2024 Annual Report of Hengyi Petrochemical Co. Ltd.
12024 Annual Report of Hengyi Petrochemical Co. Ltd.
2024 Annual Report
Section I Important notes contents and definitions
The Board of Directors the Supervisory Committee and the Directors
Supervisors and senior management of the Company warrant that the contents
of the annual report are true accurate and complete and that there are no false
records misleading statements or material omissions and that they will severally
and jointly accept legal responsibility for such contents.Qiu Yibo the legal representative Zheng Xingang the person in charge of
accounting work and Yu Zhicheng the head of the accounting agency
(accounting supervisor) declared that ensure the annual financial statement
report is true accurate and complete.All directors have attended the Board meeting at which this report was
considered.The forward-looking statements contained in this report regarding future plans
development strategies industry discussions and outlook do not constitute
substantive commitments from the Company to investors. Investors are hereby
advised to exercise caution regarding investment risks. Investors are advised to
refer to “Section III: Management Discussion and Analysis” specifically "XI.Prospects for the Future Development of the Company (IV)Risks and
Countermeasures Faced by the Company."
The Company is required to comply with the disclosure requirements in respect
of the chemical industry as set out in the "No. 3 Self-Regulatory Guidelines for
Listed Companies of the Shenzhen Stock Exchange - Disclosure of Industry
Information".
22024 Annual Report of Hengyi Petrochemical Co. Ltd.
The Company's profit distribution plan reviewed and approved by the Board: on
the basis of the share capital entitled to profit distribution registered on the date
of registration of shareholdings for the implementation of the equity distribution
a cash dividend of RMB 0.50 (tax included) per 10 shares will be distributed to
all shareholders. There will be no equity dividend (tax included) or conversion of
equity reserve into share capital of the Company.This annual report is prepared in Chinese and English respectively. In case of
any discrepancy between the two versions the Chinese version shall prevail.
32024 Annual Report of Hengyi Petrochemical Co. Ltd.
Content
Section I Important notes Contents and Definitions... 2
Section II Company Profile and Key Financial Indic... 9
Section III Management Discussion and Analysis ..... 17
Section IV Corporate Governance .................... 95
Section V Environmental and Social Responsibilitie. 150
Section VI Important Matters ...................... 177
Section VII Changes in Shares and Shareholders .... 224
Section VIII Preference Shares .................... 241
Section IX Bonds .................................. 242
Section X Financial Report ........................ 251
42024 Annual Report of Hengyi Petrochemical Co. Ltd.
List of Documents for Reference
1.Accounting statements signed and stamped by the legal representative person in
charge of accounting activities and the head of the accounting agency;
2.The original audit report stamped by the accounting firm and signed and stamped by
the certified public accountant;
3.All original documents and original announcements of the Company publicly
disclosed on the website designated by CSRC during the current period.
52024 Annual Report of Hengyi Petrochemical Co. Ltd.
Definitions
Item Refers to Definition
Hengyi
Petrochemical/Company/the Refers to Hengyi Petrochemical Co. Ltd.Company
SZSE/the Exchange Refers to Shenzhen Stock Exchange
Hengyi Group Refers to Zhejiang Hengyi Group Co. Ltd.Hengyi Limited Refers to Zhejiang Hengyi Petrochemical Co. Ltd.Hengyi Brunei Refers to Hengyi Industries Sdn. Bhd.Zhejiang Yisheng Refers to Zhejiang Yisheng Petrochemical Co. Ltd.Yisheng New Materials Refers to Zhejiang Yisheng New Materials Co. Ltd.Yisheng Dahua Refers to Yisheng Dahua Petrochemical Co. Ltd.Hainan Yisheng Refers to Hainan Yisheng Petrochemical Co. Ltd.Hengyi Polymer Refers to Zhejiang Hengyi Polymer Co. Ltd.Hengyi High-Tech Refers to Zhejiang Hengyi High-Tech Materials Co. Ltd.Haining New Materials Refers to Haining Hengyi New Materials Co. Ltd.Haining Thermal Power Refers to Haining Hengyi Thermal Power Co. Ltd.Taicang Yifeng Refers to Taicang Yifeng Chemical Fibre Co. Ltd.Jiaxing Yipeng Refers to Jiaxing Yipeng Chemical Fibre Co. Ltd.Shuangtu New Materials Refers to Zhejiang Shuangtu New Materials Co. Ltd.Hangzhou Yichen Refers to Hangzhou Yichen Chemical Fibre Co. Ltd.Suqian Yida Refers to Suqian Yida New Materials Co. Ltd.Ningbo Hengyi Trading Refers to Ningbo Hengyi Trading Co. Ltd.Hong Kong Yisheng Refers to Hong Kong Yisheng Co. Ltd.Refers to Hengyi Industries International (Singapore) Co.Hengyi Singapore
Ltd.Hangzhou Yijing Refers to Hangzhou Yijing Chemical Fibre Co. Ltd.Hengyi Caprolactam Refers to Zhejiang Baling Hengyi Caprolactam Co. Ltd.Fujian Yijin Refers to Fujian Yi Jin Chemical Fibre Co. Ltd.China Zheshang Bank Refers to China Zheshang Bank Co. Ltd.
62024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Refers to Definition
Yisheng Investment Refers to Dalian Yisheng Investment Co. Ltd.Hong Kong Tianyi Refers to Hong Kong Tianyi International Holding Co. Ltd.Hengyi Investment Refers to Hangzhou Hengyi Investment Co. Ltd.Hengqi Environmental Haining Hengqi Environmental Protection
Refers to
Protection Technology Co. Ltd.Hengyi Polyamide Refers to Zhejiang Hengyi Polyamide Co. Ltd.Guangxi New Material Refers to Guangxi Hengyi New Material Co. Ltd.Brunei Refinery ProjectPMB The petrochemical project invested and constr
Refers to
Petrochemical Project ucted by the Company in Brunei.The company is constructing the "1.2 Million
Tons Per Year Caprolactam-Polyamide Integrated
Qinzhou Project Refers to
Industrial and Supporting Project" in Qinzhou
Guangxi.Paraxylene a colorless and transparent liquid. It is
PX Refers to used to produce plastics polyester fibres and
films.Purified terephthalic acid mainly used to produce
PET can also be made into engineering polyester
PTA Refers to
plastics and be used as the raw material of
plasticizer and dye intermediate.Iso-phthalic acid mainly used in the production of
alkyd resin unsaturated polyester resin and other
PIA Refers to polymers and plasticizers as well as in the
production of film finishers coatings polyester
fibre dyeing modifiers and medicines.Ethylene glycol mainly used to produce polyester
fibre antifreeze unsaturated polyester resin
MEG Refers to
lubricant plasticizers non-ionic surfactant and
explosives etc.PET and polyester Refers to Polyethylene terephthalate. It is a fibre-forming
72024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Refers to Definition
polymer made from PTA and MEG through
direct esterification and continuous
polycondensation reaction.Polyester pre-oriented yarn or partially oriented
POY Refers to
yarn
FDY Refers to Fully drawn yarn or polyester drawn yarn
Drawn textured yarn also known as polyester
DTY Refers to
textured yarn
Caprolactam mainly used to produce polyamide
CPL Refers to fibre engineering plastics plastic film etc. It is
widely used in industrial and civil fields.Synthesized through the polymerization of
caprolactam. It is a polymer with outstanding
Polyamide Nylon Refers to comprehensive properties extensively utilized in
textile products such as apparel and carpets as
well as in a variety of industrial applications.RPET Refers to Recycled plastic materials from PET
A variety that is innovative in technology or
Differentiated yarn Refers to performance or has some characteristics that is
different from traditional yarns.RMB 1 and RMB 10000 Refers to RMB 1 and RMB 10000
Reporting period / during the
reporting period / this Refers to From January 1 2024 to December 31 2024
reporting period
End of reporting period/end
of the current reporting Refers to As of December 312024
period
82024 Annual Report of Hengyi Petrochemical Co. Ltd.
Section II Company Profile and Key Financial Indicators
I. Company profile
Stock abbreviation Hengyi Petrochemical Stock code 000703
Stock abbreviation before the
None
change (if any)
Stock exchange Shenzhen Stock Exchange
Chinese name 恒逸石化股份有限公司
Chinese abbreviation 恒逸石化
Foreign name (if any) HENGYI PETROCHEMICAL CO. LTD.Foreign abbreviation (if any) HYPC
4/F Building 2 International Science and Technology Park No. 5
Registered address Zhongma Avenue China-Malaysia Qinzhou Industrial Park
Qinzhou Port Area China (Guangxi) Pilot Free Trade Zone
Post code of the registered
535000
address
The original registered address of the Company No. G F7 Haifu
Change history of the Building No. 16 West Beihai Avenue Beihai City Guangxi
Company’s registered address Zhuang Autonomous Region was changed to current registered
address of the Company in August 2022.Building 3 Hengyi Nan’an Mingzhu 260 North Shixin Road
Office address
Xiaoshan District Hangzhou City Zhejiang Province
Post code of the office address 311215
Company website http://www.hengyishihua.com
E-mail address hysh@hengyi.com
92024 Annual Report of Hengyi Petrochemical Co. Ltd.
II. Contact person and contact information
Secretary of BOD Securities Representative
Name Zheng Xingang Zhao Guanshuang
BOD Office 16/F Building 3 Nan’an BOD Office 16/F Building 3 Nan’an
Mingzhu No. 260 North Shixin Road Mingzhu No. 260 North Shixin Road
Contact address
Xiaoshan District Hangzhou City Xiaoshan District Hangzhou City
Zhejiang Province Zhejiang Province
Telephone （0571）83871991 （0571）83871991
Fax （0571）83871992 （0571）83871992
E-mail address hysh@hengyi.com hysh@hengyi.com
III. Information disclosure and place of preparation
The website of the Stock Exchange
where the Company disclosure the Shenzhen Stock Exchange：http://www.szse.cn
Annual report
Press name and website of Annual China Securities Journal STCN Shanghai Securities News
reporting disclosure and Securities Daily; CNINFO：http://www.cninfo.com.cn
Place where the Company’s Annual
Office of the BOD of Hengyi Petrochemical Co. Ltd.Report is prepared
IV. Registration changes
Unified Social Credit Code 9145050019822966X4
Changes in the Company’s main business since listing (if any) No changes
Previous changes of controlling shareholders (if any) No changes
V. Other relevant information
1. Accounting firm engaged by the company
102024 Annual Report of Hengyi Petrochemical Co. Ltd.
Name Zhongxinghua Certified Public Accountants LLP
Address 20/F Tower B Lize SOHO 20 Lize Road Fengtai District Bejing
Name of signing accountants Zhang Liming Yin Yanning
2.Accounting firm engaged by the company
Name of
Name of sponsor
Sponsor Address Continuous supervision period
representative
Institution
The continuous supervision period is from
August 16 2022 to December 31 2023.CITIC
No. 48 Liangmaqiao Since the company has not yet fully utilized
Securities Mao Zongxuan
Road Chaoyang the raised funds the sponsor will continue to
Company Zhu Wei
District Beijing fulfill its continuous supervision
Limited
responsibilities regarding the use of the raised
funds until the funds are fully utilized.
3.The financial adivisor engaged by the company to perform continuous
supervisions duties during the reporting period
□Applicable □Not applicable
VI. Main accounting data and financial indicators
1.Whether the company is required to retrospectively adjust or restate prior
years’ accounting data
□Yes □No
112024 Annual Report of Hengyi Petrochemical Co. Ltd.
Increase/decreas
e of this year
202420232022
over the previous
year
Revenue (RMB) 125463237098.17 136148114082.34 -7.85% 152050274944.64
Net profit attributable to
shareholders of listed 233939342.84 435458340.57 -46.28% -1079547699.72companies (RMB）
Net profit after deducting
non-recurring profits and
losses attributable to 20276451.16 53685831.74 -62.23% -1092334520.95
shareholders of listed
companies（RMB）
Net cash flow from
operating activities 5997011555.76 4531834805.15 32.33% 2705533483.36
(RMB)
Primary earnings per
0.070.13-46.15%-0.30
share（RMB/share）
Diluted earnings per share
0.070.13-46.15%-0.30（RMB/share）
Weighted average ROE 0.93% 1.74% -0.81% -4.31%
Increase/decreas
e at the end of
End of 2024 End of 2023 this year over the End of 2022
end of the
previous year
Total assets（RMB） 107528828060.12 108052106925.94 -0.48% 111964797711.33
Net assets attributable to
24742051837.1225211150840.09-1.86%25446694059.09
shareholders of listed
122024 Annual Report of Hengyi Petrochemical Co. Ltd.companies (RMB）
2.The lower of the net profit before and after deducting non-recurring gains and
losses of the company in the last three financial years is negative and the audit
report of the last year shows that the company’s liability to continue as a going
concern is uncertain.□Yes □No
3.The lower of the net profit before and after deducting non-recurring gains and
losses is negative.□Yes □No
VII. Difference in accounting data under Chinese Accounting Standards and
Overseas Accounting Standards
1.Difference in the net profit and net asset in the financial statements which are
presented concurrently in accordance with International Financial Reporting
Standards and Chinese Accounting Standards
There was no difference in the net profit and net asset in the financial statements
which are presented concurrently in accordance with International Financial
Reporting Standards and Chinese Accounting Standards.
2.Difference in the net profit and net asset in the financial statements which are
presented concurrently in accordance with accounting standards and Chinese
Accounting Standards
There was no difference in the net profit and net asset in the financial statements
which are presented concurrently in accordance with international accounting
standards and Chinese Accounting Standards.
132024 Annual Report of Hengyi Petrochemical Co. Ltd.
VIII. Quarterly main financial indicators
Unit: RMB
Q1 Q2 Q3 Q4
Revenue 31655506086.59 33108541300.22 30050897461.93 30648292249.43
Net profit attributable to
413692260.3216622186.35-199404073.133028969.30
shareholders of listed company
Net Profit after deducting
non-recurring profits and losses
313739920.88-83145769.14-209486297.63-831402.95
attributable to shareholders of
listed companies
Cash flow from operating
-2455482450.412552830029.99387239289.415512424686.77
activities
1.Whether the above financial indicators or their sums are materially different
from the relevant financial indicators in the Company's disclosed quarterly
reports and half-yearly reports.□Yes □No
142024 Annual Report of Hengyi Petrochemical Co. Ltd.
IX. Non-recurring profit and loss items and amounts
Unit: RMB
Item 2024 2023 2022
Gains and losses on disposal of non-current assets
(including elimination of provision for impairment -69347520.98 416787000.84 128936835.05
of assets)
Tax rebates exemptions and reductions that
exceed the authority to approve or are not Not Applicable Not applicable 24841218.44
accompanied by official approval documents
Government grants recognised in the current
period's profit or loss (except for government
grants that are closely related to the Company's
normal operating business in line with national 73683478.38 114355884.18 179870984.15
policies and in accordance with defined criteria
and that have a continuing impact on the
Company's profit or loss)
Gains and losses from changes in fair value of
financial assets and liabilities held by
non-financial corporations and gains and losses
110896777.29491763.52-448914776.35
from the disposal of financial assets and liabilities
except for effective hedging operations related to
the Company's normal business operations
Gains and losses on external entrusted loans 16324423.72 38393856.92 48520852.95
Reversal of provision for impairment of
587594.006570.000.00
receivables individually tested for impairment
The cost of investments in subsidiaries associates
and joint ventures acquired by an enterprise is less
0.0016534148.400.00
than its share of the gain arising from the fair
value of the identifiable net assets of the investee
152024 Annual Report of Hengyi Petrochemical Co. Ltd.
at the time the investment is acquired
Custodian fee income earned on trusteeship 1698113.16 1698113.16 1698113.19
Non-operating income and expenses other than
-34615951.04-24115026.00612146.73
those listed above
Other items of profit or loss that meet the
23008095.0663233423.2817898857.26
definition of non-recurring profit or loss
Less: income tax effect -8440156.97 156969934.37 91691403.61
Minority interest impact (after tax) -82987725.12 88643291.10 -151013993.42
Total 213662891.68 381772508.83 12786821.23
1.Other profits and losses satisfying the definition of non-recurring profits and
losses:
Other items that meet the definition of non-recurring gains and losses primarily
include the portion of non-recurring gains and losses attributable to the investee in the
investment income recognized under the equity method for significant associates and
joint ventures amounting to RMB 23008095.06.
2.Definition of non-recurring profit and loss items listed in "Interpretative
Announcement for Information Disclosure of Companies Issuing Public
Securities No. 1 - Non-recurring Profit and Loss" as recurring profit and loss
items
There are no instances where the Company defines items of non-recurring gains and
losses listed in "Interpretative Announcement No. 1 on Information Disclosure by
Companies Issuing Public Securities - Non-recurring Gains and Losses" as items of
recurring gains and losses.
162024 Annual Report of Hengyi Petrochemical Co. Ltd.
Section III Management Discussion and Analysis
I.Industry in which the company operated during the reporting period
The Company is required to comply with the disclosure requirements in respect
of the chemical industry as set out in the "No. 3 Self-Regulatory Guidelines for
Listed Companies of the Shenzhen Stock Exchange - Disclosure of Industry
Information".Hengyi Petrochemical (Stock Code: 000703.SZ) a global leader in vertically
integrated "refining chemicals chemical fiber" industrial chains steadfastly adheres
to its strategic vision of "One Drop of Oil Two Strands of Fiber." Through the
forward-looking Brunei Refining & Chemical Project the company has successfully
established a closed-loop industrial chain spanning from crude oil processing to
high-end chemical fiber products pioneering China's unique "Polyester + Nylon"
dual-core business model. Leveraging the cross-border collaborative advantages
between the "Brunei Refining and Petrochemical Base" and the domestic polyester
industry the company has established a pillar-shaped industrial layout featuring
vertical integration across upstream midstream and downstream sectors with
balanced development across various business segments.
172024 Annual Report of Hengyi Petrochemical Co. Ltd.
In recent years while maintaining its industrial leadership Hengyi Petrochemical has
accelerated the "Tech-Driven Hengyi" strategic upgrade. Centered around its core
business domains the company has systematically established a proprietary
intellectual property system steadily advanced R&D of high-value-added products
optimized production processes and expanded market penetration. Guided by the
principles of "green manufacturing" and "circular economy" Hengyi is actively
pioneering low-carbon transformation across its industrial chain. Concurrently the
company has proactively driven the development and industrialization of auxiliary
products such as catalysts oils and additives laying a solid foundation for
sustainable growth. Through digitalization and intelligent transformation Hengyi is
striding confidently toward its vision of becoming a globally top-tier private
multinational conglomerate in the "refining-chemicals-chemical fiber" sector setting
new benchmarks for innovation and operational excellence.
182024 Annual Report of Hengyi Petrochemical Co. Ltd.
(I)Industries in which the company operated
In 2024 the global economy experienced moderate recovery with easing inflationary
pressures while cross-border macroeconomic policy coordination faced new
challenges. Meanwhile the accelerated evolution of next-generation high-tech
technologies reshaped the global industrial competitive landscape creating both
opportunities and challenges for the global economy. In 2024 China’s economy
maintained overall stability with steady progress achieving tangible advancements in
high-quality development which underscored the resilience and long-term potential
of the Chinese economic model.The petrochemical sector after years of rapid capacity expansion grappled with
significant headwinds in 2024. Geopolitical tensions volatile crude oil prices and
weakened consumer sentiment collectively led to a notable decline in downstream
demand. This resulted in a supply-demand mismatch amplifying operational
pressures across the industry.
1.Refining and petrochemical industry
The Brunei Refinery Project located in Brunei Darussalam primarily sells its
finished products in Southeast Asia and Australia. From the demand perspective
Southeast Asia possesses abundant oil and gas resources. However due to insufficient
infrastructure investment it has become the world's largest net import market for
refined oil products. According to the International Monetary Fund (IMF) report in
January 2025 ASEAN's GDP growth reached 4.5% in 2024 and is projected to rise to
4.6% in 2025. Within this Indonesia's GDP growth is forecasted to hit 5.1% and the
Philippines' growth is expected to reach 6.1% in 2025—both significantly higher than
the global average. This positive economic outlook is likely to further drive demand
growth for refined chemical products. The International Energy Agency (IEA) reports
that emerging Asian markets remain pivotal to global oil demand growth. Southeast
Asia's oil production is declining while its oil demand is projected to increase from
the current 5 million barrels per day (bpd) to 6.4 million bpd by 2035. Platts
192024 Annual Report of Hengyi Petrochemical Co. Ltd.
highlights that Southeast Asia exhibits robust potential in oil demand growth amid
evolving global energy dynamics particularly in transportation fuels. Over the next
decade the region is expected to account for 25% of global energy demand growth.On the supply side Southeast Asia faces a significant refined oil product supply gap
compared to the surplus in China's domestic market. Platts data indicates that between
2020 and 2023 over 30 million tons of refining capacity exited the Southeast Asian
and Australian markets due to public health crises and energy transition pressures.The IEA notes that 2025 marks the peak year for refinery closures with 800000 bpd
of capacity set to shut down. As capacity continues to phase out Southeast Asia's
refined oil product supply-demand gap is projected to widen to 68 million tons by
2026. Many regional refineries still suffer from outdated infrastructure obsolete
technologies and poor management. Coupled with stricter global environmental
policies refining companies exhibit weak expansion intentions face soaring costs for
upgrading existing capacity and adopt cautious capital expenditure plans. These
factors will severely constrain future refinery capacity growth creating strategic
opportunities for technologically advanced players. Integrated refineries with clean
production technologies and digital management capabilities are poised to dominate
regional market competition.
2.PTA industry
PTA is a critical bulk organic raw material extensively utilized across sectors of the
national economy such as chemical fibers light industry electronics and construction.In China 95% of domestic PTA demand is attributed to the polyester industry. With
ongoing efforts to enhance domestic production capacity China has solidified its
position as the world’s largest PTA producer and consumer dominating the global
PTA market. However the industry currently faces structural overcapacity with
annual operating rates of existing facilities persistently below 80%. Despite partial
capacity expansions in 2024 profitability of PTA products remained under significant
pressure during the reporting period. According to CCF data the growth rate of PTA
202024 Annual Report of Hengyi Petrochemical Co. Ltd.
capacity decelerated from 18.5% in 2020 to 6.7% in 2024. In 2024 China added 7.5
million tons of new PTA capacity while 2.1 million tons of idled capacity (inactive
for over two years) were phased out. This resulted in a net capacity increase of 5.4
million tons for the year translating to a net growth rate of 6.7%.
3.Polyester industry
Polyester products encompass polyester filament yarn polyester staple fiber
polyester chips polyester bottle flakes and other varieties. Among these polyester
filament yarn and polyester staple fiber are primarily used in apparel home textiles
and industrial textiles reflecting their critical role in sustaining livelihoods and
economic development.
(1)Steady Recovery in Downstream Demand Drives Industry Growth
Momentum
In 2024 both domestic and international market demands exhibited a dual-engine
driven growth trend. Domestically according to data from the National Bureau of
Statistics China's total retail sales of consumer goods in 2024 increased by 3.5%
year-on-year. Notably national online retail sales rose by 7.2% year-on-year
reflecting robust e-commerce activity that fueled sustained growth in online
procurement demand for the textile and apparel industries. Internationally China's
polyester industry maintained strong export performance during the reporting period
leveraging its advantages in technological innovation product quality and cost
control. As reported by CCF China's polyester product exports in 2024 reached 12.87
million tons a 15% year-on-year increase with all export destinations being emerging
market countries. Overall the industry sustained a favorable growth trajectory.
212024 Annual Report of Hengyi Petrochemical Co. Ltd.
2020-2024 Export volume of polyester in China (ten thounsand
tons)
14001287
12001116
988
1000
822
800
667
600
400
200
0
20202021202220232024
Data source: CCF
(2)The growth rate of production capacity slows down highlighting the
advantages of leading companies
Based on CCF data the growth rate of polyester filament production capacity
significantly slowed down in 2024 with new capacity additions totaling 1.28 million
tons far below the 3.85 million tons added in 2023. Meanwhile polyester filament
capacity elimination reached 1.01 million tons in 2023 and 0.23 million tons in 2024
bringing the total capacity reduction to 1.33 million tons. In 2024 the net increase in
polyester filament production capacity for the entire year was only 1.05 million tons
with a growth rate of just 2% marking a substantial deceleration in capacity
expansion. As outdated and under performing facilities lacking technological
innovation capabilities gradually exit the industry the phase-out of backward
production capacity is accelerating. In addition with the increasing stringency of
dual-carbon policies and equipment supply requirements the industry's entry barriers
will continue to rise. This will further optimize market concentration in the polyester
industry. As a leading enterprise in the industry the company continues to reinforce
its market position through advantages in technological research and development as
well as economies of scale. It has established significant competitive advantages in
differentiated product development intelligent production and full-industry-chain
222024 Annual Report of Hengyi Petrochemical Co. Ltd.
collaboration. With the deepening of industry consolidation the company's
operational efficiency is expected to improve continuously.(II)The industry position of the company
1.Refining and petrochemical sector
As the only private enterprise in China's refining and chemicals sector to achieve
large-scale overseas refinery operations the Phase I of Brunei refinery project(with an
annual capacity of 8 million tons) stands as the largest single overseas investment by a
Chinese private company. Upon the completion and operation of Brunei Refinery
Project phase II the company is poised to embrace new growth opportunities.According to Platts data Southeast Asia's total refining capacity reached
approximately 276 million tons as of December 31 2024. The Phase I of Brunei
refinery project accounts for 8 million tons representing 3% of the region's total
refining capacity.Phase I of Brunei refinery project incorporates the world's largest single-train
aromatics unit and the sixth flexible coking unit globally offering lower per-unit
production costs enhanced environmental sustainability and significant late-mover
advantages. With Phase II of Brunei Refinery Project coming online the benefits of
integrated refining and chemical complexes will become more pronounced amid the
industry's transformation and upgrading. Furthermore given limited new refining
capacity additions in Southeast Asia and the region's persistent refined oil
supply-demand gap the Brunei Refinery Project is well-positioned to capitalize on
tightening market conditions.
2.PTA Sector
CCF data shows that China's PTA capacity totaled 86.015 million tons as of
December 31 2024. As a PTA industry leader the company strategically operates
four major PTA production bases across three coastal locations: Dalian (Liaoning)
232024 Annual Report of Hengyi Petrochemical Co. Ltd.
Ningbo (Zhejiang) and Yangpu (Hainan) with combined equity-controlled PTA
capacity of 21.5 million tons.Additionally China's PIA capacity stood at 550000 tons as of December 31 2024
the company’ capacity is 300000 tons. PIA is primarily used in polyester bottle chips
alkyd resins coatings polyester fiber dye modifiers and pharmaceuticals. The
company's PIA production currently supports in-house polyester bottle chip
manufacturing but external sales are expected to grow significantly as distribution
channels expand.
3.Polyester sector
According to CCF data the majority of global polyester production capacity is
concentrated in the Asia-Pacific region with China serving as the world's largest
textile producer and exporter. By the end of 2024 China's total polyester capacity
reached 86.34 million tons comprising 42.76 million tons of direct-spun polyester
filament 9.505 million tons of polyester staple fiber and 20.43 million tons of PET
bottle-grade resin.The company holds equity stakes in aggregated production capacity totaling 12.85
million tons including 5.3 million tons of PET bottle-grade resin (including recycled
PET or RPET). Its polyester fiber capacity encompasses 6.37 million tons of
polyester filament (including polyester chips) and 1.18 million tons of polyester staple
fiber positioning it among the industry's leading players. In recent years the company
has prioritized structural optimization of its product portfolio with a strategic focus
on differentiated filament offerings. By 2024 the production share of specialty
fibers—such as colored yarn full-dull and cationic-dyeable variants—had increased
to 19.05%. Concurrently the company accelerated the scaled application of
biodegradable fibers and high-value differentiated products like "Yitaikang". Through
its "Three-Tier Upgrade Pathway"—"Premiumization of Conventional Products
Functionalization of Premium Products and Greening of Functional Products"—the
242024 Annual Report of Hengyi Petrochemical Co. Ltd.
company has developed multiple patented technologies in cotton-like polyester fibers
and transparent nylon materials. These innovations are driving the chemical fiber
industry toward low-carbon circularity while cementing the company's leadership in
technological advancement.II.Major business activities of the company during the reporting period
The Company shall comply with the disclosure requirements for petrochemical
industry specified in Guidelines No. 3 for Self-Regulation of Listed Companies of
Shenzhen Stock Exchange - Industry Information Disclosure.(I)Overview of main business
During the reporting period the company continued to focus on the petrochemical
and chemical fiber industry chain while leveraging the supportive role of the
"Petrochemical+" sector which includes supply chain services and long-term equity
investments to enhance its core business.
1.Petrochemical and Chemical Fiber Business
Since its inception the company has consistently focused on the petrochemical and
chemical fiber industry and has now evolved into a leading domestic and
internationally top-tier private multinational conglomerate with an integrated
"refining-chemicals-chemical fiber" full industrial chain. By vertically extending the
industrial chain and horizontally strengthening industrial synergy the company
continues to enrich its product matrix and optimize structural layout forming a
comprehensive product system that includes refined oil products (gasoline diesel jet
fuel) basic petrochemical raw materials (PX PTA CPL LPG) and polyester new
materials (POY FDY DTY polyester staple fiber polyester chips polyester bottle
chips). This system deeply serves fundamental industries and essential demand
sectors of the national economy such as energy textile and apparel packaging
electronics and building materials.
252024 Annual Report of Hengyi Petrochemical Co. Ltd.
As of the date of this report the company has achieved an annual refining capacity of
8 million tons (Brunei Refining Project phase I) a PTA production capacity of 21.5
million tons through equity participation a polymerization capacity of 12.85 million
tons through equity participation a PIA design capacity of 300000 tons and a
caprolactam equity participation capacity of 400000 tons. Leveraging the vertical
integration advantages of "refining-aromatics-polyester" the company has realized
full-chain value creation from crude oil processing to chemical fiber products
continuously solidifying its core competitiveness.In 2024 the company's factories operated at high and stable capacities producing
6.1861 million tons of refined oil products and 2.0056 million tons of chemical
products. Its subsidiary Zhejiang Yisheng produced 2.6096 million tons of PTA and
221800 tons of PIA. The production of polyester filament yarn (including polyester
chips) reached 6.9164 million tons while polyester staple fiber production amounted
to 1.1925 million tons.
262024 Annual Report of Hengyi Petrochemical Co. Ltd.
272024 Annual Report of Hengyi Petrochemical Co. Ltd.
Figure 1 The current capacity of main production
Shareholding and controllingCategory Product production capacity（10000 tons/year）
Refined oil Gasoline Diesel Jet fuel
565
products etc.PX Benzene etc. 265
Chemical PTA 2150
products PIA 30
CPL 40
Polyester Filament Yarn
(including Polyester 637
Chips)
Polyester
products Polyester Staple Fiber 118
Polyester bottle flakes
530
(including RPET)
2. " Petrochemical+" Business
Faced with intensifying global economic fluctuations and the restructuring of industry
competition the company remains steadfast in its core businesses of "One Drop of Oil
Two Strands of Fiber." By building the "Petrochemical+" business model the
company ensures comprehensive support for its steady and robust development.
(1)Supply Chain Service Empowerment Full-Chain Operational Efficiency
Multiplied
The company is committed to building a resilient supply chain system to address
global geopolitical and energy security challenges. Through a "trinity" strategy it
enhances the self-controllable capability of the industrial chain:At the cooperation
management level it establishes a full-cycle distribution service system for raw
materials to finished products leveraging the Hengyi Micro Mall online platform
(integrating price inquiries quick ordering market insights and financial services)
and the HTMS intelligent logistics management system achieving year-on-year
282024 Annual Report of Hengyi Petrochemical Co. Ltd.
growth in online transactions.At the logistics construction level it creates an
omnichannel control network covering warehousing transportation and distribution
innovatively introducing third-party logistics platforms significantly reducing
transportation costs in raw material supply and product delivery.At the technology
empowerment level it advances the construction of digital factories utilizes big data
analysis to achieve flexible production customization and builds a smart supply chain
system of "demand forecasting—intelligent production scheduling—dynamic
dispatching" significantly shortening response cycles.With the stable operation of the
Brunei refinery project’s first phase the company simultaneously constructs an
intelligent closed-loop system of "factory—warehousing—logistics—customer"
achieving rapid improvement in Southeast Asia’s supply chain response speed
through a 300000-ton single-point mooring terminal and supporting fleet leading the
industry’s supply chain services toward "agility visibility and ecosystem
integration."
(2)Long-Term Equity Investment Returns Boost Company Profits
China Zheshang Bank officially established in 2004 is one of the 12 national
joint-stock commercial banks approved by the China Banking Regulatory
Commission. It was listed on the Hong Kong Stock Exchange Main Board on March
30 2016 and on the Shanghai Stock Exchange on November 26 2019 becoming an
"A+H" listed bank. China Zheshang Bank has developed into a high-quality
commercial bank with a solid foundation excellent profitability rapid growth and
robust risk control. Guided by its vision of becoming a "first-class commercial bank"
it comprehensively builds a political ecosystem characterized by "integrity simplicity
expertise collaboration and integrity" practices benevolent finance adheres to smart
operations and fosters a humanistic Zhejiang Bank. It fully implements
customer-centric comprehensive collaborative reforms with digital transformation as
the main line and "deepening roots in Zhejiang" as the primary strategy. The five
major business segments—retail banking corporate banking investment banking
asset management and cross-border services—advance in tandem achieving
292024 Annual Report of Hengyi Petrochemical Co. Ltd.
comprehensive and coordinated development. Wealth management embarks on a new
journey implementing the "four foundations" of customer base talent base system
base and investment research base fully opening a new chapter of high-quality
development.(II)Business model
During the reporting period the company’s business model did not undergo any
significant changes. For detailed information on the company’s business model
please refer to the section "II.Major businesses in which the Company was engaged
during the reporting period" under "Section III. Management Discussion and
Analysis" in the company’s 2023 Annual Report specifically subsection"(II)
Operation model".(III)Process Flow Diagram of Main Products
During the reporting period the process flow diagram of the company’s main
products did not undergo any significant changes. For detailed information on the
company’s business model please refer to the section "II.Major businesses in which
the Company was engaged during the reporting period" under "Section III.Management Discussion and Analysis" in the company’s 2023 Annual Report
specifically subsection"(III) Process flow charts of main products ."
(IV)Key Business Performance During the Reporting Period
During the reporting period the domestic economy experienced steady growth and
downstream demand in the company’s industry continued to recover. The company’s
board of directors and management consistently adhered to the advanced philosophy
of being driven by technological innovation rooted in high technology and guided by
quality and efficiency improvement. Leveraging the extensive operational
management experience and forward-looking strategic advantages accumulated over
years of deep involvement in the chemical industry the company closely monitored
302024 Annual Report of Hengyi Petrochemical Co. Ltd.
dynamic changes in end-market demand flexibly adjusted operational strategies and
steadily enhanced its core business strengths.At the same time the company fully utilized its advantageous resources continuously
optimized its industrial layout and steadily advanced the construction of major
strategic projects laying a solid foundation for high-quality development and driving
stable and positive operating performance during the reporting period. During the
reporting period the company achieved operating revenue of RMB 125.463 billion
net profit attributable to shareholders of the listed company of RMB 234 million total
assets of RMB 107.529 billion and net assets attributable to shareholders of the listed
company of RMB 24.742 billion.During the reporting period the company took multiple measures to boost investor
confidence including profit distribution share repurchase plans employee stock
ownership plans and shareholding increase plans by the controlling shareholder
demonstrating the company’s firm confidence in its own value and future
development. These initiatives played a positive role in enhancing the investment
value of the listed company. The details are as follows:
(1)The company consistently prioritized shareholder returns and enhanced investor
satisfaction. During the reporting period the company implemented the 2023
dividend distribution plan with a total cash dividend of RMB 339 million accounting
for 77.78% of the net profit attributable to the parent company in 2023.
(2) The company completed the fourth phase of its share repurchase plan during the
reporting period and continued to implement the fifth phase. The fifth phase actively
utilized the stock repurchase and refinancing policy effectively reducing the
company’s financing costs and improving capital efficiency. As of March 31 2025
the fifth phase of the share repurchase plan had cumulatively repurchased 29.2408
million shares accounting for 0.80% of the company’s total share capital with a
transaction amount of RMB 185 million. The company has cumulatively implemented
312024 Annual Report of Hengyi Petrochemical Co. Ltd.
five phases of share repurchase plans with a total repurchase amount of RMB 3.210
billion.
(3) The company completed the sixth phase of its employee stock ownership plan
during the reporting period holding 114.0903 million shares of the company
accounting for 3.11% of the company’s total share capital with a transaction amount
of RMB 795 million. The cumulative transaction amount for the first to sixth phases
of the employee stock ownership plans was RMB 5.231 billion.
(4) The company’s controlling shareholder Hengyi Group launched a shareholding
increase plan intending to increase its holdings of the company’s shares between
December 26 2024 and June 25 2025 (excluding periods when such increases are
prohibited by laws regulations or Shenzhen Stock Exchange rules). The increase
amount will be no less than RMB 250 million and no more than RMB 500 million
with the price per share not exceeding RMB 9. As of April 8 2025 Hengyi Group
had cumulatively increased its holdings by 39347380 shares accounting for 1.07%
of the company’s total share capital.During the reporting period the key operational initiatives that drove the
company's performance are as follows:
1.Innovation-Driven Industrial Upgrading and Technology-Enabled Strategic
Enhancement
In 2024 the company focused on core key technologies of "one drop of oil two
strands of fiber" intensifying investment in technological innovation and R&D. It
vigorously promoted comprehensive innovation centered on technology accelerating
the transformation and application of high-tech achievements thereby empowering
the company's high-quality development. During the reporting period the company
actively introduced high-level R&D talents optimized scientific research incentive
mechanisms and systems and fostered an enterprise innovation culture of
"co-creation and sharing." Additionally the company collaborated with renowned
domestic universities such as Zhejiang University and Donghua University to
establish industry-university-research platforms. It also established the "Hengyi
322024 Annual Report of Hengyi Petrochemical Co. Ltd.
Scholars Laboratory" led by several prominent professors in the industry to create a
joint R&D platform focusing on breaking through R&D bottlenecks and exploring
cutting-edge innovative technologies.During the reporting period the company's R&D investment reached RMB 764
million a year-on-year increase of 2.68%. The number of R&D personnel was 1089
with master's and doctoral degree holders accounting for 21.67%. The company
actively committed to R&D innovation promoting the cultivation of patent-intensive
products and continuously achieving innovative results. A total of 226 invention
patent applications were submitted during the reporting period and 13
patent-intensive products including "spinning oil agents" and "anti-stain nylon" were
registered. Furthermore the company leveraged its role as an industry leader to
actively participate in the formulation of industry standards. By the end of 2024 the
company had 502 valid authorized patents including 453 R&D patents and 49
intelligent manufacturing patents. It participated in the formulation and revision of 51
standards including 13 national standards 30 industry standards and 8 group
standards.During the reporting period the industrialization process of the company's R&D
projects accelerated with multiple technological achievements achieving large-scale
applications. Projects such as spinning oil agents functional masterbatches and
biodegradable polyester entered the production and operation phase. The innovation
and market value of the biodegradable polyester "Better" were highly favored by
customers. Sales of flame-retardant polyester increased significantly stain-resistant
nylon achieved large-scale sales and antimony-free environmentally friendly
polyester products further expanded production. The company successfully
established a full-chain transformation system of "laboratory R&D—pilot
scale-up—industrialized production."
332024 Annual Report of Hengyi Petrochemical Co. Ltd.
Figure 2 The progress of company’s major Research& Development Project
Item Progress of projects
Spinning Oil Agent Project Production and Operation Phase
Functional Masterbatches Project Production and Operation Phase
Biodegradable Polyester "Better"
Production and Operation Phase
Project
Production and Operation Phase during the reporting
Fame-retardant Polyester
period production capacity further increased.Production and Operation Phase during the reporting
Easy-Clean Nylon Product
period production capacity further increased.Antimony-free Environmentally Production and Operation Phase during the reporting
Friendly Polyester Products period production capacity further increased.Currently multiple key technologies of the company have reached industry-leading
levels receiving high recognition from industry experts and government agencies and
the products have been widely praised by the market.Figure 3 Awards and Recognitions for the Company's R&D Projects
Item Awards“2024 Petroleum and Chemical Industry PatentThe patented preparation method for Awards”
TiO2 Matting Agent Five Paper Awards from the China Chemical
Fibers Association-Hengyi Foundation for 2024
Easy-Clean Nylon Zhejiang Provincial Technology Invention Award
Flame retardant polyester and
Listed in Zhejiang Province's first batch of new
TiO2-Based Delustering Slurry for
materials for 2024
Nylon Fibers
Five technologies including the Listed in Green and Low-Carbon Technologies
342024 Annual Report of Hengyi Petrochemical Co. Ltd.
atmospheric low-temperature dyeable Compilation for the Textile Industry 2024
polyester fiber with disperse dyes and
PTT composite fiber
2.Stable and Efficient Operation of Existing Production Capacity Accelerating
the Advancement of Major Strategic Projects
(1)Steady Operation of Phase I of the Brunei Refining and Chemical Project
with Continuous Optimization of Product Structure
Leveraging years of operational experience in the Southeast Asian market the
company has continuously optimized its production and sales strategies and
dynamically adjusted its product structure. During the reporting period the company
further implemented technological upgrades strengthened the foundation of process
management and achieved industry-leading comprehensive operational efficiency.By deepening the coordination mechanism between production and sales the
company has established a full-process control system guided by market demand
supported by R&D adaptation and optimized through production. This has led to the
continuous optimization of the product structure of the Brunei Refinery Project
providing critical support for the company’s global expansion.To ensure the stable operation of Phase I of the Brunei Refining and Chemical Project
the company has taken effective measures to address fluctuations in crude oil prices
and changes in product price differentials. A diversified crude oil procurement system
has been established to select the most suitable crude oil resources reducing upstream
costs. Meanwhile the product structure has been closely aligned with market changes
with rational adjustments made to the production of gasoline diesel jet fuel chemical
light oil PX and benzene. This has resulted in an optimized production structure that
synergizes aromatic products with clean fuels continuously increasing the proportion
of high-value-added products. During the reporting period Phase I of the Brunei
Refining and Chemical Project operated at high capacity producing a range of refined
products (diesel gasoline chemical light oil liquefied petroleum gas etc.) and
chemical products (PX benzene etc.) with the product structure further optimized.
352024 Annual Report of Hengyi Petrochemical Co. Ltd.
(2) Accelerating the Development of Major Strategic Projects Enhancing the
Industrial Landscape
During the reporting period the company vigorously advanced the construction of the
Qinzhou "1.2 Million Tons Per Year Caprolactam-Polyamide Integrated and
Supporting Project" (hereinafter referred to as the "Qinzhou Project"). Phase I of the
project is expected to be completed and operational by 2025 and has now entered the
production preparation phase.The Qinzhou Project is a large-scale caprolactam-polyamide integrated production
base that the company has focused on developing in recent years. The project boasts
advantages in technology integration and product structure:
1)Technological Advantage: The project has achieved large-scale industrial
application of multiple patented technologies and intellectual properties independently
developed by the company. Advanced unit technologies and technical combinations
are employed throughout the entire process and the latest energy-saving technologies
have been introduced significantly reducing production costs.
2)Integration Advantage: The project integrates production factors and energy
resources across the entire process significantly optimizing energy and material
consumption indicators achieving industry-leading standards in all aspects.
3)Product Structure Advantage: The project produces a variety of products including
civilian fibers engineering plastics and films with a rich and rational product
structure. With the continuous development of China's industry the acceleration of
domestic component production and the further adoption of polyamide films demand
for polyamide is expected to grow rapidly.Upon completion the project is expected to further enhance the company’s
performance strengthen the upstream and downstream industrial chains and fully
leverage the company’s strategic advantage of "one drop of oil two strands of fiber."
This will further solidify the company’s highly integrated and balanced industrial
362024 Annual Report of Hengyi Petrochemical Co. Ltd.
chain supported by its existing customer network and cost-driven price advantages
thereby increasing market share and achieving rapid and healthy growth.
3.Fully Leverage Integrated Upstream-Downstream Industry Chain Advantages
to Proactively Build a New Paradigm of Production-Sales Collaboration
By capitalizing on its balanced and integrated industry chain advantages the company
gains insights into domestic and international market trends strengthens market
forecasting and coordinates production plans and sales strategies across upstream and
downstream factories. It continuously refines operational strategies based on internal
conditions market dynamics and industry trends. Through optimizing product
portfolios to meet market demand and enhance competitiveness the company has
achieved seamless production-sales collaboration across the entire industry chain.Currently the company has established an end-to-end sales data management system.Digital platforms such as the Hengyi "Micro Mall" prioritize customer-centric
high-quality services while improving the flexibility and efficiency of delivery
processes. During the reporting period the proportion of differentiated products grew
rapidly significantly increasing product value-added and providing foundational
momentum to consolidate the company’s industry leadership. Additionally the
proactive use of hedging tools as a price risk control mechanism has stabilized
operating profits and promoted sustainable business growth.
4. Digital Empowerment for Efficiency Gains and Lean Management as a
Cornerstone for Development
During the reporting period the company intensified efforts to boost automation and
intelligence elevating operational efficiency and ensuring stable business operations.The entire lifecycle of polyester products is now fully digitized with end-to-end smart
processes covering raw material procurement automated production (e.g. automatic
doffing external inspection packaging and warehousing). Key initiatives include:
(1) Continuous optimization of the "Hengyi Brain" platform through big data
analytics integrating real-time production inventory and sales data. This platform
372024 Annual Report of Hengyi Petrochemical Co. Ltd.
supports high-level decision-making by providing granular insights into output
quality material consumption and energy usage unlocking the value of operational
data.
(2) Scaling 100% intelligent external inspection systems and in-house logistics
management systems across multiple plants leveraging first-mover advantages in
smart manufacturing. By fostering a culture of precision management the company
established tightly integrated high-efficiency operational workflows enhancing the
timeliness accuracy and comprehensiveness of management. This drove sustained
improvements in per-capita productivity and supported high-quality growth.
5. Top-Down Cost Optimization and Full-Process All-Element and Holistic
Control
The company implemented comprehensive cost-reduction and
efficiency-enhancement measures during the reporting period including:
(1) Introducing advanced equipment optimizing production processes and improving
raw material procurement. Initiatives like acetaldehyde recovery and waste filament
reuse reduced energy and material consumption per ton.
(2) Promoting localization of catalysts oils and additives which lowered production
costs. Environmentally friendly titanium-based catalysts further enabled green
recycling of textiles aligning corporate profitability with social and environmental
benefits.
(3) Enhancing workforce efficiency through performance-linked pay systems
workshop contracting and refined labor management. These measures reduced labor
costs per ton of polyester products by 8% and headcount per 10000 tons by 10% in
2024 cumulatively cutting costs by 24% over three years.
(4) Refinancing the Brunei Phase I refinery project in 2024 to lower capital costs
alongside the release of 872 million pledged shares by the controlling shareholder
significantly reducing pledge ratios.
6. Green and Low-Carbon Leadership Drives Industrial Transformation; ESG
Strategy Reshapes Development Landscape
382024 Annual Report of Hengyi Petrochemical Co. Ltd.
The company is committed to becoming a leading innovator in the chemical
technology industry actively aligning with national carbon peaking and carbon
neutrality policies. Key initiatives include:
(1)The company developed the antimony-free polyester product "Yitaikang" which
replaces traditional antimony-based catalysts with titanium-based catalysts. This
breakthrough significantly advances green manufacturing and ecological
conservation.
(2)The company has aggressively deployed solar power biogas power esterification
power generation waste heat recovery and process tower energy-saving systems. In
2024 it added 52MW of controllable solar capacity. By the end of 2024 total
controllable solar capacity reached 130MW with green electricity output (including
solar waste heat and esterification power) exceeding 200 million kWh annually.▲Hengyi Brunei Natural Gas and Renewable Energy Sustainable Integration Project
In 2025 the company will continue to implement its ESG strategy guided by the
principles of "green manufacturing" and "circular economy" focusing on the research
development and promotion of environmentally friendly high-end green products.We will further increase photovoltaic coverage and green power generation while
persistently advancing the green and low-carbon transition across the industrial chain.(V)Other business information
1.Purchase model of major materials
392024 Annual Report of Hengyi Petrochemical Co. Ltd.
Unit: RMB/ Tons
Whether the Average Average price
Percentage of
Main raw Procurement settlement method price in the in the second
total amount of
materials model changed first half of half of the
purchase
significantly the year year
Purchasing
Crude oil 27.45% No 4647.42 4213.67
inquiry
Purchasing
PX 9.20% No 7437.86 6438.75
inquiry
Purchasing
MEG 8.22% No 3925.67 4060.47
inquiry
2.Reasons for the significant change in the prices of raw materials compared
with the previous period
In 2024 international crude oil prices exhibited a high-then-low trend due to recurring
geopolitical conflicts and fluctuations in global crude oil inventories with overall
prices remaining largely flat compared to the previous reporting period. Prices across
the entire industrial chain fluctuated in tandem with crude oil. Notably MEG prices
rose year-on-year driven by the resumption of downstream polyester production and
coal price volatility (according to CCF data the average domestic MEG spot price in
2024 increased by 12.46% year-on-year). Conversely PX prices declined
year-on-year under pressure from accumulated inventories caused by a significant
supply surge in 2023 (CCF data shows the 2024 CFR China PX average price fell by
-7.32% year-on-year).
