, Fan 1, 724, 950, 000.00 2019/9/25 2026/12/20 No
Hongwei[Note 6]
Chen Jianhua, Fan 854, 580, 000.00 2020/10/30 2026/12/20 No
Hongwei[Note7]
Chen Jianhua, Fan 11, 316, 082, 621.89 2022/4/18 2024/12/10
Hongwei, Hengli No
Group Co., Ltd.
Chen Jianhua, Fan 300, 000, 000.00 2023/2/1 2024/1/25
Hongwei, Hengli
No
Group Co., Ltd.
[Note 8]
Chen Jianhua, Fan 170, 000, 000.00 2023/2/21 2024/12/7
Hongwei, Hengli
No
Group Co., Ltd.
[Note 9]
Chen Jianhua, Fan 10, 245, 820, 000.00 2023/6/29 2033/6/15
Hongwei, Hengli
No
Group Co., Ltd.
[Note10]
Hengli Group Co., 5, 687, 789, 805.08 2022/11/29 2024/11/28 No
Ltd.
Hengli Group Co., 360, 000, 000.00 2020/2/20 2028/2/19 No
Ltd. [Note11]
Hengli Group Co., 2, 663, 810, 000.00 2022/2/26 2027/1/26 No
Ltd. [Note12]
Hengli Group Co., 1, 208, 210, 000.00 2015/4/24 2029/1/28 No
Ltd. [Note13]
Chen Jianhua, Fan 25, 399, 999, 999.98 2018/5/3 2033/5/2 No
Hongwei, Hengli
Group Co., Ltd. ,
Jiangsu Boyada
Textile Co., Ltd. ,
Jiangsu Deshun
Textile Co., Ltd.,
290 / 319
2023 Annual Report
Jiangsu Dehua
Textile Co., Ltd. ,
Wujiang Chemical
Fiber Weaving
Factory Co., Ltd.
[Note 14]
Chen Jianhua, Fan USD900, 000, 2018/5/3 2033/5/2 No
Hongwei, Hengli 000.00
Group Co., Ltd. ,
Jiangsu Boyada
Textile Co., Ltd. ,
Jiangsu Deshun
Textile Co., Ltd.,
Jiangsu Dehua
Textile Co., Ltd. ,
Wujiang Chemical
Fiber Weaving
Factory Co., Ltd.
[Note 15]
Chen Jianhua, Fan 7, 169, 500, 000.02 2019/12/19 2034/12/19 No
Hongwei, Jiangsu
Boyada Textile
Co., Ltd. , Jiangsu
Deshun Textile
Co., Ltd., Jiangsu
Dehua Textile Co.,
Ltd. , Wujiang
Chemical Fiber
Weaving Factory
Co., Ltd. [Note 16]
Guarantee with related parties
√适用 □不适用
[Note 1]: The Company also placed security deposits to provide pledge guarantee.
[Note 2]: The Company provides mortgage guarantee with the construction in progress.
[Note 3]: The Company also provides mortgage guarantees with property and real estate, and land
use rights.
[Note 4]: The Company also provides mortgage guarantees with property and real estate, machine
equipment, land use rights.
[Note 5]: The Company also provides mortgage guarantees with property and real estate and the
construction in progress
[Note 6]: The Company also provides mortgage guarantees with land use rights.
[Note 7]: The Company also provides mortgage guarantees with property and real estate.
[Note 8]: The Company also provides mortgage guarantees with property and real estate, machine
equipment, and land use rights.
[Note 9]: The Company also provides mortgage guarantees with property and real estate and land
use rights.
[Note 10]: The Company also provides mortgage guarantees with property and real estate and the
construction in progress
[Note 11]: The Company also provides mortgage guarantees with property and real estate.
[Note 12]: The Company also provides mortgage guarantees with property and real estate and land
use rights.
[Note 13]: The Company also provides mortgage guarantees with land use rights.
[Note 14]: The Company also provides mortgage guarantees for property and real estate, land use
291 / 319
2023 Annual Report
rights, Construction in progress and machinery and equipment.
[Note 15]: The Company also provides mortgage guarantees for property and real estate, land use
rights, Construction in progress and machinery and equipment.
[Note 16]: The Company also provides mortgage guarantees for property and real estate, land use
rights, Construction in progress and machinery and equipment.
(5). Loans and borrowings with related parties
□适用 √不适用
(6). Assets transfer and debt restructuring with related parties
√适用 □不适用
Unit: Yuan Currency: RMB
Related party Nature of transaction Current year Prior year
Hengli Real Estate Property and real estate,
- 1, 323, 285, 775.22
(Dalian) Co., Ltd. etc.
Jiangsu Deshun Textile Machinery and
- 135, 024.36
Co., Ltd. equipment
Hengli (Suzhou) Textile Transportation tools
- 25, 512.50
Sales Co., Ltd.
Jiangsu Boyada Textile Machinery and
- 288, 346.30
Co., Ltd. equipment
Jiangsu Dehua Textile Machinery and
- 128, 481.40
Co., Ltd. equipment
Suzhou Hengli System Machinery and
- 95, 398.23
Integration Co., Ltd. equipment
Suzhou Wujiang Tongli Machinery and
Lake Tourist Resort Co., equipment - 55, 981.42
Ltd.