3.The purchase price of energy accounts for more than 30% of the total
production cost
□Applicable ?Not applicable
4.Reasons for significant changes in major energy types
402024 Annual Report of Hengyi Petrochemical Co. Ltd.
□Applicable ?Not applicable
5.Major production technologies
During the reporting period there were no significant changes in the production
technology of the Company’s major products. For detailed information on the
production technology status of the Company’s key products please refer to Section
III. Management Discussion and Analysis II.Major businesses in which the Companywas engaged during the reporting period and “(4) Highlights of company’s operationsduring the reporting period: Main production technologies” in the Company’s Annual
Report 2023.
6.The capacity of major products
Please refer to “(1) Overview of main business” under “II. Major business activities ofthe company during the reporting period” in this section.
7.The product categories in main chemical parks
Major chemical parks Main product categories
PMB Industrial Park Gasoline diesel jet fuel PX and benzene
Yaqian Town Industrial Park Xiaoshan District
Flake POY FDY DTY
Hangzhou
Hangzhou Linjiang High-tech Industrial Park Flake staple fibre POY FDY
Haining Economic Development Zone (Jianshan
Flake POY FDY DTY
New District)
Suqian High-tech Industrial Development Zone Flake staple fibre
Jiaxing Xiuzhou High-tech Industrial
Flake POY FDY
Development Zone
Shaxi Town Industrial Park Flake and POY
Jingjiang Yinglin Town Industrial Park FDY staple fibre flake
Ningbo Petrochemical Economic and
PTA
Technological Development Zone
Dalian Economic and Technological PTA bottle flake
412024 Annual Report of Hengyi Petrochemical Co. Ltd.
Development Zone
Yangpu Economic Development Zone PTA bottle flake
8.Environmental Impact Assessment (EIA) Approvals Applied for or Newly
Obtained During the Reporting Period:
1.Zhejiang Hengyi Polymer Co. Ltd. submitted the filing for its Energy-Efficient and
Environmentally Friendly Boiler Replacement and Retrofit Project on July 31 2023
and obtained the EIA approval (Xiaohuanjian [2024] No. 23) on February 19 2024.
2.Fujian Yijing Chemical Fiber Co. Ltd. submitted the filing for its Green Technical
Retrofit Project for Boilers on August 13 2024 and obtained the EIA approval
(Quanhuanping [2024] Shu 36) on December 9 2024.
9.During the reporting period the listed company experienced incidents of
abnormal production suspension
□Yes ?No
10.Status of Relevant Approvals Licenses Certifications and Validity Periods
Please refer to "Section V: Environmental and Social Responsibility" —
"Environmental protection administrative permits"
11.Engaged in petroleum processing and petroleum trading
?Yes □ No
12.Engaged in fertilizer industry
□Yes ?No
13.Engaged in pesticide industry
□Yes ?No
14.Engaged in chlor-alkali and soda ash industry
□Yes ?No
III.Core competitiveness analysis
(I) Focus on Core Business Strategic Leadership
The company has been deeply rooted in the petrochemical and chemical fiber industry
for decades steadfastly focusing on its core business of "one drop of oil two strands
422024 Annual Report of Hengyi Petrochemical Co. Ltd.
of fiber." This has enabled the formation of a highly integrated and synergistic
industrial cluster encompassing three core businesses: refining PTA and polyester
fiber. Following the "Headquarters + R&D + Production Base" trinity model the
company has established 1 platform 2 centers and 6 major bases creating a market
layout that "relies on the Yangtze River Delta Pearl River Delta and Bohai Bay
while expanding into the South China Sea." This stable operational framework
enhances resilience across business cycles and drives comprehensive growth
momentum. Strategically the company has prioritized Southeast Asia pioneering the
overseas deployment of Phase I of the Brunei Refining Project and actively
supporting the Belt and Road Initiative. During the reporting period the company
advanced Phase II of the Brunei Refining Project and the "1.2 Million Ton Annual
Caprolactam-Polyamide Industrial Integration and Supporting Project." Upon
completion these projects will deepen the aromatic industrial chain solidify
leadership in downstream sectors amplify production scale and market share
optimize product portfolios increase high-value-added product ratios and maximize
shareholder value.(II) R&D-Driven Innovation Technology Leadership
Aligned with the strategic goal of "consolidating highlighting and optimizing core
business competitiveness" the company has innovatively established the
"Tech-Driven Hengyi" framework. It leads the industry through pioneering
applications of polyester melt direct spinning large-scale PTA technology and green
high-end caprolactam processes. By integrating full-chain innovation and
industry-academia collaboration the company has significantly enhanced its
competitive edge and injected technological vitality into high-quality development.The Hengyi Research Institute focuses on advanced materials and green chemicals
building a full-chain innovation system from "basic research—technology
development—industrial application." Key breakthroughs include recycling polyester
across its lifecycle achieving large-scale production and sales of high-quality
432024 Annual Report of Hengyi Petrochemical Co. Ltd.
recycled and functional polyester. Self-developed green polyester products prioritize
safety quality and sustainability reducing pollutants in downstream textile
production and enabling circular economy practices.The Hengyi Global Innovation Center in Hangzhou drives cutting-edge R&D.Partnerships with Zhejiang University and Donghua University have entered a new
phase while the "Hengyi Scholars Lab"—guided by industry experts—operates with
heightened efficiency fueling long-term innovation. The company’s integrated
"industry-academia-research-application" mechanism ensures resource sharing and
complementary strengths boosting technological capabilities R&D proficiency and
market responsiveness.(III)Digital-Intelligent Integration Operational Excellence
The company has established an "Internet + Petrochemical" information strategy
continuously focusing on and actively exploring the implementation of intelligent
application scenarios. It is vigorously promoting the digital and intelligent
transformation of the industry advancing the deep integration of new-generation
information technologies with petrochemical manufacturing and achieving high-level
collaboration across the entire industrial chain. In 2024 the company's digital and
intelligent initiatives were awarded the "Outstanding Application Award for China's
Industrial Internet" and the "Excellent Case of Digital Economic Development in
Zhejiang Province" by the Zhejiang Provincial Department of Economy and
Information Technology among other accolades. Mr. Qiu Yibo the company's
Chairman and President was recognized as the "Outstanding CEO in Promoting
Intelligent Manufacturing in China 2023" and the "Digital Transformation Leader of
the Year 2024" in the industry.As a leading enterprise in the industry the company is actively building digital
workshops and smart factories. It has established China's first fully intelligent
polyester plant and the first digital benchmark factory. The company pioneered the
442024 Annual Report of Hengyi Petrochemical Co. Ltd.
Single Spindle Data Flow System Warehouse 2.0 System Product Lifecycle Quality
Traceability System and Smart Sales Supply Chain System. The Single Spindle Data
Flow System enables lifecycle management of individual spindle products. The
Warehouse 2.0 System achieves centralized and unified inventory management
enhancing the real-time operational management capabilities of finished product
warehouses. The Product Lifecycle Quality Traceability System Smart Sales Supply
Chain System and the company's self-developed visual "Hengyi Brain" support the
company's digital transformation. Additionally the end-to-end sales data system
integrates micro-stores marketing loops shipping consignments and shipping
applications forming an integrated chemical fiber supply chain platform that includes
micro-stores supply chain finance and warehousing logistics providing customers
with high-quality and efficient services and automating the sales process. The MES
(Manufacturing Execution System) enhances production flexibility strengthens
production coordination standardizes and traces quality inspections and ensures
production transparency. This system establishes industry standards for consistency
and effectiveness in large-scale group production management laying a solid
foundation for the intelligent collaboration of factories.(IV)Industrial Synergy and Scale Advantage
As a leading enterprise in the chemical and chemical fiber industry the company
continues to deepen its vertical integration strategy across the entire industrial chain
of "refining—PTA—polyester fiber." Leveraging its global industrial ecosystem the
company achieves efficient resource allocation through full-factor collaboration
significantly enhancing the anti-cyclical capability and comprehensive profitability of
the industrial chain. It has built a competitive barrier encompassing the entire chain of
"raw material supply—production manufacturing—market services" solidifying its
position as a benchmark in the global chemical fiber industry.The company’s current production capacities rank among the top in the industry. It
continues to consolidate and expand its scale advantages optimize and upgrade its
industrial model and drive both quantitative growth in business scale and qualitative
452024 Annual Report of Hengyi Petrochemical Co. Ltd.
improvement in business structure. By utilizing large-scale equipment and
energy-saving technologies the company ensures the stable operation of production
facilities and consistent product quality while significantly reducing unit investment
costs and energy consumption. Large-scale procurement and integrated centralized
procurement for domestic and international projects have notably saved procurement
costs comprehensively enhancing operational efficiency and providing strong support
for the profitability of end products.(V)Outstanding Talent and Advanced Management
The company boasts an international professional and youthful management and
operations team. Team members possess solid professional knowledge and rich
industry experience with the overall management team being relatively young
continuously injecting vitality into the company’s high-quality development. Drawing
on advanced management practices both domestically and internationally the
company has established a robust internal system continuously optimized its
organizational structure improved management efficiency and leveraged its scale
synergy advantages. In terms of talent development the company continuously
enhances overall talent effectiveness by vigorously introducing high-level
professionals strengthening strategic cooperation with domestic and international
research institutions and universities and improving talent service guarantee
mechanisms. It aims to shape new momentum and advantages through high-level
technology and high-quality talent. Additionally the company has refined an internal
talent cultivation model that integrates "production education research and
application" providing employees with excellent career development opportunities.The Brunei refinery project has steadily increased employee localization strongly
supporting the growth of local Bruneian youth and achieving win-win talent
cooperation. In employee incentives the company adheres to the philosophy of
"co-creation sharing and joyful development" striving to unite people for the
company’s growth and secure benefits for employees’ development. By implementing
restricted stock incentive plans and multiple employee stock ownership plans the
462024 Annual Report of Hengyi Petrochemical Co. Ltd.
company has established a long-term development sharing mechanism effectively
enhancing employees’ sense of belonging and cohesion and laying a solid talent
foundation for the company’s long-term development.IV.Main Business Analysis
1.Overview
In 2024 the company achieved a total operating revenue of RMB 125.463 billion
with a net profit attributable to shareholders of the listed company of RMB 234
million . After deducting non-recurring gains and losses the net profit attributable to
shareholders of the listed company was RMB 202.765 million.
2.Revenue and costs
(1)Components of operating revenue
Unit: RMB
2024 2023 Year-on-
year
Percentage in Percentage in
Amount Amount increase/d
operating income operating income
e crease
Total operating
125463237098.17100%136148114082.34100%-7.85%
income
By industry
Petrochemical
52592721073.0841.92%56484387971.1941.49%-6.89%
industry
Chemical fibre
63503724808.4450.61%61075957822.0044.86%3.97%
industry
Supply chain
9366791216.657.47%18587768289.1513.65%-49.61%
services
By product
Refinery products 31507862049.06 25.11% 31841158971.62 23.39% -1.05%
472024 Annual Report of Hengyi Petrochemical Co. Ltd.
Chemical products 12121856023.16 9.66% 12145808146.64 8.92% -0.20%
PTA 7198172823.33 5.74% 11572721877.37 8.50% -37.80%
PIA 1764830177.53 1.41% 924698975.56 0.68% 90.85%
Polyester yarn 56075394236.76 44.69% 54790605801.14 40.24% 2.34%
Flake 7428330571.68 5.92% 6285352020.86 4.62% 18.18%
Supply chain
9366791216.657.47%18587768289.1513.65%-49.61%
services
By region
Domestic 74844287538.29 59.65% 84946111780.67 62.39% -11.89%
Overseas 50618949559.88 40.35% 51202002301.67 37.61% -1.14%
By sales model
Direct sales 121628322635.62 96.94% 132413772035.05 97.26% -8.15%
Distribution 3834914462.55 3.06% 3734342047.29 2.74% 2.69%
(2)Industries products regions and sales models that account for more than 10%
of the Company's operating income or profit
1)The Company shall comply with the disclosure requirements for petrochemical
industry specified in Guidelines No. 3 for Self-Regulation of Listed Companies of
Shenzhen Stock Exchange - Industry Information Disclosure
Unit: RMB
YOY
change
Gross YOY change in YOY change in
in gross
Operating revenue Operating cost profit operating revenue operating costs
profit
margin (%) (%)
margin
(%)
By industry
Petrochemical
52592721073.0850737364413.983.53%-6.89%-6.08%-0.83%
industry
Chemical fibre
63503724808.4461033717764.363.89%3.97%3.71%0.25%
industry
Supply chain
9366791216.659101058205.172.84%-49.61%-49.88%0.53%
services
482024 Annual Report of Hengyi Petrochemical Co. Ltd.
By product
Refinery
31507862049.0631533465378.69-0.08%-1.05%2.53%-3.49%
products
Chemical
12121856023.1610469974757.2913.63%-0.20%-2.41%1.96%
products
PTA 7198172823.33 7135350602.50 0.87% -37.80% -38.86% 1.72%
PIA 1764830177.53 1598573675.50 9.42% 90.85% 84.68% 3.03%
Polyester yarn 56075394236.76 53582038836.82 4.45% 2.34% 1.71% 0.60%
Flake 7428330571.68 7451678927.54 -0.31% 18.18% 20.83% -2.19%
Supply chain
9366791216.659101058205.172.84%-49.61%-49.88%0.53%
services
By region
Domestic 74844287538.29 72021729983.50 3.77% -11.89% -12.47% 0.64%
Overseas 50618949559.88 48850410400.01 3.49% -1.14% 0.22% -1.31%
By sales model
Direct sales 121628322635.62 117325378452.10 3.54% -8.15% -7.99% -0.16%
Distribution 3834914462.55 3546761931.41 7.51% 2.69% 0.73% 1.80%
2)In the event of an adjustment to the statistical caliber of the company's main
business data during the reporting period the company's main business data for
the most recent year has been adjusted according to the caliber at the end of the
reporting period.Unit: RMB
YOY
Gross YOY change YOY change
change in
Operating revenue Operating cost profit in operating in operating
gross profit
margin revenue (%) costs (%)
margin (%)
By industry
Petrochemical
56484387971.1954021381180.674.36%-4.70%-4.80%0.10%
industry
Chemical fibre
61075957822.0058850354479.373.64%15.06%12.44%2.24%
industry
492024 Annual Report of Hengyi Petrochemical Co. Ltd.
Supply chain
18587768289.1518158498022.842.31%-53.18%-53.95%1.65%
services
By product
Refinery
31841158971.6230756174029.443.41%-23.33%-21.28%-2.51%
products
Chemical
12145808146.6410728464028.0411.67%41.25%28.08%9.08%
products
PTA 11572721877.37 11671156811.34 -0.85% 29.06% 28.42% 0.51%
PIA 924698975.56 865586311.85 6.39% 435.81% 320.13% 25.77%
Polyester yarn 54790605801.14 52683074551.51 3.85% 15.07% 12.03% 2.61%
Flake 6285352020.86 6167279927.86 1.88% 14.96% 16.10% -0.96%
Supply chain
18587768289.1518158498022.842.31%-53.18%-53.95%1.65%
services
By region
Domestic 84946111780.67 82286414562.98 3.13% -13.43% -15.52% 2.40%
Overseas 51202002301.67 48743819119.90 4.80% -5.06% -4.63% -0.43%
By sales model
Direct sales 132413772035.05 127509011660.83 3.70% -11.76% -12.96% 1.33%
Distribution 3734342047.29 3521222022.05 5.71% 87.28% 74.30% 7.02%
3)The reason for the reclassification
Polyester fiber falls within the scope of the company's main products. Its sales
strategy aligns with that of the company's main products. Therefore this portion of
revenue has been reclassified from supply chain services to the main product revenue
under the chemical fiber industry—polyester filament and chips.
4)The operating income or net profit generated by overseas business accounts for
more than 10% of the audited operating income or net profit of the Company in
the latest fiscal year
Name of Operation Impact of tax policies on overseas business during the reporting
overseas Company's response status period
business
502024 Annual Report of Hengyi Petrochemical Co. Ltd.
The overall tax burden during the reporting period was low Both China and
Stable because Brunei does not levy personal income tax business Brunei provided
Brunei operation tax salary tax production tax and export tax. A local pioneer powerful support.Project under high enterprise certificate and an export enterprise certificate have
The project enjoyed
load been issued for the project so it can enjoy a long-term long- term tax
corporate income tax exemption. incentives and other
favorable policies.
(3)Whether the Company's income from product sales is greater than its income
from labor services
YOY change
Industry Item Units 2024 2023
(%)
Sales volume 10000 tons 617.82 582.50 6.06%
Refinery Production
10000 tons 618.61 580.24 6.61%
products volume
Inventory 10000 tons 13.26 12.47 6.34%
Sales volume 10000 tons 200.64 182.77 9.78%
Chemical Production
10000 tons 200.56 181.84 10.29%
products volume
Inventory 10000 tons 7.79 7.87 -1.02%
Sales volume 10000 tons 260.31 391.78 -33.56%
Production
PTA 10000 tons 260.96 392.25 -33.47%
volume
Inventory 10000 tons 3.09 2.44 26.64%
Sales volume 10000 tons 23.39 11.93 96.06%
production
PIA 10000 tons 22.18 14.25 55.65%
volume
Inventory 10000 tons 1.12 2.33 -51.93%
Polyester Sales volume 10000 tons 810.40 772.03 4.97%
Products Production 10000 tons 810.89 770.79 5.20%
512024 Annual Report of Hengyi Petrochemical Co. Ltd.
volume
Inventory 10000 tons 51.72 51.23 0.96%
Note: The PTA sales production and inventory data mentioned above only include
the company's holding subsidiary Zhejiang Yisheng and do not include other
equity-accounted companies.
1)Description of the reasons for the year-on-year change of more than 30% in
relevant data
Compared to the same period last year the company's PTA production and sales
volume decreased in the current period primarily due to production cuts and a
reduction in operating capacity. Meanwhile PIA production and sales volume
increased mainly driven by the expansion of downstream bottle chip production
capacity the growing demand for PIA in the market and an improvement in
operating capacity.
(4)Performance of the major sales contracts and major purchase contracts
entered into by the Company as of the Reporting Date
□Applicable ?Not applicable
(5)Components of operating cost--- category of industry and products
Unit: RMB
2024 2023 YOY
Industry Item change
Percentage in Percentage in
Amount Amount
operating cost operating cost (%)
Raw
30455020862.7496.58%29630498059.9696.34%2.78%
materials
Refinery Energy 198660831.89 0.63% 246049392.24 0.80% -19.26%
products Depreciatio
879783684.062.79%879626577.242.86%0.02%
n and others
Total 31533465378.69 100.00% 30756174029.44 100.00% 2.53%
Chemica Raw 9441823236.12 90.18% 9681365938.90 90.24% -2.47%
522024 Annual Report of Hengyi Petrochemical Co. Ltd.
l materials
products Energy 597835558.64 5.71% 637270763.27 5.94% -6.19%
Depreciatio
430315962.534.11%409827325.873.82%5.00%
n and others
Total 10469974757.29 100.00% 10728464028.04 100.00% -2.41%
Raw
1317864138.0882.44%666934253.2877.05%97.60%
materials
Energy 148827209.19 9.31% 89588183.28 10.35% 66.12%
PIA
Depreciati
products
on and 131882328.23 8.25% 109063875.29 12.60% 20.92%
others
Total 1598573675.50 100.00% 865586311.85 100.00% 84.68%
Raw
6507439749.4891.20%10689612523.5091.59%-39.12%
materials
PTA Energy 140566406.87 1.97% 263768143.94 2.26% -46.71%
produc Depreciati
ts on and 487344446.15 6.83% 717776143.90 6.15% -32.10%
others
Total 7135350602.50 100.00% 11671156811.34 100.00% -38.86%
Raw
50957050961.4683.49%48892874501.4683.08%4.22%
materials
Polyes
Energy 3350751105.26 5.49% 3436860701.60 5.84% -2.51%
ter
Depreciati
produc
on and 6725915697.64 11.02% 6520619276.31 11.08% 3.15%
ts
others
Total 61033717764.36 100.00% 58850354479.37 100.00% 3.71%
532024 Annual Report of Hengyi Petrochemical Co. Ltd.
(6)Whether there was any change in the scope of consolidation during the
reporting period
The total number of subsidiaries included in the scope of consolidation in fiscal year
2024 was 54 an increase of 4 subsidiaries and a decrease of 2 subsidiaries compared
with the previous year. For details please refer to "VI. Interests in Other Entities" in
"Section X. Financial Reporting".
(7)Significant changes or adjustments in the Company's business products or
services during the reporting period
□Applicable ?Not applicable
(8)Major customers and suppliers
1)Major customer of the company
Total sales amount of the top five customers (RMB) 26652522304.26
Percentage of the total sales amount of the top five customers in
21.24%
total annual sales amount
Percentage of sales amount of related parties among the top five
3.43%
customers in total annual sales amount
2)Top 5 customers
Percentage in total
No. Customer name Sales amount (RMB) annual sales
amount
1 Customer 1 7374897067.89 5.88%
2 Customer 2 5296330397.40 4.22%
3 Customer 3 5295377750.48 4.22%
4 Customer 4 4377965993.13 3.49%
5 Customer 5 4307951095.36 3.43%
Total -- 26652522304.26 21.24%
3)Other information about major customers
542024 Annual Report of Hengyi Petrochemical Co. Ltd.
□Applicable ?Not applicable
4)Major suppliers of the company
Total purchase amount of top five suppliers (RMB) 47059176506.75
Percentage of the total purchase amount of the top five suppliers in the
38.94%
total annual purchase amount
Percentage of purchase amount of related parties among the top five
27.96%
suppliers in total annual sales amount
5)Top 5 Suppliers
Percentage in total
No. Supplier name Purchase amount (RMB) annual purchase
amount
1 Supplier 1 16387025820.81 13.56%
2 Supplier 2 11179399623.11 9.25%
3 Supplier 3 10123117660.31 8.38%
4 Supplier 4 5177005340.45 4.28%
5 Supplier 5 4192628062.07 3.47%
Total -- 47059176506.75 38.94%
6)Other information about major suppliers
□Applicable ?Not applicable
3.Expense
Unit: RMB
2024 2023 YOY change (%)
Selling expenses
243762401.38229284289.096.31%
Administration
expenses 1102851622.36 1434227935.73 -23.10%
Financial expenses
2883845156.013243902745.47-11.10%
R&D expenses
723365790.03716319527.660.98%
552024 Annual Report of Hengyi Petrochemical Co. Ltd.
4.R&D investment
1)Main R&D Projects
Name of major Expected effect on the future
Project purpose Project progress Objectives
R&D projects development of the Company
R&D of To improve and optimize the preparation process
The self-developed titanium catalysts
preparation of titanium-based polyester catalyst to produce By further optimizing the catalyst
are used in the production of large
technology of titanium-based PET flakes with excellent preparation process and polymerization
Completed and lines and the resulting products meet
polyester performance and good hue and then conduct process to improve product quality the
industrialized the indicators of superior polyester
titanium-based spinning and post-processing as needed to project has high eco-friendliness value
chips and fibres for large line
polycondensati produce heavy metal-free titanium- based and social significance.production.on catalyst polyester products.Green TiO2 matting agent is an important auxiliary for We have designed and built a Breaking the monopoly of foreign
manufacturing nylon production used to improve the 10000-ton green production technology successfully solving the
of TiO2 matting performance of fibre due to the technical Completed and demonstration plant for nylon "necklace" problem of matting agent in
agent for nylon difficulty and European and American industrialized titanium dioxide matting agent paste nylon industry improving the
and complete set technology blockade the supply has long been and combined with the relationship between supply and
of technology subject to European and American constraints characteristics of the matting agent demand improving production
562024 Annual Report of Hengyi Petrochemical Co. Ltd.
Name of major Expected effect on the future
Project purpose Project progress Objectives
R&D projects development of the Company
for industrial the domestic does not yet have a high-quality paste we have carried out efficiency reducing the production cost
application of matting agent mature production technology. In engineering system modification to of domestic nylon manufacturers
full matting recent years China's nylon fibre into form a set of complete set of promoting the healthy and rapid
nylon high-quality development stage the demand for industrialised application technology development of nylon chemical fibre
high-quality matting agent is urgent for nylon titanium dioxide matting industry and guaranteeing the security
breakthrough technology blockade is of great agent paste. of supply of important fibre materials.significance.Nano-zinc oxide antimicrobial polyester fibre Study the effect of zinc oxide particle
has green safe healthy and other characteristics size and content on the mechanical
Research and
with people's consumer attitudes and changes in properties and antimicrobial Open up the market of functional fibre
development of
the concept of health and the enhancement of the Completed and properties of fibres develop products increase market
zinc oxide
concept of health which will be favoured by industrialized antimicrobial masterbatch or competitiveness and enhance the added
antimicrobial
more and more consumers in the field of home antimicrobial polyester chips to meet value of products.polyester fibres
medical and health care military apparel and so the production needs melt spinning
on and zinc antimicrobial textiles will be more into antimicrobial polyester fibres.
572024 Annual Report of Hengyi Petrochemical Co. Ltd.
Name of major Expected effect on the future
Project purpose Project progress Objectives
R&D projects development of the Company
and more in demand.Determine the technical solutions of
flame-retardant cation polyester and
Starting from the future development direction of
flame-retardant high shrinkage
flame-retardant polyester fibre and market
polyester and prepare
demand based on the R&D and production of
Research and Pilot flame-retardant cation and
flame-retardant polyester fibre high shrinkage Enrich the company's differentiated
Development conversion to flame-retardant high shrinkage
fibre and cationic dyeable fibre the feasibility of products increase market
Project on Flame industrialisation polyester chips. The spinning process
preparing flame-retardant high shrinkage competitiveness enhance the added
Retardant for stable mass is also researched and confirmed and
flame-retardant cationic dyeable and other value of products and achieve better
Cationic production and flame-retardant cation and
composite functional polyester fibre is economic benefits.Polyester Fibre wider use flame-retardant high shrinkage fibres
investigated aiming at launching high-quality
are prepared to meet customers'
and functionalized composite flame-retardant
requirements. The technology of this
polyester fibre products.project is the enterprise's own
technology and makes full use of
582024 Annual Report of Hengyi Petrochemical Co. Ltd.
Name of major Expected effect on the future
Project purpose Project progress Objectives
R&D projects development of the Company
our existing equipment technology
and relevant supporting conditions.
592024 Annual Report of Hengyi Petrochemical Co. Ltd.
2)R&D personnel
2024 2023 YOY change (%)
Number of R&D staff (person) 1089 1027 6.04%
Percentage of R&D personnel 6.80% 6.61% 0.19%
Educational background of R&D personnel
PhD 90 79 13.92%
Master 146 125 16.80%
Bachelor 552 375 47.20%
Junior college degree and below 301 448 -32.81%
Age of R&D personnel
Under 30 445 414 7.49%
30~404194014.49%
40~501891767.39%
50~603134-8.82%
60 and above 5 2 150.00%
3)R&D investment
YOY
20242023
change (%)
R&D investment amount (RMB) 763738214.64 743797778.86 2.68%
R&D investment as a percentage of
0.61%0.55%0.06%
operating income
Capitalized R&D investment (RMB) 43809842.25 27478251.20 59.43%
Capitalized R&D investment as a
5.74%3.69%2.05%
percentage of R&D investment
Note: R&D investment= R&D expenses + Capitalized R&D investment during the
period
4)Reasons for and effects of significant changes in the composition of R&D
personnel
□Applicable ?Not applicable
602024 Annual Report of Hengyi Petrochemical Co. Ltd.
5)Reasons for the significant changes in the percentage of total R&D investment
in operating income compared with the previous year
□Applicable ?Not applicable
6)Reasons for the substantial changes in the capitalization rate of R&D
investment and Description of their reasonableness
□Applicable ?Not applicable
5.Cash flows
Unit: RMB
YOY change
Item 2024 2023
(%)
Subtotal of cash inflows from
135557724622.94151342732624.92-10.43%
operating activities
Subtotal of cash outflows from
129560713067.18146810897819.77-11.75%
operating activities
Net cash flow from operating
5997011555.764531834805.1532.33%
activities
Subtotal of cash inflows from
1521502305.081597063826.52-4.73%
investing activities
Subtotal of cash outflows from
4609621351.146899721564.69-33.19%
investing activities
Net cash flows from investing
-3088119046.06-5302657738.1741.76%
activities
Subtotal of cash inflows from
71990258760.8661611945020.6716.84%
financing activities
Subtotal of cash outflows from
73433347282.3565350940711.8612.37%
financing activities
Net cash flows from financing
-1443088521.49-3738995691.1961.40%
activities
612024 Annual Report of Hengyi Petrochemical Co. Ltd.
Net increase in cash and cash
1542770498.19-4415951490.91134.94%
equivalents
1)Description of the main factors influencing significant year-on-year changes in
relevant data
(1)The net cash flow from operating activities increased primarily due to changes in
the timing of procurement payments. More payments for crude oil purchases were
made at the beginning of 2023 while payments for crude oil purchases at the
beginning of 2024 decreased year-on-year resulting in a reduction in cash outflows
from operating activities during the current period.
(2)The net cash flow from investing activities increased mainly because payments for
project engineering equipment and entrusted loans decreased during the current period
leading to a reduction in cash outflows from investing activities.
(3)The net cash flow from financing activities increased primarily due to the recovery
of financing-related deposits and an increase in financing proceeds.
(4) The net increase in cash and cash equivalents was mainly a result of the combined
impact of changes in cash flows from operating investing and financing activities
during the reporting period.
2)Description of the reasons for the significant difference between the net cash
flows generated by the Company's operating activities and the net profit of the
year during the reporting period
For details please refer to the supplementary information in the cash flow statement
in the Company's annual audit report.V.Analysis of non-main business
Unit: RMB
Percentage
Sustainable or
Amount of total Reasons
not
profit
This is primarily due to the
Investment
481338948.25 1631.55% recognition of investment Yes
income
income from equity-accounted
622024 Annual Report of Hengyi Petrochemical Co. Ltd.
companies.Profits and This is mainly due to the
losses from changes in the fair value of
-18561440.33 -62.92% No
changes in hedging instruments during the
fair value reporting period.This is mainly due to the
Impairment provision for inventory
-34344817.62 -116.42% No
loss on assets write-downs during the
reporting period.This is mainly due to
Non-operating government subsidies and
9539070.90 32.33% No
income other income unrelated to daily
operating activities.This is mainly due to losses
from the damage and
Non-operating
61383940.48 208.07% scrapping of fixed assets and No
expenses
other items during the
reporting period.VI.Analysis of assets and liabilities
1.Significant changes in asset composition
Unit: RMB
End of 2024 Early 2024
Proportion
Percenta Percenta
increase or
ge in ge in
Amount Amount decrease
total total
assets assets
Monetary funds 13093174547.46 12.18% 13827903087.40 12.80% -0.62%
Accounts receivable 5944293285.48 5.53% 5925174959.59 5.48% 0.05%
Inventory 12407437115.10 11.54% 13060195863.37 12.09% -0.55%
Long-term equity 13911759800.05 12.94% 13669254123.61 12.65% 0.29%
632024 Annual Report of Hengyi Petrochemical Co. Ltd.
investments
Fixed assets 43686606928.39 40.63% 45430020661.94 42.04% -1.41%
Construction in
8712891498.778.10%4610305760.024.27%3.83%
progress
Right-of-use assets 411420429.59 0.38% 414782305.73 0.38% 0.00%
Short-term loans 38031193372.03 35.37% 41122258268.86 38.06% -2.69%
Contract liabilities 1253402884.38 1.17% 756571793.30 0.70% 0.47%
Long-term loans 15504087484.02 14.42% 14739441863.92 13.64% 0.78%
Lease liabilities 456139594.54 0.42% 449163796.50 0.42% 0.00%
2.High proportion of foreign assets
Whether
Proportion of
Specific there is
Operatio Controls to ensure Income overseas assets in
content of Reason Asset size Location
significant
n mode asset security status
the Company's net
assets
risk of
assets
impairment
Strengthen the parent
USD Built by
Subsidiaries Hong Company's
Overseas the
controlled by 5811971 Kong/Brunei/ Good No
Management control 168.86%
investment Compan
the Company 700 Singapore
y over overseas million
subsidiaries
3.Assets and liabilities measured at fair value
Unit: RMB
Item Beginning balance Ending balance
1. Held-for-trading financial assets (excluding
366311518.38153091745.24
derivative financial assets)
2. Derivative financial assets 0.00 4783678.80
3. Investment in other equity instruments 5600000.00 5600000.00
Subtotal of financial assets 371911518.38 163475424.04
Financial liabilities 108194619.69 2546598.89
4.Other changes
Not applicable
642024 Annual Report of Hengyi Petrochemical Co. Ltd.
5.Whether the measurement attributes of the Company's main assets changed
significantly during the reporting period
□Yes ?No
6.Restricted asset rights as of the end of the reporting period
Unit: RMB
Ending book value of the
Item Reason for restriction
year
Monetary funds 3032285927.15 Margin
Long-term equity investments 4753215991.44 Mortgage Mortgage loan
Sale and Leaseback Financing Lease
Fixed assets 22189304211.75
Mortgage loan
Intangible assets 1917089516.79 Mortgage loan
Construction in progress 17671369.60 Mortgage loan
Total 31909567016.73
VII. Analysis of investment status
1.General situation
Investment amount in the
Investment amount during the
same period of previous year YOY change (%)
reporting period (RMB)
(RMB)
13911759800.0513669254123.611.77%
652024 Annual Report of Hengyi Petrochemical Co. Ltd.
2.Significant equity investments acquired during the reporting period
□Applicable ?Not applicable
3. Significant non-equity investments in progress during the reporting period
Unit:RMB
Invest Cumulative actual
Whether it is Industry Amount invested
ment investment amount Project Disclosure
Project name fixed asset involved in during the Sources of funds Disclosure index (if any)
metho as of the end of the progress date (if any)
investment the project reporting period
d reporting period
http://www.cninfo.com.cn/new/disc
Built
Phase II of Petrochemi losure/detailplate=szse&orgId=gss
by the September
Brunei refinery Yes cal 175237351.63 2711085193.81 Self-financing 2.99% z0000703&stockCode=000703&an
Comp 16 2020
Project industry nouncementId=1208444483&anno
any
uncementTime=2020-09-16
Suqian Yida New Built Chemical Self-financing http://www.cninfo.com.cn/new/disc
Environment- by the Yes fibre 119185163.77 1092509271.64 borrowing and 33.20% June 1 2021 losure/detailplate=szse&orgId=gss
friendly Comp industry fund-raising z0000703&stockCode=000703&an
662024 Annual Report of Hengyi Petrochemical Co. Ltd.
Invest Cumulative actual
Whether it is Industry Amount invested
ment investment amount Project Disclosure
Project name fixed asset involved in during the Sources of funds Disclosure index (if any)
metho as of the end of the progress date (if any)
investment the project reporting period
d reporting period
Differentiated any nouncementId=1210132115&anno
Fibre Project uncementTime=2021-06-01
1.2 Million Tons
Per Year
http://www.cninfo.com.cn/new/disc
Caprolactam-Pol Built Petrochem
losure/detailplate=szse&orgId=gss
ical
yamide by the Self-financing and January 22
Yes chemical 3759742429.61 4647251713.18 35.00% z0000703&stockCode=000703&an
Integrated Comp fibre borrowing 2022
nouncementId=1212243026&anno
Industrial and any industry
uncementTime=2022-01-22
Supporting
Project
Total -- -- -- 4054164945.01 8450846178.63 -- -- -- --
672024 Annual Report of Hengyi Petrochemical Co. Ltd.
4.Investment in financial assets
(1) Investment in securities
The Company's made no investment in securities in the reporting period.
(2) Investment in derivatives
1) Investments in derivatives for hedging purposes during the reporting period
Unit: RMB 10000
The proportion of
the ending
Fair value
Cumulative fair investment
Type of change gains Amount purchased Amount sold
Initial investment value changes Closing amount to the
Hedging Beginning amount and losses for during the reporting during the
amount recognized in balance company's
Investment the current period reporting period
equity reported net assets
period
at the end of the
period
Foreign
exchange -10819 -10819 0 0 71732 60913 0 0.00%
hedging
Commodity
3663136631-185656332005353103155330.63%
hedging
Total 25812 25812 -1856 56 403737 414016 15533 0.63%
682024 Annual Report of Hengyi Petrochemical Co. Ltd.
Explanation
on whether
there is any
significant
change in the
accounting
policy and
specific
principles of No. The Company accounted for the hedging investment carried out in accordance with the relevant provisions of the Ministry of Finance's Accounting
accounting for Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments Accounting Standards for Business Enterprises
hedging No. 24 - Hedging Accounting Standards for Business Enterprises No. 23 - Transfer of Financial Assets Accounting Standards for Business
business of Enterprises No. 37 - Presentation of Financial Instruments and relevant guidelines to reflect the relevant items of the balance sheet and profit and loss
the Company statement.in the
reporting
period
compared
with that in
the previous
reporting
period
Explanation During the reporting period the actual profit and loss amounted to RMB 110.8968 million which included an unrealized loss on holdings of RMB
on actual -18.5614 million and realized gains from closing positions of RMB 129.4582 million.
692024 Annual Report of Hengyi Petrochemical Co. Ltd.
profit or loss
in the
reporting
period
Explanation
The profits and losses generated from the Company's hedging tools can offset the value changes of the hedged items and the hedging business has a
on hedging
good hedging effect.effects
Source of
funding for
Self-owned funds
investments in
derivatives
Risk analysis 1.Market risks When the market changes drastically the Company may not be able to fully lock in the price of raw materials or products thereby
and resulting in losses.description of 2.Liquidity risks Commodity hedging transactions are ordered within the authority specified in the Company's Management System for Commodity
control Derivatives Transactions. If the market fluctuates drastically losses may be caused by forced liquidation of positions due to lack of time for margin
measures for replenishment.derivatives 3.Operational risks as futures and forward transactions are highly specialized and complex unexpected losses may be caused due to defects in
positions information systems or internal controls.during the 4.Credit risks When the price fluctuates greatly to the disadvantage of the counterparty the counterparty may violate the relevant provisions of the
reporting contract and cancel the contract resulting in losses to the Company.period 5.Legal risks Due to changes in relevant legal systems or violations of relevant legal systems by the counterparty the contract may not be executed
(including but normally resulting in losses to the Company.not limited to Risk control measures taken by the Company: The BOD of the Company has reviewed and approved the Management System for Foreign Exchange
702024 Annual Report of Hengyi Petrochemical Co. Ltd.
market risk Derivatives Transactions and the Management System for Commodity Derivatives Transactions which stipulate that the Company engages in hedging
liquidity risk investment business with the main purpose of hedging and speculation and arbitrage transactions are prohibited. The systems clearly stipulate the
credit risk principles of the Company's business operations approval authority internal audit process responsible departments and responsible persons
operational information isolation measures internal risk reporting system and risk handling procedures which are in line with the relevant requirements of
risk and legal regulatory authorities and meet the needs of actual operations. The specified risk control measures are practical and effective.risk)
Changes in
market price
or air value of
products
involved in
invested
derivatives
During this reporting period the impact of the company's hedging investments on the current profit and loss amounted to 110.8968 million yuan. The
during the
company measures hedging investments at fair value. Forward foreign exchange is primarily determined based on prices provided or obtained from
reporting
pricing service institutions such as banks and the Reuters system. The company conducts fair value measurement and confirmation on a monthly
period; the
basis. The trading price of futures is considered the fair value.analysis of
the fair value
of derivatives
shall disclose
the specific
methods used
and the setting
712024 Annual Report of Hengyi Petrochemical Co. Ltd.
of relevant
assumptions
and
parameters
Involvement
in lawsuits (if None
applicable)
Date of
disclosure of
announcement
of the BOD
February 01 2024
for approval
of derivatives
investment (if
any)
Date of
disclosure of
announcement
of
February 23 2024
shareholders
meeting for
approval of
derivatives
722024 Annual Report of Hengyi Petrochemical Co. Ltd.
investment (if
any)
2)The Company shall comply with the disclosure requirements for petrochemical industry specified in Guidelines No. 3 for
Self-Regulation of Listed Companies of Shenzhen Stock Exchange - Industry Information Disclosure
During the reporting period the company carried out hedging investment for the purpose of reasonably avoiding the risk of price and exchange
rate fluctuations of raw materials and finished products reducing the impact of price and exchange rate fluctuations of raw materials and
finished products on the normal operation of the company and ensuring the stable operation and sustainable profitability of the company. The
commodities involved in the hedging transactions included raw materials finished products and foreign exchange related to the company's
production and operation.
3)Investments in derivatives for speculative purposes during the reporting period
There were no investments in derivatives for speculative purposes during the reporting period.
732024 Annual Report of Hengyi Petrochemical Co. Ltd.
5.Overall of raised funds
(1)Overall use of raised funds
Unit: RMB 10000
Utilization Total
The proportion
Total ratio of amount of Cumulative
of the total
Net proceeds Total amount amount of raised funds raised funds total amount The total Amount of raised
The listing amount of
Mode
Year of fund of Total funds from of raised raised as of the end with of raised amount of Usage and destination of raised funds idle for
fund date of the raised funds
raising raisin raised fundraising funds used in funds of the reallocated funds with raised funds funds not yet used more than two
g
securities cumulatively
(1) this period already reporting use during reallocated not yet utilized years
changed in
utilized (2) period the reporting use
purpose
(3)=(2)/(1) period
Publi As of December 31 2024 the
c unused raised funds amounted
issua to RMB 1393731500.nce August 18 Including RMB 1395000000
2022 of 300 000 298367.92 5610.97 158994.77 53.29% 0 0 0.00% 139373.15 was temporarily allocated for 0
2022
conve working capital supplements
rtible and not yet returned. The
Corpo
rate balance of the company’s
bonds raised funds dedicated account
in
742024 Annual Report of Hengyi Petrochemical Co. Ltd.
2022 stood at RMB 2283500. The
combined total of the
unreturned temporary working
capital supplements and the
dedicated account balance
exceeded the unused raised
funds by RMB 3552000
which was attributable to the
net interest income from the
dedicated account (after
deducting handling fees) and
unpaid issuance fees
Total -- -- 300000 298367.92 5610.97 158994.77 53.29% 0 0 0.00% 139373.15 -- 0
General description of the use of raised funds
Pursuant to the approval document [2022] No. 565 issued by the China Securities Regulatory Commission (CSRC) and with the consent of the Shenzhen Stock Exchange (SZSE) the company publicly
issued 30 million convertible corporate bonds to qualified investors. Each bond has a par value of RMB 100 resulting in a total issuance amount of RMB 3 billion. The conversion price was set at RMB
10.50 per share and the bonds were listed on the Shenzhen Stock Exchange on August 18 2022. The total proceeds from this public offering of convertible bonds amounted to RMB 3 billion. After
deducting underwriting and sponsorship fees (excluding tax) and other issuance costs the net proceeds raised were RMB 2983679200. As of December 31 2024 the company had utilized RMB
1589947700 of the raised funds.
752024 Annual Report of Hengyi Petrochemical Co. Ltd.
(2)Projects for committed investment with raised fund
Unit: RMB 10000
Cumul Whethe
ative r there
Wheth
Projects for Benefit is a
The er the
committed s
Whether the signific
listing Adjuste
Amount Cumulative Benefits
Investment expecte
investment and project has d total invested investment Date when the project realized Realize ant
date of Total committed progress as of Project Progress been investm during amount as during d
investment investment of the end of the reaches its scheduled d as of change
the Status changed (or ent the of the end the raised funds period (3) = (2)/ benefit
direction of partially amount reporting of the availability date reporting the in the
securitie (1)
changed) (1)
s are
period period (2) period
over- raised Reporti feasibil
s achieve
funds ng ity of
d
Period the
End project
Projects for committed investment
500000 tpa
Production No more
August 18 New- type January and August
No than 70000 0 33398.74 47.71% 24835.84 23763.98 No No
2022 functional fibre construction 2021 70000
technological
762024 Annual Report of Hengyi Petrochemical Co. Ltd.
transformation
projects
1.1 mtpa New Partially
Environment- Production No more Not
August 18 commissioned in May
friendly No than 230000 5610.97 125596.03 54.61% -5154.68 -8569.74 applicabl No
2022 construction and December 2023
Differentiated 230000 e
Fibre Project
Subtotal of committed investment for the No more
-- than 300000 5610.97 158994.77 -- -- 19681.16 15194.24 -- --
projects 300000
Investment direction of over-raised funds
None
No more than
Total 300000 5610.97 158994.77 -- -- -- 19681.16 15194.24 -- --
--300000
Description of the situation and reasons why the planned
progress and expected benefits have not been achieved by
Due to the combined impact of various factors the project benefits did not meet expectations
projects (including the reason for selecting "not applicable"
for "whether the expected benefits have been achieved")
Description of significant changes in project feasibility Not applicable
Amount purpose and progress of use of over-raised funds Not applicable
Change of location for implementation of projects for Not applicable
772024 Annual Report of Hengyi Petrochemical Co. Ltd.
committed investment
Adjustment of implementation mode of projects for
Not applicable
committed investment
Applicable
According to the resolution of the tenth meeting of the eleventh session of the BOD on May 31 2021 and the Proposal on the
Company's Public Issuance of Convertible Corporate Bonds reviewed and approved at the third Extraordinary General Meeting (EGM)
of Shareholders 2021 on June 16 2021 it is agreed that if the Company has invested self-raised funds in the construction of the above
projects first before the funds raised from the issuance of convertible corporate bonds are in place the funds can be replaced in
Preliminary investment and replacement of projects for accordance with the procedures prescribed by relevant laws and regulations after the funds raised are available. As of July 28 2022 the
committed investment Company has invested RMB 1042688264.58 in the above-mentioned raised funds investment project with self-raised funds in
advance and has made the advance payment of intermediary fees and related taxes of RMB 1550000.00 with self-owned funds. After
the review of the BOD of the Company it was decided to replace the self-raised funds invested in the raised funds investment project
with the raised funds with an amount of RMB 1042688264.58 and to replace the self-raised funds with the raised funds for the paid
issuance fees with an amount of RMB 1462264.15 (excluding tax). As of December 31 2024 the Company has replaced the
self-raised funds invested in advance of RMB 1044150528.73.Applicable
Temporary replenishment of working capital with idle
raised funds As of December 31 2024 the Company has temporarily replenished its working capital with idle raised funds of RMB1395000000
782024 Annual Report of Hengyi Petrochemical Co. Ltd.
and there is no situation where any fund has not been returned upon maturity.Amount and reasons for the balance of raised funds in
Not Applicable
project implementation
As of December 31 2024 the unused proceeds amounted to RMB 1393731500 Including RMB1395000000 had not yet been
due for the return of temporary supplementary liquidity and the balance of the Company's special account for proceeds was
RMB2283500 and the sum of the amount of temporary supplementary liquidity that had not yet been due for the return of
Usage and destination of unused raised funds
temporary supplementary liquidity and the balance of the special account for proceeds exceeded the amount of the unused
proceeds by RMB3552000 which was the amount of the special account for proceeds. Interest income net of handling fees and
outstanding issue fees.Problems or other situations in the use and disclosure of
Not applicable
raised funds
(3)Changes of projects for investment with raised funds
During the reporting period there was no change of the projects for investment with raised funds.VIII.Sales of major assets and equity
1.Sales of major assets
The company did not sell any significant assets during the reporting period.
2.Sales of major equity
□Applicable ?Not applicable
792024 Annual Report of Hengyi Petrochemical Co. Ltd.
IX. Analysis of major subsidiaries and JV companies
1. Major subsidiaries and JV companies with an impact of 10% or more on the net profit of the Company
Unit: RMB
Type of
Company name Main business Registered capital Total assets Net assets Operating income Operating profit Net profit
company
Hengyi Brunei Refining and
Subsidiary USD 1.0548 billion 36027658412.79 9358931520.22 44613518409.34 -990022302.25 -1029793568.64
(Single unit) petrochemical
Zhejiang
Subsidiary PTA PIA USD 514447095.46 20749905084.68 9192128492.35 15246583176.45 227193866.58 214587933.59
Yisheng
Hainan Yisheng JV PTA bottle flake 4580000000.00 19716261559.49 6871237440.20 32134063244.75 158885656.32 143801867.13
company
Yisheng
JV company PTA bottle flake 2018000000.00 17677288273.07 7528224534.18 31819742678.09 -208575017.49 -153495879.83
Investment
Yisheng New JV
PTA 3000000000.00 10734866410.15 1783216259.16 32266524499.34 -710597009.31 -510465274.41
Materials company
Hengyi Limited Subsidiary DTY 3000000000.00 41199068807.51 8119662494.35 51022112417.43 -508689487.71 -509380119.20
802024 Annual Report of Hengyi Petrochemical Co. Ltd.
Hengyi
Subsidiary Flakes POY etc. 2757250000.00 11646138178.17 5517939844.59 10741546819.20 580508730.96 549144382.19
High-Tech
Shuangtu New POY FDY and
Subsidiary 600000000.00 5395905756.72 2094476446.77 7763894451.09 153117937.53 136774329.44
flakes
Materials
China
JV company Finance 27464635963.00 3325539000000.00 202743000000.00 67650000000.00 17645000000.00 15693000000.00
Zheshang Bank
2.Acquisition and disposal of subsidiaries during the reporting period
Company name Methods of acquiring and disposing of subsidiaries during the reporting period
Hengyi Industries International (Singapore) Co. Ltd. Disposal
Hangzhou Yigao Environmental Protection Technology Co. Cancellation
Hangzhou Lanjin New Material Technology Co. Ltd. Establishment
Zhejiang Hengyi Resource Recycling Technology Co. Ltd. Establishment
Wenzhou Hengyi Resource Recycling Co. Ltd. Establishment
Jingzhou Hengyi Resource Recycling Co. Ltd. Establishment
812024 Annual Report of Hengyi Petrochemical Co. Ltd.
3.Description of major subsidiaries and JV companies
(1)Hengyi Brunei
The Company holds 70% of the shares of Hengyi Industries Sdn. Bhd. through Hong
Kong Tianyi International Holding Co. Ltd. Hengyi Brunei has a registered capital of
USD 1.0548 billion and the scope of business covers: Petroleum refining and
petrochemical.
(2)Zhejiang Yisheng
The company through Zhejiang Hengyi Petrochemical Co. Ltd. holds a total of 70%
of the shares in Zhejiang Yisheng Petrochemical Co. Ltd. Zhejiang Yisheng's
registered capital is USD 514.4471 million. The company's business scope includes:
General Projects :Production of chemical products (excluding licensed chemical
products) manufacture of basic chemical raw materials (excluding the manufacture of
hazardous chemicals and other licensed chemicals); manufacture of synthetic
materials (excluding hazardous chemicals); manufacture of synthetic fibers; sale of
chemical products (excluding licensed chemical products); sale of synthetic materials
sale of synthetic fibers; sale of new membrane materials; sale of petroleum products
(excluding hazardous chemicals); general cargo warehousing services (excluding
hazardous chemicals and other projects requiring license approval) technical services
technical development technical consultation technical exchange technical transfer
technical promotion; technology import and export goods import and export import
and export agency services (except for projects that require approval according to law;
business activities are conducted independently with a business license). Licensed
Projects: operation of hazardous chemicals (for projects that require approval
according to law business activities can only be conducted after approval by relevant
departments with specific business projects subject to approval results).
(3)Hainan Yisheng
Through its subsidiary Ningbo Hengyi the company indirectly holds 50% of the
shares in Hainan Yisheng Petrochemical Co. Ltd. Hainan Yisheng has a registered
822024 Annual Report of Hengyi Petrochemical Co. Ltd.
capital of RMB 4.58 billion. The company's business scope includes:General
Business Projects:Manufacture of basic chemical raw materials (excluding the
manufacture of hazardous chemicals and other licensed chemicals); manufacture of
engineering plastics and synthetic resins; sale of engineering plastics and synthetic
resins; manufacture of synthetic materials (excluding hazardous chemicals)Sale of
synthetic materials; housing rental; manufacture of cellulose fiber raw materials and
fibers; general cargo warehousing services (excluding hazardous chemicals and other
projects requiring license approval)(Note: General business projects within the
business scope are legally allowed to operate independently and are disclosed to the
public through the National Enterprise Credit Information Publicity System (Hainan).)
Licensed Business Projects: operation of hazardous chemicals; port operations;
technology import and export; goods import and export (licensed business projects
operate with the relevant permits).
(4)Yisheng investment
The Company holds 30% of the shares of Dalian Yisheng Investment Co. Ltd.through Zhejiang Hengyi Petrochemical Co. Ltd. The company's business scope
includes: project investment domestic general trade import and export of goods
import and export of technologies and trade intermediary services. (Excludes projects
prohibited by laws and administrative regulations; for projects restricted by laws and
administrative regulations operations may only commence after obtaining the
necessary permits.)The legal representative is Li Shuirong and the registered capital
is RMB 2.018 billion.
(5)Yisheng New Materials
The Company holds 49% of the shares of Zhejiang Yisheng New Materials Co. Ltd.through Zhejiang Hengyi Petrochemical Co. Ltd. The scope of business: import and
export of technologies; import and export of goods; import and export of agency
(Business activities subject to approval according to laws can be carried out only after
approved by relevant departments. Specific business activities are subject to the
832024 Annual Report of Hengyi Petrochemical Co. Ltd.
approval results). General business: Sales of new membrane materials; sales of
synthetic materials; sales of chemical products (excluding chemical products subject
to license); sales of petroleum products (excluding hazardous chemicals); production
of chemical products (excluding chemical products subject to license); manufacturing
of synthetic materials (excluding hazardous chemicals); technical services technical
development technical consultation technical exchange technology transfer and
technology promotion (except for business subject to approval according to laws
business activities shall be carried out independently and legally with the business
license). The legal representative is Xu Baoyue and the registered capital is RMB 3
billion.
(6)Hengyi Limited
The Company directly holds 100% of the shares (actually enjoys 100% of the rights)
of Zhejiang Hengyi Petrochemical Co. Ltd. Hengyi Limited has a registered capital
of RMB 3 billion. The scope of business: production processing and sales of
chemical fibres and chemical raw materials (excluding hazardous chemicals); import
and export.
(7)Hengyi High-Tech
The Company holds 100% of the shares of Zhejiang Hengyi High-Tech Materials Co.Ltd. through Zhejiang Hengyi Petrochemical Co. Ltd. Hengyi High-Tech has a
registered capital of RMB 2.75725 billion and the scope of business covers:
production processing and sales of PET flakes POY yarns FDY yarns and chemical
fibre raw materials; export of the company’s own products and technologies and
import of self-use products and technologies (except for those that are prohibited or
restricted according to national laws and regulations); all other legal business not
subject to approval.
(8)Shuangtu New Materials
842024 Annual Report of Hengyi Petrochemical Co. Ltd.
The company holds 100% equity in Zhejiang Shuangtu New Materials Co. Ltd.which has a registered capital of RMB 600 million. Business Scope: general Items:
production of chemical products (excluding chemical products requiring special
permits); sales of chemical products (excluding chemical products requiring special
permits); sales of synthetic fibers; manufacturing of synthetic fibers; sales of synthetic
materials; manufacturing of synthetic materials (excluding hazardous chemicals).
(Except for projects that require approval by law the company may independently
conduct business activities with its business license.). Permitted Items: Import and
export of goods; import and export of technologies (Projects requiring approval by
law may only be conducted after approval by relevant authorities and specific
business activities shall be subject to the approval results).
(9)China Zheshang Bank
The Company holds a total of 972490068 shares of China Zheshang Bank Co. Ltd.through its subsidiary Zhejiang Hengyi Petrochemical Co. Ltd. and its indirect
subsidiary Zhejiang Hengyi High-Tech Materials Co. Ltd. accounting for 3.54% of
the total share capital of China Zheshang Bank. Scope of Business: financial business
(For details please refer to the approval of the China Banking and Insurance
Regulatory Commission). Established in 2004 the company is one of the 12 national
joint-stock commercial banks approved by the China Banking and Insurance
Regulatory Commission. China Zheshang Bank was listed on the main board of the
Hong Kong Stock Exchange on March 30 2016 (stock code: 02016.HK) and on the
Shanghai Stock Exchange on November 26 2019 (stock code: 601916.SH).X. Information on structured entities controlled by the company
□Applicable ?Not applicable
XI. Prospects for the future development of the Company
(1) Strategic prospects for the development of the Company
852024 Annual Report of Hengyi Petrochemical Co. Ltd.
In 2025 Hengyi Petrochemical will continue to deepen its "One Drop of Oil Two
Strands of Fiber" development strategy accelerating the strategic transformation from
"Industrial Hengyi" to "Technology-Driven Hengyi." The company will further
consolidate its integrated advantages strengthen cross-border industrial collaboration
and fully leverage the synergistic benefits of its full-chain
"Refining-PX-Polyester-Spinning" operations. By expanding caprolactam and
polyamide production capacity it will enhance its dual "Fiber-Centric" industrial
framework. Building on its globalized layout Hengyi will advance its
"Petrochemical+" strategy to establish a multi-layered industrial ecosystem.Concurrently it will pioneer digital and intelligent upgrades in the chemical fiber
sector striving to evolve into a privately held multinational conglomerate
distinguished by "technological leadership cost competitiveness and ecosystem
synergy" while cementing its position as a global benchmark in the
"Refining-Chemical-Fiber" industry.(II) Prospects for the industrial development of the Company
For details please refer to this section (I)Industries in which the company operated"
under the heading "I.Industry in which the company operated during the reporting
period ".(III) Business strategy of the company for 2025
1. Intensify R&D investment enhance technological competitiveness and deepen
the “Tech-Driven Hengyi” Strategy
In 2025 the company will resolutely and comprehensively advance the
implementation of the "Technology Hengyi" strategy guided by "green
manufacturing" and "circular economy." It will continue to increase investment in
technological research and development closely align with industry layouts focus on
the forefront of global technology gather global innovative resources and cultivate
high-end innovative achievements. With the construction of an innovative system at
its core the company will prioritize breakthroughs in advanced fields such as green
862024 Annual Report of Hengyi Petrochemical Co. Ltd.
chemical and chemical fiber production processes bio-based materials new polyester
and polyamide materials functional fibers specialty and fine chemicals and
intelligent manufacturing. The goal is to build a world-class research and
development base for key generic technologies in refining and high-end chemical
products and to be committed to the research development and industrialization of
green chemicals and advanced materials becoming a technology leader across the
entire industry. Key measures include:
(1)The company will continue to leverage its efficient cooperation with universities
and research institutions to connect with cutting-edge technologies shorten the cycle
from laboratory to market and improve the conversion efficiency of independently
developed new technologies. It will vigorously promote the sales of products such as
flame-retardant polyester anti-stain nylon biodegradable polyester antibacterial
polyester antimony-free eco-friendly polyester "Yitaikang" PTT composite elastic
fibers and various functional masterbatches actively capturing market share in
high-tech materials and high-end chemical products.
(2)The company will focus on advancing the research and development process of
technologies such as ammonia synthesis fluidized bed processes for hydrogen
peroxide titanium dioxide and chemical fiber oils promoting the high-quality
development of the green petrochemical industry.
2.Accelerate Digital and Intelligent Transformation via the "Petrochemical +
Internet" Strategy
In 2025 the company will adhere to industry principles and continue to deepen its
"Petrochemical + Internet" information strategy. Using digitalization and smart
factories as a blueprint it will accelerate the construction of standardized information
operation systems implementing a phased and layered approach and gradually
explore the path toward digital and intelligent transformation of the chemical fiber
industry. The company will persist in strengthening and enhancing the service
experience of "Hengyi Brain" continuously iterating and upgrading integrated
applications based on information technology. This effort will fully leverage
872024 Annual Report of Hengyi Petrochemical Co. Ltd.
information technology to empower production sales operations and management
decision-making across multiple dimensions.Additionally the company will upgrade
and refine its three-in-one chemical fiber industrial internet platform which integrates
"online transactions + online financing + warehousing logistics" to provide scientific
decision-making systems for senior management enabling production and sales
integration. By promoting the self-developed logistics system for industrial parks the
company aims to effectively reduce internal logistics costs achieve upstream and
downstream collaboration and provide strong support for the development of its core
businesses. These initiatives will comprehensively enhance the company's overall
competitiveness.
3.Enhancing the quality and efficiency of existing capacity with continued focus
on advancing major strategic projects
In 2025 the company will continue to deepen the integration of its industrial chain
and strengthen the synergies between domestic and international advantages. Key
initiatives are as follows:
(1)The company will ensure the safe stable and efficient operation of its refining
PTA and polyester facilities. It will strive to maximize the potential of existing
capacity optimize the product structure and increase the production of high
value-added products.
(2)The company will work to ensure the timely completion and commencement of
production for the Qinzhou "1.2-million-ton-per-year Caprolactam-Polyamide
Integrated Project and Supporting Facilities" continuing to develop a new growth
engine for the nylon industry chain.
(3)The company will seize opportunities and steadily advance the Phase II
construction of the Brunei refining project. Upon completion the Phase II project will
further increase the company's market share overseas and boost its profitability. This
will strengthen the advantages of industrial chain integration and economies of scale
reduce production costs stabilize raw material supply and enhance the company’s
long-term profitability and risk resistance.
882024 Annual Report of Hengyi Petrochemical Co. Ltd.
1.Comprehensive cost reduction efficiency enhancement and productivity
improvement to support high-quality development
In 2025 the company will continue to learn from advanced operational management
systems and engage in continuous self-improvement. It will actively promote the
establishment of a lean production system instilling a company-wide awareness of
cost reduction and efficiency enhancement. Further it will refine the management of
production costs operational costs and financial costs to effectively reduce
expenditures improve production organization efficiency and enhance operational
performance. This will drive overall operational efficiency and support the company's
high-quality development. Key measures include:
(1)In 2025 the company will introduce new technologies and encourage
micro-innovations to improve energy conservation reduce consumption and enhance
process technologies. It will accelerate the domestic substitution of titanium dioxide
matting agents for nylon as well as spinning oils for polyester further increasing the
proportion of domestically sourced materials. The company will also continue
promoting green cost-reduction processes such as recycled filament reuse
acetaldehyde recovery esterification power generation and energy-saving measures
in process towers;
(2)In 2025 the company will continue optimizing organizational structures
strengthening talent pipeline development and further improving per capita efficiency
to consistently enhance labor productivity;
(3)In 2025 the company will maintain strict control over capital expenditures
optimize the maturity structure of its debt and seize opportunities presented by
moderately loose macroeconomic policies. It will refine the management of its
financial structure to further reduce funding costs.(IV) Risks and countermeasures faced by the Company
1. Macroeconomic risk
The company is engaged in the production and sales of petrochemical and polyester
892024 Annual Report of Hengyi Petrochemical Co. Ltd.
fiber products. The petrochemical and polyester chemical fiber industries are closely
tied to global and domestic economic conditions and are vital to national welfare and
livelihoods. The prices and sales of the company’s products are influenced by
macroeconomic fluctuations supply-demand dynamics and other factors. The
company will closely monitor macroeconomic trends and industry supply-demand
conditions proactively formulate targeted strategies to mitigate the impact of external
factors.
2. Safety Production Risks
In recent years regulatory requirements for safety and environmental protection have
become increasingly stringent. The company strictly complies with laws and
regulations such as the Work Safety Law of the People’s Republic of China and the
Environmental Protection Law of the People’s Republic of China prioritizing safe
and environmentally responsible operations and fulfilling social responsibilities. Since
commencing production no major safety or environmental incidents have occurred.As the company expands its production scale and extends its industrial chain
preventing such incidents remains a key focus. To reduce risks the company will
enhance investments in safety and environmental protection including equipment
upgrades organizational system improvements and compliance with national Grade 1
2 and 3 safety standardization requirements. It will establish a safety management
system implement dual preventive mechanisms (risk classification control and
hazard) strengthen safety training increase funding adopt technology-driven safety
measures and eliminate potential risks.
3. Raw Material Price Volatility Risks
Over 80% of the company’s production costs depend on upstream raw materials
particularly crude oil. Price fluctuations in crude oil significantly impact operations
and may affect product prices across the supply chain leading to profit volatility. The
company will optimize sales and inventory strategies and utilize hedging instruments
to mitigate adverse effects from raw material price fluctuations.
902024 Annual Report of Hengyi Petrochemical Co. Ltd.
4. Environmental Protection Risks
The company complies with environmental laws and regulations related to air water
waste management and public health holds relevant permits and undergoes
regulatory inspections. As operations expand stricter environmental standards in
China or Brunei could increase compliance costs and management complexity. The
company will continue investing in personnel technology and equipment upgrades to
meet evolving environmental requirements.
5. Exchange Rate and Interest Rate Volatility Risks
Hengyi Brunei a key subsidiary operates overseas and conducts transactions
primarily in USD. Exchange rate and interest rate fluctuations between USD and
RMB influenced by global political and economic conditions pose uncertainties. The
company will manage foreign currency assets and liabilities prudently using hedging
tools to reduce exchange rate risks. For interest rate risks linked to bank loans the
company maintains strong banking relationships designs diversified credit facilities
(e.g. credit lines terms and products) and ensures sufficient financing to stabilize
borrowing costs.
912024 Annual Report of Hengyi Petrochemical Co. Ltd.
XII. Reception of research communication interview and other activities during the reporting period
Main content of
Time Location Reception method Visitor type Visitor communication and Index of basic facts of research
information provided
Company operation and Refer to Hengyi Petrochemicals’ Investor
January 05 The Company’s Northeast Securities RayvestField research Institution industry development Relation Activities (05/01/2025）disclosed
2024 meeting room Fund and 12 other institutions
trend on cninfo.com.cn (1218831545.PDF)
Changjiang Securities CITIC
Company operation and Refer to Hengyi Petrochemicals’ Investor
March 06 The Company’s Construction InvestmentField research Institution industry development Relation Activities (06/03/2025）disclosed
2024 meeting room Securities and 17 other
trend on cninfo.com.cn (1219249653.PDF)
institutions
CITIC Construction Investment Company operation and Refer to Hengyi Petrochemicals’ Investor
April 22 TelephoneTeleconference Institution Securities Huachuang Securities industry development Relation Activities (22/04/2025）disclosed
2024 communication
and 143 other institutions trend on cninfo.com.cn (1219249653.PDF)
CITIC Construction Investment Company operation and Refer to Hengyi Petrochemicals’ Investor
April 29Teleconference Teleconference Institution Securities Boshi Fund and 16 industry development Relation Activities (29/04/2025）disclosed
2024
other institutions trend on cninfo.com.cn (1219960964.PDF)
922024 Annual Report of Hengyi Petrochemical Co. Ltd.
p5w.net "Investor Institutions Investors participating in the Company operation and Refer to Hengyi Petrochemicals’ Investor
May 14Relations Interactive Others and Company's 2023 Annual Online industry development Relation Activities (14/05/2025）disclosed
2024
Platform" individuals Earnings Conference trend on cninfo.com.cn (1220060515.PDF)
Institution CITIC Construction Investment Company operation and Refer to Hengyi Petrochemicals’ Investor
August 26 TelephoneTeleconference and Securities Guohai Securities and industry development Relation Activities (27/08/2025）disclosed
2024 communication
individuals 132 other institutions trend on cninfo.com.cn (1221001440.PDF)
Company operation and Refer to Hengyi Petrochemicals’ Investor
August 27 The Company’sField research Institution Institution investors industry development Relation Activities (27/08/2025）disclosed
2024 meeting room
trend on cninfo.com.cn (1221001440.PDF)
Investors participating in the
p5w.net "Investor Institution Company operation and Refer to Hengyi Petrochemicals’ Investor
September Company's 2024 Half-YearRelations Interactive Others and industry development Relation Activities (03/09/2025）disclosed
03 2024 Annual Online Earnings
Platform" individuals trend on cninfo.com.cn (1221137640.PDF)
Conference
Institutions CITIC Construction Investment Company operation and Refer to Hengyi Petrochemicals’ Investor
October 30 TelephoneTeleconference and Securities Huachuang Securities industry development Relation Activities 30/10/2025）disclosed on
2024 communication
individuals and 26 other institutions trend cninfo.com.cn (1221586788.PDF)
932024 Annual Report of Hengyi Petrochemical Co. Ltd.
XIII. Implementation status of the market value management regulations and
the valuation enhancement plan
1. Whether the company has developed market value management regulations.
□Yes ?No
2.Whether the company has disclosed its valuation enhancement plan.
□Yes ?No
XIV. Implementation and enforcement of the action programme "Quality
Returns and Double Improvement
1. Whether the company has disclosed the "Quality Returns Double
Improvement" action programme.□Yes ?No
942024 Annual Report of Hengyi Petrochemical Co. Ltd.
Section IV Corporate Governance
I.Overview of corporate governance
During the reporting period the Company strictly complied with the Company Law
Securities Law Code of Corporate Governance for Listed Companies in China Rules
Governing the Listing of Shares on Shenzhen Stock Exchange Shenzhen Stock
Exchange Self-Regulatory Guidelines for Listed Companies No. 1 - Standardized
Operation of Listed Companies on the Main Board and other relevant laws and
regulations. Based on the actual situation of the Company we continuously improved
and enhanced the standardized operation of corporate governance and established a
sound internal management and control system to regulate the operation of the
Company. The Company's internal control system has been increasingly improved
and the standardization level of governance has been continuously increased.
1. Shareholders and shareholders' general meetings
During the reporting period the Company strictly complied with laws and regulations
and convened and held shareholders' general meetings in a standardized manner. The
convening and holding procedures of the shareholders' general meetings the
qualifications of the persons attending the shareholders' general meetings the voting
procedures and voting results of the shareholders' general meetings all complied with
the Company Law Rules for the Shareholders' Meetings of Listed Companies and
other laws and regulations and the Company's Rules of Procedure for the General
Meeting of Shareholders which ensured that all shareholders especially minority
shareholders could fully exercise their rights. The Company's shareholders' general
meetings during the reporting period were convened by the BOD and lawyers were
engaged to witness the meetings on site ensuring the legality of the meeting
convening holding and voting procedures and safeguarding the legitimate rights and
interests of the Company and shareholders.
2. The Company and the controlling shareholder
952024 Annual Report of Hengyi Petrochemical Co. Ltd.
The Company is completely independent from the controlling shareholder and its
subsidiaries in terms of business personnel assets organization and finance. The
Company has independent and complete business and the ability to operate
independently. The Company's BOD BOS and internal organizations operate
independently. The controlling shareholder of the Company can strictly regulate its
behavior. Major decisions of the Company were made by the shareholders’ general
meetings in accordance with the law. The controlling shareholder exercised its
shareholder rights in accordance with the law and did not directly or indirectly
interfere with the decision-making and operating activities of the Company beyond
the shareholders’ general meetings of the Company.
3. Directors and the BOD
The Company elected directors in strict accordance with the selection and
appointment procedures stipulated in the Company Law and the Articles of
Association of the Company. The number and composition of the BOD of the
Company met the requirements of laws and regulations. All directors of the Company
could carry out their work in accordance with the Rules of Procedure of the BOD
attend the board meetings and shareholders' general meetings on time with a
conscientious and responsible attitude faithfully perform their duties in the interests
of the Company and all shareholders actively participate in training on relevant
knowledge study relevant laws and regulations and promote the standardized
operation and scientific decision-making of the BOD. The independent directors of
the Company could perform their duties independently in accordance with the
corresponding rules and regulations without being influenced by the actual controller
of the Company or other units or persons that have an interest in the Company.During the reporting period the procedures of the meetings of the BOD of the
Company were in compliance with relevant regulations the minutes of the meeting
were complete and true and the disclosure of relevant information at the meetings
was timely accurate and adequate. The BOD of the Company set up four special
962024 Annual Report of Hengyi Petrochemical Co. Ltd.
committees namely the Remuneration Assessment and Nomination Committee the
Risk Control Committee the Audit Committee and the Strategy and Investment
Committee which have played an important role in promoting the standardized
operation and healthy development of the Company.
4. Supervisors and the BOS
The Company's BOS consists of three supervisors one of whom is an employee
representative. The number and personnel of the Company's BOS met the
requirements of relevant laws and regulations and the Company's Articles of
Association. All the supervisors of the Company could perform their duties
conscientiously in accordance with the requirements of the Company's Rules of
Procedure of the BOS and other relevant regulations attend the shareholders’ general
meeting attend the meetings of the BOD as nonvoting delegates convene the
meetings of the BOS according to the prescribed procedures diligently and
conscientiously supervise the legality and compliance of the Company's financial
situation directors and senior executives and safeguard the legitimate rights and
interests of the Company and its shareholders.
5. Stakeholders
The Company fully respected and safeguarded the legitimate rights and interests of
relevant stakeholders to achieve a win-win situation for customers suppliers
employees shareholders and other stakeholders and jointly promote the Company's
sustainable and steady development.
6. Information disclosure and transparency
The Company strictly followed the requirements of relevant laws and regulations as
well as the Information Disclosure Management System and the Investor Relations
Management System to conscientiously fulfill our information disclosure obligations
disclose the Company's operation and management and matters that have significant
impact on the Company in a true accurate complete and timely manner coordinate
972024 Annual Report of Hengyi Petrochemical Co. Ltd.
the relationship between the Company and investors receive investors’ visits and
answer investors’ inquiries. The Company's designated newspapers and websites such
as STCN China Securities Journal Shanghai Securities News Securities Daily and
CNINFO (http://www.cninfo.com.cn) for the Company's information disclosure.
7. Performance evaluation and incentive and restraint mechanisms
The Company is gradually improving and establishing fair and transparent
performance evaluation standards and incentive and restraint mechanisms for
directors supervisors and senior executives. The appointment of senior executives of
the Company was open and transparent in line with laws and regulations.
8.Whether there is any material difference between the actual situation of
corporate governance of the Company and the laws administrative regulations
and the rules on the governance of listed companies issued by the China
Securities Regulatory Commission
There is no material difference between the actual situation of corporate governance
of the Company and laws administrative regulations and the rules on the governance
of listed companies issued by the China Securities Regulatory Commission.II. Independence of the Company in guaranteeing the Company's assets
personnel finance organization and business relative to the controlling
shareholder and actual controller
The Company carried out operations in strict accordance with the Company Law
Articles of Association and other laws regulations and rules established a sound
corporate governance structure of the Company and maintained independent from the
controlling shareholder in terms of business personnel assets organization and
finance. The Company has an independent and complete business system and the
ability to operate independently.
982024 Annual Report of Hengyi Petrochemical Co. Ltd.
1. Business: The Company has an independent and complete supply R&D
production and sales system has the ability to operate independently in the market
conduct business accounting and decision-making assume responsibilities and risks
independently and does not rely on the controlling shareholder or other any related
parties.
2. Personnel: The Company has formed a complete system for labor personnel and
salary management and an independent human resources management department to
manage labor personnel and salary independently of the controlling shareholder. The
Company has an independent workforce. The Company's directors supervisors and
senior executives are legally elected in accordance with the Company Law Articles of
Association and other relevant laws regulations and rules. The Company's senior
executives all work in the Company and receive remuneration and do not hold any
positions other than directors and supervisors in the controlling shareholder and its
subsidiaries.
3. Assets: The Company has a clear property relationship with the controlling
shareholder and independently owns complete legal person assets production and
supporting facilities land plant machinery and equipment related to production and
operation as well as ownership and right to use of trademarks patents and
non-patented technologies. The Company has full control over all assets and its assets
and funds are not occupied by the controlling shareholder to the detriment of the
interests of the Company.
4. Organization: The Company established a sound organizational system to meets its
own production and operation needs. The functional departments operate
independently and smoothly and there is no subordination relationship between the
controlling shareholder and the functional departments.
992024 Annual Report of Hengyi Petrochemical Co. Ltd.
5.Finance: The Company has an independent financial and accounting department
equipped with full-time financial personnel. The Company established an independent
accounting system and a standardized financial management system and financial
decisions were made independently. The Company opened an independent bank
account to independently make tax declarations and perform tax obligations in
accordance with the law. There is no shared bank account or mixed tax payment with
the controlling shareholder.III. Competition in the same industry
□Applicable ?Not applicable
1002024 Annual Report of Hengyi Petrochemical Co. Ltd.
IV. Information on the annual general meeting and extraordinary general meetings of shareholders held in the reporting period
1. Annual general meeting of shareholders held during the reporting period
Percentage of Date of
Session of meeting Type of meeting Disclosure date Resolution of the meeting
investors meeting
Refer to the announcement of the resolutions of
First Extraordinary General February 22 February 23
Extraordinary general 64.93% Shareholders (announcement No.: 2024-019)
Meeting 2024 2024 2024
disclosed on www.cninfo.com.cn
Refer to the announcement of the resolutions of
2023 Annual General Meeting of May 10
Annual shareholders' meeting 64.85% May 11 2024 Shareholders (announcement No.: 2024-046)
shareholders 2024
disclosed on www.cninfo.com.cn
Refer to the announcement of the resolutions of
The second Extraordinary Extraordinary general meeting July 25
63.86% July 26 2024 Shareholders (announcement No.: 2024-077)
General Meeting 2024 of shareholders 2024
disclosed on www.cninfo.com.cn
Refer to the announcement of the resolutions of
The third Extraordinary General Extraordinary general meeting September September 11
54.79% Shareholders (announcement No.: 2024-095)
Meeting 2024 of shareholders 10 2024 2024
disclosed on www.cninfo.com.cn
The fourth Extraordinary Extraordinary general meeting 63.27% October 11 October 12 Refer to the announcement of the resolutions of
1012024 Annual Report of Hengyi Petrochemical Co. Ltd.
General Meeting 2024 of shareholders 2024 2024 Shareholders (announcement No.: 2024-106)
disclosed on www.cninfo.com.cn
Refer to the announcement of the resolutions of
The fifth Extraordinary General Extraordinary general meeting November November 19
56.91% Shareholders (announcement No.: 2024-124)
Meeting 2024 of shareholders 18 2024 2024
disclosed on www.cninfo.com.cn
Refer to the announcement of the resolutions of
The sixth Extraordinary General Extraordinary general meeting December December 05
59.93% Shareholders (announcement No.: 2024-133)
Meeting 2024 of shareholders 04 2024 2024
disclosed on www.cninfo.com.cn
2. The preference shareholders whose voting rights have been restored request the convening of an extraordinary general meeting
□ Applicable ?Not applicable
V. Directors supervisors and senior executives
1. Basic information
Number of Decrease of Cause of increase
Increase of shares Other Closing balance
Employm shares held at shares in or decrease in the
Name Gender Age Title start date of term End date of term in current period change s of share held
ent status the beginning current number of shares
(shares) (shares) (share)
of the period period held
1022024 Annual Report of Hengyi Petrochemical Co. Ltd.
(shares) (shares)
President Current May 15 2015 September 27 2026
Qiu Yibo Male 38 1365000 1365000
CEO Current September 15 2020 September 27 2026
Fang
Male 61 Vice President Current May 16 2011 September 27 2026 4777500 4777500
Xianshui
Ni Defeng Male 47 Director Current August 25 2017 September 27 2026 6051500 6051500
Vice President Current January 15 2020 September 27 2026
Wu Zhong Male 36 109200 109200
Director Current September 15 2021 September 27 2026
Zhao Vice President Current January 16 2020 September 27 2026
Male 40 327600 327600
Donghua Director Current September 28 2023 September 27 2026
Luo Dan Female 42 Director Current December 22 2022 September 28 2026 0 0
Chen
Male 54 Independent Director Current September 28 2023 September 27 2026 0 0
Linrong
Hou
Male 51 Independent Director Current September 28 2023 2026 年 September27 0 0
Jiangtao
Hong Xin Male 41 Independent Director Current September 28 2023 September 27 2026 0 0
Wang Male 55 Executive Vice Current May 15 2011 September 27 2026 5778500 5778500
1032024 Annual Report of Hengyi Petrochemical Co. Ltd.
Songlin President
Chen
Male 58 Vice President Current August 25 2017 September 27 2026 3640000 3640000
Liancai
Secretary of the BOD Current August 28 2017 September 27 2026
Zheng
Male 46 Vice President and 2912000 2912000
Xingang Current December 7 2023 September 27 2026
Financial Director
Li Yugang Male 48 Chairman of the BOS Current September 15 2021 September 27 2026 218400 218400
Jin Danwen Female 39 Supervisor Current September 14 2021 September 27 2026 109200 109200
Xue Lili Female 42 Supervisor Current December 20 2024 September 27 2026 0 0
Lou Retireme
Male 63 Vice president September 15 2021 March 1 2024 0 0
jianchang nt
Resignati
Wang Peng Male 46 Supervisor September 28 2023 September 27 2026 0 1100 1100
on
Total -- -- -- -- -- -- 25288900 1100 0 25290000
1042024 Annual Report of Hengyi Petrochemical Co. Ltd.
(1)Whether there was any departure of directors and supervisors and dismissal
of senior management during the term of office during the reporting period
□Yes ?No
(2)Changes in directors supervisors and senior executives of the Company
Name Positions held Type Date Reason
Lou
Vice president Resignation March 1 2024 Retirement
Jianchang
Wang Peng Supervisor Resignation December 19 2024 Personal reason
2.Employment status
Professional background main work experience and main responsibilities of the
current directors supervisors and senior executives of the Company
(1)Directors
Qiu Yibo male born in December 1987 Chinese nationality holds an EMBA from
CEIBS (China Europe International Business School). Previously worked at Sinopec
Chemical Sales Co. Ltd. East China Branch and served as Investment Development
Department Manager at Zhejiang Hengyi Group Co. Ltd. Currently serves as
Chairman and President of Hengyi Petrochemical Co. Ltd. while also holding the
executive Director of Zhejiang Hengyi Group Co. Ltd. executive director of Suqian
Yida New Materials Co. Ltd. vice chairman of Zhejiang Hengyi Nylon Co. Ltd.director of Zhejiang Baling Hengyi Caprolactam Co. Ltd. director of Dongzhan
Shipping Co. Ltd. executive director and Manager of Ningbo Jinhou Industrial
Investment Co. Ltd. director of Zhejiang Xianfeng Data Technology Co. Ltd.executive director and general manager of Zhejiang Hengyi Hanlin Enterprise
Management Co. Ltd. executive director of Hangzhou Yibo Investment Management
Co. Ltd. director of Zhejiang Hengyi Polymer Co. Ltd. general manager of
Hangzhou Yixian Energy Technology Co. Ltd. Additionally he is one of the
significant shareholders of Zhejiang Hengyi Group Co. Ltd. the controlling
shareholder of Hengyi Petrochemical Co. Ltd.
1052024 Annual Report of Hengyi Petrochemical Co. Ltd.
Fang xianshui male born in March 1964 Chinese nationality holds a bachelor's
degree and is a Senior Economist with over 30 years of production and management
experience in the chemical fiber industry. He has previously served as the General
Manager of Hangzhou Hengyi Industrial Corporation General Manager of Hangzhou
Hengyi Chemical Fiber Co. Ltd. General Manager of Zhejiang Hengyi Group Co.Ltd. and Chief Financial Officer of Hengyi Petrochemical Co. Ltd. Currently he
serves as the Vice Chairman of Hengyi Petrochemical Co. Ltd. while also holding
the director of Zhejiang Hengyi Group Co. Ltd. executive director and Manager of
Hangzhou Hengyi Investment Co. Ltd. executive director and General Manager of
Zhejiang Hengyi Petrochemical Co. Ltd. chairman of Zhejiang Hengyi Polymer Co.Ltd. chairman of Zhejiang Yisheng Petrochemical Co. Ltd. executive director and
General Manager of Zhejiang Hengyi Advanced Materials Co. Ltd. director of
Baling Hengyi Caprolactam Co. Ltd. director of Hong Kong Tianyi International
Holdings Co. Ltd. director of Good Park International Investment Co. Ltd. director
of Yisheng Dahua Petrochemical Co. Ltd. executive director of Zhejiang Yixin
Chemical Fiber Co. Ltd. executive director and general manager of Ningbo Hengyi
Engineering Management Co. Ltd. chairman and director of Hainan Yisheng
Petrochemical Co. Ltd. executive director and Manager of Zhejiang Hengyi
Petrochemical Sales Co. Ltd. director of Hong Kong Yisheng Co. Ltd. executive
director of Shanghai Hengyi Polyester Fiber Co. Ltd. director of Zhejiang Yisheng
New Materials Co. Ltd. director of Zhejiang Hengyi Nylon Co. Ltd. executive
director of Zhejiang Hengkai Energy Co. Ltd. executive director and general
manager of Zhejiang Hengyi Energy Co. Ltd. executive director and general
manager of Zhejiang Xiaoyi Supply Chain Management Co. Ltd. director of Dalian
Yisheng Investment Co. Ltd. At the same time he is also one of the key shareholders
of Zhejiang Hengyi Group Co. Ltd. the controlling shareholder of the company.Ni Defeng male born in January 1978 Chinese nationality holds a Ph.D. degree
and is a Senior Economist (Professor-level) with nearly 20 years of experience in
1062024 Annual Report of Hengyi Petrochemical Co. Ltd.
finance and investment. He has previously served as an auditor at Zhejiang Tianjian
Certified Public Accountants Finance Manager and Investment Development
Manager at Zhejiang Hengyi Group Co. Ltd. Assistant to the President of Zhejiang
Hengyi Group Co. Ltd. and Investment Director of Hengyi Petrochemical Co.Ltd.Currently he serves as a Director of Hengyi Petrochemical Co. Ltd. while also
holding the following positions:Director and President of Zhejiang Hengyi Group Co.Ltd.Director of Zhejiang Xianfeng Data Technology Co. Ltd.Director of Zhejiang
Hengyi Nylon Co. Ltd.Manager of Ningbo Jingren Investment Co. Ltd.Director of
Hainan Hengshengyuan International Tourism Development Co. Ltd. Executive
Director and General Manager of Hangzhou Jinglin Proprietary Fund Investment Co.Ltd. Director of Dalian Yishengyuan Real Estate Co. Ltd. Chairman and General
Manager of Hangzhou Jinyi Industrial Co. Ltd. Non-Executive Director of China
Zheshang Bank Co. Ltd.Wu Zhong male born in July 1989 Chinese nationality holds a Bachelor's degree
from Zhejiang Gongshang University and a Master's degree from Shanghai Jiao Tong
University. He previously served as Deputy General Manager at Zhejiang Hengyi
Petrochemical Sales Co. Ltd. Currently he is a Director and Vice President of
Hengyi Petrochemical Co. Ltd. Additionally he holds the following
positions:Director of Fujian Yijin Chemical Fiber Co. Ltd.Director of Hong Kong
Tianyi International Holdings Co. Ltd.Manager of Zhejiang Hengyi Resource
Recycling Technology Co. Ltd.Director and Manager of Jingzhou Hengyi Resource
Recycling Co. Ltd.Director and Manager of Wenzhou Hengyi Resource Regeneration
Co. Ltd. Director of Good Park International Investment Co. Ltd. Director of Ningbo
Qingzhi Chemical Terminal Co. Ltd.Director of Hong Kong Yitian Co. Ltd.Zhao Donghua male born in February 1985 Chinese nationality holds a Master's
degree in Law from Zhejiang University and an EMBA from China Europe
International Business School (CEIBS). He is a Certified Intermediate Economist. He
previously served as Securities Affairs Representative Deputy Manager of the Legal
1072024 Annual Report of Hengyi Petrochemical Co. Ltd.
Affairs Department and Assistant to the General Manager of the Marketing Center at
Hengyi Petrochemical Co. Ltd. Currently he is the Vice President of Hengyi
Petrochemical Co. Ltd. and the General Manager of Zhejiang Hengyi Petrochemical
Sales Co. Ltd.Luo Dan female born in September 1983 Chinese nationality holds a Bachelor's
degree from Zhejiang A&F University and a Master's degree from Wuhan University
of Technology. She previously served as Manager of the General Affairs Department
in the Comprehensive Management Center at Hengyi Petrochemical Co. Ltd.Currently she is the General Manager of the Investment Management Department at
Hengyi Petrochemical Co. Ltd.Chen Linrong male born in November 1971 member of CPC PhD postdoctoral
fellow associate professor master's supervisor certified public accountant of China
independent director of listed companies graduated from Jiangxi University of
Finance and Economics with master's degree graduated from Central South
University with doctorate degree completed postdoctoral research at Fudan
University and was a senior visiting scholar at Tokyo Keizai University (Japan) and
Tsinghua University. He is now an associate professor and master's supervisor at the
School of Accounting of Zhejiang Gongshang University the director of the doctoral
programme in accounting independent director of Founder Electric and
independent director of Shenzhen Transsion Holdings Co. Ltd..Hou Jiangtao male born in October 1974 of Chinese nationality holds a Master's
degree in Professional Accounting from The Chinese University of Hong Kong and a
Bachelor's degree in Economics from Shanghai University of Finance and Economics.He currently serves as the General Manager of Hoshine Silicon Industry (Wanning)
Co. Ltd. Vice President of Shanghai Taimi Robotics Co. Ltd. and Independent
Director of Zhongyuan Home Furnishing Co. Ltd. He has previously worked at
Tianan Insurance Co. Ltd. Far East Credit Rating Co. Ltd. and CCB Engineering
1082024 Annual Report of Hengyi Petrochemical Co. Ltd.
Consulting Co. Ltd. In addition he is a Director of Shanghai Shantai Health
Technology Co. Ltd. and serves as an expert advisor for multiple companies. He
holds the Independent Director qualification from the Shanghai Stock Exchange and
has extensive experience in corporate management and financial market investment
and financing.Hong Xin male born in March 1984 holds a Ph.D. in Finance is an Associate
Professor Doctoral Supervisor and a Qiushi Distinguished Scholar at Zhejiang
University. He obtained a Bachelor's degree in Finance from Peking University and a
Ph.D. in Finance from the University of Kentucky USA. He currently serves as the
Deputy Director of the Asset Management Research Center at Zhejiang University
Associate Professor at the School of Economics at Zhejiang University Research
Fellow at the Institute of Finance at Zhejiang University and a Member of the
Academic Committee of the Zhejiang Private Equity Investment Association. He has
also served as the Deputy Director of the Development and Reform Bureau of
Xiaoshan District Hangzhou in a temporary post.
(2)Supervisors
Li Yugang male born in November 1977 Chinese nationality holds a Master's
degree is an economist an International Certified Internal Auditor and a corporate
lawyer with over twenty years of auditing experience. He previously served as the
First Deputy Director of the Audit Department and Deputy Director of the Legal
Department at Shagang Group. He is currently the Audit and Legal Director at Hengyi
Petrochemical Co. Ltd.Jin Danwen female born in April 1986 Chinese nationality holds a Master's degree
in Accounting from Hangzhou Dianzi University is a Chinese Certified Public
Accountant and a Senior Accountant. She previously served as the Finance Director
at Hengyi Industries (Brunei) Co. Ltd. and Deputy General Manager of the Financial
Management Department at Hengyi Petrochemical Co. Ltd. She is currently the
1092024 Annual Report of Hengyi Petrochemical Co. Ltd.
Funds Director and General Manager of the Funds Management Department at
Hengyi Petrochemical Co. Ltd. and also serves as a Director at Hangzhou Jinyi
Industrial Co. Ltd. and as a Supervisor at Zhejiang Hengyi Engineering Management
Co. Ltd. Zhejiang Hengyi Hanlin Enterprise Management Co. Ltd. and Haining
Hengyi New Materials Co. Ltd.Xue Lili female born in March 1983 Chinese nationality holds no permanent
overseas residency holds a Master's degree in Management from Zhejiang University
of Technology and is a Mid-level Economist. She previously served as Assistant
Manager Deputy Manager and Director of the Human Resources Department at
Hengyi Petrochemical Co. Ltd. She is currently the General Manager of the Human
Resources Department.
(3)Senior Management Personnel
Wang Songlin male born in April 1970 Chinese nationality holds a Ph.D. in
Materials and Chemical Engineering from Zhejiang University is a Senior Engineer
an Outstanding Engineer of Zhejiang Province and receives a subsidy from the
Hangzhou Municipal Government. He has over 30 years of experience in the
petrochemical and fiber industry. He has previously held positions such as Deputy
Director at China Textile Construction Planning Institute Office Director at China
Chemical Fiber Corporation General Manager of China Chemical Fiber Economic
Information Network General Manager of Beijing Cotton Outlook Company and
General Manager of Zhejiang Baling Hengyi Caprolactam Co. Ltd. He is currently
the Executive Vice President of Hengyi Petrochemical Co. Ltd. and also serves as
the Dean of Hengyi Petrochemical Research Institute and Chairman of the Technical
Committee. Additionally he holds various social positions such as Supervisor of the
Supervisory Board of China Chemical Fiber Industry Association and Deputy
Director of the Chemical Fiber Professional Committee of the China Textile
Engineering Society.
1102024 Annual Report of Hengyi Petrochemical Co. Ltd.
Chen Liancai male born in June 1967 Chinese nationality holds a postgraduate
degree is a Senior Engineer with over 30 years of experience in the petrochemical
industry. He previously served as Deputy General Manager at Sinopec Zhenhai
Refining and Chemical Company Deputy General Manager (General Manager of the
Chemical Division) at Guodian Sinopec Ningxia Energy and Chemical Co. Ltd. and
General Manager of Sinopec Great Wall Energy and Chemical (Ningxia) Co. Ltd. He
is currently the Chief Executive Officer (CEO) of Hengyi Brunei and Vice President
of Hengyi Petrochemical Co. Ltd.Zheng Xingang male born in December 1979 Chinese nationality holds a
Bachelor's degree from Huazhong University of Science and Technology a Master's
degree from Wuhan University and an EMBA from Fudan University. He holds a
Master's degree and is a Senior Economist with nearly 20 years of experience in
investment and financing capital market operations and financial work. He
previously served as Deputy Manager of the Capital Operations Department Deputy
Manager of the Investment Development Department and Director of the Board
Office at Hengyi Petrochemical Co. Ltd. He is currently a Director at Zhejiang
Baling Hengyi Caprolactam Co. Ltd. and serves as Vice President Board Secretary
and Chief Financial Officer at Hengyi Petrochemical Co. Ltd.
3.Posts held in corporate shareholders
Whether to receive
Name of incumbent Name of corporate shareholder Post held Start date of term remuneration
allowance in
shareholder units
Qiu Yibo Zhejiang Hengyi Group Co. Ltd. Director September 26 2017 No
Fang Xianshui Zhejiang Hengyi Group Co. Ltd. Director October 18 1994 No
Hangzhou Hengyi Investment Co.Fang Xianshui President October 8 2022 No
Ltd.
1112024 Annual Report of Hengyi Petrochemical Co. Ltd.
Ni Defeng Zhejiang Hengyi Group Co. Ltd. Director & President September 26 2017 Yes
Description of the position in the shareholder unit None
4.Posts held in other entities
Name of Posts held in other Name of other entities Start date of term Is remuneration paid
incumbent entities by other entities
Hangzhou Yibo Investment
Qiu Yibo Executive Director March 17 2016 No
Management Co. Ltd.Ningbo Jinhou Industry Manager & Executive
Qiu Yibo May 3 2016 No
Investment Co. Ltd. Director
Zhejiang Hengyi Hanlin
Executive Director &
Qiu Yibo Enterprise Management Co. August 20 2021 No GM
Ltd.Zhejiang Hengyi Polyamide
Qiu Yibo Vice President January 14 2022 No
Co. Ltd.Zhejiang Baling Hengyi
Qiu Yibo Director June 9 2022 No
Caprolactam Co. Ltd.Suqian Yida New Materials
Qiu Yibo Executive Director January 19 2018 No
Co. Ltd.Qiu Yibo Dongzhan Shipping Co. Ltd. Director November 30 2017 No
Zhejiang XianfengData
Qiu Yibo Director June 7 2016 No
Technology Co. Ltd.Zhejiang Hengyi Polymer Co.Qiu Yibo Director November 29 2022 No
Ltd.
1122024 Annual Report of Hengyi Petrochemical Co. Ltd.
Hangzhou Yixian Energy
Qiu Yibo General manager October 25 2023 No
Technology Co. Ltd.Zhejiang Yixin Chemical Fibre
Fang Xianshui Executive Director July 26 2017 No
Co. Ltd.Zhejiang Hengkai Energy Co.Fang Xianshui Executive Director December 18 2017 No
Ltd.Ningbo Hengyi Engineering GM & Executive
Fang Xianshui November 27 2014 No
Management Co. Ltd. Director
Zhejiang Hengyi Energy Co. Executive Director &
Fang Xianshui September 24 2022 No
Ltd. GM
Zhejiang Xiaoyi Supply Chain Executive Director &
Fang Xianshui April 19 2022 No
Management Co. Ltd. GM
Zhejiang Hengyi Petrochemical Executive Director &
Fang Xianshui July 26 2004 No
Co. Ltd. GM
Zhejiang Hengyi High-Tech Executive Director &
Fang Xianshui October 15 2007 No
Materials Co. Ltd. GM
Zhejiang Hengyi Polymer Co.Fang Xianshui President September 5 2000 No
Ltd.Zhejiang Yisheng
Fang Xianshui President May 12 2015 No
Petrochemical Co. Ltd.Zhejiang Hengyi Petrochemical Manager & Executive
Fang Xianshui July 24 2017 No
Sales Co. Ltd. Director
Hainan Yisheng Petrochemical
Fang Xianshui President June 23 2014 No
Co. Ltd.
1132024 Annual Report of Hengyi Petrochemical Co. Ltd.
Shanghai Hengyi Polyester
Fang Xianshui Executive Director May 14 2015 No
Fibre Co. Ltd.Yisheng Dahua Petrochemical
Fang Xianshui Director April 29 2006 No
Co. Ltd.Zhejiang Hengyi Polyamide
Fang Xianshui Director August 12 2013 No
Co. Ltd.Dalian Yisheng Investment
Fang Xianshui Director September 29 2007 No
Co. Ltd.Zhejiang Baling Hengyi
Fang Xianshui Director January 10 2008 No
Caprolactam Co. Ltd.Zhejiang Yisheng New
Fang Xianshui Director November 27 2017 No
Materials Co. Ltd.Hong Kong Tianyi
Fang Xianshui Director September 17 2009 No
International Holding Co. Ltd.Good Park International
Fang Xianshui Director September 17 2009 No
Investment Co. Ltd.Fang Xianshui Hong Kong Yisheng Co. Ltd. Director June 27 2014 No
Hangzhou Jinyi Industrial Co. Executive Director &
Ni Defeng September 30 2019 No
Ltd. GM
Hangzhou Jinglin Self-owned Executive Director &
Ni Defeng March 12 2018 No
Capital Investment Co. Ltd. GM
Zhejiang Hengyi Jinlun Co.Ni Defeng Director January 27 2015 No
Ltd.