Nantong Kane Polymer Property and real estate,
- 2, 003, 608, 814.83
Material Co., Ltd. etc.
Sichuan Hengli Property and real estate,
Intelligent Textile etc 127, 597, 951.89 -
Technology Co., Ltd
(7). Compensation of key management personnel
√适用 □不适用
Unit: ten thousand Yuan Currency: RMB
Item Current year Prior year
Compensation of key management 1, 043.45 804.95
personnel
(8). Other related party transactions
√适用 □不适用
(1)
The Company purchases and sells for related parties
Unit: Yuan Currency:RMB
Name of related party Transaction content Current year Prior year
Hengli (Suzhou) Textile Electricity 543, 475.26 544, 678.21
Sales Co., Ltd.
Jiangsu Boyada Textile Electricity 1, 466, 939.59 7, 101, 204.60
Co., Ltd.
292 / 319
2023 Annual Report
Jiangsu Deshun Textile Electricity 82, 002, 884.88 76, 218, 287.89
Co., Ltd.
Sichuan Hengli Smart Electricity 148, 408, 893.05 27, 779, 540.06
Textile Technology Co.,
Ltd.
Yingkou Hehai Bridge Electricity 82, 518.52 -
Gas Station Branch of
Hengli Energy
Management Service
(Dalian) Co., Ltd
Nantong Deji Concrete Electricity 65, 179.01 -
Co., Ltd
(2) Related parties purchase and sell for the Company
Unit: Yuan
Name of related party Transaction content Current year Prior year
Jiangsu Deshun Textile Water and electricity
248, 766.98 2, 182, 678.58
Co., Ltd.
Jiangsu Boyada Textile Water and electricity
35, 717.79 547, 224.69
Co., Ltd.
Suzhou Gu Feng Asset Water and electricity
183, 151.72 -
Management Co., Ltd
6. Receivables and payables with related parties
(1). Receivables from related parties
√适用 □不适用
Unit: Yuan Currency: RMB
Item Related party Closing balance Beginning balance
Provision for Provision for bad
Book balance Book balance
bad debts debts
Jiangsu - - 122, 370.50 6, 118.53
Accounts
Deshun Textile
receivable
Co., Ltd.
Wujiang 6, 467.04 323.35 8, 275.50 413.78
Accounts
Huajun Textile
receivable
Co., Ltd.
Hengli 1, 379, 248.60 68, 962.43 535, 755.00 26, 787.75
Accounts Shipbuilding
receivable (Dalian) Co.,
Ltd.
Jiangsu 270.00 13.50 660, 814.00 33, 040.70
Accounts
Boyada Textile
receivable
Co., Ltd.
Jiangsu Pejie - - 261, 283.11 13, 064.16
Textile
Accounts
Intelligent
receivable
Technology
Co., Ltd.
Suzhou 463, 848.00 - 520, 594.50 -
Gufeng Asset
Prepayments
Management
Co., Ltd.
Jiangsu 61, 852.60 - 70, 000.00 -
Prepayments Boyada Textile
Co., Ltd.
293 / 319
2023 Annual Report
Yingkou Hehai 25, 640.20 - - -
Bridge Gas
Station Branch
of Hengli
Prepayments Energy
Management
Service
(Dalian) Co.,
Ltd
Hengli 58, 193, 106.40 - 26, 366, 322.00 -
Equipment
Other non-
Manufacturing
current assets
(Dalian) Co.,
Ltd.
(2). Payables to related parties
√适用 □不适用
Unit: Yuan Currency: RMB
Item Related party Book balance at year Book balance in beginning of
end year
Suzhou Hengli System 1, 976, 292.16 1, 405, 000.89
Accounts payable
Integration Co., Ltd.
Suzhou Hengli 3, 780, 885.78 7, 300.88
Accounts payable Intelligent Technology
Co., Ltd.
Jiangsu Changshun 97, 788.73 97, 788.73
Accounts payable
Textile Co., Ltd.
Jiangsu Dehua Textile 118, 888.47 130, 931.49
Accounts payable
Co., Ltd.
Dalian Kangjia 1, 638, 364.17 1, 817, 017.75
Accounts payable Property Service Co.,
Ltd.
Hengli (Guizhou) - 376, 548.67
Accounts payable Textile Intelligent
Technology Co., Ltd.
Sichuan Hengli Smart 4, 683, 521.59 2, 970, 917.95
Accounts payable Textile Technology
Co., Ltd.
Guangdong Songfa 75, 313.20 -
Accounts payable
Ceramics Co., Ltd
Hengli Green Building 431, 375.00 -
Accounts payable Materials (Dalian) Co.,
Ltd
Hengli Equipment 13, 651, 844.32 -
Accounts payable Manufacturing
(Dalian) Co., Ltd
Jiangsu Deshun Textile 805, 787.54 -
Accounts payable
Co., Ltd
Jiangsu Peijie Textile 354, 575.16 -
Accounts payable Intelligent Technology
Co., Ltd
Suzhou Wujiang Tongli 2, 168.00 -
Accounts payable Lake Tourism Resort
Co., Ltd
294 / 319
2023 Annual Report
Dalian Henghan 19, 750, 000.00 19, 750, 000.00
Other payables
Investment Co., Ltd.