1142024 Annual Report of Hengyi Petrochemical Co. Ltd.
Hainan Hengshengyuan
Ni Defeng International Tourism Director February 26 2018 No
Development Co. Ltd.Dalian Yishengyuan Real
Ni Defeng Director March 29 2018 No
Estate Co. Ltd.Zhejiang Xiang Data
Ni Defeng Director June 7 2016 No
Technology Co. Ltd.Ningbo Jingren Investment
Ni Defeng General manager October 11 2023 No
Co. Ltd.Ni Defeng China Zheshang Bank Co. Ltd. Non-Executive Director August 09 2024 No
Hengyi Energy Technology Executive Director &
Ni Defeng February 26 2025 No
(Turpan) Co. Ltd. GM
Ningbo Qingchi Chemical
Wu Zhong Director September 1 2023 No
Terminal Co.Fujian Yijin Chemical Fibre
Wu Zhong Director October 22 2021 No
Co. Ltd.Wu Zhong Hong KongYitan Co. Ltd. Director October 12 2020 No
Zhejiang Hengyi Resource
Wu Zhong Recycling Technology Co. Director November 05 2024 No
Ltd.Wenzhou Hengyi Resource
Wu Zhong Director&GM November 19 2024 No
Regeneration Co. Ltd.Wu Zhong Jingzhou Hengyi Resource Director&GM November 27 2024 No
1152024 Annual Report of Hengyi Petrochemical Co. Ltd.
Recycling Co. Ltd.Hangzhou Jinyi Industrial Co.Jin Danwen Director February 28 2021 No
Ltd.Zhejiang Hengyi Engineering
Jin Danwen Supervisor January 29 2018 No
Management Co. Ltd.Zhejiang Hengyi Hanlin
Jin Danwen Enterprise Management Co. Supervisor August 20 2021 No
Ltd.Haining Hengyi New Materials
Jin Danwen Supervisor October 27 2021 No
Co. Ltd.Zhejiang Hengyi Petrochemical
Executive Director &
Wang Songlin August 4 2021 No
Research Institute Co. Ltd. GM
Jiangsu New Horizon
Wang Songlin Advanced Functional Fibre Supervisor July 19 2018 No
Innovation Center Co. Ltd.Zhejiang Baling Hengyi
Zheng Xingang Director June 21 2024 No
Caprolactam Co. Ltd.Posts held in other entities None
5.Punishments of the Company’s current and outgoing directors supervisors
and senior management by securities regulators during the reporting period in
the previous three years
On September 9 2022 the Company received the Administrative Supervision
Measures Decision Letter ([2022] No. 25) issued by the Guangxi Regulatory Bureau
i.e. Decision on Measures to Issue Warning Letter to Wuzhong. In accordance with
Article 170 (2) of the Securities Law of the People's Republic of China the Guangxi
Regulatory Bureau decided to adopt the regulatory measures to issue a warning letter
1162024 Annual Report of Hengyi Petrochemical Co. Ltd.
to Wuzhong. For details please refer to the Announcement on the Receipt of Warning
Letter from Guangxi Regulatory Bureau by Company Directors (Announcement No.
2022-097) disclosed on September 17 2022 in the STCN China Securities Journal
Shanghai Securities News Securities Daily and CNINFO (www.cninfo. com. cn).
6.Remuneration of directors supervisors and senior management
(1)Decision-making procedures basis for determination and actual payment of
remuneration of directors supervisors and senior management
The Company passed the Salary and Performance Appraisal Management System for
Senior Management Staff (reviewed and approved at the third meeting of the eighth
session of the BOD) to conduct performance appraisal and pay remuneration to the
Company's directors supervisors and senior management. The annual remuneration
of directors supervisors and senior managers who receive remuneration from the
Company in 2022 (including total remuneration of basic salary bonuses allowances
subsidies employee benefits and various insurance premiums public reserve funds
and other forms of pre-tax payment from the Company) is released in accordance with
the Company’s relevant regulations and based on the Company’s operating
conditions and the duties and work performance evaluation of relevant personnel by
BOD. During the reporting period the remunerations of the Company's directors
supervisors and senior management have been paid on a monthly basis.Upon agreement reached at the first meeting of the eleventh BOD of the Company on
September 15 2020 and the fifth extraordinary general meeting of shareholders of the
Company on October 12 2020 the allowance standard of the independent director
was adjusted to RMB 150000 per person per year (including Tax) allowances are
paid on an average monthly basis.
(2) Remuneration of directors supervisors and senior management during the
reporting period of the Company
Unit: 10000
1172024 Annual Report of Hengyi Petrochemical Co. Ltd.
Whether to get
Total pre-tax
remuneration
Employment remuneration
Name Gender Age Title from related
status received from
parties of the
the Company
Company
Qiu Yibo Male 61 President and CEO Current 89.80 No
Fang
Male 47 Vice President Current 90.60 No
Xianshui
Ni Defeng Male 36 Director Current - Yes
Wu
Male 40 Director Vice President Current 66.30 No
Zhong
Zhao
Male 42 Director Vice President Current 66.30 No
Donghua
Luo Dan Female 54 Director Current 23.70 No
Chen
Male 51 Independent Director Current 15.00 No
Linrong
Hou
Male 41 Independent Director Current 15.00 No
Jiangtao
Hong Xin Male 55 Independent Director Current 15.00 No
Wang
Male 58 Executive Vice President Current 72.80 No
Songlin
Chen
Male 63 Vice President Current 84.04 No
Liancai
Lou
Male 46 Vice President Retirement 13.80 No
jianchang
Vice President Secretary
Zheng
Male 48 of the BOD Financial Current 46.40 No
Xingang
Director
Li
Male 39 Chairman of the BOS Current 41.85 No
Yugang
Jin
Female 42 Supervisor Current 35.50 No
Danwen
Xue Lili Female 46 Supervisor Current 2.35
Wang
Male 61 Supervisor Step down 24.99 No
Peng
Total -- -- -- -- 703.43 --
Note: On December 24 2024 the company disclosed the "Announcement on the
Resignation of the Employee Representative Supervisor and the Election of a
Replacement Employee Representative Supervisor" (Announcement No.: 2024-136).Mr. Wang Peng applied to resign from his position as the company's employee
representative supervisor due to personal reasons. The company held its second
Employee Representative Meeting of 2024 approving the election of Ms. Xue Lili as
the employee representative supervisor of the company's 12th Supervisory Committee.
1182024 Annual Report of Hengyi Petrochemical Co. Ltd.
Therefore the disclosed compensation for Mr. Wang Peng and Ms. Xue Lili
represents the total remuneration they received during their respective terms as
supervisors.
(3)Other information notes
□Applicable □Not applicable
1192024 Annual Report of Hengyi Petrochemical Co. Ltd.
VI.Performance of Duties by the Directors during the reporting period
1. Performance of the BOD during the reporting period
Date of Disclosure
Session of meeting Meeting Resolution
meeting date
Announcement on the Resolutions of the 12th Board of Directors' 7th Meeting of Hengyi
The Seventh Meeting of the Twelfth Board January 31 February 01
Petrochemical (Announcement No.: 2024-006). Disclosed on: CNINFO
of Directors 2024 2024
(www.cninfo.com.cn)
The Eighth Meeting of the Twelfth Board of Announcement on the Resolutions of the 12th Board of Directors' 8th Meeting of Hengyi
April 19 April 20
Directors and the 2023 Annual Board Petrochemical (Announcement No.: 2024-029). Disclosed on: CNINFO
20242024
Meeting (www.cninfo.com.cn)
The Ninth Meeting of the Twelfth Board of April 26
--
Directors 2024
Announcement on the Resolutions of the 12th Board of Directors' 10th Meeting of
The Tenth Meeting of the Twelfth Board of
May 09 2024 My 10 2024 Hengyi Petrochemical (Announcement No.: 2024-044). Disclosed on: CNINFO
Directors
(www.cninfo.com.cn)
The Eleventh Meeting of the Twelfth Board July 09 2024 July 10 2024 Announcement on the Resolutions of the 12th Board of Directors' 11th Meeting of
1202024 Annual Report of Hengyi Petrochemical Co. Ltd.
of Directors Hengyi Petrochemical (Announcement No.: 2024-062). Disclosed on: CNINFO
(www.cninfo.com.cn)
Announcement on the Resolutions of the 12th Board of Directors' 12th Meeting of
The Twelfth Meeting of the Twelfth Board
July 25 2024 July 26 2024 Hengyi Petrochemical (Announcement No.: 2024-074). Disclosed on: CNINFO
of Directors
(www.cninfo.com.cn)
Announcement on the Resolutions of the 12th Board of Directors' 13th Meeting of
The Thirteenth Meeting of the Twelfth August 22 August 24
Hengyi Petrochemical (Announcement No.: 2024-081). Disclosed on: CNINFO
Board of Directors 2024 2024
(www.cninfo.com.cn)
Announcement on the Resolutions of the 12th Board of Directors' 14th Meeting of
The Fourteenth Meeting of the Twelfth September 23 September 23
Hengyi Petrochemical (Announcement No.: 2024-096). Disclosed on: CNINFO
Board of Directors 2024 2024
(www.cninfo.com.cn)
Announcement on the Resolutions of the 12th Board of Directors' 15th Meeting of
The Fifteenth Meeting of the Twelfth Board October 22 October 24
Hengyi Petrochemical (Announcement No.: 2024-108). Disclosed on: CNINFO
of Directors 2024 2024
(www.cninfo.com.cn)
The Sixteenth Meeting of the Twelfth Board October 28
--
of Directors 2024
1212024 Annual Report of Hengyi Petrochemical Co. Ltd.
Announcement on the Resolutions of the 12th Board of Directors' 17th Meeting of
The Seventeenth Meeting of the Twelfth November 01 November 02
Hengyi Petrochemical (Announcement No.: 2024-116). Disclosed on: CNINFO
Board of Directors 2024 2024
(www.cninfo.com.cn)
Announcement on the Resolutions of the 12th Board of Directors' 18th Meeting of
The eighteenth Meeting of the Twelfth November 18 November 19
Hengyi Petrochemical (Announcement No.: 2024-125). Disclosed on: CNINFO
Board of Directors 2024 2024
(www.cninfo.com.cn)
Announcement on the Resolutions of the 12th Board of Directors' 19th Meeting of
The Nineteenth Meeting of the Twelfth December 09 December 10
Hengyi Petrochemical (Announcement No.: 2024-134). Disclosed on: CNINFO
Board of Directors 2024 2024
(www.cninfo.com.cn)
Announcement on the Resolutions of the 12th Board of Directors' 20th Meeting of
The Twentieth Meeting of the Twelfth December 20 December 24
Hengyi Petrochemical (Announcement No.: 2024-137). Disclosed on: CNINFO
Board of Directors 2024 2024
(www.cninfo.com.cn)
1222024 Annual Report of Hengyi Petrochemical Co. Ltd.
2.Attendance of Directors in the Board Meeting and the General Meeting of
Shareholders
Attendance of Directors in the Board Meeting and the General Meeting of Shareholders
Whether
Number of
Number of absent from
Number of attendances Number of Number of
board Number of board
on-site of board attendances of attendances of
Name of meetings to absences at meetings in
attendances of meetings by board General
director attend during board person for
board means of meetings by Shareholder s
the reporting meetings two
meetings telecommunic entrustees Meetings
period consecutive
ations
times
Qiu Yibo 14 10 4 0 0 No 7
Fang
14 10 4 0 0 No 7
Xianshui
Ni Defeng 14 10 4 0 0 No 7
Wu Zhong 14 10 4 0 0 No 7
Zhao
14 10 4 0 0 No 7
Donghua
Luo Dan 14 10 4 0 0 No 7
Chen
14 10 4 0 0 No 7
Linrong
Hou
14 10 4 0 0 No 7
Jiangtao
Hong Xin 14 10 4 0 0 No 7
The situation where a company director fails to attend two consecutive board
meetings in person has not occurred.
3.Situation where a director raises objections to matters related to the company
During the reporting period no director raised any objections to matters related to the
company.
1232024 Annual Report of Hengyi Petrochemical Co. Ltd.
4.Additional Notes on Directors' Performance of Duties
(1)Whether directors’ suggestions to the Company are accepted
?Yes □ No
(2)Description of the directors' recommendations that were adopted or refused
During the reporting period all directors of the Company strictly adhered to the
Company Law Securities Law Code of Corporate Governance for Listed Companies
Shenzhen Stock Exchange Self-Regulatory Guidelines for Listed Companies No.1 -
Standardized Operation of Main Board Listed Companies along with the Articles of
Association and Rules of Procedure for the Board of Directors in performing their
duties. With due diligence and professional dedication they proactively monitored the
Company's operational management information financial status and material
matters provided substantive input on major corporate governance and operational
decisions conducted in-depth deliberations on all proposals submitted to the Board
and reached unanimous resolutions through robust discussions. Decision-making
processes rigorously incorporated the interests and demands of minority shareholders
thereby enhancing the scientific rigor of Board resolutions. They resolutely
supervised and advanced the implementation of Board decisions to ensure scientific
timely and efficient governance effectively safeguarding the legitimate rights and
interests of the Company and all shareholders.
1242024 Annual Report of Hengyi Petrochemical Co. Ltd.
VII.Performance of duties by the specialized committees under the BOD during the reporting period
Number
Other Details of
of
Committee Members Date of meeting Contents Important opinions and recommendations made performance of objections (if
meetings
duties any)
held
1. Reviewed Internal Audit
Performance Report 2023； The Audit Committee carried out its work in strict
2. Reviewed Report on the accordance with the Company Law the regulatory
Chen
Financial Accounts for the rules of the CSRC and the Articles of Association
Linrong
year 2023 (preliminary of the Company the Rules of Procedure of the
Hong Xin
draft)； Board of Directors and other laws and regulations
Audit Committee Hou 5 April 11 2024 Not applicable Not applicable
3. Reviewed Annual Audit with diligence and due diligence and made
Jiangtao Ni
Report 2023 (preliminary relevant comments in accordance with the actual
Defeng Luo
draft)； situation of the Company and unanimously
Dan
4. Reviewed Annual passed all the motions after full communication
Report 2023(preliminary and discussion.draft)；
1252024 Annual Report of Hengyi Petrochemical Co. Ltd.
5. Reviewed Annual
Internal Control
Self-Evaluation Report
2023；
6. Reviewed Motion on the
Annual Deposit and Use of
Proceeds in FY2023；
7. Reviewed Special Audit
Report on Funds Utilisation
by Related Parties for the
Year 2023 (Preliminary
Draft)
1. Reviewed Half Yearly
Report of the Company
April 22 2024 2023 (preliminary draft)；
2. Reviewed Motion on the
Special Report on the
1262024 Annual Report of Hengyi Petrochemical Co. Ltd.
Deposit and Use of
Proceeds for the
Semi-Annual Period of
2023；
3. Reviewed Report on the
Semi-Annual Internal Audit
Exercise 2023 (preliminary
draft)
1. Reviewed Half Yearly
Report of the Company
2023 (preliminary draft)；
2. Reviewed Motion on the
August 12 2024 Special Report on the
Deposit and Use of
Proceeds for the
Semi-Annual Period of
2023；
1272024 Annual Report of Hengyi Petrochemical Co. Ltd.
3. Reviewed Report on the
Semi-Annual Internal Audit
Exercise 2023 (preliminary
draft)
1.Reviewed Third Quarterly
Report 2024 (preliminary
draft);
October 23 2024
2.Reviewed Report on the
Work of Internal Audit for
the Third Quarter of 2024.
1.Reviewed Proposal
Regarding the Renewal of
October 29 2024
the Accounting Firm's
Engagement.Remuneration Hong Xin 1.Reviewed on Proposal The Remuneration Evaluation and Nomination
Evaluation and Qiu Yibo 3 January 24 2024 Regarding the
Nomination Wu Zhong Sixth Phase of Employee Company Law the regulatory rules of the CSRC
1282024 Annual Report of Hengyi Petrochemical Co. Ltd.
Committee Chen Stock Ownership Plan of and the Articles of Association of the Company
Linrong Hou Hengyi Petrochemical Co. and the Rules of Procedure of the Board of
Jiangtao Ltd.> and its Summary; Directors diligently and responsibly and put
2. Reviewed on Proposal forward relevant opinions in accordance with the
Regarding the actual situation of the Company and unanimously
the Sixth Phase of and discussion.Employee Stock Ownership
Plan of Hengyi
Petrochemical Co. Ltd.
1.Reviewed on Proposal on
the Extension of the Fourth
July 24 2024
Phase of the Employee
Stock Ownership Plan.
1.Reviewed on Proposal on
July 24 2024 Adjustments to the
of the Sixth Phase
1292024 Annual Report of Hengyi Petrochemical Co. Ltd.
Employee Stock Ownership
Plan of Hengyi
Petrochemical Co. Ltd.>
and Its Summary;
2.Reviewed on Proposal on
Adjustments to the
the Sixth Phase Employee
Stock Ownership Plan of
Hengyi Petrochemical Co.Ltd.
1.Reviewed on Proposal on The Strategy and Investment Committee worked
Qiu Yibo
Strategy and Conducting Foreign strictly in accordance with the Company Law the
Fang
Investment Exchange Hedging Business regulatory rules of the CSRC and the Articles of
Xianshui Ni 4 January 24 2024 Not applicable Not applicable
Decision- making for 2024; Association of the Company and the Rules of
Defeng Hou
Committee 2.Reviewed on Proposal on Procedure of the Board of Directors diligently
Jiangtao
Conducting Commodity and responsibly and put forward relevant
1302024 Annual Report of Hengyi Petrochemical Co. Ltd.
Hedging Business for 2024. opinions in accordance with the actual situation of
1. Reviewed on Proposal on the Company and unanimously passed all the
Terminating the 2023 motions after full communication and discussion.April 11 2024
Issuance of A-Shares to
Specific Targets
1.Reviewed on Proposal on
Acquiring Minority
Shareholdings of Zhejiang
September 20 2024
Hengyi Hanlin Enterprise
Management Co. Ltd. and
Related-Party Transaction
1.Reviewed on Proposal on
Conducting Foreign
Exchange Hedging Business
Decemeber 9 2024
for 2025;
2.Reviewed on Proposal on
Conducting Commodity
1312024 Annual Report of Hengyi Petrochemical Co. Ltd.
Hedging Business for 2025
1.Reviewed on Proposal on
Conducting Foreign
Exchange Hedging Business
January 24 2024 for 2024;
The Risk Control Committee worked strictly in
2.Reviewed on Proposal on
accordance with the Company Law the regulatory
Hou Conducting Commodity
rules of the CSRC and the Articles of Association
Jiangtao Hedging Business for 2024.of the Company and the Rules of Procedure of the
Risk Control Chen 1.Reviewed Report on the
4 Board of Directors diligently and responsibly Not applicable Not applicable
Committee Linrong Financial Accounts for the
April 11 2024 and put forward relevant opinions in accordance
Zhao year 2023 (preliminary
with the actual situation of the Company and
Donghua draft)
unanimously passed all the motions after full
1.Reviewed on Proposal on
communication and discussion.Acquiring Minority
September 20 2024 Shareholdings of Zhejiang
Hengyi Hanlin Enterprise
Management Co. Ltd. and
1322024 Annual Report of Hengyi Petrochemical Co. Ltd.
Related-Party Transaction
1.Reviewed on Proposal on
Conducting Foreign
Exchange Hedging Business
Decemeber 9 2024 for 2025;
2.Reviewed on Proposal on
Conducting Commodity
Hedging Business for 2025
1332024 Annual Report of Hengyi Petrochemical Co. Ltd.
VIII.Performance of Duties by the BOS
Whether there are any risks found by the BOS in its supervisory activities
during the reporting period
The BOS had no objections to the matters under supervision during the reporting
period
IX.Employees of the Company
1.Number of employees professional composition and education level
Number of employees in the parent company at the end of the
0
reporting period (person)
Number of employees of service in major subsidiaries at the end of
16014
the reporting period (person)
Total number of employees in service at the end of the reporting
16014
period (person)
Total number of employees receiving salaries in current period
16014
(person)
Number of retired employees whose expense is borne by the parent
175
company and major subsidiaries (person)
Composition
Number of professional
Professional composition category
composition (person)
Production personnel 12881
Sales staff 354
Technical staff 2124
Finance staff 146
Administrative staff 509
Total 16014
1342024 Annual Report of Hengyi Petrochemical Co. Ltd.
Education level
Education level category Quantity (person)
Master degree or above 379
Bachelor degree 2410
College degree or below 13225
Total 16014
2.Compensation policies
The Company implements a labor contract system sign labor contracts with every
employee in accordance with the Labor Law of the PRC the Labor Contract Law of
the PRC and relevant labor laws and regulations. The Company strictly implements
the national employment system labor protection system and social security system
pays social insurance for employees in accordance with national regulations sets up
corresponding safety protection measures and creates a good and safe production
environment for employees. Through innovative management mechanisms the
Company guides the functional system to continuously improve quality and efficiency
and to create a streamlined and efficient functional team of headquarters. The
Company develops an effective salary incentive system for the Company's financial
personnel administrative personnel technical personnel production personnel and
sales personnel and gives corresponding performance rewards based on the
performance evaluation of the Company department and individual.
3.Training plans
The Company established Hengyi Enterprise University according to the needs of
production and operation and talent training aiming to build a competitive enterprise
university and support Hengyi's global development. It serves as the power center and
load bearing platform for Hengyi's organizational development talent training
technology accumulation and corporate transformation. The "Blue" series of talent
projects are implemented in Hengyi University to establish talent echelons at
different levels; meanwhile it attaches importance to continuous improvement job
1352024 Annual Report of Hengyi Petrochemical Co. Ltd.
skill assessment and on-the-job education promotion to enhance professional skills
and effectiveness. The Company develops training plans for different types of
employees organizes internal and outbound trainings according to the plan pays
special attention to job skills training and provides certification for special positions
and hazardous chemical operators to ensure safe production and normal operation.The Company also trains technical and business backbones through targeted training
to improve their business capabilities.
4.The situation of labor outsourcing
Total number of working hours of labor
12264266
outsourced (hours)
Total remuneration paid for labor outsourced
329612236.00
(RMB)
X.The Company’s common stock profit distribution and capitalization of capital
reserves
1.The formulation implementation or adjustment of the profit distribution
policy especially the cash dividend policy during the reporting period
The company in accordance with the provisions and requirements outlined in
documents such as the "Guidelines for the Supervision of Listed Companies No. 3 —
Cash Dividends for Listed Companies (2025 Revision)" and the "Self-Regulatory
Guidelines for Listed Companies No. 1 — Standard Operations for Main Board
Listed Companies (December 2023 Revision)" issued by the Shenzhen Stock
Exchange has made specific provisions in the Articles of Association regarding the
decision-making procedures for profit distribution and the profit distribution policy
based on the company's actual situation. Additionally the company formulated the
"Shareholder Dividend Return Plan for the Next Three Years (2023–2025)" to better
ensure reasonable returns for all shareholders further refine the Articles of
Association's clauses related to the profit distribution policy increase transparency
1362024 Annual Report of Hengyi Petrochemical Co. Ltd.
and operability in dividend distribution decisions and establish a sustainable stable
and scientific return plan and mechanism for investors ensuring the continuity and
stability of the profit distribution policy. During the reporting period the company
strictly adhered to the aforementioned profit distribution policy.According to the proposal "On the Profit Distribution Plan for the Year 2023 and the
Mid-Year Cash Dividend for 2024" approved at the company's 2023 Annual General
Meeting held on May 10 2024 the profit distribution plan for 2023 is as follows:
based on the total share capital registered on the record date specified in the equity
distribution announcement a cash dividend of RMB 1.00 (inclusive of tax) per 10
shares will be distributed to all shareholders with no bonus shares issued and no
capital reserves converted into share capital. The company published the
"Implementation Announcement of the 2023 Annual Equity Distribution of Hengyi
Petrochemical Co. Ltd." and completed the implementation on June 26 2024.The proposal titled "On the Plan Not to Conduct Profit Distribution for the First Half
of 2024" which was approved at the company's 13th meeting of the 12th Board of
Directors and the 9th meeting of the 12th Supervisory Committee on August 22 2024
outlines the following profit distribution plan for the first half of 2024: Considering
industry conditions the company's development strategy and operational
performance no cash dividends will be distributed no bonus shares will be issued
and no capital reserves will be converted into share capital for the first half of 2024.The undistributed profits will be carried forward to the next year. This plan complies
with the profit distribution policy outlined in the Articles of Association and aligns
with the company's disclosed shareholder return plan.Special description of cash dividend policy
Whether it meets the requirements of the Company's Articles of Association or the
Yes
resolutions of the General Meeting of Shareholders:
1372024 Annual Report of Hengyi Petrochemical Co. Ltd.
Whether the dividend standard and proportion are clear and definite: Yes
Were the relevant decision-making procedures and mechanisms are complete: Yes
Whether independent directors have performed their due diligence and played their due
Yes
role:
If the company has not made cash dividends it should disclose the specific reasons and
Not applicable
the next steps it intends to take to enhance the level of investor returns:
Whether small and medium shareholders have sufficient opportunities to express their
Yes
opinions and demands and whether their legitimate equities are fully protected:
If the cash dividend policy is adjusted or changed whether the conditions and procedures
are compliant and transparent: Yes
2.The Company was profitable during the reporting period and the parent
company’s profit available for distribution to ordinary shareholders was positive
but no distribution plan for cash dividend for ordinary shares was proposed
□Applicable ?Not applicable
3.Distribution of profit and capitalisation of capital reserve for the reporting
period
Number of bonus shares per 10 shares (shares) 0
Dividend per 10 shares (RMB) (inclusive of tax) 0.50
Number of shares transferred per 10 shares (shares) 0
Equity base for the proposed distribution (shares) 3300350247
Cash dividend amount (RMB) (including tax) 165017512.35
Amount of cash dividends in other ways (e.g. share
0
buybacks) (RMB)
Total cash dividends (including other means) (RMB) 165017512.35
Distributable profit (RMB) 414712578.51
1382024 Annual Report of Hengyi Petrochemical Co. Ltd.
Total cash dividends (including other methods)
100%
Percentage of total profit distribution
The current cash dividend
If the company's development stage is in the growth period and there are arrangements for
major capital expenditure when profit distribution is made the proportion of cash dividends
in the profit distribution should be at least 20%.Detailed description of the proposed distribution of profits or capitalisation of capital reserves
On April 22 2025 the 22nd meeting of the 12th Board of Directors of the company approved
a proposal to distribute a cash dividend of RMB 0.50 (inclusive of tax) per 10 shares to all
shareholders based on the total share capital on the equity registration date for the
implementation of the equity distribution after deducting the number of shares held in the
company's dedicated repurchase securities account. For this year there will be no conversion
of capital reserves into share capital and no issuance of bonus shares.As of March 31 2025 the company's total share capital was 3666321336 shares Including
365971089 shares were held in the company's dedicated repurchase securities account and
will not participate in this profit distribution. After excluding the shares held in the dedicated
repurchase securities account the company's total share capital amounts to 3300350247
shares. Based on this the total proposed cash dividend to be distributed is RMB
165017512.35 (inclusive of tax).
If changes occur to the total share capital before the equity registration date due to events such
as additional share issuance share repurchase or conversion of convertible bonds into shares
the company intends to maintain the per-share distribution amount unchanged while adjusting
the corresponding total share capital.The above proposal is still subject to approval at the company's 2024 Annual General
Meeting.
1392024 Annual Report of Hengyi Petrochemical Co. Ltd.
XI.Implementation of the Company's SIPs ESOPs or other employee incentives
1. Equity incentive
□Applicable ?Not applicable
2.Implementation of the Employee Share Ownership Plan
(1)Employee Share Ownership Schemes in force during the reporting period
Total number of Percentage of total Implementation plan Sources of
Number of Status of
Name Scope of employees shares held share capital of funding for the implementation of
employees changes
(shares) listed companies the plan
Directors Supervisors senior management of the
Fourth Employee Legal remuneration of employees
Company regular employees of the Company No more
Share Ownership 113754600 / 3.10% self-financing and other means
and its subsidiaries and other persons as than 4011
Plan permitted by laws and regulations
determined by the Board of Directors
Directors Supervisors senior management of the
Fifth Employee Legal remuneration of employees
Company regular employees of the Company No more
Share Ownership 87167750 / 2.38% self-financing and other means
and its subsidiaries and other persons as than 6000
Plan permitted by laws and regulations
determined by the Board of Directors
1402024 Annual Report of Hengyi Petrochemical Co. Ltd.
Directors Supervisors senior management of the
Sixth Employee Legal remuneration of employees
Company regular employees of the Company No more
Share Ownership 114090297 / 3.11% self-financing and other means
and its subsidiaries and other persons as than 2500
Plan permitted by laws and regulations
determined by the Board of Directors
1412024 Annual Report of Hengyi Petrochemical Co. Ltd.
(2)Shareholdings of directors supervisors and senior management in the
Employee Share Ownership Plan during the reporting period
Number of shares
Number of shares Percentage of
held at the
held at the end of total share capital
Name Title beginning of the
the reporting of listed
reporting period
period (shares) companies
(shares)
Fang Xianshui Vice president 1550388 2411732 0.07%
Ni Defeng Director 1958551 2819895 0.08%
Director Vice
Wu Zhong 924959 1642745 0.04%
president
Director Vice
Zhao Donghua 924959 1642745 0.04%
president
Luo Dan Director 356357 571693 0.02%
Wang Songlin Vice president 408163 1125949 0.03%
Chen Liancai Vice president 924959 1642745 0.04%
Vice president
Zheng Xingang Secretary of BOD 761694 1479480 0.04%
Financial Director
Chairman of
Li Yugang 503296 862189 0.02%
Supervisor
Jin Danwen Supervisor 380847 739740 0.02%
Xue Lili Supervisor 380846 524403 0.01%
(3)Changes in asset management organisations during the reporting period
□Applicable □ Not applicable
(4)Changes in equity during the reporting period arising from holders' disposals
of shares etc.□Applicable □ Not applicable
(5)Exercise of shareholders' rights during the reporting period
1422024 Annual Report of Hengyi Petrochemical Co. Ltd.
□Applicable □ Not applicable
(6)Other relevant circumstances and description of the Employee Share
Ownership Plan during the reporting period
□Applicable □ Not applicable
(7)Changes in the membership of the Management Committee of the Employee
Share Ownership Plan
□Applicable □ Not applicable
(8)Financial impact of the Employee Share Ownership Plan on listed companies
during the reporting period and related accounting treatment
□Applicable □ Not applicable
(9)Termination of the Employee Share Ownership Plan during the reporting
period
□Applicable □ Not applicable
(10)Other notes:
None
3.Other employee incentives
□Applicable □ Not applicable
XII.Establishment and implementation of internal control system during the
reporting period
1.Establishment and implementation
During the reporting period the Company continuously updated and optimized its
internal control system in accordance with the Basic Standard for Enterprise Internal
Control and other relevant regulations to adapt to the changing external environment
and internal management requirements. The Company's internal control system is
sound and reasonable and covers the main aspects of its operation and management. It
works well and there is no significant omission.
(1) Internal environment. The Company has an organizational structure that is
1432024 Annual Report of Hengyi Petrochemical Co. Ltd.
suitable for its business which has a clear division of labor and sound and complete
functional departments and the Company implements the principle of separation of
incompatible duties to make these departments restrain with each other.
(2) Risk assessment. The Company collects relevant information in a comprehensive
and systematic manner according to its strategic objectives development thoughts and
the industry characteristics to conduct risk assessment timely and weigh risks and
benefits then determines risk response strategies to keep the risks under control.
(3) Control activities. The Company continuously sorts out and improves the system
according to the current state of its management and development needs without
comprising the legality normality feasibility and operability.
(4) Information and communication. The Company has established an information
and communication system to define the procedures for the collection processing and
transmission of information related to internal control in order to build a smooth
communication line and promote effective conduct of internal control.
(5)Supervision. The Company has established a corporate governance mechanism so
that the independent directors and the BOS are able to independently perform their
supervisory duties and independently conduct evaluation and provide
recommendations on the Company's management. A special internal audit body is set
up under the Audit Committee of the BOD to carry out internal audit work
independently according to law in order to realize the effective supervision of the
management and effective operation of the internal control system.
2.Details of significant internal control deficiency identified during the reporting
period
□Yes ? No
XIII.The Company’s management and control over subsidiaries during the
reporting period
During the reporting period in order to strengthen management and control over its
1442024 Annual Report of Hengyi Petrochemical Co. Ltd.
subsidiaries standardize their internal operations and promote their healthy
development the company following the operational standards for listed companies
formulated and improved the "Comprehensive Management System for Subsidiaries."
This system provides specific regulations for subsidiaries in terms of establishing
sound governance structures operational and business decision-making financial
management information management investment decision-making inspection and
performance evaluation. Subsidiaries are also required to uniformly implement the
"Major Information Internal Reporting System" which clearly defines procedures for
reporting and reviewing major matters. The company closely monitors significant
issues regarding subsidiary governance financial status production and operations
project construction safety and environmental protection while promptly fulfilling
information disclosure obligations.To enhance the standardized operation levels of its
subsidiaries the company's Audit and Legal Department provides guidance
supervision and evaluation of the establishment and implementation of internal
control systems in all subsidiaries. This ensures the continuous improvement and
effective implementation of the company's various internal control systems.
1452024 Annual Report of Hengyi Petrochemical Co. Ltd.
XIV.Internal control self-evaluation report or internal control audit report
1.Internal control self-evaluation report
Disclosure date of full text of Internal Control
April 24 2025
Evaluation Report
Disclosure index of full text of Internal Control
http://www.cninfo.com.cn
Evaluation Report
Proportion of total assets included
in the evaluation scope to that of the Company’s 100.00%
consolidated financial statements
Proportion of operating income included in the
evaluation to that of the Company’s consolidated 100.00%
financial statements
Defect Identification Standard
Category Financial reports Financial reports Non-financial reports
⑴Major defects: The negative news about the safety ⑴ Identification standard of major defects: * lack of
democratic decision-making process; * huge errors eco-friendliness social responsibility practice ethics
caused by decision-making process;* violation of and operation of the enterprise has been spread all over
national laws and regulations and punishment;* serious the country has been specially investigated by the
loss of middle or senior management members and
1462024 Annual Report of Hengyi Petrochemical Co. Ltd.
senior technicians;* frequent negative news in the
government or regulatory agencies and has caused
media involving a wide range;* lack of system or
continuous special reports by the public media. As a
system failures in major business;* failure to rectify
major or significant internal control defects. result the enterprise has adverse events such as capital
Identification standard of significant defects:* loan and recovery suspension or revocation of
Imperfect democratic decision making procedures; * administrative license pledge of assets and a large
decision-making procedures leading to general errors;*
number of claims (occurrence of level-I mass
violation of internal regulations of the Company
resulting in losses; * outflow of many business disturbance).⑵Significant defects: The negative news
personnel in key positions;* negative news appeared about the safety eco-friendliness social responsibility
on the media involving local region; * defects in practice ethics and operation of the enterprise has been
Important business systems or systems;* failure to
reported by the public media for three times in a row
rectify material or general deficiencies in internal
control.⑶ Identification standard of general defects: and has been concerned and investigated by the
* low efficiency of decision-making process; * industry or regulatory agencies and has caused adverse
violation of internal rules and regulations without
effects within the industry (occurrence of level-II mass
Qualitative criteria losses;* serious loss of business personnel in general
positions;* negative news in the media with little disturbance). ⑶General defects: The negative news
impact; * defects in general business systems; about the safety eco- friendliness social responsibility
* failure to rectify general defects; * other defects. practice ethics and operation of the enterprise has been
reported by the public media for three times in a row
and has been concerned and investigated by the
industry or regulatory agencies and has caused adverse
effects within the industry (occurrence of level-III or
level-IV mass disturbance)
Quantitative standard ⑴Major defects: The overall impact ⑴Major defects: direct financial loss:
level is higher than the importance level (1% of the RMB 50 million or above; personnel health and safety
audited net assets of the previous year).⑵Significant impact: death of more than 10 people or serious injury
defects: 0.2% of the audited net assets of the previous of more than 50 people. ⑵Significant defects: direct
1472024 Annual Report of Hengyi Petrochemical Co. Ltd.
year < overall importance level < 1% of the audited net financial loss: RMB 10 million (included) to RMB 50
assets of the previous year. ⑶General defects: The million; personnel health and safety impact: death of
overall importance level is less than 0.2% of the audited more than 3 (included) but less than 10 people or
net assets of the previous year. serious injury of more than 10 (included) but less than
50 people. ⑶General defects: direct financial loss:
less than RMB 10 million; personnel health and safety
impact: death of less than 3 people or serious injury of
less than 10 people.Number of major defects in financial report (piece) 0
Number of major defects in non- financial report 0
(piece)
Number of significant defects in financial report
0
(piece)
Number of significant defects in non-financial report
0
(piece)
1482024 Annual Report of Hengyi Petrochemical Co. Ltd.
2.Internal control audit report
Reviewed parts in the internal control audit report
In our opinion Hengyi Petrochemical Co. Ltd. maintained effective internal control in all material
respects in accordance with the Basic Norms for Enterprise Internal Control and relevant regulations
at December 31 2024.Disclosure of internal control audit
Disclosure
report
Date of full-text disclosure for Internal
April 24 2025
Control Audit Report
Full-text disclosure index for the Internal
CNINFO (http://www.cninfo.com.cn)
Control Audit Report
Category of opinions Standard unqualified opinion
Whether there are major defects in the
No
non-financial report
(1)Whether the accounting firm has issued an internal control audit report with
modified and qualified opinions
□Yes ?No
(2)Whether the opinions in the internal control assurance report issued by the
accounting firm are consistent with those in the self-evaluation report issued by
the BOD
?Yes □ No
XV. Self-examination and rectifications through the special campaign on
corporate governance of listed companies
Not applicable
1492024 Annual Report of Hengyi Petrochemical Co. Ltd.
Section V Environmental and Social Responsibilities
I. Major environmental issues
1.Whether the listed company and its subsidiaries are the key pollutant
discharge units announced by the environmental protection departments
?Yes □ No
2.Environmental protection related policies and industry standards
The company and its subsidiaries strictly comply with the environmental protection
laws regulations and relevant provisions of the national and local governments
including the Environmental Protection Law the Air Pollution Prevention and
Control Law the Water Pollution Prevention and Control Law the Solid Waste
Pollution Prevention and Control Law the Noise Pollution Prevention and Control
Law the Environmental Protection Tax Law the Soil Pollution Prevention and
Control Law the Regulations on Environmental Protection Management for
Construction Projects and the Regulations on Pollutant Discharge Permits. All
pollutants are discharged in strict accordance with relevant standards including the
"Emission Standard of Pollutants for Synthetic Resin Industry" (GB31752-2015) the
"Emission Standard of Air Pollutants for Boilers" (GB13271-2014) the "Emission
Standard for Odor Pollutants" (GB14554-93) the "Standard for Pollution Control on
Hazardous Waste Storage" (GB18597-2023) the "Emission Standard for Industrial
Enterprises Noise at Boundary" (GB12348-2008) and the "Standard for Pollution
Control on the Storage and Landfill of General Industrial Solid Waste"
(GB18599-2020) among others.
1502024 Annual Report of Hengyi Petrochemical Co. Ltd.
3.Environmental protection administrative permits
Valid
No. Holder Certification Certification No. Issuer
period
Hangzhou Municipal
Hengyi
1 Emission Permit 91330000765215943G001Y Bureau of Ecology 2029.10.17
Limited
and Environment
Hangzhou Municipal
Hengyi
2 Emission Permit 913301006680033406001Q Bureau of Ecology 2029.05.08
High-Tech
and Environment
Hangzhou Municipal
Hengyi
3 Emission Permit 913301097245283880001P Bureau of Ecology 2026.11.02
Polymer
and Environment
Hangzhou Municipal
Hengyi Radiation Safesty
4 ZHFZ No. A2255 Bureau of Ecology 2029.08.19
Polyme Permit
and Environment
Jiaxing Municipal
Jiaxing
5 Emission Permit 91330411MA28BLMY30001V Bureau of Ecology 2029.07.29
Yipeng
and Environment
Suzhou Municipal
Taicang
6 Emission Permit 91320585MA1P1GPBXM00V Bureau of Ecology 2028.02.29
Yifeng
and Environment
Shuangtu Hangzhou Municipal
7 New Emission Permit 91330100566050736P001Y Bureau of Ecology 2029.05.08
Materials and Environment
Shuangtu Hangzhou Municipal
Radiation Safesty
8 New ZHFZ No. A3048 Bureau of Ecology 2028.12.12
Permit
Materials and Environment
1512024 Annual Report of Hengyi Petrochemical Co. Ltd.
Valid
No. Holder Certification Certification No. Issuer
period
Quanzhou Municipal
9 Fujian Yiji Emission Permit 91350582MA31G07Q8C001V Bureau of Ecology 2026.04.07
and Environment
Suqian Municipal
10 Suqian Yida Emission Permit 91321311MA1UXUC8XJ001R Bureau of Ecology 2028.11.05
and Environment
Suqian Municipal
Radiation Safesty
11 Suqian Yida SHFZ No. 0199 Bureau of Ecology 2027.01.12
Permit
and Environment
Suqian
Suqian Municipal
Hengyuan
12 Emission Permit 91321311MA25ADT26R001V Bureau of Ecology 2028.12.27
Thermal
and Environment
Energy
Haining Jiaxin Municipal
13 Thermal Emission Permit 91330481MA29HXML34001R Bureau of Ecology 2029.06.13
Power and Environment
Jiaxin Municipal
Haining New
14 Emission Permit 91330481MA29HRX724001V Bureau of Ecology 2029.11.12
Materials
and Environment
Beilun Branch of
Zhejiang Ningbo Municipal
15 Emission Permit 91330200744973411W001W 2029.11.12
Yisheng Bureau of Ecology
and Environment
Zhejiang Provincial
Zhejiang Radiation Safesty Department of
16 ZHFZ No. B2005 2029.11.10
Yisheng Permit Ecology and
Environment
1522024 Annual Report of Hengyi Petrochemical Co. Ltd.
4.Industry emission standards and specific situations of pollutant emissions involved in production and business activities
Name of main Number
Name of Main pollutants
pollutants and of Distribution of Pollutant discharge Total Total approved Excessive
Company or and characteristic Way to discharge Emission concentration
characteristic discharge discharge ports standards implemented emissions emissions emissions
subsidiary pollutants
pollutants ports
Process waste Discharge Sewage Up to
PH 1 6.99 GB31572-2015 / /
water after treatment treatment plant standard
Process waste Discharge Sewage Up to
COD 1 10.95mg/L GB31572-2015 0.03t 25.72t
water after treatment treatment plant standard
Process waste Ammonia Discharge Sewage Up to
1 1.36mg/L GB31572-2015 0.001t 1.80t
Hengyi water nitrogen after treatment treatment plant standard
High-Tech Particulate Discharge Heat transfer Up to
Waste gas 2 1.29/1.79mg/m3 DB33/2147-2018 1.57t 3.43t
matter after treatment station standard
Discharge Heat transfer Up to
Waste gas SO2 2 7.12/10.55mg/m3 DB33/2147-2018 9.44t 40.42t
after treatment station standard
Discharge Heat transfer Up to
Waste gas NOx 2 31.21/30mg/m3 DB33/2147-2018 33.23t 60.92t
after treatment station standard
Hengyi Process waste Discharge Sewage Up to
PH 1 7.84 GB31572-2015 / /
Polymer water after treatment treatment plant standard
1532024 Annual Report of Hengyi Petrochemical Co. Ltd.
Name of main Number
Name of Main pollutants
pollutants and of Distribution of Pollutant discharge Total Total approved Excessive
Company or and characteristic Way to discharge Emission concentration
characteristic discharge discharge ports standards implemented emissions emissions emissions
subsidiary pollutants
pollutants ports
Process waste Discharge Sewage Up to
COD 1 97.39mg/L GB31572-2015 4.18t 34.50t
water after treatment treatment plant standard
Process waste Ammonia Discharge Sewage Up to
1 6.11mg/L GB31572-2015 0.3t 2.42t
water nitrogen after treatment treatment plant standard
Particulate Discharge Heat transfer Up to
Waste gas 3 6.48/5.23/2.94m3 GB13271-2014 1.49t 14.02t
matter after treatment station standard
Discharge Heat transfer Up to
Waste gas SO2 3 28.3/21.4/20.63mg/m3 GB13271-2014 9.85t 29.22t
after treatment station standard
Discharge Heat transfer Up to
Waste gas NOx 3 114.64/100.64/112.57mg/m3 GB13271-2014 31.18t 87.67t
after treatment station standard
Particulate Discharge Heat transfer Up to
Shuangtu Waste gas 2 1.77/1.38mg/m3 DB33/2147-2018 1.39t 5.55t
matter after treatment station standard
New
Discharge Heat transfer Up to
Materials Waste gas SO2 2 10.13/22.48mg/m3 DB33/2147-2018 13.68t 38.82t
after treatment station standard
1542024 Annual Report of Hengyi Petrochemical Co. Ltd.
Name of main Number
Name of Main pollutants
pollutants and of Distribution of Pollutant discharge Total Total approved Excessive
Company or and characteristic Way to discharge Emission concentration
characteristic discharge discharge ports standards implemented emissions emissions emissions
subsidiary pollutants
pollutants ports
Discharge Heat transfer Up to
Waste gas NOx 2 38.22/40.27mg/m3 DB33/2147-2018 41.68t 55.45t
after treatment station standard
Process waste Discharge Sewage Up to
PH 1 8 GB8978-1996 / /
water after treatment treatment plant standard
Process waste Discharge Sewage Up to
COD 1 35.1mg/L GB8978-1996 13.56t 21.33t
water after treatment treatment plant standard
Haining Process waste Ammonia Discharge Sewage Up to
1 0.398mg/L GB8978-1996 0.019t 2.13t
Hengyi water nitrogen after treatment treatment plant standard
Thermal Particulate Discharge Heat transfer Up to
Waste gas 1 0.606mg/m3 DB33/2147-2018 2.36t 8.83t
Power matter after treatment station standard
Discharge Heat transfer Up to
Waste gas SO2 1 16.31mg/m3 DB33/2147-2018 26.06t 61.52t
after treatment station standard
Discharge Heat transfer
Waste gas NOx 1 45.45mg/m3 DB33/2147-2018 8.18t 88.33t 超标
after treatment station
1552024 Annual Report of Hengyi Petrochemical Co. Ltd.
Name of main Number
Name of Main pollutants
pollutants and of Distribution of Pollutant discharge Total Total approved Excessive
Company or and characteristic Way to discharge Emission concentration
characteristic discharge discharge ports standards implemented emissions emissions emissions
subsidiary pollutants
pollutants ports
Process waste Discharge Sewage Up to
PH 1 7.5 GB31572-2015 / /
water after treatment treatment plant standard
Haining
Process waste Discharge Sewage Up to
Hengyi New COD 1 21.34mg/L GB31572-2015 0.062t 4.26t
water after treatment treatment plant standard
Materials
Process waste Ammonia Discharge Sewage Up to
1 0.11mg/L GB31572-2015 0.0003t 0.42t
water nitrogen after treatment treatment plant standard
Process waste Discharge Sewage Up to
PH 1 7.44 GB31572-2015 / /
water after treatment treatment plant standard
Process waste Discharge Sewage Up to
COD 1 4.20mg/L GB31572-2015 0.11t 6.03t
Jiaxing water after treatment treatment plant standard
Yipeng Process waste Ammonia Discharge Sewage Up to
1 0.11mg/L GB31572-2015 0.003t 0.80t
water nitrogen after treatment treatment plant standard
Discharge Heat transfer Up to
Waste gas NOx 2 34.96/50.27mg/m3 GB13271-2014 23.24t 48.49t
after treatment station standard
1562024 Annual Report of Hengyi Petrochemical Co. Ltd.
Name of main Number
Name of Main pollutants
pollutants and of Distribution of Pollutant discharge Total Total approved Excessive
Company or and characteristic Way to discharge Emission concentration
characteristic discharge discharge ports standards implemented emissions emissions emissions
subsidiary pollutants
pollutants ports
Process waste Discharge Sewage Up to
PH 1 8.31 GB31572-2015 / /
water after treatment treatment plant standard
Process waste Discharge Sewage Up to
COD 1 26.65mg/L GB31572-2015 1.09t 13.27t
water after treatment treatment plant standard
Process waste Ammonia Discharge Sewage Up to
1 0.63mg/L GB31572-2015 0.03t 0.46t
Taicang water nitrogen after treatment treatment plant standard
Yifeng Particulate Discharge Heat transfer Up to
Waste gas 1 4.59mg/m3 GB31572-2015 1.40t 9.72t
matter after treatment station standard
Discharge Heat transfer Up to
Waste gas SO2 1 2.03mg/m3 GB31572-2015 0.63t 3.80t
after treatment station standard
Discharge Heat transfer Up to
Waste gas NOx 1 68.05mg/m3 GB31572-2015 22.32t 26.60t
after treatment station standard
Process waste Discharge Sewage Up to
Suqian Yida PH 1 8.39 GB31572-2015 / /
water after treatment treatment plant standard
1572024 Annual Report of Hengyi Petrochemical Co. Ltd.
Name of main Number
Name of Main pollutants
pollutants and of Distribution of Pollutant discharge Total Total approved Excessive
Company or and characteristic Way to discharge Emission concentration
characteristic discharge discharge ports standards implemented emissions emissions emissions
subsidiary pollutants
pollutants ports
Process waste Discharge Sewage Up to
COD 1 22.35mg/L GB31572-2015 2.71t 7.85t
water after treatment treatment plant standard
Process waste Ammonia Discharge Sewage Up to
1 0.51mg/L GB31572-2015 0.048t 0.09t
water nitrogen after treatment treatment plant standard
Particulate Discharge Up to
Waste gas 1 Boiler Island 0.37mg/m3 DB33/2147-2018 0.42t 12.41t
Suqian matter after treatment standard
Hengyuan Discharge Up to
Waste gas SO2 1 Boiler Island 3.21mg/m3 DB33/2147-2018 2.72t 46.21t
Thermal after treatment standard
Energy Discharge Up to
Waste gas NOx 1 Boiler Island 15.76mg/m3 DB33/2147-2018 10.2t 59.33t
after treatment standard
Process waste Discharge Sewage Up to
PH 1 8.05 GB31572-2015 / /
Fujian water after treatment treatment plant standard
Yijin Process waste Discharge Sewage Up to
COD 1 15.17mg/L GB31572-2015 0.312t 3.45t
water after treatment treatment plant standard
1582024 Annual Report of Hengyi Petrochemical Co. Ltd.
Name of main Number
Name of Main pollutants
pollutants and of Distribution of Pollutant discharge Total Total approved Excessive
Company or and characteristic Way to discharge Emission concentration
characteristic discharge discharge ports standards implemented emissions emissions emissions
subsidiary pollutants
pollutants ports
Process waste Ammonia Discharge Sewage Up to
1 0.24mg/L GB31572-2015 0.004t 0.46t
water nitrogen after treatment treatment plant standard
Particulate Discharge Heat transfer Up to
Waste gas 1 8.81mg/m3 GB13271-2014 6.02t 49.5t
matter after treatment station standard
Discharge Heat transfer Up to
Waste gas SO2 1 27.24mg/m3 GB13271-2014 19.7t 143.29t
after treatment station standard
Discharge Heat transfer Up to
Waste gas NOx 1 160.16mg/m3 GB13271-2014 113.17t 179.12t
after treatment station standard
Process waste Discharge Wastewater Up to
COD 2 49.19mg/L 100mg/L 506.32t 880.08t
water after treatment station standard
Zhejiang Process waste Ammonia Discharge Wastewater Up to
2 0.16mg/L 8mg/L 1.65t 13.2t
Yisheng water nitrogen after treatment station standard
Discharge Up to
Waste gas SO2 2 Boiler Island 10.1mg/m3 35mg/m3 24.61t 333.47t
after treatment standard
1592024 Annual Report of Hengyi Petrochemical Co. Ltd.
Name of main Number
Name of Main pollutants
pollutants and of Distribution of Pollutant discharge Total Total approved Excessive
Company or and characteristic Way to discharge Emission concentration
characteristic discharge discharge ports standards implemented emissions emissions emissions
subsidiary pollutants
pollutants ports
Discharge Up to
Waste gas NOx 2 Boiler Island 17.6mg/m3 50mg/m3 64.23t 880.08t
after treatment standard
Discharge Up to
Waste gas Particulates 2 Boiler Island 3.28mg/m3 10mg/m3 28.85t 110.46t
after treatment standard
1602024 Annual Report of Hengyi Petrochemical Co. Ltd.
5.Treatment of pollutants
(1) Wastewater Treatment
The principle of "separation of clean water and sewage separation of stormwater and
sewage and separation of industrial and domestic sewage" is implemented. A
comprehensive wastewater collection system has been established within the plant
area with measures for corrosion prevention leak prevention and seepage control.Polyester production wastewater is pretreated via a stripping unit and then combined
with wastewater from the spinning workshop and domestic sewage for treatment at
the sewage treatment station. The sewage treatment station adopts a "pre-treatment +
anaerobic + aerobic secondary biological treatment" process. After treatment part of
the water is reused through a reclaimed water system while the remaining treated
wastewater is discharged into the sewage network after meeting the relevant standards
in the Discharge Standard of Pollutants for Synthetic Resin Industry
(GB31752-2015).
(2)Exhaust Gas Treatment
The principle of classified management is applied to exhaust gas treatment focusing
on source control. Various control measures proposed in the Environmental Impact
Assessment (EIA) are implemented to reduce the generation of exhaust gases and
strictly control and minimize fugitive emissions. PTA (Purified Terephthalic Acid)
feed dust is treated with a bag filter before discharge. Polyester exhaust gas is directed
into the thermal oil furnace for incineration before being discharged. Spinning exhaust
gas is treated with an oil fume purifier before discharge. Flue gas from the coal-water
slurry boiler undergoes denitrification dust removal and desulfurization before being
discharged through the chimney.The organized emissions of dust non-methane
hydrocarbons and acetaldehyde comply with the relevant standards in the Discharge
Standard of Pollutants for Synthetic Resin Industry (GB31752-2015). Boiler flue gas
emissions in Zhejiang Province comply with the local standards Emission Standard
of Air Pollutants for Coal-Fired Power Plants (DB33/2147-2018) and Emission
Standard of Air Pollutants for Boilers (DB33/1415-2025). In other regions emission
1612024 Annual Report of Hengyi Petrochemical Co. Ltd.
standards follow the national Emission Standard of Air Pollutants for Boilers
(GB13271-2014). The emission of malodorous pollutants complies with the relevant
standards in the Emission Standard for Odor Pollutants (GB14554-93).
(3)General and Hazardous Solid Waste
TreatmentIn accordance with the principles of "resource utilization reduction and
harmlessness" a ledger system has been established and a temporary waste storage
facility has been set up. Hazardous and general solid waste are collected stored and
disposed of separately to facilitate the comprehensive utilization of resources.Hazardous waste such as waste oil agents is entrusted to qualified units with the
corresponding hazardous waste treatment capabilities for disposal. The transfer and
approval procedures for hazardous waste are handled in accordance with relevant
regulations strictly implementing the hazardous waste transfer manifest system. The
temporary storage of hazardous waste strictly adheres to the relevant provisions of the
Standard for Pollution Control on Hazardous Waste Storage (GB18597-2023).General solid waste management complies with the Standard for Pollution Control on
the Storage and Landfill of General Industrial Solid Waste (GB18599-2020).
6.Environmental emergency response plan
(1)The Emergency Response Plan for Environmental Incidents of Zhejiang Hengyi
High-Tech Materials Co. Ltd. was filed with the local environmental protection
department in March 2025.
(2)The Emergency Response Plan for Environmental Incidents of Zhejiang Hengyi
Polymer Co. Ltd. was filed with the local environmental protection department in
August 2024.
(3)The Emergency Response Plan for Environmental Incidents of Zhejiang Shuangtu
New Materials Co. Ltd. was filed with the local environmental protection department
in October 2022.
(4)The Emergency Response Plan for Environmental Incidents of Haining Hengyi
Thermal Power Co. Ltd. was filed with the local environmental protection
1622024 Annual Report of Hengyi Petrochemical Co. Ltd.
department in July 2024.
(5)The Emergency Response Plan for Environmental Incidents of Haining Hengyi
New Materials Co. Ltd. was filed with the local environmental protection department
in July 2024.
(6)The Emergency Response Plan for Environmental Incidents of Jiaxing Yipeng
Chemical Fiber Co. Ltd. was filed with the local environmental protection
department in November 2023.
(7)The Emergency Response Plan for Environmental Incidents of Suqian Yida New
Materials Co. Ltd. was filed with the local environmental protection department in
August 2023.
(8)The Emergency Response Plan for Environmental Incidents of Suqian Hengyuan
Thermal Energy Co. Ltd. was filed with the local environmental protection
department in February 2023.
(9)The Emergency Response Plan for Environmental Incidents of Fujian Yijin
Chemical Fiber Co. Ltd. was filed with the local environmental protection
department in January 2025.
(10)The Emergency Response Plan for Environmental Incidents of Zhejiang Hengyi
Petrochemical Co. Ltd. was filed with the local environmental protection department
in June 2022.
(11)The Emergency Response Plan for Environmental Incidents of Zhejiang Yisheng
Petrochemical Co. Ltd. was revised reviewed and filed with the local environmental
protection department in September 2023.
7.Environmental self-monitoring program
The company and its subsidiaries strictly comply with national and local
environmental protection laws regulations and related provisions. They have
established an environmental self-monitoring plan to ensure that all pollutants are
discharged and disposed of in strict accordance with the requirements of the laws and
regulations. The self-monitoring plan has been made public in the Pollutant Source
Monitoring Data Management System. The company meticulously conducts pollutant
1632024 Annual Report of Hengyi Petrochemical Co. Ltd.
source monitoring in strict adherence to the monitoring plan to ensure that all
pollutants meet the required standards set forth by laws and regulations. Additionally
the company entrusts qualified third-party monitoring agencies to carry out regular
monitoring.
8.Investments in environmental governance and protection and payment of
environmental protection taxes
Enterprises are not only economic entities striving to maximize profits but also key
drivers of economic wealth accumulation social progress and environmental
sustainability. The company conscientiously implements the ecological and
environmental requirements of the national and local governments earnestly practices
the development philosophy of "lucid waters and lush mountains are invaluable
assets" focuses on pollution prevention and control ensures compliance with
emission standards as a foundation actively responds to the "Battle for Blue Skies"
vigorously promotes clean transformation and continues efforts in air pollution
control achieving positive progress and results while effectively improving the
ecological environment.In 2024 the company and its subsidiaries collectively invested approximately RMB
400 million in environmental protection with an accrued environmental protection
tax of RMB 1.88 million. Among these: Zhejiang Hengyi Polymer Co. Ltd. invested
approximately RMB 80 million to upgrade its coal-fired thermal oil boiler reducing
pollutant emission standards and pollutant discharge amounts. Zhejiang Hengyi
Petrochemical Co. Ltd. invested approximately RMB 500000 to update its oil fume
purifiers. Zhejiang Hengyi High-Tech Materials Co. Ltd. invested approximately
2.21 million to implement an integrated upgrade of the oil fume purifiers in the
spinning AB workshop improving VOCs treatment efficiency. Haining Hengyi New
Materials Co. Ltd. invested approximately RMB 800000 to upgrade the SCR system
of its boiler flue gas denitrification facilities enhancing denitrification efficiency.Jiaxing Yipeng Chemical Fiber Co. Ltd. invested approximately RMB 640000
1642024 Annual Report of Hengyi Petrochemical Co. Ltd.
to .standardize the transformation of its wastewater treatment plant's backup exhaust
gas processing facilities and spinning exhaust gas detection ports. Suqian Yida New
Materials Co. Ltd. invested approximately RMB 1.7 million to upgrade the
first-phase VOC treatment facilities and sewage lifting tanks reducing exhaust gas
and wastewater emissions and minimizing abnormal data occurrences. Fujian Yijin
Chemical Fiber Co. Ltd. invested approximately RMB 5.66 million to upgrade the
denitrification desulfurization and dust removal facilities for its coal-fired thermal oil
boiler and flue gas lowering pollutant emission standards and reducing pollutant
discharge amounts.
9.Measures taken to reduce carbon emissions during the reporting period and
their effects
Improving coal quality to make chemical raw materials lighter; implementing a series
of measures such as upgrading to energy-saving lamps merging the use of air
compressors and updating equipment to reduce the company's electricity
consumption. Actively utilizing solar thermal power generation the company has
established a solar thermal and photovoltaic power generation experimental base on
the rooftops of its factory buildings. Employees are encouraged to use new energy
vehicles as transportation and new non-road mobile machinery equipment powered
by new energy has been added on-site. The company strengthens ecological
civilization education among employees integrating the green and low-carbon
concept organically into daily life and production. It actively promotes and posts
advertisements conducts thematic promotional activities such as Environment Day
and Low Carbon Day for all employees and enhances their green and low-carbon
awareness.
1652024 Annual Report of Hengyi Petrochemical Co. Ltd.
10.Administrative punishment for environmental issues during the reporting period
Name of Impacts on the
Company production and Rectification measures of the
Reasons for punishment Violations Penalty results
or operation of listed Company
subsidiary companies
On May 23rd it was discovered that without the approval of the
Violated Article 22 Paragraph It has not affected The company has obtained the
environmental impact assessment documents the construction of two new
Hengyi 1 of the Environmental Impact Fine of RMB the company's environmental impact
24.5MW natural gas furnaces and two 52.5MW coal-fired boilers began
High-Tech Assessment Law of the People's 500100 production and assessment approval for the
in April 2022 was completed in September and put into operation in
Republic of China. operations. project.December.On May 23 it was discovered during an inspection that the environmental
Violation of the first paragraph
impact assessment documents had not been submitted for approval.of Article 19 of the It has not affected The company has completed
Construction of two new 24.5MW natural gas furnaces and two 52.5MW
Hengyi "Regulations on the Fine of RMB the company's the environmental protection
coal-fired boilers began in April 2022 was completed in September and
High-Tech Administration of 376000 production and facilities completion
put into operation in December. The environmental protection facilities
Environmental Protection for operations. acceptance for the project.completion acceptance process was not conducted resulting in the
Construction Projects".operation of a construction project without the acceptance of
1662024 Annual Report of Hengyi Petrochemical Co. Ltd.
Name of Impacts on the
Company production and Rectification measures of the
Reasons for punishment Violations Penalty results
or operation of listed Company
subsidiary companies
environmental protection facilities.On May 23rd it was discovered during an inspection that the
Violated Article 22 Paragraph It has not affected The company has obtained the
Shuangtu environmental impact assessment documents had not been approved. The
1 of the Environmental Impact Fine of RMB the company's environmental impact
New construction of three new 70t/h (49MW) coal-fired boilers began in
Assessment Law of the People's 560900 production and assessment approval for the
Material March 2022 was completed in August and they were put into use in
Republic of China. operations. project.December.On May 23 it was discovered that without approval of the environmental
Violation of the first paragraph
impact assessment documents the newly constructed three 70t/h (49MW)
of Article 19 of the It has not affected The company has completed
Shuangtu coal-fired boilers began construction in March 2022 were completed in
"Regulations on the Fine of RMB the company's the environmental protection
New August and put into use in December. The environmental protection
Administration of 370600 production and facilities completion
Material facility completion acceptance was not carried out indicating the use of a
Environmental Protection for operations. acceptance for the project.construction project with environmental protection facilities that have not
Construction Projects
been inspected and accepted.
1672024 Annual Report of Hengyi Petrochemical Co. Ltd.
Name of Impacts on the
Company production and Rectification measures of the
Reasons for punishment Violations Penalty results
or operation of listed Company
subsidiary companies
Violation of the first paragraph
It has not affected
On September 19 it was discovered that self-monitoring of antimony in of Article 19 of the The company will conduct
Suqian the company's
wastewater for December 2023 was not conducted in accordance with the "Regulations on the Fine of 20000 self-inspection for antimony
Yida production and
stipulations of the emission permit. Administration of Pollutant every month in the future.operations.Discharge Permits
This violates the provisions of It has not affected the The company immediately
Fire sprinkler pump No. 2 is malfunctioning and cannot be started
Jiaxing Article 16 Paragraph 1 Item 2 Fine of RMB company's repaired the remote start
remotely. The unit's fire protection facilities were not maintained in good
Yipeng of the Fire Protection Law of 15000 production and function of the fire pump and
and effective working condition
the People's Republic of China operations. passed the inspection
Violated the provisions of It has not affected The company immediately
Goods were placed on the fire truck passage between the stereoscopic
Jiaxing Article 28 of the Fire Fine of RMB the company's cleared the on-site goods to
warehouse and the Textile Workshop No. 2 preventing the fire truck from
Yipeng Protection Law of the People's 35000 production and ensure the fire access remains
passing. The unit has occupied the fire truck passage
Republic of China operations. unobstructed
1682024 Annual Report of Hengyi Petrochemical Co. Ltd.
Name of Impacts on the
Company production and Rectification measures of the
Reasons for punishment Violations Penalty results
or operation of listed Company
subsidiary companies
The north side of the first floor of Building A in the Phase II Spinning
Project was arbitrarily changed from a production workshop to a raw The company immediately
Violated the provisions of It has not affected
material and finished goods warehouse covering an area of over 1000 cleared the goods in the
Jiaxing Article 16 Paragraph 1 Item 2 Fine of RMB the company's
square meters without installing smoke exhaust facilities as required. workshop and installed
Yipeng of the "Fire Protection Law of 35000 production and
Additionally the conveyor corridor between the automated storage system automatic fire extinguishing
the People's Republic of China operations.and Spinning Workshop 2 lacked an automatic fire suppression system facilities in the corridor
and the fire protection facilities were not up to standard.* The exits of two Class C warehouses are blocked by stacked items； * Clear debris from the
* The diesel unloading area does not have static elimination Violated Article 42 Paragraph It has not affected warehouse exits；* Install
Jiaxing facilities and the static grounding clamps are malfunctioning；* The 2 and Article 41 Paragraph 2 the company's additional static electricity
Fine of 180000
Yipeng area where the fuel dispensers are located lacks ventilation measures of the Work Safety Law of the production and elimination facilities；
and the surrounding electrical equipment is not explosion-proof. People's Republic of China operations. * Install additional static
Additionally there are no combustible gas concentration alarm electricity elimination
1692024 Annual Report of Hengyi Petrochemical Co. Ltd.
Name of Impacts on the
Company production and Rectification measures of the
Reasons for punishment Violations Penalty results
or operation of listed Company
subsidiary companies
devices or static elimination devices installed；* The diesel facilities；* Engage a third
unloading area refueling area and storage tanks have not undergone party to conduct a safety
formal design and safety evaluation；* There is an office inside the assessment；
warehouse but it does not have a direct safety exit leading outdoors.； * Decommission the
* The nitrogen storage tank manhole in the air separation storage warehouse office；* Improve
tank area lacks proper confined space hard isolation measures during protective measures for
maintenance confined spaces
The company has replaced the
Violations of Articles 18 41 It has not affected boiler involved in the accident
In the '3·22' thermal oil boiler fire incident there were violations of
Jiaxing and 42 of the Special the company's enhanced training on safety
Articles 18 41 and 42 of the Special Equipment Safety Law of the Fine of 150000
Yipeng Equipment Safety Law of the production and operating procedures for the
People's Republic of China
People's Republic of China operations. position and revised the
emergency response plan for
1702024 Annual Report of Hengyi Petrochemical Co. Ltd.
Name of Impacts on the
Company production and Rectification measures of the
Reasons for punishment Violations Penalty results
or operation of listed Company
subsidiary companies
accidents
A violation of Article 17 Item
A total of 13 individuals were not arranged for a follow-up occupational 3 of the "Administrative It has not affected The company has arranged for
Hengyi health examination based on the circumstances outlined in Occupational Measures for Supervision and the company's 13 people to undergo
Fine of 27000
Limited Health Examination Certificate No. (Xiaokai) Zhi Jian Zi No. Management of Occupational production and follow-up occupational health
(2022-0072) and No. (Xiaokai) Zhi Jian Zi No. (2022-0073) Health Monitoring by operations. examinations
Employers
11.Other environmental information that shall be made public
Environmental information that shall be made public had been disclosed as required.
1712024 Annual Report of Hengyi Petrochemical Co. Ltd.
12.Other environmental protection information
The company and its subsidiaries place a high priority on environmental protection
and make significant environmental decisions on a regular or irregular basis. The
company has established a Health Safety and Environment (HSE) Management
Committee to comprehensively oversee and manage HSE work. Each subsidiary has a
dedicated environmental protection department responsible for daily comprehensive
management and supervision. The company has established a strict monitoring system
and has commissioned environmental management monitoring departments to
conduct monitoring of water air noise and waste throughout the entire plant to keep
track of pollution dynamics.The Company shall comply with the disclosure requirements for petrochemical
industry specified in Guidelines No. 3 for Self-Regulation of Listed Companies of
Shenzhen Stock Exchange - Industry Information Disclosure
13.Relevant situations of environmental accidents in listed companies
Not applicable
II..Social responsibility
Please see the Social Environmental Governance (ESG) report of 2024 for details.The Company shall comply with the disclosure requirements for petrochemical
industry specified in Guidelines No. 3 for Self-Regulation of Listed Companies of
Shenzhen Stock Exchange - Industry Information Disclosure
In 2024 the company maintained a stable safety production situation with no major
safety production accidents and zero new cases of occupational diseases. The
company consistently prioritizes safety as the foremost element of development fully
fulfills its primary responsibility for safety management and rigorously manages
safety across all aspects of operations.Actively Enforcing Safety Responsibilities: At the beginning of the year the company
signed the "Safety and Environmental Protection Production Target Responsibility
Agreement" with each subsidiary and relevant departments clarifying safety
1722024 Annual Report of Hengyi Petrochemical Co. Ltd.
production responsibilities strengthening safety awareness and fostering a positive
structure where all levels actively promote and implement safety measures.Promoting Subsidiary Safety Standardization and Dual-Prevention Mechanism
Construction: The company actively advanced the development of safety
standardization systems and dual-prevention mechanisms within its subsidiaries. In
the road transportation sector safety production standardization reached Level 1
standards the hazardous chemical production sector maintained Level 2 standards
and 80% of chemical fiber manufacturing enterprises achieved Level 3 safety
production standardization. Other subsidiaries are progressively creating and
improving their systems.Comprehensive Safety Inspection and Rectification: The company conducted
extensive safety production inspections and special checks on the implementation of
the all-employee safety production responsibility system. Methods such as
comprehensive inspections external expert reviews and on-site inspections were
employed to enhance the depth and professionalism of safety supervision. The annual
hazard rectification completion rate reached 100%.Increasing Investment in Safety Production: The company actively adopted new
technologies processes and equipment to continuously improve safety conditions and
elevate intrinsic safety levels. In total the company invested RMB 169 million in
safety-related expenses throughout the year.Emphasizing Safety Education and Training: The company prioritized increasing
safety awareness among all employees. Its safety training system covered key
personnel safety production management staff specialized operations and equipment
operators other employees and contractors/subcontractors and labor workers.Throughout the year 37497 person-times of safety education and training were
conducted achieving a 100% completion and qualification rate ensuring
1732024 Annual Report of Hengyi Petrochemical Co. Ltd.
comprehensive coverage with a focus on key areas.Building a Dual-Prevention Safety Mechanism: The company strengthened its safety
production defense line by constructing a robust dual-prevention mechanism.Throughout the year subsidiaries underwent 47 routine safety inspections by
supervising authorities with no violations penalties or major safety hazards
identified.III.Consolidating and Expanding Poverty Alleviation Achievements and Rural
Revitalization
The company consistently adheres to the philosophy of "industrial service to the
nation" integrating philanthropy into its corporate DNA. With a sense of
responsibility it practices great love and takes action for good. By actively
participating in various public welfare activities such as volunteer service educational
donations community building and environmental protection the company not only
demonstrates the social value of a modern enterprise but also contributes to social
progress collaborating with partners to create a beautiful life together.In 2024 the company and its controlling shareholder Hengyi Group donated a total
of RMB 28.77 million. Some details are as follows:
(1)Education is the cornerstone of national revitalization and social progress the core
carrier of knowledge innovation and talent cultivation and a long-term project to
promote national prosperity and achieve people's happiness.
1)The company actively responded to the call for educational philanthropy in the new
era donating RMB 25300 during the reporting period to provide scholarships for the
"Dream Building Class" of the 2021 cohort at Qinzhou No. 2 High School. The
"Dream Building Class" project is an "educational precision poverty alleviation"
initiative strongly supported by the Guangxi Zhuang Autonomous Region Education
Department targeting academically outstanding impoverished high school students.The 2021 "Dream Building Class" was jointly funded by the Guangxi National
1742024 Annual Report of Hengyi Petrochemical Co. Ltd.
Education Development Foundation and the company. Since the initiation of support
the company has donated a total of RMB 423300 to cover tuition living expenses
daily purchases of learning and sports supplies and special scholarships. In 2024 this
class delivered impressive results in the college entrance exam: all 50 students from
underprivileged backgrounds were admitted to undergraduate institutions with 12
entering "985 Double First-Class Universities" 17 entering "211 Universities" and 48
exceeding the special control line.
2)Hengyi Group signed a cooperation agreement with Donghua University
committing RMB 10 million during the cooperation period to support the university's
scientific research talent cultivation and discipline construction with a donation of
RMB 1 million already executed in 2024.
3)In 2024 the company donated RMB 10 million to the Zhejiang University
Education Foundation with the funds managed under the "Zhejiang University
Education Foundation Hengyi Excellence Development Fund" primarily supporting
Zhejiang University's talent recruitment and "Double First-Class" construction.
4)Hengyi Group signed the "Hengyi Education Reward Fund Donation Agreement"
with the Xiaoshan District People's Education Foundation establishing a RMB 20
million principal-named fund aimed at rewarding top innovative talent cultivation and
outstanding teacher awards with a donation of RMB 1 million already executed in
2024.
(2)To assist the development of the China Chemical Fiber Industry Association and
promote industry progress Hengyi Group donated RMB 800000 to the China
Chemical Fiber Industry Association Hengyi Fund in 2024.
(3)To support the development of charity in Beilun District Ningbo City and
contribute to the modernization of the urban fire control system and governance
capacity the company donated RMB 30000 to the "Safety Guardian" fire protection
charity fund in Qijiashan Street.
1752024 Annual Report of Hengyi Petrochemical Co. Ltd.
(4)Since 2016 the company has established environmental public welfare funds and
new era civilization practice charity funds. In 2024 the company donated 300000
yuan primarily for environmental and charity projects in Beilun District Ningbo City
with cumulative donations reaching RMB 1.9 million .
(5)The company's development is inseparable from neighborhood support. To foster
harmonious relationships and community cohesion the company donated RMB
146000 to sponsor cultural activities in streets surrounding communities and schools
actively engaging in public welfare.
(6)To support the growth and development of local talent in Brunei foster positive
interactions strengthen connections between Hengyi Brunei and the community and
protect local biodiversity and natural environment Hengyi Brunei launched several
projects like "Towards the Future" "Hengyi Care" and "One Earth" contributing to
Brunei's Vision 2035.
1)The "Towards the Future" project focuses on supporting the cultivation and
development of local talent promoting youth entrepreneurship and empowering
Hengyi Brunei employees. It includes joint scholarships student awards and book
scholarship sponsorship with actual expenditures of 1425500 USD in 2024.
2)The "Hengyi Care" project sponsors community and national activities organizes
donation activities to help impoverished families and orphans striving to promote
unity care progress and inclusiveness within the community and support national
and community development with actual expenditures of 100400 USD in 2024.
3)The "One Earth" project aims to protect and maintain Brunei's biodiversity and
natural environment such as providing clean energy to local communities especially
in remote areas lacking reliable energy supply or public facilities (like parks and
schools) sponsoring and participating in activities themed around environmental
protection sustainable development and green economy and collaborating with
environmental NGOs to restore areas affected by exploration and mining activities
focusing on biodiversity restoration with actual expenditures of 17800 USD in 2024.
1762024 Annual Report of Hengyi Petrochemical Co. Ltd.
Section VI Important Matters
I.Fulfillment of commitments
1.Commitments that the Company’s actual controllers shareholders related parties acquirers and the Company and other relevant
parties have fulfilled during the reporting period and that have not been fulfilled as of the end of the reporting period
Commitment Commitment Commitment
Commitment item Promising party Commitment content Performance
type time period
Up to now Hengyi
Commitments made Qiu Jianlin the Group and the
Commitment He ensures the independence of Hengyi Group and its actual
in the acquisition actual controller Long-term actual controller
on independent controller's affiliates and the Company in terms of personnel assets April 29 2010
report equity change of Hengyi Group effective Qiu Jianlin have not
operation finance organization and business in the commitment
report and the Company violated this
commitment.
1772024 Annual Report of Hengyi Petrochemical Co. Ltd.
Commitment Commitment Commitment
Commitment item Promising party Commitment content Performance
type time period
Up to now Hengyi
Commitment
Commitments made Qiu Jianlin the Group and the
Regarding
in the acquisition actual controller Long-term actual controller
Competition Promise not to compete with the Company in the same industry. April 29 2010
report equity change of Hengyi Group effective Qiu Jianlin have not
Within the
report and the Company violated this
Same Industry
commitment.Up to now Hengyi
Commitments made Qiu Jianlin the Commitment Group and the
in the acquisition actual controller on related- Long-term actual controller
Commit to regulate related-party transactions with the Company. April 29 2010
report equity change of Hengyi Group party effective Qiu Jianlin have not
report and the Company transactions violated this
commitment.
1782024 Annual Report of Hengyi Petrochemical Co. Ltd.
Commitment Commitment Commitment
Commitment item Promising party Commitment content Performance
type time period
Up to now Hengyi
Commitments made Qiu Jianlin the Group and the
Commitment
in the acquisition actual controller Long-term actual controller
on the use of It is promised that not to take yo the Company’s funds April 29 2010
report equity change of Hengyi Group effective Qiu Jianlin have not
funds
report and the Company violated this
commitment.
1792024 Annual Report of Hengyi Petrochemical Co. Ltd.
Commitment Commitment Commitment
Commitment item Promising party Commitment content Performance
type time period
It is promised that the equity adjustment of Zhejiang Yisheng and
Yisheng Investment will not increase the actual or potential tax The commitment
burden of Hengyi Petrochemical or related subsidiaries. On the remains valid and is
Commitments made premise of the completion of this major asset reorganization if still in the process
in the acquisition Hengyi Group Other Hengyi Petrochemical or its subsidiaries are required to pay taxes or Long-term of fulfillment. Up
April29 2010
report equity change and other parties commitments be demanded by tax authorities for the above-mentioned equity effective to now Hengyi
report adjustment due to the adjustment of national tax policy or other Group did not go
reasons the reorganization party promised to compensate the against this
Company for any losses incurred by it in cash and full amount commitment.timely.
1802024 Annual Report of Hengyi Petrochemical Co. Ltd.
Commitment Commitment Commitment
Commitment item Promising party Commitment content Performance
type time period
It is promised that will not overreach in intervening in the
company's operational management activities and will not encroach
on the company’s interests.From the date of this commitment until
Commitment the completion of the public issuance of A-share convertible
on Measures to corporate bonds by the company if the China Securities Regulatory
Compensate for Commission (CSRC) issues new regulatory requirements regarding
Up to now Hengyi
the Dilution of measures to compensate returns and their commitments and if the
Commitments Made Qiu Jianlin the The duration of Group and the
Immediate above commitments do not meet such requirements [we/I] hereby
During Initial Public actual controller "Hengyi actual controller
Returns commit to issue supplementary commitments in accordance with April 25 2019
Offerings or of Hengyi Group Convertible Qiu Jianlin have not
Regarding the the latest regulations of the CSRC at that time.As one of the
Refinancing and the Company Bonds" violated this
Public Issuance responsible parties for the measures to compensate returns if [we/I]
commitment.of Convertible violate the above commitments or refuse to fulfill them [we/I]
Corporate agree that the China Securities Regulatory Commission and the
Bonds Shenzhen Stock Exchange among other securities regulatory
bodies may impose penalties or take relevant regulatory measures
against [us/me] in accordance with their established or issued
regulations and rules.
1812024 Annual Report of Hengyi Petrochemical Co. Ltd.
Commitment Commitment Commitment
Commitment item Promising party Commitment content Performance
type time period
Translation:I hereby commit not to transfer benefits to other entities
or individuals without compensation or under unfair conditions nor
to adopt other methods that harm the interests of the company.I
hereby commit to restraining my official consumption behavior.I
hereby commit not to use the company's assets for investment or
consumption activities unrelated to the performance of my duties.I
hereby commit to fully supporting the Board of Directors or the
Remuneration and Assessment Committee in formulating the
remuneration system ensuring that it is linked to the
Commitment implementation of the company's return-filling measures and to
on Measures to voting in favor of relevant proposals during deliberations (if I have
Compensate voting rights).I hereby commit that when promoting the company's
As of now the
for the Dilution equity incentives (if any) the conditions for exercising equity
Commitments Made The duration of directors and senior
of Immediate incentives will be linked to the implementation of the company's
During Initial Public Directors senior "Hengyi management have
Returns return-filling measures.From the date this commitment is issued April 25 2019
Offerings or managers Convertible not violated the
Regarding the until the completion of the company's current public issuance of
Refinancing Bonds" matters stipulated
Public Issuance A-share convertible corporate bonds if the China Securities
182 in this commitment.
of Convertible Regulatory Commission (CSRC) introduces new regulatory
Corporate requirements regarding return-filling measures and related
Bonds commitments and if the above commitments no longer satisfy such2024 Annual Report of Hengyi Petrochemical Co. Ltd.Commitment Commitment Commitment
Commitment item Promising party Commitment content Performance
type time period
Not to overstep authority to interfere with the company's operational
and management activities nor to encroach upon the company's
interests;To earnestly fulfill the company's formulated measures for
Commitment
compensating returns and this commitment. In the event of any
on Measures to
violation of this commitment or refusal to fulfill it resulting in
Compensate
losses to the company or its shareholders to agree to bear As of now Hengyi
for the Dilution
Commitments Made Qiu Jianlin the corresponding legal responsibilities in accordance with laws The duration of Group and its actual
of Immediate
During Initial Public actual controller regulations and relevant provisions of securities regulatory "Hengyi controller Qiu
Returns April 31 2021
Offerings or of Hengyi Group authorities;From the date this commitment letter is issued until the Convertible Jianlin have not
Regarding the
Refinancing and the Company completion of the company's public issuance of convertible Bonds 2" breached any
Public Issuance
corporate bonds if the China Securities Regulatory Commission commitments.of Convertible
(CSRC) introduces new regulatory requirements regarding
Corporate
measures for compensating returns and related commitments and
Bonds
the above commitments fail to meet such requirements the
company/I hereby undertake to issue a supplementary commitment
in accordance with the latest regulations of the CSRC at that time.
1832024 Annual Report of Hengyi Petrochemical Co. Ltd.
Commitment Commitment Commitment
Commitment item Promising party Commitment content Performance
type time period
I pledge not to transfer benefits to other units or individuals
gratuitously or under unfair conditions nor will I employ other
methods to harm the company's interests.I pledge to restrain my
official consumption behavior.I pledge not to use company assets
for investments or consumption activities unrelated to the
performance of my duties.I pledge that the remuneration system
formulated by the Board of Directors or the Compensation and
Assessment Committee will be linked to the execution of the
Commitment
company's measures for compensating returns.If the company
on Measures to
subsequently introduces an equity incentive policy I pledge that the
Compensate
exercise conditions for equity incentives will be linked to the As of now Hengyi
for the Dilution
Commitments Made execution of the company's measures for compensating returns.I The duration of Group and its actual
of Immediate
During Initial Public Directors senior will earnestly fulfill the company's formulated measures for "Hengyi controller Qiu
Returns April 31 2021
Offerings or management compensating returns and this commitment. In the event of any Convertible Jianlin have not
Regarding the
Refinancing violation of this commitment or refusal to fulfill it resulting in Bonds 2" breached any
Public Issuance
losses to the company or its shareholders I agree to bear commitments.of Convertible
corresponding legal responsibilities in accordance with laws
Corporate 184
regulations and relevant provisions of securities regulatory
Bonds
authorities.From the date this commitment letter is issued until the
completion of the company's public issuance of convertible2024 Annual Report of Hengyi Petrochemical Co. Ltd.Commitment Commitment Commitment
Commitment item Promising party Commitment content Performance
type time period
It promises that it will not compete in the same industry with the
production and sales of polyester fiber products which is one of the
main businesses of listed companies. Supplementary commitment: Up to now Hainan
Hainan Shanghai Hengyi Polyester Fiber Co. Ltd. will permanently shut Hengshengyuan
Other commitments Hengshengyuan down its existing production facilities no longer participate in or add International
Commitment
made to the International any areas that may compete with the Company's industry in the Long-term Tourism
on horizontal March 21 2016
Company's minority Tourism same industry since the 100% equity transfer transaction of effective Development Co.competition
shareholders Development Co. Shanghai Hengyi Polyester Fiber Co. Ltd. is approved at the Ltd. has not
Ltd. Company’s 2016 fourth extraordinary general meeting of violated this
shareholders; Besides Shanghai Hengyi Polyester Fiber Co. Ltd. commitment.split and disposes of its existing assets to completely solve this
potential horizontal competition problem
1852024 Annual Report of Hengyi Petrochemical Co. Ltd.
Commitment Commitment Commitment
Commitment item Promising party Commitment content Performance
type time period
The Company commits not to reduce its holdings of the Company's
Letter of As of now Hengyi
Hengyi Group shares during the share acquisition period and the statutory period
Commitment Group and Hengyi
and its concerted and guarantees to complete the share acquisition plan within the December 25 Long-term
Other commitments Regarding the Investment have
actor Hengyi specified implementation period. After the completion of this share 2024 effective
Share Increase not breached this
Investment acquisition plan the acquired shares will be locked in accordance
Plan commitment.with relevant laws and regulations.Whether the promise is fulfilled on time Yes
If the commitment is not fulfilled within the time limit the specific reasons for the unfulfilled commitment and the next work plan shall be explained in detail None
1862024 Annual Report of Hengyi Petrochemical Co. Ltd.
2.There is a profit forecast for the Company’s assets or projects and it is still in
the profit forecast period at the reporting period the Company provides an
explanation of the reason for the assets or projects reaching the original profit
forecast
□Applicable ?Not applicable
II.The non-operating capital occupation of the listed company by the controlling
shareholder and its related parties
During the reporting period of the Company there was no non-operating capital
occupation of the listed company by the controlling shareholder and its related parties.III.External Guarantees Against the Rules and Regulations
There was no external guarantee provided by the Company which was against rules
and regulations during the reporting period.IV.Explanation of the BOD on the latest “Non-standard Audit Report ”
□Applicable ?Not applicable
V.Description of the BOD the BOS and the independent directors (if any) on
the “Non- standard Audit Report” for the current reporting period issued by the
accounting firm
□Applicable ?Not applicable
VI.Description of changes in accounting policies accounting estimates or
corrections of material accounting errors compared to the financial report of the
previous year
During the reporting period there were no changes in accounting policies accounting
estimates or corrections of significant accounting errors.
1872024 Annual Report of Hengyi Petrochemical Co. Ltd.
VII. Description of changes in the scope of the consolidated financial statements
compared to the financial report of the previous year
The total number of subsidiaries included in the scope of consolidation in fiscal year
2024 was 54 an increase of 4 subsidiaries and a decrease of 2 subsidiaries compared
with the previous year. For details please refer to "VI. Interests in Other Entities" in
"Section X. Financial Reporting".VIII.Appointment and dismissal of the accounting firms
1.Currently employed accounting firm
Zhongxinghua Certified Public
Name of the domestic accounting firm
Accountants LLP
Remuneration of domestic accounting firms (RMB 10000) 325
Consecutive years of audit services of domestic accounting
6
firms
Name of CPA in domestic accounting firms Zhang Liming Yin Yanning
Consecutive years of audit services provided by the domestic
accounting firm's CPAs
Name of overseas accounting firms (if any) None
Remuneration of overseas accounting firms (RMB 10000) (if
0
any)
Consecutive years of audit services of overseas accounting firms
None
(if any)
Name of the certified public accountant of the overseas
None
accounting firms (if any) (if any)
Consecutive years of CPA audit services of overseas accounting
None
firms (if any)
1882024 Annual Report of Hengyi Petrochemical Co. Ltd.
2.Whether to reappoint an accounting firm in current period
□Yes ?No
3.Employment of internal control auditing accounting firms financial
consultants or sponsors
During the reporting period the Company hired Zhongxinghua Certified Public
Accountants LLP as the internal control audit agency with an internal control audit
fee of RMB 550000.IX.Delisting after the disclosure of annual report
□Applicable ?Not applicable
X.Matters Related to bankruptcy and reorganization
During the reporting period the Company did not have any bankruptcy and
reorganization related matters.XI.Major litigations and arbitrations
The Company had no major litigation or arbitration matters during the reporting
period.XII.Penalties and rectifications
There were no penalties and rectifications during the reporting period of the
Company.XIII.Integrity of the Company and its controlling shareholders and the actual
controller
Applicable ?Not applicable
1892024 Annual Report of Hengyi Petrochemical Co. Ltd.
XIV.Significant related-party transactions
1.Related-party transactions related to daily operations
Proportion s Available
Pricing Whether it Settlement
Price of Amount of in the Approved market
Related Type of Contents of principle for exceeds method of
related- related- party amount of transaction prices for
Related party party related- party related- party related- the related-
party transactions similar limit (RMB similar
relations transactions transactions party approve d party
transactions (RMB 10000) transactions 10000) transaction
transactions quota transactions
(%) s
Procurement Market Market Market
PTA 38152.38 1.22% 80300 No Bill/cash
of goods price price price
Yisheng Associated Market Market Market
PIA 29152.83 16.52% 29500 No Bill/cash
Dahua enterprises Sales of price price price
goods Market Market Market
PX 11482.50 1.37% 15000 No Bill/cash
price price price
Procurement Market Market Market
Hainan PTA 105302.89 3.37% 120000 No Bill/cash
JV of goods price price price
Yisheng
Sales of PX Market Market 382614.27 45.78% 500000 No Bill/cash Market
1902024 Annual Report of Hengyi Petrochemical Co. Ltd.
goods price price price
Market Market Market
PIA 48126.77 27.27% 54000 No Bill/cash
price price price
Procurement Market Market Market
PTA 1211640.53 38.74% 1500000 No Bill/cash
of goods price price price
Yisheng
Associated Sales of Market Market Market
New PX 6353.45 0.76% 7000 No Bill/cash
enterprises goods price price price
materials
Provision of Transportation Market Market Market
6744.66 7.33% 7000 No Bill/cash
labor of goods price price price
Power and
Market Market Market
energy-related 47223.89 100.00% 49000 No Bill/cash
Procurement price price price
products
of goods
Hengyi Auxiliary Market Market Market
JV 166.89 2.98% 1900 No Bill/cash
Caprolactam materials price price price
Power and
Sales of Market Market Market
energy-related 110918.94 70.59% 160000 No Bill/cash
goods price price price
products
1912024 Annual Report of Hengyi Petrochemical Co. Ltd.
Market Market Market
Benzene 47386.22 7.76% 50000 No Bill/cash
price price price
Transportation Market Market Market
454.75 0.49% 550 No Bill/cash
Provision of of goods price price price
labor Engineering Market Market Market
2428.5 65.96% 3500 No Bill/cash
management price price price
A holding Provision of Transportation Market Market Market
1199.38 1.30% 1200 No Bill/cash
subsidiary labor of goods price price price
Hengyi of the Sales of Auxiliary Market Market Market
2302.14 45.97% 3000 No Bill/cash
Polyamide ultimate goods materials price price price
parent Procurement Polyamide Market Market Market
5748 24.91% 25000 No Bill/cash
company of goods flake price price price
Associated Polyester Market Market Market
1007659.79 16.46% 1020000 No Bill/cash
enterprises Procurement products price price price
Shaoxing
of the of goods Packing Market Market Market
Hengming 2488.52 29.50% 5000 No Bill/cash
ultimate materials price price price
parent Sales of Equipment Market Market 6551.5 67.44% 6700 No Bill/cash Market
1922024 Annual Report of Hengyi Petrochemical Co. Ltd.
company goods price price price
Packing Market Market Market
2983.2 33.01% 3500 No Bill/cash
materials price price price
Auxiliary Market Market Market
2984.25 46.17% 4500 No Bill/cash
materials price price price
Power and
Market Market Market
energy 32999.89 21.00% 35000 No Bill/cash
price price price
products
Market Market Market
Custodian Fee 169.81 100.00% 180 No Bill/cash
price price price
Trademark Market Market Market
1398.72 100.00% 1500 No Bill/cash
Provision of Licensing Fee price price price
labor Transportation Market Market Market
11951.59 12.99% 12000 No Bill/cash
of goods price price price
Engineering Market Market Market
554.27 15.05% 1200 No Bill/cash
management price price price
Hangzhou A holding Procurement Polyamide Market Market 17330.37 75.09% 33000 No Bill/cash Market
1932024 Annual Report of Hengyi Petrochemical Co. Ltd.
Yichen subsidiary of goods flake price price price
of the Provision of Transportation Market Market Market
2199.7 2.39% 3000 No Bill/cash
ultimate labor of goods price price price
parent Sales of Auxiliary Market Market Market
2706.01 54.03% 3000 No Bill/cash
company goods materials price price price
JV of the
Hengqi Power and
ultimate Sales of Market Market Market
Environmental energy-related 3216.55 2.05% 3000 Yes Bill/cash
parent goods price price price
Protection products
company
Related
Legal
Entity in
Procurement Loading and
Qingzhi which a Market Market Market
of Labor unloading of 2324.98 2.63% 6000 No Bill/cash
Matou Director price price price
Services goods
of the
Listed
Company
1942024 Annual Report of Hengyi Petrochemical Co. Ltd.
Serves as
a Director
A holding Procurement
Market Market Market
subsidiary of Labor Rental service 2156.55 9.08% 3900 No Bill/cash
price price price
Hangzhou of the Services
Yijing ultimate
Procurement Market Market Market
parent Equipment 10662.75 12.34% 17000 No Bill/cash
of goods price price price
company
A holding
subsidiary
Hong Kong of the Procurement Market Market Market
Crude oil 1117935.7 34.29% 1200000 No Bill/cash
Yitian ultimate of goods price price price
parent
company
Total -- -- 4285673.14 -- 4965430 -- -- --
Announcement on Estimated Amount of 2024 Daily Related-party Transactions" (Announcement No.: 2024-008)
Disclosure date and index
disclosed by the Company on February 1 2024; "Announcement on Additional Estimated Amount of 2024 Daily
1952024 Annual Report of Hengyi Petrochemical Co. Ltd.
Related-party Transactions" (Announcement Nos.: 2024-034 2024-085 2024-139) disclosed on April 20 2024
August 24 2024 and December 24 2024 respectively.Details of returns of large sales None
The aforementioned related-party transactions are beneficial in fully utilizing the advantageous resources of the
The actual implementation (if any) during the
company and its significant related parties ensuring the stable supply of essential raw materials and the
reporting period of the total amount of daily
continuous transmission of electricity. These transactions safeguard the sales of downstream products facilitate
related-party transactions expected to occur in
the company's exploration of upstream product operations and help consolidate the advantages of an integrated
the current period categorized by type.industry chain.The related-party transactions between the company and the aforementioned related parties are all connected to
the company's daily operations. These transactions are priced based on market prices or the electricity rates
Reasons for the large difference between the
determined by the power department adhering to the principles of fairness justice and transparency. They do
transaction price and the market reference price
not harm the interests of the company or minority shareholders. The company's main business will not become(if applicable）
significantly dependent on these related-party transactions ensuring the company's independence. These
transactions have a positive impact on the company's current and future financial condition and operating results.
1962024 Annual Report of Hengyi Petrochemical Co. Ltd.
2.Related Party Transactions Arising from Asset or Equity Acquisition and Sale
Type of Appraised Settlement Profit or Loss
Pricing Book Value of
Related Value of Transfer Method of from
Related Nature of Details of Related Principle of Transferred Disclosure Disclosure
Party Transferred Price (10000 Related Transaction
Party Relationship Party Transaction Related Party Assets (10000 Date Reference
Transacti Assets (10000 RMB) Party (10000
Transaction RMB)
on RMB) Transaction RMB)
Sale of 100% Equity
Subsidiary
Interest in Hengyi
Hong of the Transfer
Industries Not
Kong Ultimate of Market price $179.48 0 $180.26 Cash $0.79 Not applicable
International applicable
Yitian Parent Equity
(Singapore) Co.Company
Ltd. (Singapore)
http://www.cninfo.c
Acquisition of 25% om.cn/new/dis
Equity Interest in closure/detailor
Acquisiti
Hengyi Controlling Zhejiang Hengyi September gId=gssz000070
on of Market price 26583.58 31511.23 31500 Cash -
Group Shareholder Hanlin Enterprise 24 2024 3&announcement
Equity
Management Co. Id=1221276140&an
Ltd. nouncement
Time=2024-09-24
1972024 Annual Report of Hengyi Petrochemical Co. Ltd.
Reasons for Significant Differences Between the
Transfer Price and Book Value or Appraised Value (If Not Applicable
Any)
Impact on the Company’s Operating Results and The transaction price is fair and reasonable and will not have an adverse impact on the company’s financial condition
Financial Condition or operating results.If the relevant transaction involves performance
commitments the performance realization during the Not Applicable
reporting period.
1982024 Annual Report of Hengyi Petrochemical Co. Ltd.
3.Related-party transactions involving joint external investments
During the reporting period the company did not engage in any related-party
transactions involving joint external investments.
4.Related creditor-debtor transactions
1. Are there any non-operating related-party creditor-debtor transaction
（1）Accounts receivable from related parties
Closin
Relate This Period's g
Is there any Interest
d Formati Beginning Amount added Recovered balanc
Related non-operati Interest this period
Party on balance (RMB this period Amount e
party ng fund rate (RMB
Relati cause 10000) (RMB 10000) (RMB (RMB
occupation 10000)
onship 10000) 10000
)
Associ
Yisheng Entrus
ated
New ted No 78714.92 0 80445.31 4.785% 1730.39 0
enterpr
materials Loan
ise
The impact of related party claims on the company's
Not applicable
operating results and financial position
(2)Payable to Related Parties Debt
Is there This
Related any Beginning Amount Period's Interest
Related Party Formation non-operat balance(R added this Recovered Interest this
party Relationsh cause ing fund MB period(RM Amount rate period(RM
ip occupatio 10000) B 10000) (RMB B 10000)
n 10000)
1992024 Annual Report of Hengyi Petrochemical Co. Ltd.
Controllin
Hengyi g Inter fund
05759655759653.45%00
Group Sharehold Borrowing
er
The Impact of Related Party Debt on the Company's
Not applicable
Operating Results and Financial Position
5.Transactions with Affiliated Financial Companies
There were no deposits loans credit facilities or other financial transactions between
the company and affiliated financial companies.
6.Transactions between Company-controlled Financial Companies and Affiliates
There were no deposits loans credit facilities or other financial transactions between
company-controlled financial companies and affiliates.
7.Other Significant Related Party Transactions
There were no other significant related party transactions during the reporting period.XV.Major contracts and their performance
1.Custody contracting and leasing matters
(1)Custody situation
There was no custody in the Company during the reporting period.
(2)Contracting situation
There was no contracting situation during the reporting period of the Company.
(3)Leasing situation
During the reporting period there was no leasing situation.