Sichuan Hengli Smart 21, 518, 410.47 2, 220, 459.94
Other payables Textile Technology
Co., Ltd.
Hengli Green Building 303, 113.23 -
Other payables Materials (Dalian) Co.,
Ltd
Hengli Industrial 123, 005.88 10, 516, 284.19
Lease liabilities Investment (Suzhou)
Co., Ltd.
Contract assets and contract liabilities arising from related party transactions
1．Contract assets
None
2．Contract liabilities
Name of related party Closing balance Beginning balance
Jiangsu Boyada Textile Co., Ltd. 431, 840.13 237, 809.14
Wujiang Huajun Textile Co., Ltd. 730.78 727.14
Jiangsu Deshun Textile Co., Ltd. 904, 053.54 148, 515.44
Jiangsu Pejie Textile Intelligent
896, 212.56 770, 761.60
Technology Co., Ltd.
Jiangsu Dehua Textile Co., Ltd. 639, 776.71 96, 717.29
Hengli (Suzhou) Textile Sales Co.,
68, 538.08 68, 538.04
Ltd.
Hengli Shipbuilding (Dalian) Co.,
803, 787.59 1, 615.22
Ltd.
Hengli (Guizhou) Textile
1, 801, 538.53 -
Intelligent Technology Co., Ltd
Hengli Engine (Dalian) Co., Ltd 170, 678.94 -
Hengli Ocean Engineering
32, 499.58 -
(Dalian) Co., Ltd
Hengli Precision Casting (Dalian)
535, 643.86 -
Co., Ltd
Hengli Green Building Materials
359, 421.83 -
(Dalian) Co., Ltd
Hengli Equipment Manufacturing
281, 934.39 -
(Dalian) Co., Ltd
Sichuan Hengli Intelligent Textile
213, 114.73 -
Technology Co., Ltd
（3）Other project:
□适用 √不适用
7. Commitments with related party
□适用 √不适用
8. Others
□适用 √不适用
XV. Share-based payments
1. Information about share-based payments
□适用 √不适用
295 / 319
2023 Annual Report
Stock options or other equity instruments issued to the public at the end of the period
□适用 √不适用
2. Equity-settled share-based payments
√适用 □不适用
Unit: Yuan Currency: RMB
Method in determining the fair value of equity
-
instruments at the date of grant
Important parameters for the fair value of equity
-
instruments on the grant date
It is expected that the on-the-job employees will
Basis in determining the quantity of exercisable equity
eventually obtain the corresponding benefits of the
instruments
employee share incentive plan
Reasons for the significant difference between the
None
current estimate and the previous estimate
Accumulated amount recorded in capital reserve for 371, 449, 176.90
equity-settled share-based payments
Other notes:
None
3. Information on cash-settled share-based payments
□适用 √不适用
4. Share-based payment expenses in the current period
√适用 □不适用
Unit: Yuan Currency: RMB
Grant object category Share-based payment expenses Share-based payment expenses
settled in equity settled in cash
Company employees 77, 070, 049.22 -
Total 77, 070, 049.22
Other notes:
None
5. Information on modification and termination of share-based payment
□适用 √不适用
6 Others
□适用 √不适用
XVI. Commitments and contingencies
1. Significant commitments
√适用 □不适用
Important external commitments, nature and amount on the balance sheet date
1. Signed external investment contracts that have not yet been performed or have not been fully
performed and related financial expenditures
Item Closing balance Beginning balance
Commitment to purchase and build long-term
5, 245, 473, 299.61 3, 585, 319, 049.57
assets
296 / 319
2023 Annual Report
Unused letter of credit issued 4, 736, 563, 964.70 6, 351, 652, 193.39
Letter of guarantee not due for payment 81, 303, 948.76 258, 707, 203.30
Total 10, 063, 341, 213.07 10, 195, 678, 446.26
2. Leases that the lessee has committed but not started and their financial impact
As of the balance sheet date, the future potential cash outflows of the leases that the company
has committed as a lessee but has not yet started are as follows:
Item Closing balance
Undiscounted lease payments:
1 year after balance sheet date 41, 881, 753.80
2 years after balance sheet date 25, 779, 663.21
3 years after balance sheet date 10, 098, 433.08
Thereafter 10, 551, 206.99
Total 88, 311, 057.08
2. Contingencies
(1). Important contingencies existing on the balance sheet date
□适用 √不适用
(2). The company has no important contingencies that need to be disclosed, and it
should also be explained:
□适用 √不适用
3. Others
√适用 □不适用
1．Contingent liabilities arising from pending litigation arbitration and their financial impact
There are no contingent liabilities arising from pending litigation or arbitration.
2. Contingent liabilities arising from providing debt guarantees to other entities and their financial
implications:
The company does not provide debt guarantees for other units.