2002024 Annual Report of Hengyi Petrochemical Co. Ltd.
2.Major guarantees
Unit: RMB 10000
The Company and its subsidiaries’ external guarantees (excluding guarantees to subsidiaries)
Date of
Name of the disclosure of Actual Whether it Whether it
Guarantee Type of
guaranteed announcement Actual date guarantee Guarantee period has been is a related
d limit guarantee
object on guaranteed amount fulfilled party
quota guarantee
February 01 General July 08 2024 to November 17
Hainan Yisheng 95000 July 08 2024 67345.50 No Yes
2024 guaranty 2025
Total amount of external guarantees approved Total amount of external guarantees actually
9500067345.50
during the reporting period（A1） incurred during the reporting period （A2）
Total amount of external guarantees approved at Total balance of actual external guarantees at
9500067345.50
the end of the reporting period （A3） the end of the reporting period （A4）
The Company's guarantees for subsidiaries
Date of disclosure of Whether it Whether it is a
Name of the Guaranteed Actual guarantee Type of
announcement on Actual date Guarantee period has been related party
guaranteed object limit amount guarantee
guaranteed quota fulfilled guarantee
Hengyi Limited December 07 113268.44 April 12 2023 113268.44 General April 12 2023 to Yes Yes
2012024 Annual Report of Hengyi Petrochemical Co. Ltd.
2022 guaranty December 28 2024
December 07 General January 19 2024 to April
Hengyi Limited 3304.24 January 19 2024 3304.24 Yes Yes
2022 guaranty 18 2024
February 01 General February 22 2024 to April
Hengyi Limited 41482.34 February 22 2024 41482.34 Yes Yes
2024 guaranty 29 2024
Hengyi High- December 07 General February 07 2023 to
83780 February 07 2024 83780 Yes Yes
Tech 2022 guaranty December 27 2024
Hengyi High- December 07 General January 01 2024 to June
25000 January 01 2024 25000 Yes Yes
Tech 2022 guaranty 30 2024
Hengyi High- February 01 General February 20 2024 to
36000 February 20 2024 36000 Yes Yes
Tech 2024 guaranty August 31 2024
Hengyi High- December 07 General October 24 2023 to
64520 October 24 2023 64520 Yes Yes
Tech 2022 guaranty December 9 2024
Hengyi High- February 01 General February 2 2024 to
30000 February 02 2024 30000 Yes Yes
Tech 2024 guaranty November 1 2024
December 07 General January 4 2023 to
Hengyi Polymer 39300 January 04 2023 23580 Yes Yes
2022 guaranty December 28 2024
2022024 Annual Report of Hengyi Petrochemical Co. Ltd.
December 07 General January 1 2024 to June
Hengyi Polymer 12600 January 01 2024 7560 Yes Yes
2022 guaranty 30 2024
December 07 General November 30 2023 to
Hengyi Polymer 5000 November 30 2023 3000 Yes Yes
2022 guaranty November 29 2024
February 01 General February 19 2024 to
Hengyi Polymer 7400 February 19 2024 4440 Yes Yes
2024 guaranty August 19 2024
February 01 General June 20 2024 to
Hengyi Polymer 12600 June 20 2024 7560 Yes Yes
2024 guaranty December 31 2024
Shuangtu New December 07 General March 24 2023 to
73400 March 24 2023 73400 Yes Yes
Materials 2022 guaranty December 28 2024
Shuangtu New February 01 General February 23 2024 to
25000 February 23 2024 25000 Yes Yes
Materials 2024 guaranty November 18 2024
Shuangtu New December 07 General December 18 2023 to
13000 December 18 2023 13000 Yes Yes
Materials 2022 guaranty December 12 2024
General March 22 2022 to March
January 03 2023 January 22 2022 20000 March 22 2022 14000 Yes Yes
guaranty 20 2024
July 10 2023 December 07 106435 January 04 2023 74504.5 General January 4 2023 to Yes Yes
2032024 Annual Report of Hengyi Petrochemical Co. Ltd.
2022 guaranty December 6 2024
December 07 General January 3 2023 to March
Taicang Yifeng 15370 January 03 2023 15370 Yes Yes
2022 guaranty 23 2024
December 07 General July 10 2023 to July 9
Taicang Yifeng 5000 July 10 2023 5000 Yes Yes
2022 guaranty 2024
December 07 General January 3 2024 to
Taicang Yifeng 12000 January 03 2024 12000 Yes Yes
2022 guaranty December 31 2024
February 01 General February 29 2024 to
Taicang Yifeng 50 February 29 2024 50 Yes Yes
2024 guaranty August 28 2024
December 07 General June 25 2023 to June 19
Suqian Yida 7000 June 25 2023 7000 Yes Yes
2022 guaranty 2024
December 07 General July 26 2023 to July 22
Suqian Yida 5000 July 26 2023 5000 Yes Yes
2022 guaranty 2024
Hong Kong December 07 General July 26 2023 to July 22
16547.86 October 07 2023 16547.86 Yes Yes
Tianyi 2022 guaranty 2024
Hong Kong February 01 General March 11 2024 to
13555.44 March 11 2024 13555.44 Yes Yes
Tianyi 2024 guaranty November 29 2024
2042024 Annual Report of Hengyi Petrochemical Co. Ltd.
December 07 General October 10 2023 to April
Jiaxing Yipeng 10000 October 10 2023 10000 Yes Yes
2022 guaranty 9 2024
February 01 General April 18 2024 to October
Jiaxing Yipeng 9999 April 18 2024 9999 Yes Yes
2024 guaranty 18 2024
December 07 General September 1 2023 to
Jiaxing Yipeng 60000 September 01 2023 60000 Yes Yes
2022 guaranty November 23 2024
Haining Thermal General April 24 2020 to June 10
January 16 2020 6250 April 24 2020 6250 Yes Yes
Power guaranty 2024
Haining Thermal General January 4 2022 to January
January 22 2021 12750 January 04 2022 12750 Yes Yes
Power guaranty 4 2024
Haining Thermal General October 21 2022 to
January 22 2022 675 October 21 2022 675 Yes Yes
Power guaranty October 21 2024
Haining Thermal December 07 General January 6 2023 to
11575 January 06 2023 11575 Yes Yes
Power 2022 guaranty November 21 2024
Haining Thermal December 07 General January 5 2024 to
13500 January 05 2024 13500 Yes Yes
Power 2022 guaranty September 30 2024
Haining Thermal February 01 10000 May17 2024 10000 General May 17 2024 to Yes Yes
2052024 Annual Report of Hengyi Petrochemical Co. Ltd.
Power 2024 guaranty November 13 2024
Haining Thermal December 07 General January 4 2024 to July 4
20000 January 04 2024 20000 Yes Yes
Power 2022 guaranty 2024
Haining Thermal February 01 General February 19 2024 to
32000 February 19 2024 32000 Yes Yes
Power 2024 guaranty August 1 2024
Haining Thermal General April 20 2021 to October
January 22 2021 17259 April 20 2021 17259 Yes Yes
Power guaranty 26 2024
General May 26 2020 to
Fujian Yijin January 16 2020 12029.28 May26 2020 10826.35 Yes Yes
guaranty November 21 2024
February 01 General March 12 2024 to
Fujian Yijin 3000 March12 2024 2700 Yes Yes
2024 guaranty September 13 2024
Hengyi December 07 General July 6 2023 to March 22
73875.68 July 06 2023 51712.98 Yes Yes
Singapore 2022 guaranty 2024
Hengyi December 07 General January 5 2024 to July 3
14376.8 January 05 2024 10063.76 Yes Yes
Singapore 2022 guaranty 2024
Hengyi February 01 General February 13 2024 to
103953.83 February 13 2024 72767.68 Yes Yes
Singapore 2024 guaranty November 22 2024
2062024 Annual Report of Hengyi Petrochemical Co. Ltd.
December 07 General October 9 2023 to May
Hengyi Brunei 202382.95 October 09 2023 141668.07 Yes Yes
2022 guaranty 30 2024
December 07 General January 5 2024 to April 5
Hengyi Brunei 50000 January 05 2024 35000 Yes Yes
2022 guaranty 2024
February 01 General March 5 2024 to
Hengyi Brunei 481409.19 March 05 2024 336986.43 Yes Yes
2024 guaranty December 27 2024
February 01 General May 10 2024 to October
Hengyi Limited 104437.68 May 10 2024 104437.68 No Yes
2024 guaranty 18 2025
December 07 General January 9 2024 to
Hengyi Limited 20000 January 09 2024 20000 No Yes
2022 guaranty February 5 2025
February 01 General March 14 2024 to
Hengyi Limited 132500 March 14 2024 132500 No Yes
2024 guaranty November 26 2025
February 01 General August 1 2024 to
Hengyi Limited 32000 August 01 2024 32000 No Yes
2024 guaranty February 1 2025
February 01 General August 1 2024 to March
Hengyi Limited 23000 August 01 2024 23000 No Yes
2024 guaranty 24 2025
Hengyi High- December 07 15000 January 18 2024 15000 General January 1 2024 to January No Yes
2072024 Annual Report of Hengyi Petrochemical Co. Ltd.
Tech 2022 guaranty 17 2025
Hengyi High- February 01 General February 4 2024 to
103080 February 04 2024 103080 No Yes
Tech 2024 guaranty November 13 2025
Hengyi High- December 07 General January 31 2024 to
5000 January 31 2024 5000 No Yes
Tech 2022 guaranty January 25 2025
Hengyi High- February 01 General July 18 2024 to November
88156 July 18 2024 88156 No Yes
Tech 2024 guaranty 13 2025
Hengyi High- February 01 General May 30 2024 to
26000 May 302024 26000 No Yes
Tech 2024 guaranty November 12 2025
December 07 General January 4 2024 to January
Hengyi Polymer 6000 January 04 2024 3600 No Yes
2022 guaranty 17 2025
February 01 General March 8 2024 to March
Hengyi Polymer 3000 March 08 2024 1800 No Yes
2024 guaranty 14 2025
February 01 General December 4 2024 to
Hengyi Polymer 20000 December 04 2024 12000 No Yes
2024 guaranty December 3 2025
February 01 General November 12 2024 to
Hengyi Polymer 5000 November12 2024 3000 No Yes
2024 guaranty November 12 2025
2082024 Annual Report of Hengyi Petrochemical Co. Ltd.
February 01 General May 30 2024 to May 29
Hengyi Polymer 10000 May 30 2024 6000 No Yes
2024 guaranty 2025
Shuangtu New December 07 General January 1 2024 to June 3
15000 January 1 2024 15000 No Yes
Materials 2022 guaranty 2025
Shuangtu New February 01 General June 7 2024 to October
71800 June 07 2024 71800 No Yes
Materials 2024 guaranty 29 2025
Shuangtu New February 01 General August 9 2024 to
65000 August 09 2024 65000 No Yes
Materials 2024 guaranty September 20 2027
Shuangtu New December 07 General January 01 2024 to
8000 January 18 2024 8000 No Yes
Materials 2022 guaranty January 17 2025
Shuangtu New February 01 General August 6 2024 to
32999.75 August 06 2024 32999.75 No Yes
Materials 2024 guaranty November 21 2025
Zhejiang December 07 General November 13 2023 to
2240 November 13 2023 1568 No Yes
Yisheng 2022 guaranty November 12 2025
Zhejiang December 07 General January 2 2024 to May 2
15000 January 02 2024 10500 No Yes
Yisheng 2022 guaranty 2025
Zhejiang February 01 124555 February 20 2024 87188.5 General February 20 2024 to No Yes
2092024 Annual Report of Hengyi Petrochemical Co. Ltd.
Yisheng 2024 guaranty October 15 2026
Zhejiang February 01 General November 27 2024 to
5000 November27 2024 3500 No Yes
Yisheng 2024 guaranty May 27 2025
Zhejiang February 01 General February 6 2024 to
57727.8 February 06 2024 40409.46 No Yes
Yisheng 2024 guaranty December 9 2025
Zhejiang February 01 General July 3 2024 to April 16
21816.72 July 03 2024 15271.7 No Yes
Yisheng 2024 guaranty 2025
February 01 General February 29 2024 to
Taicang Yifeng 6950 February 29 2024 6950 No Yes
2024 guaranty March 28 2025
February 01 General March 26 2024 to March
Taicang Yifeng 3000 March 26 2024 3000 No Yes
2024 guaranty 25 2025
February 01 General June 28 2024 to July 22
Suqian Yida 8000 June 28 2024 8000 No Yes
2024 guaranty 2025
February 01 General August 26 2024 to
Suqian Yida 5000 August 26 2024 5000 No Yes
2024 guaranty February 26 2025
February 01 General May 17 2024 to May 16
Suqian Yida 8000 May 17 2024 8000 No Yes
2024 guaranty 2025
2102024 Annual Report of Hengyi Petrochemical Co. Ltd.
February 01 General April 2 2024 to April 1
Jiaxing Yipeng 10000 April 02 2024 10000 No Yes
2024 guaranty 2025
February 01 General October 23 2024 to April
Jiaxing Yipeng 10000 October 23 2024 10000 No Yes
2024 guaranty 23 2025
February 01 General September 4 2024 to
Jiaxing Yipeng 60000 September 04 2024 60000 No Yes
2024 guaranty September 5 2025
Haining Thermal General April 24 2020 to
January 16 2020 25250 April 24 2020 25250 No Yes
Power guaranty December 10 2029
Haining Thermal February 01 General September 27 2024 to
14000 September 27 2024 14000 No Yes
Power 2024 guaranty September 27 2026
Haining Thermal February 01 General March 27 2024 to March
20000 March 27 2024 20000 No Yes
Power 2024 guaranty 26 2025
Haining Thermal February 01 General August 20 2024 to June
20000 August 20 2024 20000 No Yes
Power 2024 guaranty 11 2025
Haining Thermal February 01 General July 9 2024 to July 10
20000 July 09 2024 20000 No Yes
Power 2024 guaranty 2025
Haining Thermal February 01 32000 August 01 2024 32000 General August 1 2024 to No Yes
2112024 Annual Report of Hengyi Petrochemical Co. Ltd.
Power 2024 guaranty February 1 2025
Haining Thermal General April 20 2021 to April 26
January 22 2021 97627 April 20 2021 97627 No Yes
Power guaranty 2029
General May 26 2020 to May 21
Fujian Yijin January 16 2020 21652.71 May 26 2020 19487.44 No Yes
guaranty 2028
February 01 General September 13 2024 to
Fujian Yijin 3000 September13 2024 2700 No Yes
2024 guaranty March 13 2025
Guangxi New December 07 General January 13 2023 to
278146.8 January13 2023 278146.8 No Yes
Materials 2022 guaranty December 25 2032
Guangxi New December 07 General January 1 2024 to
25192.05 January 01 2024 25192.05 No Yes
Materials 2022 guaranty December 25 2032
Guangxi New February 01 General February 7 2024 to
126063.58 February 07 2024 126063.58 No Yes
Materials 2024 guaranty December 25 2032
Hong Kong February 01 General November 5 2024 to
8134.19 November 05 2024 8134.19 No Yes
Tianyi 2024 guaranty January 20 2025
Hengyi February 01 General September 30 2024 to
112877 September 30 2024 79013.9 No Yes
Singapore 2024 guaranty May 16 2025
2122024 Annual Report of Hengyi Petrochemical Co. Ltd.
February 01 General December 27 2024 to
Hengyi Brunei 50000 December 27 2024 35000 No Yes
2024 guaranty March 27 2025
February 01 General December 27 2024 to
Hengyi Brunei 31309.34 December 27 2024 21916.54 No Yes
2024 guaranty June 4 2025
February 01 General November 12 2024 to
Hengyi Brunei 162757.13 November 12 2024 113929.99 No Yes
2024 guaranty May 26 2025
Total amount of guarantees to subsidiaries approved Total amount of guarantees to subsidiaries actually
33550002303112.23
during the reporting period（B1） incurred during the reporting period（B2）
Total amount of guarantees to subsidiaries approved at Total balance of guarantees to subsidiaries actually
33550001976222.58
the end of the reporting period（B3） incurred at the end of the reporting period（B4）
Subsidiary guarantees for subsidiaries
Date of disclosure of Whether it Whether it is a
Name of the Guaranteed Actual guarantee Type of
announcement on Actual date Guarantee period has been related party
guaranteed object limit amount guarantee
guaranteed quota fulfilled guarantee
December 07 General March 16 2023 to
Hengyi Limited 30500 March16 2023 30500 Yes Yes
2022 guaranty December 10 2024
Hengyi Limited February 01 26750 February 09 2024 26750 General February 9 2024 to Yes Yes
2132024 Annual Report of Hengyi Petrochemical Co. Ltd.
2024 guaranty September 6 2024
Hengyi High- February 01 General February 9 2024 to May
3307.57 February 09 2024 3307.57 Yes Yes
Tech 2024 guaranty 9 2024
Hengyi High- December 07 General June 21 2023 to
44881.89 June 21 2023 44881.89 Yes Yes
Tech 2022 guaranty December 5 2024
December 07 General February 16 2023 to
Hengyi Polymer 34555 February 16 2023 20733 Yes Yes
2022 guaranty August 23 2024
December 07 General December 27 2023 to
Hengyi Polymer 20000 December 27 2023 12000 Yes Yes
2022 guaranty November 1 2024
December 07 General August 31 2023 to August
Hengyi Polymer 8400 August 31 2023 5040 Yes Yes
2022 guaranty 23 2024
December 07 General January 1 2024 to July 12
Hengyi Polymer 7700 January 16 2024 4620 Yes Yes
2022 guaranty 2024
Zhejiang General February 25 2022 to
January 22 2022 5000 February 25 2022 3500 Yes Yes
Yisheng guaranty August 23 2024
Zhejiang December 07 General February 27 2023 to
79650 February 27 2023 55755 Yes Yes
Yisheng 2022 guaranty December 2 2024
2142024 Annual Report of Hengyi Petrochemical Co. Ltd.
Zhejiang December 07 General January 3 2024 to
45594.2 January 03 2024 31915.94 Yes Yes
Yisheng 2022 guaranty December 5 2024
Zhejiang February 01 General April 3 2024 to December
15457.5 April 03 2024 10820.25 Yes Yes
Yisheng 2024 guaranty 31 2024
Hengyi High- December 07 General December 28 2023 to
20000 December28 2023 20000 Yes Yes
Tech 2022 guaranty December 26 2024
Hengyi High- December 07 General January 26 2024 to
5000 January 26 2024 5000 Yes Yes
Tech 2022 guaranty December 26 2024
Haining Thermal General September 15 2019 to
January 23 2019 6456.23 September 15 2019 6456.23 Yes Yes
Power guaranty December 23 2024
Haining Thermal General March 29 2020 to
January 16 2020 2092.74 March 29 2020 2092.74 Yes Yes
Power guaranty November 11 2024
December 07 General November 20 2023 to
Hengyi Brunei 42760.8 November 20 2023 29932.56 Yes Yes
2022 guaranty May 20 2024
February 01 General November 20 2023 to
Hengyi Brunei 71268 May 14 2024 49887.6 Yes Yes
2024 guaranty May 20 2024
Hengyi Brunei December 07 243553.57 October 27 2023 170487.5 General October 27 2023 to March Yes Yes
2152024 Annual Report of Hengyi Petrochemical Co. Ltd.
2022 guaranty 26 2024
General May 27 2022 to
Hengyi Brunei January 22 2022 132338.44 May 27 2022 92636.91 Yes Yes
guaranty September 30 2024
December 07 General January 24 2024 to April
Hengyi Brunei 14376.8 January 24 2024 10063.76 Yes Yes
2022 guaranty 24 2024
February 01 General December 26 2024 to
Hengyi Brunei 682474.44 February 02 2024 477732.11 Yes Yes
2024 guaranty December 19 2025
December 07 General November 29 2023 to
Hengyi Limited 9800 November 29 2023 9800 No Yes
2022 guaranty November 22 2025
February 01 General August 21 2024 to
Hengyi Limited 35730 August 21 2024 35730 No Yes
2024 guaranty September 5 2025
February 01 General December 26 2024 to
Hengyi Limited 15000 December 26 2024 15000 No Yes
2024 guaranty December 19 2025
Hengyi High- February 01 General June 20 2024 to
39710 June 20 2024 39710 No Yes
Tech 2024 guaranty December 5 2025
December 07 General January 25 2024 to
Ningbo Hengyi 1000 January 25 2024 700 No Yes
2022 guaranty January 24 2025
2162024 Annual Report of Hengyi Petrochemical Co. Ltd.
February 01 General September 6 2024 to April
Ningbo Hengyi 9000 September 06 2024 6300 No Yes
2024 guaranty 27 2025
February 01 General September 6 2024 to
Ningbo Hengyi 12580.86 September 06 2024 8806.6 No Yes
2024 guaranty September 5 2025
December 07 General January 1 2024 to January
Hengyi Polymer 1300 January 12 2024 780 No Yes
2022 guaranty 31 2025
February 01 General July 19 2024 to
Hengyi Polymer 34800 July 19 2024 20880 No Yes
2024 guaranty September 26 2025
Zhejiang General February 25 2022 to
January 22 2022 7500 February 25 2022 5250 No Yes
Yisheng guaranty February 22 2026
Zhejiang February 01 General January 1 2024 to January
4300 January 18 2024 3010 No Yes
Yisheng 2024 guaranty 16 2025
Zhejiang February 01 General April 9 2024 to March 5
49267 April 09 2024 34486.9 No Yes
Yisheng 2024 guaranty 2026
Zhejiang February 01 General December 16 2024 to
2694.42 December 16 2024 1886.09 No Yes
Yisheng 2024 guaranty March 16 2025
Zhejiang February 01 79235.8 July 22 2024 55465.06 General July 22 2024 to December No Yes
2172024 Annual Report of Hengyi Petrochemical Co. Ltd.
Yisheng 2024 guaranty 5 2025
Zhejiang February 01 General December 27 2024 to
2500 December 27 2024 1750 No Yes
Yisheng 2024 guaranty December 27 2025
Zhejiang February 01 General October 9 2024 to April 9
18000 October 09 2024 12600 No Yes
Yisheng 2024 guaranty 2025
Zhejiang February 01 General August 6 2024 to
4200 August 06 2024 2940 No Yes
Yisheng 2024 guaranty February 6 2025
Hengyi High- December 07 General January 30 2024 to
15500 January 30 2024 15500 No Yes
Tech 2022 guaranty January 24 2025
Hengyi High- February 01 General May 15 2024 to February
7500 May 15 2024 7500 No Yes
Tech 2024 guaranty 9 2025
Haining Thermal General September 15 2019 to
January 23 2019 31489.28 September 15 2019 31489.28 No Yes
Power guaranty December 23 2029
Haining Thermal General March 29 2020 to May
January 16 2020 22510.09 March 29 2020 22510.09 No Yes
Power guaranty 11 2030
February 01 General October 18 2024 to
Hengyi Brunei 74710.12 October 18 2024 52297.08 No Yes
2024 guaranty February 21 2025
2182024 Annual Report of Hengyi Petrochemical Co. Ltd.
February 01 General October 24 2024 to
Hengyi Brunei 20161.12 October 24 2024 14112.78 No Yes
2024 guaranty February 6 2025
February 01 General September 25 2024 to
Hengyi Brunei 95218.65 September 25 2024 66653.06 No Yes
2024 guaranty June 25 2027
February 01 General December 30 2024 to
Hengyi Brunei 14980.81 December 30 2024 10486.56 No Yes
2024 guaranty April 3 2025
February 01 General October 17 2024 to March
Hengyi Brunei 212275.65 October 17 2024 148592.96 No Yes
2024 guaranty 17 2025
Total amount of guarantees to subsidiaries approved during the Total amount of guarantees to subsidiaries actually incurred
15750001175284.32
reporting period (C1) during the reporting period (C2)
Total amount of guarantees to subsidiaries approved at the end of Total balance of guarantees to subsidiaries actually incurred
1575000624236.46
the reporting period (C3) at the end of the reporting period (C4)
Total amount of company guarantees (i.e. the total of the first three items)
Total amount of guarantees approved during the reporting period Total amount of guarantees actually incurred during the
50250003545742.05
(A1+B1+C1) reporting period (A2+B2+C2)
Total amount of guarantees approved at the end of the reporting 5025000 Total balance of guarantees actually incurred at the end of 2667804.54
2192024 Annual Report of Hengyi Petrochemical Co. Ltd.
period (A3+B3+C3) the reporting period (A4+B4+C4)
Proportion of the actual total amount of guarantee (A4+B4+C4) to the Company's net assets 107.82%
Wherein:
Balance of guarantees provided for shareholders actual controllers and their related parties (D) 0
Balance of debt guarantees provided directly or indirectly for the guaranteed object whose
914470.55
asset-liability ratio exceeds 70% (E)
Total amount of the total guarantee exceeding 50% of the net assets (F) 1430701.95
Total amount of the above three guarantees (D+E+F) 1651215.44
For unexpired guarantees the statement of the situation where guarantee liability has occurred
None
or may bear joint liability for repayment during the reporting period (if any)
Description of external guarantees against the rules and regulations (if any) None
2202024 Annual Report of Hengyi Petrochemical Co. Ltd.
1)Description of the specific circumstances of the use of composite guarantees
The Company and its subsidiaries provide the Company's holding subsidiary Hengyi
Brunei with a guarantee line of USD 1.75 billion or equivalent overseas RMB for the
syndicated loan. Please refer to the Company’s disclosure Announcement on
Providing Guarantees to Holding Subsidiary Hengyi Industries Sdn. Bhd. on the
website of CNINFO on November 19 2024 for details (Announcement No.:
2024-128).
3.Entrust others to manage cash asset
(1) Entrusted financing management
The Company has no entrusted financial management during the reporting period.
(2) Entrusted loans
1) Overview of entrusted loans during the reporting period
Unit: RMB 10000
Total amount Sources of funds Outstanding balance Overdue amount
78600 Self-owned capital 0 0
2212024 Annual Report of Hengyi Petrochemical Co. Ltd.
2)High-risk entrusted loans with significant individual amounts or low security or low liquidity
Unit: RMB 10000
Actual Actual
Amount of Whether it Whether there
profit and recovery of
Loan Loan Sources Expected provision for goes is any
Loan Loan loss during profits and Summary of matters and related query index
object interest of Start date End date return (if impairment through entrusted
object amount the losses during (if any)
type rate funds any) reserves (if legal loan plan in
reporting the reporting
any) procedures the future
period period
Associa http://www.cninfo.com.cn/new/disclosure/de
Yisheng Self-
ted January 09 December 24 tailplate=szse&orgId=gssz0000703&stock
New 4.785% 78600 owned 1632.44 1632.44 1632.44 0 Yes Yes
compan 2023 2024 Code=000703&announcementId=12181822
Materials capital
y 58&announcementTime=2023-10-28
Total 78600 -- -- -- 1632.44 1632.44 -- -- -- --
2222024 Annual Report of Hengyi Petrochemical Co. Ltd.
3)The principal of the entrusted loans is expected to be unable to be recovered or
there are other situations that may cause impairment
□Applicable ?Not applicable
4.Other major contracts
There were no other major contracts during the reporting period
XVI.Description of other important matters
There were no other material matters requiring disclosure during the reporting period.XVII.Important matters of subsidiaries of the company
□Applicable ?Not applicable
2232024 Annual Report of Hengyi Petrochemical Co. Ltd.
Section VII Changes in Shares and Shareholders
I.Changes in shares
1.Changes in shares
Unit: Share
Before the change Increase or decrease in current period (+ -) After the change
Proportion Issue of new Proportion Issue of new Issue of new
Quantity Quantity Quantity Proportion (%)
(%) shares (%) shares shares
I.Shares with Restrictions on
192396750.52%-271900-271900189677750.52%
Sales
1.State shares
2.State-owned legal person
shares
3.Other domestic shares 19239675 0.52% -271900 -271900 18967775 0.52%
Wherein: Domestic corporate
shares
2242024 Annual Report of Hengyi Petrochemical Co. Ltd.
Domestic natural person shares 19239675 0.52% -271900 -271900 18967775 0.52%
I.Shares with Restrictions on
Sales
1. State shares
2. State-owned legal person
shares
II.Shares without Restrictions on
364706235099.48%284082284082364734643299.48%
Sales
1.Ordinary shares in RMB 3647062350 99.48% 284082 284082 3647346432 99.48%
2.Domestically listed foreign
shares
3.Overseas listed foreign shares
4.Others
III.Total Number of Shares 3666302025 100.00% 12182 12182 3666314207 100.00%
2252024 Annual Report of Hengyi Petrochemical Co. Ltd.
2.Reasons for change in shares
(1)During the reporting period Shares held by Ms. Ni Jinmei former supervisor of
the company were converted from 273000 restricted shares to unrestricted shares as
her resignation had exceeded half a year. Mr. Wang Peng who resigned as a
supervisor less than half a year ago due to personal reasons holds 1100 restricted
shares acquired during his tenure.
(2)During the reporting period 90 "Hengyi Convertible Bonds" were converted into
822 shares of Hengyi Petrochemical. 1183 "Hengyi Convertible Bonds Series 2"
were converted into 11360 shares of Hengyi Petrochemical. Total new shares issued
from convertible bond conversions: 12182 shares.
3.Approval of changes in shares
(1)Upon approval by Shenzhen Stock Exchange ("approval document" SZS [2020]
No. 1027) the Company’s convertible corporate bonds amounting to RMB 2 billion
were listed on Shenzhen Stock Exchange on November 16 2020. The bond named
"Hengyi Convertible Bonds" and the bond code is "127022".
(2)Upon approval by Shenzhen Stock Exchange ("approval document" SZS [2022]
No. 782) the Company’s convertible corporate bonds amounting to RMB 3 billion
were listed on Shenzhen Stock Exchange on August 18 2022. The bond named
"Hengyi Convertible Bonds" and the bond code is "127067".
4.Transfer of changed shares
□Applicable ?Not applicable
5.The impact of share changes on financial indicators such as basic earnings per
share and diluted earnings per share net assets per share attributable to the
Company’s common shareholders etc. in the recent one year and the reporting
period
2262024 Annual Report of Hengyi Petrochemical Co. Ltd.
The Company’s share capital was 3666302025 shares at the beginning of the
reporting period and was 3666314207 shares as at the end of the reporting period.The change in shares resided in the conversion of convertible corporate bonds into
shares. In accordance with Accounting Standards for Business Enterprises - Earnings
Per Share the most recent share capital was recalculated on the basis of the adjusted
number of shares and therefore the basic earnings per share over the past period was
RMB 0.07/share and the diluted earnings per share after the change was RMB
0.07/share.
6.Miscellaneous disclosures deemed necessary by the Company or required by
regulatory authorities
□Applicable ?Not applicable
7.Changes in restricted shares
Unit: Share
Number of Number of
Number of Number of
restricted restricted
restricted restricted Date of
Name of shares shares Reason for
shares at the shares at the restriction
shareholders increased released in restrictions
beginning of end of release
during the current
period period
period period
A supervisor who
resigned upon
completion of their March 12
Ni Jinmei 273000 0 273000 0
term has exceeded 2024
half a year since
resignation.
2272024 Annual Report of Hengyi Petrochemical Co. Ltd.
Number of Number of
Number of Number of
restricted restricted
restricted restricted Date of
Name of shares shares Reason for
shares at the shares at the restriction
shareholders increased released in restrictions
beginning of end of release
during the current
period period
period period
A supervisor
resigned due to
personal reasons
Wang Peng 0 1100 0 1100 --
and the resignation
has not yet reached
half a year
Total 273000 1100 273000 1100 -- --
II.Securities issuance and listing
1.Securities issuance (excluding preference shares) in the reporting period
□Applicable ?Not applicable
2.Statement of changes in the Company's total number of shares and
shareholder structure changes in the Company’s assets and debts
During the reporting period the Company’s conversion of convertible corporate
bonds into shares resulted in change in the total number of shares which was
3666302025 at the beginning of period and was 3666314207 as at the disclosure
date of the report.
3.Existing employee stocks
□ Applicable ?Not applicable
2282024 Annual Report of Hengyi Petrochemical Co. Ltd.
III. Shareholders and actual controller
1.The number of shareholders and shareholding of the Company
Unit: Share
Total number of
preference Total number of preference
The total shareholders shareholders with voting
number of with voting rights restored at the end of
The total number of common
44126 shareholders 42581 rights restored at 0 the previous month before 0
shareholders at the end of period
as at March the end of the the annual report disclosure
31 2024 reporting period date (if any) (Refer to note
(if any) (Refer to 8)
note 8)
Shareholders holding more than 5 per cent of shares or top 10 shareholders' shareholdings (excluding shares lent through the transfer facility)
Nature of Number of Increase/decreas Number of Number of shares Pledged or frozen
Shareholding
Name of shareholders shareholder shares held at the e in the reporting shares with without Status
ratio Quantity
s end of the period restrictions restrictions held of
2292024 Annual Report of Hengyi Petrochemical Co. Ltd.
reporting period held shares
Domestic
non-
Pledg
Zhejiang Hengyi Group Co. Ltd. state-owne 40.61% 1488933728 0 0 1488933728 264050000
ed
d legal
person
Domestic
non- Not
Hangzhou Hengyi Investment Co.state-owne 6.99% 256338027 0 0 256338027 applic 0
Ltd.d legal able
person
Not
Hengyi petrochemical Co. Ltd.-Phase
Others 3.11% 114090297 114090297 0 114090297 applic 0
VI Employee Share Ownership Plan
able
Gongqingcheng Shengbang Investment Not
Management Co. Ltd. - Others 2.68% 98111801 0 0 98111801 applic 0
Gongqingcheng Shengbang Kaimi able
2302024 Annual Report of Hengyi Petrochemical Co. Ltd.
Investment Partnership (limited
partnership)
Domestic
non- Not
Xinghui Chemical Fibre Group Co.state-owne 2.66% 97662383 0 0 97662383 Appli 0
Ltd.d legal cable
person
Hengyi Petrochemical Company Not
Limited- Phase V Employee Share Others 2.38% 87167750 0 0 87167750 Appli 0
Ownership Plan cable
Huaneng Guicheng Trust Co. Ltd. - Not
Huaneng Trust Jinyi Xincheng Others 1.96% 72030334 0 0 72030334 Appli 0
Assembled Funds Trust Program cable
State-owne Not
Shenwan Hongyuan Securities
d legal 1.67% 61152097 -926100 0 61152097 Appli 0
Co.Ltd.person cable
Bersegold Asset Management Co. Others 1.36% 49936900 0 0 49936900 Not 0
2312024 Annual Report of Hengyi Petrochemical Co. Ltd.
Ltd. – Berseagold Hui Xin No. 8 Appli
Private Securities Investment Fund cable
Tibetan Trust Co. Ltd. - Tibetan Not
Trust - Hong Jing No. 29 Assembled Others 1.30% 47841104 0 0 47841104 Appli 0
Funds Trust Program cable
Strategic investors or general legal persons
ranked the top 10 shareholders due to placing (if None
any) (Please refer to Note 3)
Among the top 10 shareholders Hangzhou Hengyi Investment Co. Ltd. is a controlled subsidiary
of Hengyi Group. Hengyi Petrochemical Company Limited - Phase V Employee Share Ownership
Statement of the connected relation or parties Plan and Hengyi Petrochemical Company Limited - Phase VI Employee Share Ownership Plan
acting in concert among the above shareholders have no affiliation or concerted action relationship with other shareholders. It is unknown whether
connected relation exists among other shareholders and it is unknown whether they are
shareholders acting in concert either.Among the top 10 shareholders holders of Hengyi Petrochemical Company Limited - Phase V
Statement of the above shareholders
involvement in entrustment/trustee voting and Employee Share Ownership Plan and Hengyi Petrochemical Company Limited - Phase VI
waiver of voting
Employee Share Ownership Plan voluntarily waived their voting rights in respect of the
2322024 Annual Report of Hengyi Petrochemical Co. Ltd.
Company's shares indirectly held as a result of their participation in the Employee Share
Ownership Plan.Special statement of the existence of special Among the top 10 shareholders Hengyi Petrochemical Co. Ltd. held 362030589 shares of the
account for repurchase among top 10 shareholders Company in its special securities account for repurchases accounting for 9.87% of the total share
(if any) (Please refer to Note 10) capital of the Company and was not included in the list of top 10 shareholders.Top 10 shareholders holding of shares without restrictions
Number of shares without restrictions Stock class
Name of shareholders
held at the end of the reporting period Stock class Quantity
Zhejiang Hengyi Group Co. Ltd. 1488933728 Ordinary shares in RMB 1488933728
Hangzhou Hengyi Investment Co. Ltd. 256338027 Ordinary shares in RMB 256338027
Hengyi petrochemical Co. Ltd.-Phase VI Employee Share Ownership Plan 114090297 Ordinary shares in RMB 114090297
Gongqingcheng Shengbang Investment Management Co. Ltd.-Gongqingcheng Shengbang Kaimi Investment Partnership (limited 98111801 Ordinary shares in RMB 98111801
partnership)
Xinghui Chemical Fibre Group Co. Ltd. 97662383 Ordinary shares in RMB 97662383
Hengyi Petrochemical Company Limited-Phase V Employee Share 87167750 Ordinary shares in RMB 87167750
2332024 Annual Report of Hengyi Petrochemical Co. Ltd.
Ownership Plan
Huaneng Guicheng Trust Co. Ltd. - Huaneng Trust Jinyi Xincheng
72030334 Ordinary shares in RMB 72030334
Assembled Funds Trust Program
Shenwan Hongyuan Securities Co.Ltd. 61152097 Ordinary shares in RMB 61152097
Bersegold Asset Management Co. Ltd. – Berseagold Hui Xin No. 8 Private
49936900 Ordinary shares in RMB 49936900
Securities Investment Fund
Tibetan Trust Co. Ltd. - Tibetan Trust - Hong Jing No. 29 Assembled Funds
47841104 Ordinary shares in RMB 47841104
Trust Program
Statement of connected relation or parties acting
Among the top 10 shareholders Hangzhou Hengyi Investment Co. Ltd. is a controlled subsidiary of Hengyi
in connect among the top 10 shareholders of Group. Hengyi Petrochemical Company Limited - Phase V Employee Share Ownership Plan and Hengyi
Petrochemical Company Limited - Phase VI Employee Share Ownership Plan have no related-party
unrestricted tradable shares and between the top
relationships or acting-in-concert arrangements with other shareholders. It is unknown whether connected
10 shareholders of unrestricted tradable shares relation exists among other shareholders and it is unknown whether they are shareholders acting in concert
either.and top 10 shareholders
Statement of the top 10 common shareholders 1. The shareholder Zhejiang Hengyi Group Co. Ltd. held 1400471542 shares through general securities
involvement in margin trading and securities account and held 88462186 shares through CITIC Securities customer credit collateral securities trading
lending business (if any) (Please refer to Note 4) account both Including sum up to 1488933728 shares.
2.The shareholder Hangzhou Hengyi Investment Co. Ltd. held 0 shares through ordinary securities account
2342024 Annual Report of Hengyi Petrochemical Co. Ltd.
and held 256338027 shares through Soochow Securities Co. Ltd. customer credit collateral securities trading
account both Including sum up to 256338027 shares.
3.A shareholder of the Company Hengyi Petrochemical Company Limited - Phase VI Employee Share
Ownership Plan held 0 shares through an ordinary securities account and also held 114090297 shares through
a customer credit transaction guarantee securities account of Shenwan Hongyuan Securities Co.Ltd. totalling
114090297 shares.
4.A shareholder of the Company Hengyi Petrochemical Company Limited - Phase V Employee Share
Ownership Plan held 0 shares through an ordinary securities account and also held 87167750 shares through a
customer credit transaction guarantee securities account of Guoxin Securities Company Limited totalling
87167750 shares.
5.The shareholder Berseagold Asset Management Co. Ltd. - Berseagold Hui Xin No. 8 private securities
investment fund held zero share through general securities account and held 49936900 shares through Guosen
Securities Co. Ltd. customer credit collateral securities trading account both Including sum up to 49936900
shares.
2352024 Annual Report of Hengyi Petrochemical Co. Ltd.
2.Shareholders with shareholding of over 5% top 10 shareholder and top ten
shareholders not subject to trading restrictions participating in share lending
and refinancing
□ Applicable ?Not applicable
3.Changes in top 10 shareholders and top 10 shareholders not subject to trading
restriction due to securities lending/return compared to the previous period
□ Applicable ?Not applicable
4.Whether the top 10 ordinary shareholders and the top 10 unrestricted
ordinary shareholders of the Company engaged in any agreed repurchase
transactions during the reporting period.The company's top 10 common shareholders and top 10 unrestricted common
shareholders did not engage in any agreed repurchase transactions during the
reporting period.
5.The majority shareholder of the Company
Nature of controlling shareholder: natural person holding
Type of controlling shareholder: legal person
Legal
Name of majority Date of
representative
Organization code Primary business
shareholder /Head of establishment
company
Industrial investment
October 18
Hengyi Group Qiu Jianlin 91330109143586141L production and
1994
marketing of textile
materials and products
2362024 Annual Report of Hengyi Petrochemical Co. Ltd.
Holding of and
involvement in other As at the disclosure date hereof Hengyi Group held 643052319 shares of
domestically and China Zheshang Bank Co. Ltd. (Security code: 601916.SH 02016.HK)
overseas listed equity by accounting for 2.34% of its total share capital.majority shareholders in
the reporting period
6.Change in majority shareholder in the reporting period
There’s no change in majority shareholder of the Company in the reporting period.
7.The Company's actual controller and its persons acting in concert
Nature of actual controller: domestic natural person
Type of actual controller: natural person
Name of actual Relation with the actual National Whether the right of residence in other countries
controller controller ity or regions is acquired or not
Qiu Jianlin Himself China No
Since 1994 Mr. Qiu Jianlin has been serving as the President of Zhejiang Hengyi Group
Primary
Co. Ltd. Currently he holds social positions such as the Special Vice President of the
occupation
China Textile Industry Federation and the Senior Vice President of the China Chemical
and title
Fibers Association.Domestically and As at the disclosure date hereof Mr. Qiu Jianlin is the actual controller of Hengyi Group
overseas listed that directly holds 40.61% of the Company shares and holds 6.99% of the Company
companies shares through Zhejiang Hengyi Investment Co. Ltd. a controlled subsidiary of Hengyi
controlled over Group (Hengyi Group holds 60% of the shares of Zhejiang Hengyi Investment Co.the past 10 years Ltd.). Therefore Mr. Qiu Jianlin is the actual controller of the Company.
8.Change in actual controller in the reporting period
There’s no change in actual controller of the Company in the reporting period.
9.Block diagram of equity and control relationship between the Company and
the actual controller
2372024 Annual Report of Hengyi Petrochemical Co. Ltd.
Note: As of December 31 2024 Qiu Jianlin holds 26.19% of the equity of Hengyi
Group and actually controls 84.77% of the equity of Hengyi Group through acting in
concert with his family members (Qiu Jianlin signed the Acting-in-Concert Agreement
with Hangzhou Wanyong Industrial Investment Co. Ltd. Qiu Xiangjuan Qiu Yibo
Qiu Lirong and Qiu Xingjuan on February 8 2018. The agreement has maintained
effective and under the agreement Wanyong Industrial Investment Co. Ltd.controlled by Qiu Xiangjuan Qiu Yibo Qiu Lirong and Qiu Xingjuan are persons
acting in concert with Qiu Jianlin. The four shareholders hold 27.04% 26.19% 3.94%
and 1.42% of Hengyi Group equity respectively). Hengyi Group owns a direct 40.61%
stake of Hengyi Petrochemical and owns a 6.99% stake of Hengyi Petrochemical
through its controlled subsidiary - Hengyi Investment Co. Ltd. both Including sum
up to a 47.60% stake of Hengyi Petrochemical. Therefore Qiu Jianlin remains the
actual controller of the listed Company.The share purchase plan by controlling shareholder Hengyi Group is currently
underway. As of April 8 2025 Hengyi Group directly holds 1528281108 shares of
the Company representing a 41.68% equity stake; Through its affiliate Hengyi
Investment it holds 256338027 shares (6.99% ownership). The combined holdings
of controlling shareholder Hengyi Group and its acting-in-concert party Hengyi
2382024 Annual Report of Hengyi Petrochemical Co. Ltd.
Investment total 1784619135 shares constituting a 48.68% controlling interest. Mr.Qiu Jianlin remains the ultimate beneficial owner of the listed entity.
10.The actual controller controls the Company through trust or other means of
asset management.□Applicable ?Not applicable
11.The accumulative total number of pledged shares owned by the controlling
shareholder of the Company or the largest shareholder and its persons acting in
concert with him accounts for 80% of their holding.□Applicable ?Not applicable
12.Other corporate shareholders with the holding over 10%
□Applicable ?Not applicable
13.Restricted reduction of holding of the controlling shareholder actual
controller restructuring party and other major parties to the commitment
□Applicable ?Not applicable
IV.Implementation details of repurchase in the reporting period
1.Implementation progress of repurchase
Disclosure date Proposed amount of Proposed period of Repurchased
Purpose of repurchase
of the plan repurchase repurchase shares
Not less than RMB 500 Implement employee stock
December 16 December 16 2023
million and not more than ownership plan or share 122212697
2023 to December15 2024
RMB 1 billion incentive plan later
Not less than RMB 250 Implement employee stock
October 24 October 22 2024 to
million and not more than ownership plan or share 25300340
2024 October 21 2025
RMB 125 million incentive plan later
2.Implementation progress of reducing the holding repurchased shares through
centralized bidding
□Applicable ?Not applicable
2392024 Annual Report of Hengyi Petrochemical Co. Ltd.
2402024 Annual Report of Hengyi Petrochemical Co. Ltd.
Section VIII Preference Shares
There were no preference shares of the Company in the reporting period.
2412024 Annual Report of Hengyi Petrochemical Co. Ltd.
Section IX Bonds
I.Enterprise bonds
There were no enterprise bonds of the Company in the reporting period.II.Corporate bonds
There were no corporate bonds of the Company in the reporting period.III.Non-financial corporate debt financing instruments
There were no debt-financing instruments of non-financial businesses in the reporting
period.IV.Convertible corporate bonds
1.Historic changes in conversion price
(1)Hengyi convertible bonds (Bond code: 127022)
Since the Company implemented the equity distribution 2020 business the
convertible corporate bonds issued by the Company (bond abbreviation: Hengyi
Convertible Bonds; bond code: 127022) were subject to change in the conversion
price: original conversion price was RMB 11.50 per share and the changed conversion
price was RMB 11.20 per share and the change took effect since July 6 2021.Since the Company implemented the equity distribution 2021 business the
convertible corporate bonds issued by the Company (bond abbreviation: Hengyi
Convertible Bonds; bond code: 127022) were subject to change in the conversion
price The original conversion price of Hengyi Convertible Bonds was RMB 11.20 per
share and the changed conversion price of Hengyi Convertible Bonds was RMB 11.00
per share and the change took effect since July 7 2022.Due to the Company's implementation of the 2023 annual rights distribution the
conversion price of "Hengyi Convertible Bonds" will be adjusted accordingly: The
conversion price before adjustment was RMB 11.00 per share and the adjusted
conversion price will be RMB 10.91 per share. The adjusted conversion price will
take effect from June 26 2024.
2422024 Annual Report of Hengyi Petrochemical Co. Ltd.
According to the Announcement on the Downward Adjustment of the Conversion
Price of "Hengyi Convertible Bonds" (Announcement No.: 2024-127) disclosed by
the Company on November 19 2024 and based on the authorization from the
Company’s 2024 Fifth Extraordinary General Meeting of Shareholders the
Company’s Board of Directors has approved to downward adjust the conversion price
of "Hengyi Convertible Bonds" from RMB 10.91 per share to RMB 9.20 per share.The revised conversion price will take effect from November 19 2024.
(2)Hengyi Convertible Bonds 2 (Bond Code: 127067)
Due to the Company's implementation of the 2023 annual rights distribution the
conversion price of its issued convertible corporate bonds (Bond Abbreviation:
Hengyi Zhuan 2 Bond Code: 127067) will be adjusted accordingly. The conversion
price of "Hengyi Zhuan 2" before adjustment was RMB 10.50 per share and the
adjusted conversion price will be RMB 10.41 per share. The revised conversion price
will take effect from June 26 2024.
2.Cumulative conversion
Proportion
of
converted
Accumulat
Proportion
quantity to
ive
Abbreviatio Total Accumulativ of amount
total
Beginning and number of Amount of bonds
n of the Total number of amount of e amount of of bonds not
shares in
ending dates bonds not converted
convertible issues issuance conversion converted to
issue
of conversion converted (RMB)
bonds (RMB) (RMB) total amount
before the
into shares
of issuance
conversio
(share)
n
beginning
date
Hengyi April 22
Convertible 2021 to 20000000 2000000000 193800 17035 0.0005% 1999806200 99.99%
Bonds October 15
2432024 Annual Report of Hengyi Petrochemical Co. Ltd.
2026
Hengyi
January 30 2023
Convertible 30000000 3000000000 329900 31495 0.0009% 2999670100 99.99%
to July 20 2028
Bonds 2
3.Top 10 Hengyi convertible bonds holders
Number of Amount of Proportion of
Nature of convertible convertible bonds convertible
Name of convertible bonds
SN convertible bonds held at held at the end of bonds held at
holders
bonds holders the end of the the reporting period the end of the
reporting period (RMB) reporting period
Domestic
1 Minsheng Securities Co. Ltd. Non-State-Owned 885512 88551200 4.43%
Legal Person
China Merchants Bank Co. Ltd.
2 – Bosera CSI Convertible & Others 882101 88210100 4.41%
Exchangeable Bond ETF
Bank of China Co. Ltd. –
3 Nanhua Ruizhe Bond Securities Others 532136 53213600 2.66%
Investment Fund
E Fund Yitian Allocation Mixed
Pension Product – Industrial
4 Others 401407 40140700 2.01%
and Commercial Bank of China
Co. Ltd.Industrial and Commercial Bank
of China Co. Ltd. – Fullgoal
5 Others 399300 39930000 2.00%
Xingli Enhanced Bond Initiative
Fund
2442024 Annual Report of Hengyi Petrochemical Co. Ltd.
China National Petroleum
Corporation Corporate Annuity
6 Plan – Industrial and Others 362726 36272600 1.81%
Commercial Bank of China Co.Ltd
Basic Old-Age Insurance Fund
7 Others 356558 35655800 1.78%
Portfolio 107
Southern Fund Ningyuan
Fixed-Income Pension Product
8 Others 351596 35159600 1.76%
– Agricultural Bank of China
Co. Ltd.China Construction Bank Co.Ltd. – E Fund Dual Bond
9 Others 298720 29872000 1.49%
Enhanced Bond Securities
Investment Fund
Bank of China Co. Ltd. – E
10 Fund Stable Return Bond Others 287004 28700400 1.44%
Securities Investment Fund
4.Top 10 Hengyi convertible bonds 2 holders
Number of Amount of Proportion of
convertible bonds convertible bonds convertible bonds
Name of convertible Nature of convertible bonds
SN held at the end of held at the end of the held at the end of
bonds holders holders
the reporting reporting period the reporting
period (RMB) period
China Life Asset
Management -
1 Others 5040499 504049900 16.80%
Bank of China -
China Life Assets
2452024 Annual Report of Hengyi Petrochemical Co. Ltd.
- Dingkun
Advantage
Selection 2383
Asset
Management
Product
Hangzhou Hengyi Domestic
2 Investment Co. Non-State-Owned Legal 2144011 214401100 7.15%
Ltd. Person
CITIC Securities State-Owned Legal
319865001986500006.62%
Company Limited Person
Guotai Junan
State-Owned Legal
4 Securities Co. 1635100 163510000 5.45%
Person
Ltd.China Merchants
Bank Co. Ltd. -
Bosera CSI
5 Others 1292534 129253400 4.31%
Convertible &
Exchangeable
Bond ETF
Bank of China
Co. Ltd. - E Fund
6 Others 987219 98721900 3.29%
Stable Income
Bond Fund
Shenwan
Hongyuan State-Owned Legal
7884400884400002.95%
Securities Co. Person
Ltd.
8 China Life Asset Others 708060 70806000 2.36%
2462024 Annual Report of Hengyi Petrochemical Co. Ltd.
Management -
Bank of China -
China Life Assets
- Dingkun
Advantage
Selection 2384
Asset
Management
Product
Shanghai Pudong
Development
9 Bank Co. Ltd. - E Others 637980 63798000 2.13%
Fund Yu Xiang
Return Bond Fund
Dajia Life
Insurance Co.
10 Others 592043 59204300 1.97%
Ltd. - Traditional
Product
5.Major changes in the profitability condition of assets and credit status of
guarantor
□Applicable ?Not applicable
6.Debt condition credit standing and respectability changes of the Company at
the end of the reporting period and cash arrangement for debt repayment in the
coming years
(1)Relevant accounting data and financial indicators
End of current End of Add/deduct at the end of current
Item reporting period previous year reporting period over the end of
previous year
2472024 Annual Report of Hengyi Petrochemical Co. Ltd.
Liquidity ratio 0.63 0.66 -4.55%
Debt-to-asset ratio 71.42% 70.42% 1.00%
Acid-test ratio 0.40 0.43 -6.98%
Current The same
Year-on-year add/deduct in the
Item reporting period of
reporting period
period previous year
Interest coverage ratio 0.96 1.10 -12.73%
Loan repayment ratio (%) 100% 100% 0.00%
Interest repayment rate (%) 100% 100% 0.00%
(2) Credit rating of convertible bonds
During the reporting period Shanghai New Century Credit Appraisal & Investment
Services Co. Ltd. conducted follow-up ratings on the long-term credit status of the
main body of the Company and the HengYi Convertible Bonds and HengYi
Convertible Bonds 2 issued by the Company and maintained the main body of the
Company's credit rating at AA+ and assigned the abovementioned bonds a credit
rating of AA+. During the term of this convertible bond Shanghai New Century
Credit Appraisal & Investment Services Co. Ltd. will conduct regular follow-up
ratings once a year.
(3)Cash arrangement for debt repayment in the coming years
The Company maintains stable operations with robust cash flow. Both asset scale and
profitability have demonstrated steady growth while the asset-liability ratio remains
at a prudent level. With a sound credit standing the Company will ensure stable and
sufficient capital reserves to prudently arrange for future interest payments on
convertible bonds and bond redemptions supported by disciplined financial
management.
2482024 Annual Report of Hengyi Petrochemical Co. Ltd.
V. 10% more losses within the consolidation in the reporting period than the net
assets at the end of previous year
□Applicable ?Not applicable
VI. Overdue situation of interest-bearing debts except for bonds in the reporting
period
□Applicable ?Not applicable
VII. Existence/non-existence of violation of rules and regulations in the reporting
period
□Yes ?No
VIII.Main accounting data and financial indicators for the past two years as at
the end of the reporting period
Unit: RMB 10000
Add/deduct at the end of current
End of current End of previous
Item reporting period over the end of
reporting period year
previous year
Liquidity ratio 0.63 0.66 -4.55%
Debt-to-asset ratio 71.42% 70.42% 1.00%
Acid-test ratio 0.40 0.43 -6.98%
Current The same
Year-on-year add/deduct in the reporting
reporting period of
period
period previous year
Net profit after deducting non- recurring
2027.655368.58-62.23%
profit and loss
Debts to EBITDA 8.38% 9.55% -1.17%
Times interest earned ratio 0.96 1.10 -12.73%
2492024 Annual Report of Hengyi Petrochemical Co. Ltd.
Times cash interest earned ratio 3.55 2.72 30.51%
EBITDA times interest earned ratio 2.01 2.10 -4.29%
Loan repayment ratio 100.00% 100.00% 0.00%
Interest coverage 100.00% 100.00% 0.00%
2502024 Annual Report of Hengyi Petrochemical Co. Ltd.
Section X Financial Report
I.Audit Report by Zhongxinghua Certified Public Accountants (Special General
Partnership)
ZXHSZ (2025) No. 014536
To all shareholders of Hengyi petrochemical Co. Ltd.I.Auditor’s opinion
We have audited the financial statements of Hengyi Petrochemical Co. Ltd.(hereinafter referred to as "Hengyi Petrochemical") which comprise the parent
company’ balance sheets as of December 31 2024 and the consolidated statement
the parent company’ income statements and the consolidated statement the parent
company’ cash flow statements and the consolidated statement the parent company’
statements of changes in shareholders' equity and the consolidated statement and
notes to the financial statements for the year 2024.In our opinion the attached financial statements are prepared and present fairly in all
material aspects the consolidated financial position of Hengyi Petrochemical and
parent company’s financial position as of December 31 2024 and the results of their
operations and cash flows for the year 2024 in accordance with the Accounting
Standards for Business Enterprises.II.Basis for Auditor’s Opinions
In accordance with the Chinese Auditing Standards for Certified Public Accountants
we have performed the audit. The section titled "Responsibilities of the Certified
Public Accountants for the Financial Statement Audit" in the Audit Report further
elaborates our responsibilities under these standards. Following the Code of Ethics for
Chinese Certified Public Accountants we maintain independence from Hengyi
Petrochemical Co. Ltd. and have fulfilled our other ethical obligations. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
2512024 Annual Report of Hengyi Petrochemical Co. Ltd.
III.Key audit matters
Key audit matters are those matters that in our professional judgment were of most
significance in our audit of the financial statements for current period. These matters
were addressed in the context of our audit of the financial statements as a whole and
in forming our opinion thereon and we do not provide a separate opinion on these
matters. We have identified the following items as key audit matters that need to be
dealt with in the Audit Report.(I)Recognition of operating income
1.Description of matters
For relevant disclosures please refer to Note 3.26 "Revenue" and Note 5.48
"Operating Revenue and Operating Costs" in the financial statement annexes. In fiscal
year 2024 Hengyi Petrochemical Co. Ltd. reported consolidated operating revenue of
CNY 125463237100 reflecting a decrease of 7.85% compared to the previous fiscal
year. Given the materiality of revenue recognition to the financial statements as a
whole and the inherent risk of management manipulation to achieve specific targets or
expectations we have identified revenue recognition as a key audit matter in our
audit.
2.Audit response
The main audit procedures we performed are as follows:
(1)Understanding evaluating and testing the effectiveness of the design and operation
of the Company's internal control related to the revenue recycling;
(2)Selecting the sales contracts signed by samples identifying the individual
performance obligations transfer of control and other terms in the contracts and
evaluating whether the timing of revenue recognition has met the requirements of the
Accounting Standards for Business Enterprises;
(3)Performing analytical procedures on revenues and costs; analyzing fluctuations in
revenue cost gross profit rate for each month of current period; comparing and
2522024 Annual Report of Hengyi Petrochemical Co. Ltd.
analyzing the analysis procedures for revenue cost gross profit rate of main products
in current period with those in previous period and comparing and analyzing product
sales prices and raw material purchase prices with those of related products in the
industry and evaluating the accuracy of revenue recognition;
(4)Selecting samples from the accounting records of sales revenue checking
sales-related contracts delivery notes bills of lading certificates of transfer of goods
property invoices etc. and evaluating the authenticity and completeness of revenue
recognition;
(5)Selecting samples from the customers involved in the reporting period
implementing transaction confirmation procedure and evaluating the authenticity and
accuracy of the revenue;
(6)For some major clients implementing field-visit procedures to understand and
evaluate the transaction purpose and business background of relevant businesses;
(7)For export sales checking the relevant information via China Export & Credit
Insurance Corporation and the People's Insurance Company of China APPs against
the book sales records export declarations sales invoices etc. to verify the
authenticity of the export income;
(8)Performing a cut-off test for revenue; selecting samples from revenue recognition
transactions before and after the balance sheet date obtaining relevant documents
such as contracts invoices and delivery notes etc. and evaluating whether revenue
has been recognized in an appropriate period.(II)Inventory depreciation reserves
1.Description of matters
For further information disclosures please refer to Notes Three 16 Fixed Assets 17
Construction in Progress and Notes Five 15 Fixed Assets 16 Construction in
Progress in the financial statements.As of December 31 2024 the book value of Hengyi Petrochemical Company's fixed
asset projects was RMB 43686.607 million primarily comprising machinery and
2532024 Annual Report of Hengyi Petrochemical Co. Ltd.
equipment used for the production of aromatics refined oil polyester filament
purified terephthalic acid and the corresponding constructed plant buildings. These
fixed assets are recognized when they reach their intended usable state and are
depreciated on a straight-line basis over their estimated useful lives.As of December 31 2024 the book balance of Hengyi Petrochemical Company's
construction in progress projects was RMB 8712.8915 million primarily consisting
of the second phase of the Brunei Refinery and Chemical Project the first phase of
the Guangxi Jijin Project and other projects. Construction in progress is measured at
actual incurred costs including construction costs installation costs borrowing costs
that meet capitalization conditions and other necessary expenditures to bring the
construction in progress to its intended usable state. These expenditures include
engineering design supervision and cost consulting among others.Management's
judgments in the following areas impact the book value of fixed assets and
construction in progress as well as the depreciation policy for fixed assets. These
areas include: determining which expenditures qualify for capitalization identifying
the timing of transferring construction in progress to fixed assets and commencing
depreciation and estimating the economic useful lives and residual values of the
corresponding fixed assets.Since the evaluation of the book value of fixed assets and construction in progress
involves significant management judgment and represents a substantial portion of the
consolidated financial statements we have identified the measurement and
recognition of fixed assets and construction in progress as a key audit matter.IV.Other information
The management is responsible for the “other information”. The “other information”
comprises the information included in Hengyi Petrochemical's 2024 Annual Report
but does not include the financial statements and our audit report.
2542024 Annual Report of Hengyi Petrochemical Co. Ltd.
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 otherwise appears to be
materially misstated to the best of our knowledge in the course of our audit.If based on the work we have performed we conclude that there is a material
misstatement in the “other information” we are required to report that fact. We have
nothing to report in this regard.V.Responsibilities of the management and those charged with governance for the
financial statements
The management is responsible for preparing financial statements that present fairly
the financial position of the Company in accordance with the provisions of the
Accounting Standards for Business Enterprises and designing implementing and
maintaining necessary internal controls relevant to preparing and presenting financial
statements that are free from material misstatement due to fraud or error.In preparing the financial statements management is responsible for assessing the
ability to continue of Hengyi Petrochemical as a going concern disclosing matters
related to going concern (if applicable) and applying the going concern assumptions
unless management intends to liquidate Hengyi Petrochemical or Hengyi
Petrochemical ceases operations or has no realistic alternative.Those charged with governance are responsible for overseeing the financial reporting
process of Hengyi Petrochemical.VI.Responsibilities of the CPAs for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
2552024 Annual Report of Hengyi Petrochemical Co. Ltd.
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 may arise from fraud or error and are generally considered
material if they individually or in aggregate could reasonably be expected to
influence the economic decisions made by users based on the financial statements.As part of an audit in accordance with Auditing Standards we exercise professional
judgment and maintain professional skepticism throughout the audit. At the same time
we also:
(1)Identify and assess the risks of material misstatement of the financial statements
whether due to fraud or error design and perform audit procedures responsive to
those risks and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion; The risk of not detecting a material misstatement resulting from
fraud is higher than resulting from error as fraud may involve collusion forgery
willful omission misrepresentation or 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 using the going concern assumption by the
management; and based on the audit evidence obtained conclude whether a material
uncertainty exists related to events or conditions that may cast significant doubt on the
ability of Hengyi Petrochemical to continue as a going concern. If we conclude that a
material uncertainty exists we are required by the Auditing Standards to draw
attention in our report to the related disclosures in the financial statements; if such
disclosures are inadequate we shall express a modified opinion. Our conclusions are
based on information available as of the date of our Audit Report. However future
events or conditions may cause Hengyi Petrochemical to cease to continue as a going
concern.
2562024 Annual Report of Hengyi Petrochemical Co. Ltd.
(5)Evaluate the overall presentation structure and content of the financial statements
and whether the financial statements fairly represent the relevant transactions and
events.
(6)Obtain sufficient and appropriate audit evidence on the financial information of
Hengyi Petrochemical’s entities or business activities to express an audit opinion on
the consolidated financial statements. We are responsible for the direction
supervision and performance of the group audit and are solely responsible for our
audit opinion.We communicated with those charged with governance regarding among other
matters the planned scope and timing of the audit and significant audit matters
including any significant deficiencies in internal control that we identified during our
audit.We also provided a statement to those charged with governance that we had complied
with ethical requirements related to independence and communicated with those
charged with governance about all relationships and other matters that may
reasonably be deemed to affect our independence and related precautions if
applicable.From the matters communicated with those charged with governance we determined
which matters were most significant to the audit of the financial statements for current
period and therefore constituted key audit matters. We described these matters in our
audit report except public disclosure of such matters is prohibited by laws and
regulations or in rare cases where we determine that a matter shall not be
communicated in an audit report if there is a reasonable expectation that the negative
consequences of communicating such matter in the audit report would outweigh the
benefits in the public interest.II.Financial statements
Unit for the statements included in the notes: RMB
2572024 Annual Report of Hengyi Petrochemical Co. Ltd.
1.Consolidated Balance Sheet
Prepared by: Hengyi Petrochemical Co. Ltd.Unit: RMB
Item Ending balance Beginning balance
Current assets：
Monetary funds 13093174547.46 13827903087.40
Settlement Reserve Fund
Funds Lent
Financial Assets at Fair Value Through Profit
153091745.24366311518.38
or Loss
Derivative Financial Assets 4783678.80 0.00
Notes Receivable 6833997.24 167871662.32
Accounts Receivable 5944293285.48 5925174959.59
Receivables Financing 8782497.35 36904996.06
Prepayments 1570761713.95 1820494475.73
Premiums Receivable
Reinsurance Receivables
Reinsurance Contract Assets
Other Receivables 262407082.57 187541184.46
Including: Interest Receivable
Dividends Receivable
Financial Assets Purchased Under Resale
Agreements
Inventory 12407437115.10 13060195863.37
Including: Data Resources
Contract Assets
Assets Held for Sale
Non-current Assets Due Within One Year 68036685.67 0.00
Other Current Assets 1132982413.41 1533885409.09
2582024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Ending balance Beginning balance
Total Current Assets 34652584762.27 36926283156.40
Non-current Assets:
Loans and Advances Granted
Debt Investments
Other Debt Investments
Long-term Receivables 23640428.71 140987280.45
Long-term Equity Investments 13911759800.05 13669254123.61
Other Equity Instrument Investments 5600000.00 5600000.00
Other Non-current Financial Assets
Investment Properties
Fixed Assets 43686606928.39 45430020661.94
Construction in Progress 8712891498.77 4610305760.02
Productive Biological Assets
Oil and Gas Assets
Right-of-use Assets 411420429.59 414782305.73
Intangible Assets 2635077804.22 2734338605.88
Including: Data Resources
Development Expenditures 89193644.85 48821220.24
Including: Data Resources
Goodwill 221865586.69 221865586.69
Long-term Prepaid Expenses 374048947.17 460659030.78
Deferred Tax Assets 300209043.63 339577579.58
Other Non-current Assets 2503929185.78 3049611614.62
Total Non-current Assets 72876243297.85 71125823769.54
Total Assets 107528828060.12 108052106925.94
Current Liabilities:
Short-term Borrowings 38031193372.03 41122258268.86
Borrowings from the Central Bank
2592024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Ending balance Beginning balance
Funds Borrowed
Trading Financial Liabilities 2546598.89 108194619.69
Derivative Financial Liabilities
Notes Payable 1149382637.33 740998553.81
Accounts Payable 6516393154.04 6562123368.59
Deferred Revenue
Contract Liabilities 1253402884.38 756571793.30
Financial Assets Sold Under Repurchase
Agreements
Deposits and Inter bank Placements
Funds for Agency Trading of Securities
Funds for Agency Underwriting of Securities
Employee Benefits Payable 182643488.89 177419198.25
Taxes Payable 551789117.92 306721370.31
Other Payable 211562059.73 188374004.43
Including: Interest Payable
Dividends Payable
Handling Charges and Commission Payable
Reinsurance Payable
Liabilities Held for Sale
Non-current Liabilities Due Within One Year 6899022314.11 5809708815.79
Other Current Liabilities 133419904.46 76672908.46
Total Current Liabilities 54931355531.78 55849042901.49
Non-current Liabilities:
Insurance Contract Reserves
Long-term Borrowings 15504087484.02 14739441863.92
Bonds Payable 4494979631.55 4278805701.33
Including: Preferred Stock
2602024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Ending balance Beginning balance
Perpetual Bonds
Lease Liabilities 456139594.54 449163796.50
Long-term Payable 1070496662.83 464759585.87
Long-term Employee Benefits Payable
Provisions 2630823.25 819949.97
Deferred Income 269021790.94 223722228.38
Deferred Tax Liabilities 68008990.43 83862227.74
Other Non-current Liabilities
Total Non-current Liabilities 21865364977.56 20240575353.71
Total Liabilities 76796720509.34 76089618255.20
Owners’ Equity:
Share Capital 3666314207.00 3666302025.00
Other Equity Instruments 1159002779.38 1159031770.29
Including: Preferred Stock
Perpetual Bonds
Capital Surplus 8753596729.54 9085229180.87
Less: Treasury Stock 2676639183.21 2368941966.92
Other Comprehensive Income 955761424.10 680732360.18
Special Reserves
Surplus Reserves 807136900.99 807136900.99
General Risk Reserves
Undistributed Profits 12076878979.32 12181660569.68
Total Equity Attributable to Owners of the
24742051837.1225211150840.09
Parent Company
Non-controlling Interests 5990055713.66 6751337830.65
Total Owners’ Equity 30732107550.78 31962488670.74
Total Liabilities and Owners’ Equity 107528828060.12 108052106925.94
Legal representative: Qiu Yibo Chief accountant: Zheng Xingang Head of accounting agency: Yu Zhicheng
2612024 Annual Report of Hengyi Petrochemical Co. Ltd.
2.Parent company balance sheet
Unit: RMB
Item Closing balance Beginning balance
Current assets：
Monetary funds 479486887.90 460230369.89
Financial Assets at Fair Value Through Profit or Loss
Derivative Financial Assets
Notes Receivable 0.00 199750000.00
Accounts Receivable
Receivables Financing 1452086.00 0.00
Prepayments 4689162.00 112674.42
Other Receivables 6204340335.74 5912890574.22
Including: Interest Receivable
Dividends Receivable 340000000.00 765000000.00
Inventory
Including: Data Resources
Contract Assets
Non-current Assets Held for Sale
Non-current Assets Due within One Year
Other Current Assets 4609681.15 6225369.08
Total Current Assets 6694578152.79 6579208987.61
Non-current Assets:
Debt Investments
Other Debt Investments
Long-term Receivables
Long-term Equity Investments 16052619316.60 15955924520.80
Investments in Other Equity Instruments
Other Non-current Financial Assets
2622024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Closing balance Beginning balance
Investment Property
Property Plant and Equipment (PPE) 649.40 649.40
Construction in Progress
Biological Assets
Oil and Gas Assets
Right-of-use Assets
Intangible Assets
Including: Data Resources
Development Costs
Including: Data Resources
Goodwill
Long-term Prepaid Expenses
Deferred Tax Assets
Other Non-current Assets
Total Non-current Assets 16052619966.00 15955925170.20
Total Assets 22747198118.79 22535134157.81
Current liabilities：
Short-term borrowings 332361777.78 199750000.00
Financial Liabilities at Fair Value through Profit or
Loss
Derivative Financial Liabilities
Notes Payable 1083306000.00 847800000.00
Accounts Payable 0.00 60008624.46
Advances from Customers
Contract Liabilities 70970.45 0.00
Employee Benefits Payable
Taxes Payable 528739.90 296916.07
Other Payable 815497075.98 572827721.60
2632024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Closing balance Beginning balance
Including: Interest Payable
Dividends Payable
Liabilities Held for Sale
Non-current Liabilities Due within One Year 13206855.21 10092304.09
Other Current Liabilities 9226.16 0.00
Total Current Liabilities 2244980645.48 1690775566.22
Non-current Liabilities:
Long-term Borrowings
Bonds Payable 4494979631.55 4278805701.33
Including: Preference Shares
Perpetual Bonds
Lease Liabilities
Long-term Payable
Long-term Employee Benefits Payable
Provisions
Deferred Income
Deferred Tax Liabilities
Other Non-current Liabilities
Total Non-current Liabilities 4494979631.55 4278805701.33
Total Liabilities 6739960277.03 5969581267.55
Equity：
Share Capital 3666314207.00 3666302025.00
Other Equity Instruments 1159002779.38 1159031770.29
Including: Preference Shares
Perpetual Bonds
Capital Reserve 12743923502.17 13008445718.54
Less: Treasury Shares 2676639183.21 2368941966.92
Other Comprehensive Income
2642024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Closing balance Beginning balance
Special Reserves
Surplus Reserve 699923957.91 664659745.28
Retained Earnings 414712578.51 436055598.07
Total Equity 16007237841.76 16565552890.26
Total Liabilities and Equity 22747198118.79 22535134157.81
Legal representative: Qiu Yibo Chief accountant: Zheng Xingang Head of accounting agency: Yu
Zhicheng
3.Consolidated income statement
Unit: RMB
Item Year 2024 Year 2023
I.Total operating revenue 125463237098.17 136148114082.34
Including：Operating revenue 125463237098.17 136148114082.34
Interest income
Earned premiums
Fee and Commission Income
II.Total Operating Costs 126063153820.20 136903509470.71
Of which: Cost of Sales/Operating Costs 120872140383.51 131030233682.88
Interest Expense
Fee and Commission Expenses
Surrender Benefits
Net Claims Incurred
Net Change in Insurance Contract
Liabilities
Policyholder Dividends
Reinsurance Expenses
Taxes and Surcharges 237188466.91 249541289.88
Selling Expenses 243762401.38 229284289.09
2652024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Year 2024 Year 2023
Administrative Expenses 1102851622.36 1434227935.73
Research and Development Expenses
723365790.03716319527.66
(R&D)
Financial Expenses 2883845156.01 3243902745.47
Of which: Interest Expense 2938880617.79 3306322914.56
Interest Income 208017001.29 217648751.41
Add: Other Income 310806964.41 336961048.78
Investment Income (Loss) 481338948.25 985476736.48
Of which: Income from Associates and
351824646.06490890359.42
Joint Ventures
Gains on Derecognition of Financial
Assets at Amortized Cost
Exchange Gains (Loss)
Net Hedging Gains (Loss)
Fair Value Change Gains (Loss) -18561440.33 -45121198.68
Credit Impairment Losses(Loss) -6389552.52 -11426732.92
Asset Impairment Losses(Loss) -34344817.62 -71262509.77
Gains on Disposal of Assets(Loss) -51586614.89 -9342790.49
III.Operating Profit (Loss) 81346765.27 429889165.03
Add: Non-operating Income 9539070.90 35920509.46
Less: Non-operating Expenses 61383940.48 65971503.46
IV.Profit Before Tax (PBT) (Loss) 29501895.69 399838171.03
Less: Income Tax Expense 95255086.41 31159461.25
V.Net Profit (Loss) -65753190.72 368678709.78
(I)By Operational Continuity
1. Net Profit from Continuing Operations(Loss) -65753190.72 368678709.78
2. Net Profit from Discontinued Operations(Loss)
(II)By Ownership Attribution
2662024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Year 2024 Year 2023
1.Net Profit Attributable to Parent Company
233939342.84435458340.57
Shareholders
2. Non-controlling Interests (Minority Interests) -299692533.56 -66779630.79
VI.Other Comprehensive Income (OCI) Net of Tax 266298955.54 301662130.69
OCI Attributable to Parent Company Shareholders 275029063.92 299811615.99
(I)OCI Not Reclassifiable to Profit or Loss 2017800.00 790515.39
1. Remeasurements of Defined Benefit Plans
2.OCI from Equity Method Investments Not
2017800.00790515.39
Reclassifiable
3. Fair Value Changes of Other Equity Instruments
4. Fair Value Changes Due to Own Credit Risk
5. Others
(II)OCI Reclassifiable to Profit or Loss 273011263.92 299021100.60
1.OCI from Equity Method Investments
78833868.5041753641.58
Reclassifiable
2.Fair Value Changes of Debt Instruments at FVOCI
3.Reclassification Adjustments for Financial Assets
4.Credit Impairment Reserves for Debt Instruments
at FVOCI
5. Cash Flow Hedge Reserve 421087.50 22418946.16
6.Foreign Currency Translation Differences 193756307.92 234848512.86
7. Others
OCI Attributable to Non-controlling Interests -8730108.38 1850514.70
VII.Total Comprehensive Income 200545764.82 670340840.47
Total Comprehensive Income Attributable to Parent
508968406.76735269956.56
Company Shareholders
Total Comprehensive Income Attributable to
-308422641.94-64929116.09
Non-controlling Interests
2672024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Year 2024 Year 2023
VIII.Earnings Per Share (EPS)
(I)Basic EPS 0.07 0.13
(II)Diluted EPS 0.07 0.13
Legal representative: Qiu Yibo Chief accountant: Zheng Xingang Head of accounting agency: Yu
Zhicheng
4.Parent company income statement
Unit: RMB
Item Year 2024 Year 2023
I.Total operating revenue 1069681728.42 0.00
Less: Cost of Sales/Operating Costs 1065678320.71 0.00
Taxes and Surcharges 2577331.18 1586855.08
Selling Expenses
Administrative Expenses 5794888.04 5089989.92
Research and Development Expenses (R&D)
Financial Expenses -13854988.64 -12982277.77
Of which: Interest Expense 264479682.30 266658832.11
Interest Income 290350773.97 288732193.54
Add: Other Income 3340558.65 2128804.24
Investment Income (Loss) 339694795.80 339901377.58
Of which: Income from Associates and Joint
-305204.20-98622.42
Ventures
Gains on Derecognition of Financial Assets at
Amortized Cost
Net Hedging Gains (Loss)
Fair Value Change Gains (Loss)
Credit Impairment Losses(Loss) 0.00 -10000.00
Asset Impairment Losses(Loss)
2682024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Year 2024 Year 2023
Gains on Disposal of Assets(Loss)
II.Operating Profit (Loss) 352521531.58 348325614.59
Add: Non-operating Income 120594.69 234746.93
Less: Non-operating Expenses
III.Profit Before Tax (PBT) (Loss) 352642126.27 348560361.52
Less: Income Tax Expense
IV.Net Profit (Loss) 352642126.27 348560361.52
(I)Net Profit from Continuing Operations (Loss) 352642126.27 348560361.52
(II)Net Profit from Discontinued Operations (Loss)
V.Other Comprehensive Income (OCI) Net of Tax
OCI Attributable to Parent Company Shareholders
(I)OCI Not Reclassifiable to Profit or Loss
1. Remeasurements of Defined Benefit Plans
2.OCI from Equity Method Investments Not
Reclassifiable
3. Fair Value Changes of Other Equity Instruments
4. Fair Value Changes Due to Own Credit Risk
5. Others
(II)OCI Reclassifiable to Profit or Loss
1.OCI from Equity Method Investments Reclassifiable
2.Fair Value Changes of Debt Instruments at FVOCI
3.Reclassification Adjustments for Financial Assets
4.Credit Impairment Reserves for Debt Instruments at
FVOCI
5. Cash Flow Hedge Reserve
6.Foreign Currency Translation Differences
VI.Total Comprehensive Income 352642126.27 348560361.52
5.Consolidated cash flow statement
2692024 Annual Report of Hengyi Petrochemical Co. Ltd.
Unit: RMB
Item Year 2024 Year 2023
I. Cash Flows from Operating Activities：
Cash received from sales of goods and services 133741965540.01 149171462352.96
Net increase in customer deposits and inter bank
deposits
Net increase in borrowings from central banks
Net increase in borrowings from other financial
institutions
Cash received from original insurance contract
premiums
Net cash received from reinsurance business
Net increase in policyholder deposits and investment
funds
Cash received from interest service fees and
commissions
Net increase in inter bank borrowings
Net increase in repurchase agreement funds
Net cash received from securities brokerage
Tax and fee refunds received 1284902741.57 1704518936.01
Other cash received related to operating activities 530856341.36 466751335.95
Subtotal of Operating Cash Inflows 135557724622.94 151342732624.92
Cash paid for purchases of goods and services 125041850148.09 141837557690.06
Net increase in customer loans and advances
Net increase in deposits with central banks and interbank
institutions
Cash paid for claims under original insurance contracts
Net increase in interbank lending
Cash paid for interest service fees and commissions
2702024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Year 2024 Year 2023
Cash paid for policyholder dividends
Cash paid to and on behalf of employees 2470514775.18 2447999748.11
Taxes and fees paid 1191352463.94 1235348190.93
Other cash paid related to operating activities 856995679.97 1289992190.67
Subtotal of Operating Cash Outflows 129560713067.18 146810897819.77
Net Cash Flows from Operating Activities 5997011555.76 4531834805.15
II. Cash Flows from Investing Activities:
Cash received from disposal of investments 786000000.00 988000000.00
Cash received from investment returns 290020712.53 301046977.47
Net cash received from disposal of fixed assets
100441217.5723009592.59
intangible assets and other long-term assets
Net cash received from disposal of subsidiaries and
56084.57138494181.97
business units
Other cash received related to investing activities 344984290.41 146513074.49
Subtotal of Investing Cash Inflows 1521502305.08 1597063826.52
Cash paid for acquisition/construction of fixed assets
4435706426.434934677342.08
intangible assets and other long-term assets
Cash paid for investments 123419685.61 1820698257.11
Net increase in pledged loans
Net cash paid for acquisition of subsidiaries and
business units
Other cash paid related to investing activities 50495239.10 144345965.50
Subtotal of Investing Cash Outflows 4609621351.14 6899721564.69
Net Cash Flows from Investing Activities -3088119046.06 -5302657738.17
III. Cash Flows from Financing Activities:
Cash received from capital contributions 100000.00 0.00
Including: Cash received from minority shareholders’
100000.000.00
investments in subsidiaries
2712024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Year 2024 Year 2023
Cash received from borrowings 60464223489.44 54367260691.80
Other cash received related to financing activities 11525935271.42 7244684328.87
Subtotal of Financing Cash Inflows 71990258760.86 61611945020.67
Cash paid for debt repayment 60911284372.07 52009598096.99
Cash paid for dividends profit distributions or interest
2702270253.542671790544.07
payments
Including: Dividends/profits paid to minority
shareholders by subsidiaries
Other cash paid related to financing activities 9819792656.74 10669552070.80
Subtotal of Financing Cash Outflows
73433347282.3565350940711.86
Net Cash Flows from Financing Activities
Subtotal of Financing Cash Outflows
-1443088521.49-3738995691.19
Net Cash Flows from Financing Activities
IV. Effect of Exchange Rate Changes on Cash and Cash
76966509.9893867133.30
Equivalents
V. Net Increase in Cash and Cash Equivalents 1542770498.19 -4415951490.91
Add:Opening balance of cash and cash
8518118122.1212934069613.03
equivalents
VI. Closing Balance of Cash and Cash Equivalents 10060888620.31 8518118122.12
6.Parent company cash flow statement
Unit: RMB
Item Year 2024 Year 2023
I. Cash Flows from Operating Activities：
Cash received from sales of goods and services 1188268463.72 0.00
Tax and fee refunds received
Other cash received related to operating activities 248223517.39 1040086300.14
Subtotal of Operating Cash Inflows 1436491981.11 1040086300.14
2722024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Year 2024 Year 2023
Cash paid for purchases of goods and services 1014221925.11 109000000.00
Cash paid to and on behalf of employees
Taxes and fees paid 2345507.35 1821256.10
Other cash paid related to operating activities 735034477.07 18375813.22
Subtotal of Operating Cash Outflows 1751601909.53 129197069.32
Net Cash Flows from Operating Activities -315109928.42 910889230.82
II. Cash Flows from Investing Activities:
Cash received from disposal of investments
Cash received from investment returns 765000000.00 0.00
Net cash received from disposal of fixed assets
intangible assets and other long-term assets
Net cash received from disposal of subsidiaries
and business units
Other cash received related to investing activities 288435226.49 490259339.49
Subtotal of Investing Cash Inflows 1053435226.49 490259339.49
Cash paid for acquisition/construction of fixed
assets intangible assets and other long-term assets
Cash paid for investments 97000000.00 10000000.00
Net cash paid for acquisition of subsidiaries and
business units
Other cash paid related to investing activities 0.00 81350573.14
Subtotal of Investing Cash Outflows 97000000.00 91350573.14
Net Cash Flows from Investing Activities 956435226.49 398908766.35
III. Cash Flows from Financing Activities：
Cash received from capital contributions
Cash received from borrowings 332000000.00 199750000.00
Other cash received related to financing activities 2583748112.69 1137694931.25
Subtotal of Financing Cash Inflows 2915748112.69 1337444931.25
2732024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Year 2024 Year 2023
Cash paid for debt repayment 0.00 500811000.00
Cash paid for dividends profit distributions or
381501848.8446494106.24
interest payments
Other cash paid related to financing activities 2933096243.91 2446291636.25
Subtotal of Financing Cash Outflows 3314598092.75 2993596742.49
Net Cash Flows from Financing Activities -398849980.06 -1656151811.24
IV. Effect of Exchange Rate Changes on Cash and Cash
Equivalents
V. Net Increase in Cash and Cash Equivalents 242475318.01 -346353814.07
Add: Opening balance of cash and cash equivalents 20350369.89 366704183.96
VI. Closing Balance of Cash and Cash Equivalents 262825687.90 20350369.89
2742024 Annual Report of Hengyi Petrochemical Co. Ltd.
7.Consolidated statement of changes in equity
Current period amount
Unit: RMB
Year 2024
Equity attributable to parent company
Item Other equity instruments Other Non-contr
Less: General Undistri
Share Capital compreh Special Surplus olling Total equity
Preferre Perpetua Treasury risk buted Others Subtotal interest
capital Others reserve ensive reserve reserve
d shares l bonds shares reserve interest
income
121816
36663011590390852223689468073280713625211150675133731962488
I.Closing Balance of Prior Year 60569.6
2025.001770.299180.871966.92360.18900.99840.09830.65670.74
8
Add: Accounting Policy Changes
Prior Period Error Corrections
Other
121816
36663011590390852223689468073280713625211150675133731962488
II. Opening Balance of Current Year 60569.6
2025.001770.299180.871966.92360.18900.99840.09830.65670.74
8
12182.0-28990.-331632307697275029-104781-4690990-7612821-1230381III.Current period increase （or less: decrease)
091451.33216.29063.92590.3602.9716.99119.96
27502923393950896840-3084226200545764
(I)Total Comprehensive Income
063.92342.846.7641.94.82
(II)Contributions from and Reductions in 12182.0 -28990. -264522 307697 -5722362 -4475000 -1019736
Owners’ Equity 0 91 216.37 216.29 41.57 00.00 241.57
-169040817685-8178548-4475000-1265354
1.Ordinary Shares Issued by Owners.52803.2043.7200.00843.72
2.Capital Contributions by Holders of Other 12182.0 -28990. 127298.
110489.65110489.65
Equity Instruments 0 91 56
2752024 Annual Report of Hengyi Petrochemical Co. Ltd.
3.Share-Based Payments Recognized in Equity
-264480-50998824550811245508112
4.Other
474.41586.912.50.50
-338720-3387209-33872093
(III)Profit Distribution
933.2033.203.20
1.Allocation to Surplus Reserves
2.Allocation to General Risk Provisions
-338720-3387209-33872093
3.Distributions to Owners (or Shareholders)
933.2033.203.20
4.Other
(IV)Internal Transfers within Equity
1.Capitalization of Capital Reserves
2.Capitalization of Surplus Reserves
3.Utilization of Surplus Reserves to Offset Losses
4.Revisions to Defined Benefit Plans Transferred
to Retained Earnings
5.Reclassification of Other Comprehensive Income
to Retained Earnings
6.Other
(V)Special Reserves
5073155073158050731580.
1.Current Period Appropriations
80.68.6868
5073155073158050731580.
2.Current Period Utilizations
80.68.6868
-67110-6711023-5359475.-72469710
(VI)Other
234.964.9605.01
120768
36663111590087535926766395576180713624742051599005530732107
IV. Closing Balance of Current Year 78979.3
4207.002779.386729.549183.21424.10900.99837.12713.66550.78
2762024 Annual Report of Hengyi Petrochemical Co. Ltd.
Previous period amount
Year 2023
Equity attributable to parent company
Item Other equity instruments Other Non-contr
Less: General Undistri
Share Capital compreh Special Surplus olling Total equity
Preferre Perpetua Treasury risk buted Others Subtotal interest
capital Others reserve ensive reserve reserve
d shares l bonds shares reserve interest
income
117716
36662811590891706314835638092078170125446694721145132658145
I.Closing Balance of Prior Year 37510.9
0806.002382.387734.406737.98744.19619.18059.09336.07395.16
2
Add: Accounting Policy Changes
Prior Period Error Corrections
Other
117716
36662811590891706314835638092078170125446694721145132658145
II. Opening Balance of Current Year 37510.9
0806.002382.387734.406737.98744.19619.18059.09336.07395.16
2
21219.0-50612.-85408885375299811254352410023-2355432-4601135-69565672III.Current period increase （or less: decrease)
009553.53228.94615.9981.81058.7619.0005.424.42
29981143545873526995-6492911670340840
(I)Total Comprehensive Income
615.99340.576.566.09.47
(II)Contributions from and Reductions in 21219.0 -50612. 106188. 885375 -8852984 -1887684 -1074066
Owners’ Equity 0 09 81 228.94 33.22 32.00 865.22
-86407.885375-8854616-1887684-1074230
1.Ordinary Shares Issued by Owners
31228.9436.2532.00068.25
2.Capital Contributions by Holders of Other 21219.0 -50612. 192596.
163203.03163203.03
Equity Instruments 0 09 12
3.Share-Based Payments Recognized in Equity
4.Other
(III)Profit Distribution 254352 -25435 -5098156 -50981568
2772024 Annual Report of Hengyi Petrochemical Co. Ltd.
81.81281.818.00.00
254352-25435
1.Allocation to Surplus Reserves
81.81281.81
2.Allocation to General Risk Provisions
-5098156-50981568
3.Distributions to Owners (or Shareholders)
8.00.00
4.Other
(IV)Internal Transfers within Equity
1.Capitalization of Capital Reserves
2.Capitalization of Surplus Reserves
3.Utilization of Surplus Reserves to Offset Losses
4.Revisions to Defined Benefit Plans Transferred
to Retained Earnings
5.Reclassification of Other Comprehensive Income
to Retained Earnings
6.Other
(V)Special Reserves
5684085684083056840830.
1.Current Period Appropriations
30.32.3232
5684085684083056840830.
2.Current Period Utilizations
30.32.3232
-85514-8551474-1554343-24094913
(VI)Other
742.342.3489.331.67
121816
36663011590390852223689468073280713625211150675133731962488
IV. Closing Balance of Current Year 60569.6
2025.001770.299180.871966.92360.18900.99840.09830.65670.74
8
8.Parent company statement of changes in equity
Current period amount
2782024 Annual Report of Hengyi Petrochemical Co. Ltd.
Unit: RMB
Year 2024
Other equity instruments Other
Item Less: Treasury Special
Share capital Preferred Perpetual Capital reserve comprehensive Surplus reserve Capital reserve Other Total equity
Others shares reserve
shares bonds income
I.Closing
Balance of Prior 3666302025.00 1159031770.29 13008445718.54 2368941966.92 664659745.28 436055598.07 16565552890.26
Year
Add:
Accounting
Policy Changes
Prior Period
Error Corrections
Other
II. Opening
Balance of 3666302025.00 1159031770.29 13008445718.54 2368941966.92 664659745.28 436055598.07 16565552890.26
Current Year
III.Current period
increase (or less: 12182.00 -28990.91 -264522216.37 307697216.29 35264212.63 -21343019.56 -558315048.50
decrease)
(I)Total
Comprehensive 352642126.27 352642126.27
Income
(II)Contributio
ns from and
12182.00-28990.91-264522216.37307697216.29-572236241.57
Reductions in
Owners’ Equity
1.Ordinary
-169040.52817685803.20-817854843.72
Shares Issued by
2792024 Annual Report of Hengyi Petrochemical Co. Ltd.
Owners
2.Capital
Contributions by
Holders of Other 12182.00 -28990.91 127298.56 110489.65
Equity
Instruments
3.Share-Based
Payments
Recognized in
Equity
4.Other -264480474.41 -509988586.91 245508112.50
(III)Profit
35264212.63-373985145.83-338720933.20
Distribution
1.Allocation to
35264212.63-35264212.63
Surplus Reserves
2.Allocation to
General Risk -338720933.20 -338720933.20
Provisions
3.Distributions to
Owners (or
Shareholders)
4.Other
(IV)Internal
Transfers within
Equity
1.Capitalization
of Capital
Reserves
2.Capitalization
of Surplus
2802024 Annual Report of Hengyi Petrochemical Co. Ltd.
Reserves
3.Utilization of
Surplus Reserves
to Offset Losses
4.Revisions to
Defined Benefit
Plans Transferred
to Retained
Earnings
5.Reclassification
of Other
Comprehensive
Income to
Retained
Earnings
6.Other
(V)Special
Reserves
1.Current Period
Appropriations
2.Current Period
Utilizations
(VI)Other 3666314207.00 1159002779.38 12743923502.17 2676639183.21 699923957.91 414712578.51 16007237841.76
Previous period amount
Unit: RMB
Item Year 2023
2812024 Annual Report of Hengyi Petrochemical Co. Ltd.
Other equity instruments Specia
Other
Less: Treasury l Surplus Capital Othe
Share capital Preferre Perpetua Capital reserve comprehensiv Total equity
Others shares reserv reserve reserve r
d shares l bonds e income
e
I.Closing
3666280806.01159082382.313008339529.71483566737.9629803709.1122351272.717102290961.9
Balance of Prior
0838306
Year
Add:
Accounting
Policy Changes
Prior
Period Error
Corrections
Other
II. Opening
3666280806.01159082382.313008339529.71483566737.9629803709.1122351272.717102290961.9
Balance of
0838306
Current Year
III.Current
period increase 313704325.3
21219.00-50612.09106188.81885375228.9434856036.15-536738071.70
（or less: 7decrease)
(I)Total
348560361.5
Comprehensive 348560361.52
2
Income
(II)Contributi
ons from and
21219.00-50612.09106188.81885375228.94-885298433.22
Reductions in
Owners’ Equity
1.Ordinary
Shares Issued by -86407.31 885375228.94 -885461636.25
Owners
2822024 Annual Report of Hengyi Petrochemical Co. Ltd.
2.Capital
Contributions by
Holders of Other 21219.00 -50612.09 192596.12 163203.03
Equity
Instruments
3.Share-Based
Payments
Recognized in
Equity
4.Other
(III)Profit -34856036.1
34856036.15
Distribution 5
1.Allocation to
-34856036.1
Surplus 34856036.15
5
Reserves
2.Allocation to
General Risk
Provisions
3.Distributions
to Owners (or
Shareholders)
4.Other
(IV)Internal
Transfers within
Equity
1.Capitalization
of Capital
Reserves
2.Capitalization
of Surplus
2832024 Annual Report of Hengyi Petrochemical Co. Ltd.
Reserves
3.Utilization of
Surplus
Reserves to
Offset Losses
4.Revisions to
Defined Benefit
Plans
Transferred to
Retained
Earnings
5.Reclassificatio
n of Other
Comprehensive
Income to
Retained
Earnings
6.Other
(V)Special
Reserves
1.Current Period
Appropriations
2.Current Period
Utilizations
3666302025.01159031770.213008445718.52368941966.9664659745.2436055598.016565552890.2
(VI)Other
0942876
2842024 Annual Report of Hengyi Petrochemical Co. Ltd.
III.Basic information about the Company
1.Historical development
Hengyi Petrochemical Co. Ltd. (referred to as "the Company" or "Company")
formerly known as Centennial Brilliance Science and Technology Co. Ltd. (referred
to as "Centennial Brilliance") which was changed into its current name on June 1
2011 by change in the registration with administration for industry and commerce.
The Company was established with initiation by shareholders on December 14 1989
and upon approval by the Economic System Reform Commission of Guangxi Zhuang
Autonomous Region with the G. T. G. [1990] No. 3 Document issued on February 10
1990. The Company’s stocks were listed on Shenzhen Stock Exchange on March 28
1997 under the stock code of 000703 and the current stock abbreviation of "Hengyi
Petrochemical".Upon approval by China Securities Regulatory Commission with the document Reply
on Approval of the Sales of Major Assets of Centennial Brilliance Science and
Technology Co. Ltd. and the Issuance of Its Shares to Zhejiang Hengyi Group Co.Ltd. for Purchase of Assets (ZJXK[2011] No. 540) issued on April 15 2011 the
Company sold all its assets and liabilities to Henan Huicheng Investment Co. Ltd.("Henan Huicheng") with the employees transferred with assets. Henan Huicheng
paid the consideration in cash. The Company issued 432883813 shares to purchase
100% equity in Zhejiang Hengyi Petrochemical Co. Ltd. (hereinafter referred to as
Hengyi Limited) held by Zhejiang Hengyi Group Co. Ltd. Tianjin Dinghui Equity
Investment Phase I Fund (Limited Partnership) Tianjin Dinghui Yuanbo Equity
Investment Fund (Limited Partnership); at the same time Henan Huicheng transferred
its 12237050 shares in Centennial Brilliance to Zhejiang Hengyi Group Co. Ltd.(hereinafter referred to as Hengyi Group) in form of agreement and Hengyi Group
paid the consideration in cash.On April 27 2011 Ascenda conducted capital verification on the major asset
reorganization and issuance of shares to purchase assets and issued TJZXY(2011) Z.
2852024 Annual Report of Hengyi Petrochemical Co. Ltd.
Z. No. 020057 Capital Verification Report to verify the issued 432883813 shares.According to the resolutions of the Company’s 2011 Annual General Meeting of
Shareholders and the revised Articles of Association three bonus shares for every 10
shares were distributed to all shareholders on the basis of the Company’s original total
share capital of RMB 576793813.00 and the capital reserve was transferred to
increase 7 shares for every 10 shares to all shareholders at the same time. The
Company increased its registered capital by RMB 576793813.00. The base date of
the increase by transfer was March 27 2012 and the registered capital after the
change was RMB 1153587626.00.According to the resolutions of the 2015 Annual General Meeting of Shareholders and
the revised Articles of Association the Company implemented the first restricted
stock incentive plan in 2015. The incentive form adopted in this incentive plan was
restricted stocks and 15 incentive objects were granted the restricted stocks in the
first time. 11.7 million restricted stocks with a par value of RMB 1 per share were
granted to incentive objects by means of targeted issuance. The Company increased
its registered capital by RMB 11700000.00 and the registered capital after the
change was RMB 1165287626.00.According to the resolutions of the 2014 Annual General Meeting of Shareholders and
the revised Articles of Association upon the approval of China Securities Regulatory
Commission with the Reply on Approval of Hengyi Petrochemical Co. Ltd.’s
Non-public Issuance of Stocks (ZJXK [2015] No. 2085) the Company privately
issued 140845070 RMB ordinary shares (A-shares) with a par value of RMB 1 per
share in 2015. The Company increased its registered capital by RMB 140845070.00
and the registered capital after the change was RMB 1306132696.00.According to the resolutions of the twenty-sixth meeting of the ninth session of the
BOD of the Company in 2016 and the revised Articles of Association the Company’s
2862024 Annual Report of Hengyi Petrochemical Co. Ltd.
repurchased and cancelled 25% of the granted restricted stocks that were held by
incentive objects and did not meet the unlocking conditions for the first unlocking
period i.e. 2925000 restricted stocks. The Company reduced the registered capital
by RMB 2925000.00 and the registered capital after the change was RMB
1303207696.00.