3．Other contingencies and their financial impact
For bank acceptance bills that have been discounted or endorsed and have not yet expired on
the balance sheet date, please refer to the description of “Receivables financing” in the note.
XVII. Event after balance sheet date
1. Important non-adjusting matters
□适用 √不适用
2. Appropriation of profits
√适用 □不适用
Unit: Yuan Currency: RMB
Proposed dividend per 10 shares (Yuan) 5.5
Dividend per 10 shares declared and 5.5
approved for distribution (Yuan)
Profit distribution plan The 19th meeting of the 9th Board of Directors of the
company deliberated and approved the proposed profit
distribution plan for 2023: based on the total share capital
on the date of equity distribution and registration, a cash
297 / 319
2023 Annual Report
dividend of RMB 5.50 (including tax) per 10 shares will be
distributed to all shareholders.
3. Sales returned
□适用 √不适用
4. Other event after balance sheet date
□适用 √不适用
XVIII. Other significant events
1. Correction of previous accounting errors
(1). Retrospective restatement method
□适用 √不适用
(2). Prospective application method
□适用 √不适用
2. Debt restructuring
□适用 √不适用
3. Exchange of assets
(1). Exchange of non-monetary assets
□适用 √不适用
(2). Exchange of other assets
□适用 √不适用
4. Annuity plan
□适用 √不适用
5. Discontinued operations
□适用 √不适用
6. Segment information
(1). Basis for determining the reporting segment and accounting policies
√适用 □不适用
According to the Company's internal organizational structure, management requirements and
internal reporting system, the Company mainly operates in three business segments: petrochemical
business segment, polyester business segment, headquarters and other business segments, the
Company's management evaluate the operating results of these segments to determine the allocation
of resources and evaluate their performance.
Segment report information is disclosed based on the accounting policies and measurement
standards adopted by each segment when reporting to management. These measurement bases are
consistent with the accounting and measurement bases used in the preparation of financial
statements.
298 / 319
2023 Annual Report
(2). Reporting of segment information
√适用 □不适用
Unit: ten thousand yuan Currency: RMB
Item Petrochemical Polyester Headquarters Elimination Total
segment segment and other between
business segments
segment
Segment 21, 734, 875.06 4, 140, 195.82 10, 350, 287.62 -12, 738, 745.99 23, 486, 612.51
revenue
Including: 11, 787, 010.70 3, 873, 952.87 7, 825, 648.94 - 23, 486, 612.51
External
revenue
Inter- 9, 947, 864.36 266, 242.95 2, 524, 638.68 -12, 738, 745.99 -
segment
sales
Segment cost 19, 568, 517.88 3, 729, 059.04 10, 278, 004.15 -12, 737, 195.88 20, 838, 385.19
Segment 659, 474.79 209, 182.41 175, 088.79 -156, 422.76 887, 323.23
profit (loss)
Total assets 20, 326, 820.27 6, 644, 315.02 5, 821, 029.37 -6, 732, 262.56 26, 059, 902.10
Total 15, 110, 959.77 5, 332, 684.61 1, 672, 946.65 -2, 056, 545.17 20, 060, 045.86
liabilities
(3). If the company has no reportable segment, or cannot disclose the total assets and
total liabilities of each reportable segment, the reasons shall be explained
□适用 √不适用
(4). Other note
□适用 √不适用
7. Other important transactions and events affecting investors' decision-making
√适用 □不适用
1. Pledge of the Company’s shares by the parent Company and the ultimate controller Chen Jianhua,
Fan Hongwei:
Pledgor Pledgee Pledge period Number of pledged
shares
Hengli Group Co., Ltd. Huaxia Bank Co., Ltd. 2023/11/8-2026/10/26 142, 000, 000.00
Suzhou Branch
Hengli Group Co., Ltd. Yunnan International 2023/4/26-2024/4/28 98, 000, 000.00
Trust Co., Ltd
Hengli Group Co., Ltd. Zhejiang Merchants 2023/4/18-2028/4/30 38, 000, 000.00
Bank Co., Ltd. Suzhou
Wujiang Sub-branch
Hengneng Investment Industrial International 2023/12/29-2025/1/7 287, 000, 000.00
(Dalian) Co., Ltd Trust Co., Ltd
Hengli Group Co., Ltd. China Minsheng [Note] 71, 000, 000.00
Banking Corp., Ltd
Hengneng Investment China Galaxy Securities [Note] 21, 046, 100.00
(Dalian) Co., Ltd Co., Ltd
Hengneng Investment Essence Securities Co., [Note] 18, 786, 200.00
(Dalian) Co., Ltd Ltd
299 / 319
2023 Annual Report
Hengneng Investment Huatai Securities Co., [Note] 17, 752, 400.00
(Dalian) Co., Ltd Ltd
Hengneng Investment Guangfa Securities Co., [Note] 15, 976, 300.00
(Dalian) Co., Ltd Ltd
[Note ] The share pledge of Hengli Group is mainly used to provide pledge guarantee for the
trust plan established by employees of Hengli Group and its related subsidiaries. The specific pledge
expiration date is subject to the actual pledge cancellation registration procedures.
8. Others
√适用 □不适用
Split off the subsidiary Kanghui New Material Technology Co., Ltd. and reorganize it for listing:
On July 4, 2023, the Company held the 10th meeting of the 9th Board of Directors and the 7th
meeting of the 9th Board of Supervisors, and considered and approved the "Proposal on Agreeing to
the Restructuring and Listing of the Company's Subsidiary Kanghui New Material Technology Co., Ltd."
The Company agreed to spin off its subsidiary Kanghui New Material Technology Co., Ltd. (hereinafter
referred to as "Kanghui New Material") and use the Company and Jiangsu Hengli Chemical Fiber Co.,
Ltd. (hereinafter referred to as "Hengli Chemical Fiber") to subscribe for 100% of the equity of Kanghui
New Material through non-public offering of shares of Dalian Thermal Power Co., Ltd. (hereinafter
referred to as "Dalian Thermal Power"). At the same time, Dalian Thermal Power plans to raise
matching funds from no more than 35 specific investors through non-public offering of shares to
achieve restructuring and listing.
On October 24, 2023, the application for the spin-off of the subsidiary and restructuring for listing
was accepted by the Shanghai Stock Exchange.
XIX. Notes on important items of parent company's financial statements
1. Accounts receivable
(1). Disclosure by ageing
√适用 □不适用
Unit: Yuan Currency: RMB
Ageing Closing balance Beginning balance
Within one year
Including: Within one year
Within one year 1, 270, 363.60 -
Subtotal of within one year 1, 270, 363.60 -
1 to 2 years
2 to 3 years
Over 3 years
3 to 4 years
4 to 5 years
Over 5 years
Total 1, 270, 363.60 -
300 / 319
2023 Annual Report
(2). Disclosure by method of provision for bad debts
√适用 □不适用
Unit: Yuan Currency: RMB
Closing balance Beginning balance
Provision for bad Provision for bad
Book balance Carryin Book balance Carryin
Categor debts debts
g g
y Provisio Rati Provisio
Amoun Ratio Amoun amoun Amoun Amoun amoun
n ratio o n ratio
t (%) t t t t t
(%) (%) (%)
Provisio
n for
bad
debts on
individu
al basis
Including:
Provisio
n for
bad 1, 270, 100.0 63, 1, 206,
5.00
debts on 363.60 0 518.18 845.42
portfolio
basis
Including:
Ageing
1, 270, 100.0 63, 1, 206,
analysis 5.00
363.60 0 518.18 845.42
portfolio
1, 270, 100.0 63, 1, 206,
Total 5.00
363.60 0 518.18 845.42
Provision for bad debts on individual basis:
□适用 √不适用
Provision for bad debts on portfolio basis:
√适用 □不适用
Provision for bad debts on portfolio basis: Ageing analysis portfolio
Unit: Yuan Currency: RMB
Name Closing balance
Accounts receivable Provision for bad debts Provision ratio (%)
Ageing analysis 1, 270, 363.60 63, 518.18 5.00
portfolio
Total 1, 270, 363.60 63, 518.18 5.00
Confirmation criteria and notes for bad debt provision by portfolio:
√适用 □不适用
Provision for bad debts by ageing portfolio is as below:
Provision for bad
Ageing Book balance Provision ratio (%)
debts
Within one 1, 270, 363.60 63, 518.18 5.00
year(including one
year)
- - -
1-2 years
301 / 319
2023 Annual Report
Provision for bad
Ageing Book balance Provision ratio (%)
debts
- - -
2-3 years
- - -
3-4 years
- - -
4-5 years
- - -
Over 5 years
1, 270, 363.60 63, 518.18 5.00
Subtotal
According to the expected credit loss general model to accrual provision for bad debts:
□适用 √不适用
Basis for dividing each stage and proportion of bad debt provision
None
Note to the significant change in the book balance of accounts receivable due to changes in
provisions for losses incurred during the current period：
□适用 √不适用
(3). Provision for bad debts
√适用 □不适用
Unit: Yuan Currency: RMB
Beginning
Category Movement in the year Closing balance
balance
Transfer
Recovery
or Other
Accrual or
written- movement
reversal
off
Provision - - - - - -
for bad
debts on
individual
basis
Provision - 63, 518.18 - - - 63, 518.18
for bad
debts on
portfolio
basis
Total - 63, 518.18 - - - 63, 518.18
Including significant amount of recovery or reversal of provision for bad debts:
□适用 √不适用
Other notes:
None
(4). Accounts receivable written-off during the year
□适用 √不适用
The important write-off of accounts receivable:
302 / 319
2023 Annual Report
□适用 √不适用
Notes for write-off of accounts receivable:
□适用 √不适用
(5). Accounts receivable and contract assets due from the top five debtors
√适用 □不适用
Unit: Yuan Currency: RMB
Proportion of
the total
Closing
closing
Book balance Book balance balance of Closing
balance of
Name of unit of account of contract accounts balance of bad
accounts
recievables asset receivable and debt provision
receivable and
contract assets
contract assets
（%）
Hengli 1, 270, 363.60 1, 270, 363.60 100.00 63, 518.18
Shipbuilding
(Dalian) Co.,
Ltd
Total 1, 270, 363.60 1, 270, 363.60 100.00 63, 518.18
The Company’s top five year-end balances for accounts receivable in total of RMB1, 270,
363.60, accounting for 100.00% of the total account balance of year-end balances of accounts
receivable, and the corresponding year-end balance of provision for bad debts is RMB63, 518.18.
Other note
□适用 √不适用
2. Other receivables
Presented by item
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Interest receivable
Dividends receivable 81, 550, 000.00 800, 000, 000.00
Other receivables 83, 181, 382.20 11, 162, 769.45
Total 164, 731, 382.20 811, 162, 769.45
Other note:
□适用 √不适用
Interest receivable
(1). Interest receivable by category
□适用 √不适用
(2). Significant overdue interest
□适用 √不适用
303 / 319
2023 Annual Report
(3). Information of provision for bad debts
□适用 √不适用
Provision for bad debts on individual basis:
□适用 √不适用
Notes for provision for bad debts on individual basis:
□适用 √不适用
Provision for bad debts on portfolio basis:
□适用 √不适用
(4). Provision for bad debts based on the general model of expected credit losses
□适用 √不适用
Basis for dividing each stage and proportion of provision for bad debt:
None
Explanation of the significant change in the book balance of interest receivable due to changes in
provisions for losses incurred during the current period:
□适用 √不适用
(5)Provision for bad debts Provision for bad debts
□适用 √不适用
The significant amount of provision for bad debt recovered or reversed in the current period:
□适用 √不适用
Other note:
None
(6)Interest receivable written-off during the year
□适用 √不适用
The important write-off of Interest receivable:
□适用 √不适用
Notes for write-off of Interest receivable:
□适用 √不适用
Dividends receivable
(1) Dividends receivable
√适用 □不适用
Unit: Yuan Currency: RMB
Item (or Investee) Closing balance Beginning balance
Subtotal of book balance 81, 550, 000.00 800, 000, 000.00
Less: Provision for bad debts - -
Total 81, 550, 000.00 800, 000, 000.00
(2). Important dividends receivable aged over 1 year
□适用 √不适用
(3). Information of provision for bad debts
□适用 √不适用
304 / 319
2023 Annual Report
Provision for bad debts on individual basis:
□适用 √不适用
Notes for provision for bad debts on individual basis:
□适用 √不适用
Provision for bad debts on portfolio basis:
□适用 √不适用
(4). Provision for bad debts based on the general model of expected credit losses
□适用 √不适用
Basis for dividing each stage and proportion of provision for bad debt:
None
Explanation of the significant change in the book balance of dividends receivable due to changes in
provisions for losses incurred during the current period:
□适用 √不适用
(5) Provision for bad debts Provision for bad debts
□适用 √不适用
The significant amount of provision for bad debt recovered or reversed in the current period:
□适用 √不适用
Other note:
None
(6) Dividends receivable written-off during the year
□适用 √不适用
The important write-off of dividends receivable:
□适用 √不适用
Notes for write-off of dividends receivable:
□适用 √不适用
Other note:
□适用 √不适用
Other receivables
(1). Disclosure by ageing
√适用 □不适用
Unit: Yuan Currency: RMB
Ageing Book balance at year end Book balance in beginning of year
Within one year
Including: Within one year
Within one year 87, 047, 433.89 11, 723, 262.09
Subtotal of within one year 87, 047, 433.89 11, 723, 262.09
1 to 2 years 607, 900.00 -
2 to 3 years - 23, 805.45
Over 3 years
3 to 4 years
4 to 5 years - 56, 935.95
Over 5 years - 362, 040.00
Total 87, 655, 333.89 12, 166, 043.49
305 / 319
2023 Annual Report
(2). Disclosure by nature
√适用 □不适用
Unit: Yuan Currency: RMB
Nature Book balance at year end Book balance in beginning of
year
Current accounts 3, 500, 000.00 -
Deposits and security deposits 10, 400.00 456, 931.40
Others 84, 144, 933.89 11, 709, 112.09
Total 87, 655, 333.89 12, 166, 043.49
(3). Information of provision for bad debts
√适用 □不适用
Unit: Yuan Currency: RMB
Provision for bad First stage Second stage Third stage Total
debts
Expected credit Expected credit loss Expected credit loss
loss within next for lifetime (no for lifetime (credit
12 months credit impairment impairment has
occurred) occurred)
Balance of 1 - 1, 003, 274.04 - 1, 003, 274.04
January 2022
Balance of 1 -
January 2022
during the period
--transfer to -
second stage
--transfer to third -
stage
--Reverse to -
second stage
--Reverse to first -
stage
Provision for the - 3, 470, 677.65 - 3, 470, 677.65
year
Reversal in the -
year
Transfer in the -
year
Write-off in the -
year
Other movement -
Balance of 31 4, 473, 951.69 - 4, 473, 951.69
December 2021
Basis for dividing each stage and proportion of bad debt provision:
The basis for dividing each stage is detailed in the note "Impairment of Financial Instruments".
Note on the significant changes in other receivables book balance that have changed the loss provision in
the current period:
√适用 □不适用
No significant changes occurred in the provision for losses in the current period
306 / 319
2023 Annual Report
Basis for accruing bad debt provision for the current period and assessing whether the credit risk of
financial instruments has increased significantly:
√适用 □不适用
The basis, input values, assumptions and other information used to determine the provision for bad
debts amount and the assessment of whether the credit risk of financial instruments have increased
significantly since initial confirmation are detailed in the note “Credit Risk”.
(4). Provision for bad debts
√适用 □不适用
Unit: Yuan Currency: RMB
Beginning Closing
Category Movement in the year
balance balance
Recovery
Transfer or Other
Accrual or
written-off movement
reversal
Provision for - - - - - -
bad debts
on individual
basis
Provision for 1, 003, 274.04 3, 470, 677.65 - - - 4, 473, 951.69
bad debts
on portfolio
basis
Total 1, 003, 274.04 3, 470, 677.65 - - - 4, 473, 951.69
Including, the important reversed or recovered amount of bad debt provision for the current period:
□适用 √不适用
Other notes:
None.
(5). Actual written-off of other receivables in the year
□适用 √不适用
The write-off of importanto ther receivables:
□适用 √不适用
Notes to write-off of other receivables:
□适用 √不适用
(6). Other receivables due from the top five debtors
√适用 □不适用
The Company’s top five year-end balances of other receivables in total is RM87, 652, 433.89,
accounting for 99.99% of the total year end balance of other receivables, and the corresponding year-
end balance of provision for bad debts is RMB4, 473, 746.69.
(7). Other receivables reported due to centralized management of funds
□适用 √不适用
Other note:
□适用 √不适用
307 / 319
2023 Annual Report
3. Long-term equity investment
√适用 □不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Provision Provision
Carrying Carrying
Book balance for Book balance for
amount amount
impairment impairment
Investment
44, 366, 275, 44, 366, 275, 44, 316, 275, 44, 316, 275,
in - -
704.93 704.93 704.93 704.93
subsidiaries
Investment
in
associates
and joint
ventures
44, 366, 275, 44, 366, 275, 44, 316, 275, 44, 316, 275,
Total - -
704.93 704.93 704.93 704.93
(1). Investment in subsidiaries
√适用 □不适用
Unit: Yuan Currency: RMB
Closing
Provision
balance of
Beginning Closing for
Investee Increase Decrease provision
balance balance impairment
for
in the year
impairment
Jiangsu Hengli 10, 808, 919, 10, 808, 919, - -
Chemical 000.00 000.00
Fiber Co., Ltd.
Kanghui New 1, 937, 601, 1, 937, 601, - -
Material 065.09 065.09
Technology
Co., Ltd.
Suzhou 2, 000, 000.00 2, 000, 000.00 - -
Textile Group
Network E-
commerce
Co., Ltd.
Hengli 4, 619, 719, 4, 619, 719,
Petrochemical 782.89 782.89
(Dalian)
Chemical Co.,
Ltd.
Hengli 17, 516, 472, 17, 516, 472,
Petrochemical 093.22 093.22
(Dalian)
Refining Co.,
Ltd.
Hengli 9, 381, 563, 9, 381, 563,
Investment 763.73 763.73
(Dalian) Co.,
Ltd.
308 / 319
2023 Annual Report
Hengli 50, 000, 50, 000,
Petrochemical 000.00 000.00
Sales Co., Ltd.
Hengli - 50, 000, 50, 000,
International 000.00 000.00
Trade Co., Ltd
44, 316, 275, 50, 000, 44, 366, 275,
Total
704.93 000.00 704.93
(2). Investment in associates and joint ventures
□适用 √不适用
Other note:
None
(3) Impairment test of long-term equity investment
□适用 √不适用
Other note
At the end of the period, there was no obvious sign of impairment of long-term equity
investment, so no Provision for impairment.
4. Operating income and operating cost
(1). Operating income and operating cost
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Revenue Cost Revenue Cost
Primary operations - - - -
Other operations 3, 454, 179.12 2, 011, 877.89 1, 633, 324.64 1, 270,
659.72
3, 454, 179.12 2, 011, 877.89 1, 633, 324.64 1, 270,
Total
659.72
(2). Breakdown information of operating income and operating costs
□适用 √不适用
Other notes:
□适用 √不适用
(3). Note on performance obligations
□适用 √不适用
(4). Description of apportionment to remaining performance obligations :
□适用 √不适用
(5) Significant changes of contracts or Significant transaction price adjustments:
□适用 √不适用
Other note:
None
309 / 319
2023 Annual Report
5. Investment income
√适用 □不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Income from long-term equity investment 1, 521, 000, 000.00 6, 023, 294, 874.00
by cost method
Income from long-term equity investment
by equity method
Gain from disposal of long-term equity -422, 352.37
investment
Investment income of financial assets
held for trading during the holding period
Investment income of other equity
instruments investment during the
holding period
Interest income from debts investment
during the holding period
Interest income from other debt
investments during the holding period
Gain from disposal of Financial assets
held for trading
Investment income from disposal of other
equity instruments investment
Gains from disposal of debts investment
Gain from disposal of other debt
investments
Gains from debt restructuring
Total 1, 521, 000, 000.00 6, 022, 872, 521.63
Other note:
None
6. Others
□适用 √不适用
XX. Supplement information
1. Details of non-recurring gain or loss for the year
√适用 □不适用
Unit: Yuan Currency: RMB
Item Amount Note
Gain or loss on disposal of non-current assets -4, 564, 909.89
Government grants that are included in the
profit or loss (closely related to the business of
the enterprise, except for government grants 638, 569, 056.98
that are subject to fixed or quantitative quotas
in accordance with national unified standards)
In addition to the effective hedging business
related to the normal business operations of
the same company, the profit or loss from
431, 893, 116.94
changes in fair value of financial assets and
financial liabilities held by non-financial
enterprises, as well as the profit or loss from
310 / 319
2023 Annual Report
the disposal of financial assets and financial
liabilities
Fund occupation fees charged to non-financial
enterprises included in the current profit or
loss
Profit or loss of entrusting others to invest or
manage assets
Profit or loss from external entrusted loans
Provision for impairment arising from force
majeure such as natural disasters
Reversal of impairment provision for
receivables that have been individually tested
for impairment
The investment cost of the enterprise's
acquisition of subsidiaries, associates, and
joint ventures is less than the return generated
by the fair value of the investee's identifiable
net assets when the investment is made.
Net profit of subsidiaries for the period from
beginning of the year to date of acquisition by
business combination under common control
Non-monetary assets exchange profit or loss
Profit or loss of debt restructuring
One-time expenses incurred by enterprises
due to the discontinuation of related business
activities, such as the expenditure for
resettling employees
One-time impact on current profit or loss due
to adjustments in tax, accounting, and other
laws and regulations
Share-based payment expenses recognized in
one time due to cancellation or modification
of equity incentive plans
For cash-settled share-based payments, after
the vesting date, the profit or loss arising from
the change in the fair value of employee
compensation payable
Profit or loss arising from changes in fair value
of investment real estate subsequently
measured using the fair value model
Gains from transactions with unfair
transaction prices
Profit or loss arising from contingencies
unrelated to the company's normal business
operations
Income from custody fees obtained from
entrusted operation
Other non-operating income and expenses
-25, 075, 119.31
other than the above items
Other profit or loss items that meet the
7, 339, 987.53
definition of non-recurring profit or loss
Less: Income tax impact 140, 790, 996.05
Impact amount of minority shareholders'
equity (after tax)
Total 907, 371, 136.20
311 / 319
2023 Annual Report
If the company recognizes items not listed in the "Explanatory Announcement No. 1 on Information
Disclosure by Companies that Offer Securities to the Public - Non-recurring Gains or Losses" as non-
recurring gains or losses with significant amounts, and defines the non-recurring gains or losses
listed in the "Explanatory Announcement No. 1 on Information Disclosure by Companies that Offer
Securities to the Public - Non-recurring Gains or Losses" as recurring gains or losses, the reasons
should be explained.
□适用 √不适用
Other notes:
√适用 □不适用
The impact of the first implementation of the "Explanatory Announcement No. 1 on Information
Disclosure by Companies that Offer Securities to the Public - Non-Recurring Gains or Losses (2023
Revision)" on non-recurring gains or losses during comparable accounting periods:
The Company will implement the "Explanatory Announcement No. 1 on Information Disclosure by
Companies that Offer Securities to the Public - Non-Recurring Gains or Losses (2023 Revision)" from
December 22, 2023, and will recalculate and present the non-recurring gains or losses for the
comparable accounting period of 2022. The affected non-recurring gains or losses and their amounts
are as follows (unit: yuan; currency: RMB):
Affected non-recurring gain or loss
Before adjustment Adjustment amount After adjustment
items
Government grants that are included in
the profit or loss (closely related to the
business of the enterprise, except for
government grants that are subject to 1, 594, 250, 334.30 -311, 921, 306.08 1, 282, 329, 028.22
fixed or quantitative quotas in
accordance with national unified
standards)
Income tax impact (decrease in income
360, 240, 063.26 -56, 948, 417.60 303, 291, 645.66
tax expense is indicated by “-”)
Impact of minority shareholders' profit
- - -
or loss (after tax)
Net non-recurring gain or loss
attributable to shareholders of the 1, 273, 018, 054.78 -254, 972, 888.48 1, 018, 045, 166.30
parent company
2. Return on equity and earnings per share
√适用 □不适用
Weighted average
Profit in reporting period return on equity Earnings per share
(%)
Basic earnings per Diluted earnings per
share share
Net profit attributable to the
12.24 0.98 0.98
Company’s shareholders
Net profit attributable to the
shareholders of the Company, 10.63 0.85 0.85
excluding non-recurring items
3. Differences in accounting data under domestic and foreign accounting standards
□适用 √不适用
312 / 319
2023 Annual Report
4. Others
□适用 √不适用
Chairman of the Board: Fan Hongwei
Date of Board Approval and Submission: 9 April 2024
Revised information
□适用 √不适用
313 / 319