According to the resolutions of the Company’s 2015 Annual General Meeting of
Shareholders and the revised Articles of Association upon the approval granted by
China Securities Regulatory Commission with the Reply on Approval of Hengyi
Petrochemical Co. Ltd.’s Non- public Issuance of Stocks (ZJXK [2016] No. 1320)
the Company privately issued 316666666 RMB ordinary shares (A shares) with a
par value of RMB 1 per share in 2016. The Company increased its registered capital
by RMB 316666666.00 and the registered capital after the change was RMB
1619874362.00.
According to the resolutions of the Second Extraordinary General Meeting of
Shareholders of the Company in 2017 and the Company’s revised Articles of
Association the Company implemented the second restricted stock incentive plan in
2017. The incentive form adopted in this incentive plan was restricted stocks and 50
incentive objects were granted the restricted stocks in this time. 28.55 million
restricted stocks with a par value of RMB 1 per share were granted to incentive
objects by means of targeted issuance. The Company increased its registered capital
by RMB 28550000.00 and the registered capital after the change was RMB
1648424362.00.
According to the resolutions of the Company’s 2017 Annual General Meeting of
Shareholders and the revised Articles of Association the capital reserve was
transferred to increase 4 shares for every 10 shares to all shareholders based on the
Company’s original total share capital of RMB 1648424362. The Company
completed the registration of bonus and transferred stocks on May 24 2018. The
2872024 Annual Report of Hengyi Petrochemical Co. Ltd.
Company increased its registered capital by RMB 659369744 and the registered
capital after the change was RMB 2307794106.00.In October 2018 due to the resignation of restricted stock incentive objects the
Company repurchased and cancelled 679000 restricted stocks. The Company reduced
its registered capital (share capital) by RMB 679000. After the change the registered
capital was RMB 2307115106 and the share capital was RMB 2307115106.In December 2018 the Company issued 170592433 shares to Zhejiang Hengyi
Group Co. Ltd. (hereinafter referred to as "Hengyi Group") 75124910 shares to
Fulida Group Holding Co. Ltd. (hereinafter referred to as "Fulida Group") and
75124910 shares to Xinghui Chemical Fiber Group Co. Ltd. (hereinafter referred to
as "Xinghui Chemical Fiber Group") to purchase related assets. After the change the
registered capital was RMB 2627957359.00 and the share capital was RMB
2627957359.00.
In January 2019 the Company privately issued 213768115 shares to 6 investors
separately to raise matching funds. After the change the registered capital was RMB
2841725474.00 and the share capital was RMB 2841725474.00.
According to the resolutions of the Company’s 2019 Annual General Meeting of
Shareholders and the revised Articles of Association the capital reserve was
transferred to increase three shares for every 10 shares to all shareholders based on the
Company’s original total share capital of RMB 2841725474.00. The Company
completed the registration of bonus and transferred stocks on May 28 2020. The
Company increased its registered capital by RMB 852517642 and the registered
capital after the change was RMB 3694243116.00.On June 9 2020 in accordance with the Proposal on the Issuance of Shares to
Purchase Assets and the Realization of Performance Commitments for Related-party
2882024 Annual Report of Hengyi Petrochemical Co. Ltd.
Transaction Projects in 2019 and Performance Compensation Plan the cancellation of
12597709 shares was completed and the registered capital after the change was
RMB 3681645407.00.Upon approval by Shenzhen Stock Exchange (SZSE) (approval document SZS [2020]
No. 1027) the Company’s convertible corporate bonds amounting to RMB 2 billion
were listed on Shenzhen Stock Exchange on November 16 2020 with the bond name
of Hengyi Convertible Bonds the conversion period of which was from April 22
2021 to October 15 2026. Through 2021 a total of 1639 Hengyi Convertible Bonds
were converted into 14337 Hengyi Petrochemical shares.On July 28 2021 in accordance with the Proposal on Achievement of Performance
Commitments and Performance Compensation Plan in 2020 through the Share
Issuance for Asset Acquisition and related-party transactions the Company canceled
15379730 shares.
With the approval of the Shenzhen Stock Exchange (hereinafter referred to as "SZSE")
document "Shenzhen Stock Exchange [2020] No. 1027" the company's convertible
corporate bonds amounting to 2000 million RMB were listed for trading on the
Shenzhen Stock Exchange starting from November 16 2020. The bond is abbreviated
as "Hengyi Convertible Bond". The conversion period for "Hengyi Convertible Bond"
is from April 22 2021 to October 15 2026.With the approval of the SZSE document "Shenzhen Stock Exchange [2022] No.
782" the company's convertible corporate bonds amounting to 3000 million RMB
were listed for trading on the SZSE starting from August 18 2022. The bond is
abbreviated as "Hengyi Convertible Bond 2". The conversion period for "Hengyi
Convertible Bond 2" is from January 30 2023 to July 20 2028.In the year 2021 a total of 1639 "Hengyi Convertible Bonds" were converted into
2892024 Annual Report of Hengyi Petrochemical Co. Ltd.
14337 shares of "Hengyi Petrochemical" stock. In 2022 a total of 89 "Hengyi
Convertible Bonds" were converted into 792 shares of "Hengyi Petrochemical" stock.In 2023 a total of 120 "Hengyi Convertible Bonds" were converted into 1084 shares
of "Hengyi Petrochemical" stock and a total of 2116 "Hengyi Convertible Bond 2"
were converted into 20135 shares of "Hengyi Petrochemical" stock. In 2024 a total
of 90 "Hengyi Convertible Bonds" were converted into 822 shares of "Hengyi
Petrochemical" stock and a total of 1183 "Hengyi Convertible Bond 2" were
converted into 11360 shares of "Hengyi Petrochemical" stock.After the conversion of the aforementioned "Hengyi Convertible Bond" and "Hengyi
Convertible Bond 2" into 48530 shares as of December 31 2024 the company's
registered capital was RMB 3666265677.00 and the share capital changed to RMB
3666314207.00.
After the conversion of the aforementioned "Hengyi Convertible Bond" and "Hengyi
Convertible Bond 2" into 48530 shares as of December 31 2024 the company's
registered capital was RMB 3666265677.00 and the share capital changed to RMB
3666314207.00.
The parent company of the Company is: Zhejiang Hengyi Group Co. Ltd.
2.Industry Involved
The Company involves petrochemical and chemical fiber products manufacturing.
3.Line of Business
The approved business scope of the Company: production processing and sales of
chemical fibers chemical raw materials (excluding hazardous chemicals); imports and
exports (except the items banned and restricted under national laws and regulations).
4.Key Products
2902024 Annual Report of Hengyi Petrochemical Co. Ltd.
The Company's main products include purified terephthalic acid (PTA) polyethylene
terephthalate (PET) flakes PET bottle flakes polyester pre-oriented yarn (POY)
polyester fully drawn yarn (FDY) polyester drawn textured yarn (DTY) polyester
staple fiber paraxylene (PX) gasoline diesel and jet fuel etc.
5.Statement of Changes in Line of Business Major Changes in Equity Major
Mergers and Acquisitions of the Company
For details please refer to “Historical Development”.
6.The Financial Statements were approved for submission by the BOD of the
Company on April 22 2025
I.Basis for the preparation of the financial statements
1.Basis for the preparation
The company's financial statements are prepared on the basis of the going concern
assumption according to the transactions and events that actually occurred in
accordance with the "Accounting Standards for Business Enterprises - Basic
Standards" issued by the Ministry of Finance along with various specific accounting
standards application guidelines for accounting standards interpretations of
accounting standards and other relevant regulations (collectively referred to as
"Accounting Standards for Business Enterprises") as well as the "Rules for the
Preparation and Disclosure of Company Information for Publicly Issued Securities
No. 15 - General Provisions for Financial Reports" (revised in 2023) issued by the
China Securities Regulatory Commission.According to the relevant provisions of the Accounting Standards for Business
Enterprises the company's accounting is based on the accrual basis. Except for
certain financial instruments these financial statements are measured on the basis of
historical cost.
2.Going Concern
2912024 Annual Report of Hengyi Petrochemical Co. Ltd.
These financial statements are presented on a going concern basis and the company
has the ability to continue as a going concern for at least 12 months from the end of
the reporting period.II.Important accounting policies and estimates
The company and its subsidiaries have formulated several specific accounting policies
and estimates for transactions and events such as the provision for bad debts on
receivables depreciation of fixed assets amortization of intangible assets revenue
recognition etc. based on the actual characteristics of production and operation and
in accordance with the relevant accounting standards for enterprises. Details are
described as follows:
1.Statement of Compliance with Accounting Standards for Business Enterprises
The financial statements prepared by the company comply with the requirements of
the Accounting Standards for Business Enterprises and accurately and completely
reflect the consolidated and parent company financial position as of December 31
2024 as well as the consolidated and parent company operating results and cash flows
for the year 2024.
2.Accounting Period
The company's accounting periods are divided into annual and interim periods with
an interim period being a reporting period shorter than a full accounting year. The
company's accounting year follows the Gregorian calendar year which starts on
January 1 and ends on December 31.
3.Operating Cycle
The normal operating cycle refers to the period from the acquisition of assets for
processing to the realization of cash or cash equivalents. The company uses a
12-month period as an operating cycle which serves as the standard for classifying
the liquidity of assets and liabilities.
2922024 Annual Report of Hengyi Petrochemical Co. Ltd.
4.Functional Currency
The Renminbi (RMB) is the currency used in the primary economic environment
where the company and its domestic subsidiaries operate and they use RMB as their
functional currency. The company's overseas subsidiaries determine the U.S. dollar as
their functional currency based on the primary economic environment of their
operations. The currency used in preparing these financial statements is RMB.
5.Method and Basis for Determining Materiality Standards
In preparing and disclosing financial statements the company follows the principle of
materiality. The notes to these financial statements disclose items that involve
judgments of materiality standards and the methods and bases for determining
materiality standards as follows:
Location of
Disclosures involving disclosure of this Methodology for identifying
judgements on materiality matter in the notes materiality criteria and basis for
criteria to the present selection
financial statements
The company identifies advance
Important prepayments with payments with individual amounts
V.7
an aging of over one year exceeding 0.25% of the total assets as
important advance payments.The company identifies construction
projects in progress with individual
Significant construction in
V.16 amounts exceeding 0.25% of the total
progress
assets as important construction
projects in progress.The company identifies accounts
Important accounts payable payable with individual amounts
V.27
with an aging of over one year exceeding 0.25% of the total assets as
important accounts payable.Important contract liabilities V.28 The company identifies contract
2932024 Annual Report of Hengyi Petrochemical Co. Ltd.
Location of
Disclosures involving disclosure of this Methodology for identifying
judgements on materiality matter in the notes materiality criteria and basis for
criteria to the present selection
financial statements
with an aging of over one year liabilities with individual amounts
exceeding 0.25% of the total assets as
important contract liabilities.The company identifies other payable
Important other payable with with individual amounts exceeding
V.31
an aging of over one year 0.25% of the total assets as important
other payable
The company identifies capitalized
Status of important development projects with individual
capitalized development VI.2.(1) amounts exceeding 0.25% of the total
projects assets as important capitalized
development projects.The company identifies non-wholly
owned subsidiaries with revenue
exceeding 0.5% of the company's
Important non-wholly owned
VII.7.(1) total revenue or total assets
subsidiaries
exceeding 1% of the company's total
assets as important non-wholly
owned subsidiaries.The company identifies joint ventures
or associates with revenue exceeding
Important joint ventures or 0.5% of the company's total revenue
VII.8.(1)
associates or total assets exceeding 1% of the
company's total assets as important
joint ventures or associates.
6.Accounting treatment of business combination under common control and
business combination not under common control
Business combination refers to the transaction or event where two or more separate
entities merge to form a single reporting entity. Business combinations are
2942024 Annual Report of Hengyi Petrochemical Co. Ltd.
categorized into combinations under common control and combinations not under
common control.
(1)Combinations under common control:
A business combination under common control occurs when the participating entities
are ultimately controlled by the same party or the same group of parties before and
after the combination and this control is not temporary. In a business combination
under common control the entity obtaining control over other participating entities on
the combination date is the merging party while the other entities involved are the
merged parties. The combination date is the date when the merging party actually
acquires control over the merged party.The assets and liabilities acquired by the merging party are measured at the book
value of the merged party on the combination date. The difference between the book
value of the net assets acquired by the merging party and the book value of the
consideration paid for the combination (or the total par value of shares issued) is
adjusted against capital reserves (share premium); if capital reserves (share premium)
are insufficient to offset the difference retained earnings are adjusted. Direct
expenses incurred by the merging party for the business combination are recognized
in the current period's profit or loss when incurred.
(2)Combinations not under common control:
A business combination not under common control occurs when the participating
entities are not ultimately controlled by the same party or the same group of parties
before and after the combination. In a business combination not under common
control the entity obtaining control over other participating entities on the acquisition
date is the acquirer while the other entities involved are the acquirees. The
acquisition date is the date when the acquirer actually obtains control over the
acquiree.
2952024 Annual Report of Hengyi Petrochemical Co. Ltd.
For business combinations not under common control the acquisition cost includes
the fair value of assets given liabilities incurred or assumed and equity securities
issued by the acquirer to obtain control over the acquiree on the acquisition date.Audit legal services valuation consulting and other management fees related to the
business combination are recognized in the current period's profit or loss when
incurred. Transaction costs of equity or debt securities issued as consideration by the
acquirer are included in the initial recognition amount of these securities. Contingent
consideration is recognized at fair value as part of the acquisition cost on the
acquisition date; if new or further evidence related to conditions existing on the
acquisition date arises within 12 months after the acquisition date the contingent
consideration is adjusted accordingly affecting goodwill. The acquisition cost and
identifiable net assets acquired in the combination are measured at fair value on the
acquisition date. If the acquisition cost exceeds the fair value of the acquiree’s
identifiable net assets obtained on the acquisition date the difference is recognized as
goodwill. If the acquisition cost is less than the fair value of the acquiree’s
identifiable net assets obtained the measurement of the fair value of the identifiable
assets liabilities contingent liabilities acquired and the acquisition cost should be
reviewed. Any remaining difference after review is recognized in the current period's
profit or loss.If the acquirer obtains deductible temporary differences of the acquiree that were not
recognized as deferred tax assets on the acquisition date due to not meeting the
criteria for recognition and new or further information obtained within 12 months
after the acquisition date indicates that the relevant circumstances existed on the
acquisition date and the economic benefits of the deductible temporary differences are
expected to be realized the deferred tax assets are recognized reducing goodwill. If
goodwill is insufficient to offset the difference is recognized in the current period’s
profit or loss. Deferred tax assets related to the business combination other than the
aforementioned situation are recognized in the current period’s profit or loss.
2962024 Annual Report of Hengyi Petrochemical Co. Ltd.
For business combinations not under common control achieved through multiple
transactions in steps if they constitute a "package deal" accounting treatment should
refer to the previous sections of this part and Note 3 15 "Long-term Equity
Investments"; if they do not constitute a "package deal" relevant accounting treatment
should distinguish between individual financial statements and consolidated financial
statements:
In individual financial statements the initial investment cost is the sum of the book
value of the equity investment held in the acquiree before the acquisition date and the
additional investment cost on the acquisition date. Other comprehensive income
related to the equity held before the acquisition date should be accounted for using the
same basis as the disposal of directly related assets or liabilities of the acquiree
(except for changes in defined benefit plan net liabilities or net assets measured
according to the equity method which are transferred to current investment income).In consolidated financial statements equity held in the acquiree before the acquisition
date is remeasured at fair value on the acquisition date and the difference between
fair value and book value is recognized in current investment income. Other
comprehensive income related to the equity held before the acquisition date should be
accounted for using the same basis as the disposal of directly related assets or
liabilities of the acquiree (except for changes in defined benefit plan net liabilities or
net assets measured according to the equity method which are transferred to
investment income for the period to which the acquisition date belongs).
7.Criteria for judgement of control and presentation of consolidated financial
statements
(1) Criteria for Determining Control
The scope of consolidation in the consolidated financial statements is determined
based on control. Control refers to the Company’s power over the investee the ability
to derive variable returns by participating in the relevant activities of the investee and
2972024 Annual Report of Hengyi Petrochemical Co. Ltd.
the ability to use its power over the investee to influence the amount of those returns.This typically includes investees where the parent company holds more than half of
the voting rights or where the company holds less than half of the voting rights but
has more than half of the voting rights through agreements with other investors in the
investee. Control can also result from having the right to determine the financial and
operating policies of the investee pursuant to the Articles of Association or agreements
having the right to appoint or remove the majority of the members of the board of
directors of the investee or holding majority voting rights in the investee’s board of
directors.
(2) Methods for Preparing Consolidated Financial Statements
From the date the Company obtains actual control over the net assets and operational
decision-making of a subsidiary the subsidiary is included in the scope of
consolidation. From the date the Company loses actual control the subsidiary is
excluded from the scope of consolidation. For disposed subsidiaries their operating
results and cash flows before the disposal date are appropriately included in the
consolidated income statement and consolidated statement of cash flows. For
subsidiaries disposed of during the current period the opening balances of the
consolidated balance sheet are not adjusted. For subsidiaries newly acquired through
business combinations not under common control their operating results and cash
flows after the acquisition date are appropriately included in the consolidated income
statement and consolidated statement of cash flows and the opening balances and
comparative figures of the consolidated financial statements are not adjusted. For
subsidiaries newly added through business combinations under common control or for
absorbed parties in mergers their operating results and cash flows from the beginning
of the period to the combination date are appropriately included in the consolidated
income statement and consolidated statement of cash flows and the comparative
figures of the consolidated financial statements are adjusted accordingly.When preparing consolidated financial statements if the accounting policies or
2982024 Annual Report of Hengyi Petrochemical Co. Ltd.
reporting periods of the subsidiaries differ from those of the Company necessary
adjustments are made to the subsidiaries' financial statements to align them with the
Company’s accounting policies and reporting periods. For subsidiaries acquired
through business combinations not under common control their financial statements
are adjusted based on the fair value of their identifiable net assets on the acquisition
date.All significant inter company balances transactions and unrealized profits are
eliminated in the preparation of consolidated financial statements.The portion of a subsidiary’s shareholders’ equity and current net profit or loss not
attributable to the Company is presented as minority interests and minority
shareholders’ profit or loss under shareholders’ equity and net profit in the
consolidated financial statements. The portion of a subsidiary’s current net profit or
loss attributable to minority interests is presented as "Minority Shareholders’ Profit or
Loss" under the net profit item in the consolidated income statement. Losses borne by
minority interests exceeding the portion of minority interests in the subsidiary’s
beginning shareholders’ equity are still deducted from minority interests.When control over a subsidiary is lost due to the disposal of part of the equity
investment or other reasons the remaining equity is remeasured at its fair value on the
date control is lost. The difference between the sum of the consideration received
from the disposal of equity and the fair value of the remaining equity and the share of
the net assets of the original subsidiary calculated based on the original ownership
percentage from the acquisition date is included in the investment income for the
period when control is lost. Other comprehensive income related to the equity
investment in the original subsidiary is accounted for on the same basis as the disposal
of directly related assets or liabilities of the subsidiary when control is lost (i.e.except for changes in defined benefit plan net liabilities or net assets remeasured in
the original subsidiary all other items are transferred to current investment income for
2992024 Annual Report of Hengyi Petrochemical Co. Ltd.
the period). Subsequently the remaining equity is measured in accordance with
relevant standards such as CAS No. 2 – Long-term Equity Investments or CAS No. 22
– Recognition and Measurement of Financial Instruments as detailed in Note III 15
("Long-term Equity Investments") or Note III 11 ("Financial Instruments").If the Company loses control over a subsidiary through multiple-step disposals of
equity investments it is necessary to determine whether the transactions resulting in
the loss of control constitute a "package transaction." If the terms conditions and
economic effects of the transactions meet one or more of the following criteria they
are generally treated as a package transaction for accounting purposes:* The
transactions are entered into simultaneously or with consideration of their mutual
influence;* The transactions must be completed together to achieve a complete
commercial result;* The occurrence of one transaction depends on the occurrence of
at least one other transaction;* One transaction when considered alone is not
economically viable but it becomes viable when considered in conjunction with other
transactions. If the transactions do not constitute a package transaction each
transaction is accounted for separately based on whether it falls under "Partial
Disposal of Long-term Equity Investments in Subsidiaries without Losing Control" or
"Loss of Control due to Partial Disposal of Equity Investments or Other Reasons." For
transactions constituting a package transaction all transactions are treated as a single
transaction in which control over the subsidiary is lost. However before losing
control the difference between the proceeds from each disposal and the share of the
subsidiary's net assets corresponding to the disposed investment is recognized in the
consolidated financial statements as other comprehensive income which is transferred
to profit or loss for the period when control is lost.
8.Classification of joint arrangements and accounting of joint operations
A joint arrangement is a contractual agreement controlled jointly by two or more
parties. Based on the rights and obligations the Company possesses in a joint
arrangement it classifies joint arrangements into joint operations and joint ventures.
3002024 Annual Report of Hengyi Petrochemical Co. Ltd.
A joint operation is a joint arrangement where the Company has rights to the related
assets and obligations for the related liabilities. A joint venture is a joint arrangement
where the Company has rights only to the net assets of the arrangement.The Company accounts for investments in joint ventures using the equity method
following the accounting policies described in Note III 15(2)* "Long-term Equity
Investments Accounted by the Equity Method."
As a party to a joint operation the Company recognizes the assets it solely holds the
liabilities it solely undertakes as well as the assets and liabilities jointly held and
undertaken in proportion to its share. The Company recognizes revenue from its share
of output sold from the joint operation recognizes revenue generated from the joint
operation selling output in proportion to its share and recognizes expenses incurred
solely by the Company and expenses incurred by the joint operation in proportion to
its share.When the Company contributes or sells assets to the joint operation (assets not
constituting a business similarly hereafter) or purchases assets from the joint
operation before these assets are sold to third parties the Company only recognizes
the portion of gains or losses attributable to the other parties in the joint operation. If
these assets incur impairment losses in accordance with standards such as CAS No. 8
– Asset Impairment the Company fully recognizes the loss for assets contributed or
sold to the joint operation and recognizes the loss in proportion to its share for assets
purchased from the joint operation.
9.Recognition criteria for cash and cash equivalents
The cash and cash equivalents of the Company include cash at hand deposit in bank
that can be readily used for payment and investments of short terms (generally mature
within three months from the date of purchase) and high liquidity that can be easily
converted into known sums of cash and are exposed to low risks in terms of change in
3012024 Annual Report of Hengyi Petrochemical Co. Ltd.
value.
10.Foreign currency business and conversion of foreign currency statement
(1) Translation Methods for Foreign Currency Transactions
For foreign currency transactions undertaken by the Company the initial recognition
is translated into the functional currency using the spot exchange rate at the beginning
of the month in which the transaction occurs (typically referring to the central parity
rate of exchange published by the People's Bank of China on that day). However for
foreign currency exchange transactions or transactions involving foreign currency
exchanges the functional currency amount is translated based on the actual exchange
rate used.
(2) Translation Methods for Foreign Currency Monetary and Non-Monetary Items
On the balance sheet date foreign currency monetary items are translated using the
spot exchange rate on the balance sheet date. The resulting exchange differences are
recognized in the current period's profit or loss except for the following cases: *
Exchange differences arising from foreign currency-specific borrowings related to the
acquisition or construction of qualifying assets are treated in accordance with the
principles of capitalization of borrowing costs; * Exchange differences arising from
hedging instruments in effective hedges of net investments in foreign operations are
recognized in other comprehensive income and will only be recognized in profit or
loss when the net investment is disposed of; * Exchange differences arising from
available-for-sale foreign currency monetary items (other than changes in amortized
cost) are recognized in other comprehensive income.When preparing consolidated financial statements involving foreign operations for
foreign currency monetary items that substantially constitute a net investment in a
foreign operation the exchange differences arising from exchange rate changes are
recognized in other comprehensive income. Upon disposal of the foreign operation
these exchange differences are transferred to profit or loss for the period of disposal.
3022024 Annual Report of Hengyi Petrochemical Co. Ltd.
For foreign currency non-monetary items measured at historical cost the functional
currency amount is determined based on the spot exchange rate on the transaction
date and remains unchanged. For foreign currency non-monetary items measured at
fair value the spot exchange rate on the date the fair value is determined is used for
translation. The difference between the translated functional currency amount and the
original functional currency amount is treated as a fair value change (including
exchange rate changes) and recognized in either the current profit or loss or in other
comprehensive income.
(3) Translation Methods for Foreign Currency Financial Statements
When preparing consolidated financial statements involving foreign operations for
foreign currency monetary items that substantially constitute a net investment in a
foreign operation the exchange differences arising from exchange rate changes are
recognized as "foreign currency statement translation differences" under other
comprehensive income. Upon disposal of the foreign operation these exchange
differences are transferred to profit or loss for the period of disposal.The financial statements of foreign operations are translated into RMB financial
statements using the following methods: Assets and liabilities in the balance sheet are
translated at the spot exchange rate on the balance sheet date; Shareholders' equity
items except for the "undistributed profits" item are translated at the spot exchange
rate on the transaction date. Income and expense items in the income statement are
translated at the weighted average exchange rate during the transaction period.The undistributed profits at the year-end of the previous year are carried forward from
the translated year-end undistributed profits of the prior year. The year-end
undistributed profits are calculated and presented based on the translated profit
distribution items. Any difference between the translated total of asset items and the
combined total of liability and shareholders' equity items is recognized as a foreign
currency statement translation difference and recorded in other comprehensive
3032024 Annual Report of Hengyi Petrochemical Co. Ltd.
income. When disposing of foreign operations and losing control the foreign
currency statement translation differences related to the foreign operation presented
under shareholders' equity in the balance sheet are transferred in full or
proportionally to profit or loss for the period of disposal.Foreign currency cash flows are translated using the weighted average exchange rate
during the period of cash flow occurrence. The effect of exchange rate changes on
cash is presented as a separate adjustment item in the cash flow statement.The year-end balances and actual amounts from the prior year are presented based on
the translated amounts in the prior year's financial statements.When disposing of all equity interests in a foreign operation or losing control over a
foreign operation due to the partial disposal of equity interests or other reasons the
foreign currency statement translation differences presented under shareholders'
equity in the balance sheet and attributable to the parent company are fully transferred
to profit or loss for the period of disposal.When disposing of part of the equity interests in a foreign operation or reducing the
equity proportion due to other reasons without losing control of the foreign operation
the foreign currency statement translation differences related to the disposed portion
are attributed to minority interests and are not transferred to profit or loss for the
period. When disposing of part of the equity interests in a foreign operation that is an
associate or a joint venture the foreign currency statement translation differences
related to the foreign operation are proportionally transferred to profit or loss for the
period of disposal.
11.Financial instruments
(1) Translation of transactions in foreign currencies
3042024 Annual Report of Hengyi Petrochemical Co. Ltd.
A transaction in a foreign currency of the Company when initially recognized is
translated into the benchmark currency at the spot rate (the middle rate of the foreign
exchange quotation published by the People's Bank of China; the same below) on the
transaction date provided that foreign currency translation transactions and
transactions involving conversion of foreign currencies are translated into the
benchmark currency at the exchange rate actually adopted for the transactions.
(2) Translation of monetary and non-monetary assets in foreign currencies
On the balance sheet date monetary assets in foreign currencies are translated at the
spot rate on the balance sheet date and the exchange difference arising therefrom is
recognized in current profit and loss except that * the exchange difference arising
from special loans in foreign currencies used to purchase assets eligible for
capitalization is treated following the principle of capitalization of borrowing cost; *
the exchange difference arising from the hedging instruments used for effective
hedging of net investment in overseas operations is recognized in other
comprehensive income and after the net investment is disposed recognized in current
profit and loss; * the exchange difference arising from changes in the book balance
of monetary assets available for sale except the amortized cost is recognized in other
comprehensive income.When preparing the Consolidated Financial Statements if a monetary asset in foreign
currency constitutes a net investment in an overseas operation the exchange
difference arising due to a change in the exchange rate is recognized in other
comprehensive income and transferred to current profit and loss upon the disposal of
the overseas operation.Non-monetary transactions in foreign currencies that are measured at the historical
costs are translated at the spot rate prevailing on the Transaction Date. A
non-monetary asset in a foreign currency measured at the fair value is translated at
the spot rate on the date on which the fair value is determined and the difference
3052024 Annual Report of Hengyi Petrochemical Co. Ltd.
between the amounts recorded in the benchmark currency after the translation and that
recorded in the original currency is treated as changes in the fair value (including
change in exchange rate) and recognized in current profit and loss or other
comprehensive income.
(3) Translation of accounting statements in foreign currencies
When preparing the Consolidated Financial Statements if a monetary asset in foreign
currency constitutes a net investment in an overseas operation the exchange
difference arising due to a change in the exchange rate is recognized in other
comprehensive income as a difference from translation of accounting statements in
foreign currencies and transferred to current profit and loss upon the disposal of
overseas operation.Financial statements in foreign currencies of overseas operations are translated into
RMB and assets and liabilities in the balance sheet are translated at the spot rate on
the Balance Sheet Date; all transactions in Shareholders' Equity except those in
Undistributed Profit are translated at the current exchange rate on the Transaction
Date. Income and expense in the balance sheet are translated at the prevailing
exchange rate on the Transaction Date. Undistributed profit at the end of previous
year is the undistributed profit at the end of previous year; the undistributed profit at
the yearend is measured and presented by the items of the translated profit distribution;
the difference between the translated assets/liabilities and the total shareholders'
equity is recognized in other comprehensive income as the difference of foreign
currency translation. If an overseas operation is disposed of and the control over it is
lost the difference of foreign currency translation related to the overseas operation
listed in Shareholders' Equity in the Balance Sheet is transferred to current profit and
loss in which the same is disposed of wholly or in proportion to the share of the
overseas operation thus disposed of.
3062024 Annual Report of Hengyi Petrochemical Co. Ltd.
For cash flows in foreign currencies the weighted-average exchange rate on the
occurrence day of cash flow shall apply. The difference of cash caused by change of
exchange rate shall be separately presented in Cash Flow Statement.The amounts at the end of the previous year and the actual amounts of the previous
year are presented as translated from the financial statements of the previous year.If all the shareholders’ equity in an overseas operation is disposed of or if the control
over it is lost as a result of disposal of part of the owner’s equity or for any other
reason the difference of foreign currency translation related to the overseas operation
that is attributable to shareholders of the parent company as listed in Owners’ Equity
in the Balance Sheet is wholly transferred to current profit and loss in which the same
is disposed of.If the share of the equity in an overseas operation held by the Company decreases as a
result of disposal of part of the equity investment or for any other reason but the
decrease does not result in the loss of control over the overseas operation the
difference of foreign currency translation related to the part of the overseas operation
is classified as minority shareholder's equity and is not transferred to current profit
and loss. If part of the equity in an overseas operation that is an associate or a joint
venture is disposed of the difference of foreign currency translation related to the
overseas operation is transferred to current profit and loss in which the same is
disposed of wholly or in proportion to the share of the overseas operation thus
disposed of.
12. Impairment of financial assets
Financial assets for which impairment loss is required to be recognized by the
Company are financial assets measured at amortized cost investment in debt
instruments measured at fair value through other comprehensive income these mainly
include bills receivable accounts receivable other receivables debt investments
other debt investments and long-term receivables. Furthermore for certain financial
3072024 Annual Report of Hengyi Petrochemical Co. Ltd.
guarantee contracts impairment reserves are provided and credit impairment losses
are recognized according to the accounting policies mentioned in this section.
(1) Method for recognizing impairment reserves
Based on expected credit loss the Company recognizes impairment reserves and
credit impairment loss in respect of the above-mentioned items according to the
applicable method for measuring excepted credit loss (the general approach or
simplified approach).Credit loss is the difference between all contractual cash flow receivable by the
Company under contracts which are discounted according to the original effective
interest rate and all the cash flow expected to be received namely the present value
of all cash shortfall. Particularly financial assets acquired or derived to which credit
impairment has occurred are discounted by the Company according to the
credit-adjusted effective interest rate.The general approach for measuring expected credit loss means that at each balance
sheet date the Company assesses the financial assets to see if the credit risk has
significantly increased after initial recognition if credit risk has significantly
increased after initial recognition the Company calculates provision for loss
according to the amount of expected credit loss over the life-time of the assets; if
credit risk has not significantly increased after initial recognition the Company
calculates loss provision based on expected credit loss in the future twelve-month.When evaluating expected credit loss the Company considers all reasonable
information that is supported by evidence including forward-looking information.For financial instruments that have relatively low credit risk at the balance sheet date
the about assumes that the credit risk of such instruments has not significantly
increased after initial recognition and chooses to calculate loss provision according to
the twelve-month expected credit loss.
3082024 Annual Report of Hengyi Petrochemical Co. Ltd.
(2) Criteria for determining whether credit risk has significantly increased since
initial recognition
If the probability of default of a certain financial asset within the expected lifetime of
the asset as determined at the balance sheet date is significantly higher than the
probability of default within the expected lifetime determined at the time of initial
recognition then it indicates that the credit risk of such asset has significantly
increased. Except for special circumstances the Company regards the change in
default risk occurring in the future twelve-month period as the reasonable estimate of
the change in default risk occurring over the entire lifetime of an asset
thereby determining whether the credit risk has increased significantly after initial
recognition. Usually in case of more than 30 days overdue the Company deems that
the credit risk of the financial instrument has increased significantly unless there is
conclusive evidence showing that the credit risk of the financial instrument has not
increased significantly since its initial recognition.The Company will take into account the following factors when assessing whether the
credit risk has increased significantly:
1) Whether the actual or expected operating results of the debtor have changed
significantly;
2) Whether the regulatory economic or technological environment of the debtor has
been subject to significant adverse changes;
3) Whether the value of the collateral mortgaged for debt or the quality of guarantee
provided by a third party or credit enhancement has changed significantly with these
changes expected to reduce the debtor’s economic motivation to repay the debt within
the term set out in the contract or affect the probability of breach;
4) Whether the expected performance and repayment behaviors of the debtor have
changed significantly;
5) Whether the Company’s credit management methods for financial instruments
have changed etc.
3092024 Annual Report of Hengyi Petrochemical Co. Ltd.
On the balance sheet date if the Company determines that a financial instrument has
only low credit risk the Company will assume that the credit risk of the financial
instrument has not increased significantly since its initial recognition. If the default
risk of financial instruments is low the borrower has a strong capacity to fulfill its
cash flow obligations under contract in the short term and the borrower’s
performance of its cash obligations under contract may not necessarily be reduced
even if there are unfavorable changes in the economic situation and operating
environment in a long period of time then the financial instrument will be deemed to
have low credit risk.
(3) Criteria for determining financial assets that have been subject to credit
impairment When one or more events that adversely affects the expected future cash
flow of a financial asset has occurred such financial asset is considered to be an asset
which has suffered credit impairment. Evidence of credit impairment of financial
assets includes the following observable information:
A serious financial difficulty occurs to the issuer or debtor;
The debtor breaches any of the contractual stipulations for example fails to pay or
delays the payment of interests or the principal etc.;
Due to the economic or contractual considerations related to the debtor’s financial
difficulties the creditor gives the debtor a compromise that the debtor would not
make under any other circumstances;
The debtor will probably become bankrupt or carry out other financial
reorganizations;
The issuer or the debtor’s financial difficulties result in the disappearance of the
active market for the financial asset;
A financial asset is purchased or originated at a heavy discount and this discount
reflects the fact that the credit loss has occurred.The credit impairment of a financial asset may be caused by the combined effects of
several events and may not necessarily be caused by a separately identifiable event.
3102024 Annual Report of Hengyi Petrochemical Co. Ltd.
(4) Method for evaluating the expected credit risk on a portfolio basis
For financial assets which have significantly different credit risk the Company
evaluates the credit risk on an individual basis for example amounts due from related
parties; receivables from a debtor with which the Company has a dispute or which
involve a lawsuit or arbitration; and receivables for which there is a clear indication
that the debtor thereof is very likely to be unable to meet its payment obligation.In addition to financial assets with credit risk assessed individually the Company
divides financial assets into different groups based on common risk characteristics.The common credit risk characteristics adopted by the Company include types of
financial instruments credit risk ratings aging combination etc. and it assesses credit
risk on the basis of combination.
(5) Accounting treatment for the impairment of financial assets
At the end of period the Company calculates the expected credit loss of various
financial assets if the expected credit loss is greater than the carrying amount of the
current impairment reserves the difference between the two amounts is recognized as
an impairment loss; if the expected credit loss is smaller than the carrying amount of
impairment reserves then the difference is recognized as an impairment gain.
(6) Method for determining the credit loss of financial assets
With regard to the notes receivable accounts receivable and financing of accounts
receivable arising from daily business activities such as selling goods providing labor
services etc. the Company measures the loss provision based on the expected credit
loss for the entire duration regardless of whether there is a significant financing
component.* Notes receivable
Based on the credit risk characteristics the notes receivable will be classified into
different combinations.
3112024 Annual Report of Hengyi Petrochemical Co. Ltd.
Method for measuring of expected credit
Item Basis for grouping
loss
Bank acceptance bills The Company deems that this type of funds
The acceptor is a bank with
and domestic letter of has a relatively low credit risk and does not
relatively low credit risk.credit recognize the expected credit loss.This credit risk characteristic of
Confirm the expected credit rate with
Commercial this portfolio of receivables is
reference to corresponding policy of
acceptance bills defined by account receivable
receivables
aging.* Accounts receivable
Except for other receivables for which credit risk is assessed individually assets are
classified into different portfolios based on credit risk characteristic:
Method for measuring of expected credit
Item Basis for grouping
loss
Related parties’
This portfolio represents
receivables within the receivables due from related The Company deems that this type of funds
parties with relatively low risk has a relatively low credit risk and does not
scope of consolidation
which are included within the recognize the expected credit loss.(note) scope of consolidation.With reference to historical credit loss
experience and based on the current
conditions and the forecasts of future
This credit risk characteristic of
Receivables from third this portfolio of receivables is economic conditions a comparison table
parties defined by account receivable
between the aging of accounts receivable and
aging.the expected credit loss rate for the entire
duration are prepared and the expected credit
losses are calculated.Note: “Related parties included in the scope of consolidation” refer to Hengyi
3122024 Annual Report of Hengyi Petrochemical Co. Ltd.
Petrochemical and those companies recorded in the scope of its consolidated financial
statement (the same below).Comparison table showing the account age of the portfolio of accounts receivable and
other receivables based on credit risk characteristic and the full lifetime expected
credit loss:
Aging Expected credit loss rate (%)
Within six (6) months (included) 0.00
7-12 months (included) 5.00
1-2 years (included) 30.00
2-3 years (included) 50.00
Over three years 100.00
* Other receivables
Based on the determination as to whether the credit risk of other receivables has
increased significantly since initial recognition the Company calculates impairment
loss according to the twelve-month expected credit loss or life-time expected credit
loss. Except for other receivables for which credit risk is assessed individually assets
are classified into different portfolios based on credit risk characteristic:
Method for measuring of expected
Item Basis for grouping
credit loss
Related party funds within the scope
With reference to historical credit
of consolidation
loss experience and based on the
Receivables and payable such as The nature of other
current conditions and the forecasts
advance from entities beyond the receivables is used edit risk
of future economic conditions the
scope of consolidation characteristics
expected credit loss is calculated
Combination of consumption taxes based on the default risk exposure
3132024 Annual Report of Hengyi Petrochemical Co. Ltd.
and export tax rebates receivable and the expected credit loss rate
within the next 12 months or for the
Combination of tax refunds entire duration.receivable and other government
subsidies
Portfolio of deposits and security
Employee loan and petty cash
Other groups
* For other financial assets with regard to financial assets other than those under the
aforesaid measurement methods the Company measures impairment at an amount
equivalent to expected credit losses within the next 12 months or for the entire duration
based on whether its credit risk has increased significantly since initial recognition loss.
13. Inventory
(1) Classification of inventory
Inventories refer to finished goods or commodities for sale held in daily activities
unfinished goods in manufacturing process and materials and supplies consumed in
process of manufacturing products or providing services etc. including large
categories such as materials in transit raw materials products in progress
commodities in stock etc.
(2) Pricing method for acquisition and distribution of inventories
Inventories are measured at the weighted average method upon receiving and sending.If the daily accounting of inventories is valued at planned cost the cost difference of
materials shall be carried over at the end of the year and the planned cost shall be
adjusted to the actual cost.
(3) Inventory system
The Company adopts the perpetual inventory system.
(4) Amortization of low-value consumables and packing materials
One-time amortization method will be used for low-value consumables and packing
3142024 Annual Report of Hengyi Petrochemical Co. Ltd.
materials.
(5) Methods for recognition of net realizable value of inventories and retaining the
provision for depreciation
The net realizable value of the inventory is determined at the estimated selling price
less the estimated cost and sales cost at the time it is distributed as well as related
taxes and charges. The net realizable value of the inventory is determined on the basis
of conclusive evidence obtained while considering the purpose of keeping the
inventory and effect of events after the balance sheet date.On the balance sheet date the inventories are measured at the lower of cost and net
realizable value. If the net realizable value is lower than the cost then the inventory
depreciation reserves is retained for the inventory. The inventory depreciation
reserves are retained by the difference of the cost less its net realizable value.If the factors leading to the write-down of the price of an inventory no longer exist
and the net realizable value is higher than the book value of the inventory after the
inventory depreciation reserves are retained the difference is reversed from the
provision and recognized in current profit and loss.
14. Assets available for sale and disposal group
Where the Company recovers the book value of one non-current asset or disposal
group mainly through sales (including the non-monetary asset exchange with
commercial substance similarly hereinafter) rather than sustained use upon
satisfaction of following conditions it is categorized to the held-for-sale category.The specific standard is that the following conditions are met simultaneously: some
non-current assets or disposal group can be sold immediately under current conditions
according to the practices of selling similar asset or disposal group in similar
transactions; the Company has made a decision on the selling plan and obtained the
positive purchase commitment. It’s predicted that the selling will be completed within
a year. Disposal group refers to a group of assets disposed together through selling or
other methods in a transaction as a whole and liabilities directly related to these assets
transferred in the transaction. If the goodwill from the business merger is apportioned
3152024 Annual Report of Hengyi Petrochemical Co. Ltd.
to the asset group or combination of asset groups that the disposal group belongs to
according to the Accounting Standards for Business Enterprises No. 8 - Impairment of
Asset the disposal group shall include the goodwill apportioned to the disposal group.Upon initial measurement or re-measurement upon balance sheet date of held-for-sale
non- current asset or disposal group where the book value is higher than the net
amount that the fair value minus the selling expense the book value is written down
the net amount after the fair value minus selling expense the write-down amount is
determined as the asset impairment loss and included into current profits and losses
and the held-for-sale asset impairment reserves are retained at the same time. For the
disposal group the recognized assets depreciation loss shall be used to firstly offset
against the book value of goodwill in the disposal group and then against the book
value of each non-current asset applicable to the measurement rules in the Accounting
Standards for Business Enterprises No. 42 Non-current Assets Held for Sale Disposal
Groups and Discontinued Operations (hereinafter referred to as “No. 42 Standard”).The reversed amount shall be included in the current profit and loss and its book
value shall be increased proportionally according to the portion of the book value of
each non- current asset in the disposal group applicable to the measurement rules of
No. 42 Standard except goodwill. The written-down book value of goodwill and the
assets impairment loss recognized before the non-current assets is classified into those
held for sale applicable to the measurement rules of No. 42 Standard shall not be
reversed.No depreciation or amortization is provisioned for the non-current asset in the
held-for-sale non-current asset or disposal group and the interest of liability in
held-for-sale disposal group and other expenses shall continue recognition.When the non-current asset or disposal group no longer meets the classification
condition of held-for-sale category and no longer continues to classify the
held-for-sale category or the non-current asset is removed from the held-for-sale
3162024 Annual Report of Hengyi Petrochemical Co. Ltd.
disposal group measurement is made at whichever is lesser: (1) for the book value
prior to classification into the held-for-sale category the amount after adjustment of
depreciation amortization or impairment to be recognized in case of assuming no
classification into the held-for-sale category; (2) Recoverable amount.
15. Long-term equity investments
Long-term equity investments in this part refer to the Company’s long-term equity
investments having control joint control or significant influence on the invested unit.Long-term equity investments in this section refer to the long-term equity investments
by the Company in the investee with control joint control or significant influence.Long-term equity investments which do not enable the Company to exert control
common control or significant influence over the investee entity are accounted for as
financial assets at fair value through profit or loss in particular if such long-term
equity investments are not held for trading they may be designated by the Company
on initial recognition as financial assets at fair value through other comprehensiveincome for the relevant accounting policy refer to Note III 11 “FinancialInstruments”.Joint control refers to the control the Company shares with other entities over a
certain arrangement following relevant agreement by which any activity under the
arrangement may be conducted only with unanimous agreement of all participants
sharing the power of control. Significant influence refers to the situation where the
Company is entitled to participate in but is not authorized to control the financial
and/or business decisions either alone or in joint efforts with other participants.
(1) Determination of investment cost
For a long-term equity investment acquired through combination of businesses under
common control the share of the shareholders' equity of the acquiree in the book
value of the shareholders’ equity in the consolidated financial statements of the
ultimate controlling party on acquisition date shall be taken as the initial investment
3172024 Annual Report of Hengyi Petrochemical Co. Ltd.
cost for the long-term equity investment. Capital reserve is adjusted based on the
difference between the initial cost for the long-term equity investment and the book
values of cash paid non-cash asset transferred and debt assumed and if the capital
reserve is insufficient to offset such difference the difference will be offset against
retained earnings. If the consideration is paid in the form of equity securities the
share of the shareholders’ equity of the acquiree in the book value of the owners’
equity in the consolidated financial statements of the ultimate controlling party on
acquisition date is taken as the initial investment cost for the long-term equity
investment on the date of combination. The face value of the shares issued is taken as
the equity and the capital reserve is adjusted by the difference between the initial
investment cost for the long-term equity investment and the total face value of the
shares issued; and if the capital reserve is insufficient to offset such difference the
difference will be offset against retained earnings. If the combination of businesses
under common control is realized through a series of transactions in acquiring the
equity of the acquiree the transactions are determined whether to be a package deal
and treated in either of the following manners: If the whole series of transactions are
determined to constitute a package deal then they are treated as one transaction
realizing the acquisition of the control. If not the share of the shareholders’ equity of
the acquiree in the book value of the owners’ equity in the consolidated financial
statements of the ultimate controlling party on acquisition date is taken as the initial
investment cost for the long-term equity investment on the date of combination.Capital reserve is adjusted based on the difference between the initial investment cost
for the long-term equity investment and the book value of the long-term equity
investment before the combination plus the total book value of newly paid
consideration for acquiring shares on acquisition date; and if the capital reserve is
insufficient to offset such difference the difference will be offset against retained
earnings. The other comprehensive income accounted for the adoption of equity
method for the equity investment held or recognized for financial assets available for
sale before acquisition date is not accounted for upon the acquisition.For a long-term equity investment acquired through combination of businesses not
3182024 Annual Report of Hengyi Petrochemical Co. Ltd.
under common control the cost for the combination which is fair value of the total of
the assets paid liabilities incurred or assumed and the equity securities issued by the
acquiring party is taken as the initial investment cost for the long-term equity
investment on acquisition date. If the combination of businesses not under common
control is realized through a series of transactions in acquiring the equity of the
acquiree the transactions are determined whether to be a package deal and treated in
either of the following manners: If the whole series of transactions are determined to
constitute a package deal then they are treated as one transaction realizing the
acquisition of the control. If not the aggregate of the book value of the equity
investment in the acquiree held by the Company and the increase in the investment
cost is taken as the initial cost for the long-term equity investment remeasured using
the cost method. If the originally held equity is measured by the equity method the
relevant other comprehensive income is not accounted.Intermediary costs incurred by the acquirer in the course of combination for audit
legal and valuation services and other administrative services are recorded in current
profit and loss.Equity investments except long-term equity investments derived from business
combination are initially measured at the cost. The cost is determined depending on
the means of acquisition at the purchase price actually paid in cash the fair value of
the equity securities issued by the Company the value determined in the investment
contract or agreement the fair value of the original book value of the asset traded off
by means of exchange trade of non- monetary asset or the fair value of long-term
equity investment itself. Charges taxes and other necessary expenses related to the
acquisition of long-term equity investments are recognized in Investment Costs. In
case of a long-term equity investment made in addition to other investment if the
investment results in the Company's ability to exercise significant influence over the
investee but does not constitute the control over the same the cost is the aggregate of
the fair value of the equity investment originally held as determined following the
3192024 Annual Report of Hengyi Petrochemical Co. Ltd.
Accounting Standards for Business Enterprises No. 22 - Recognition and
Measurement of Financial Instruments and the newly increased cost.
(2) Methods for subsequent measurement and recognition of profit and loss
If the entity in which the Company invests exercises joint control (except those
constitute a joint operation) or significant influence over the long-term equity
investments equity method is adopted for such long-term equity investments. Also a
long-term equity investment that grants control over the investee is accounted for in
the financial statements of the Company using the cost method.* Long-term equity investments accounted for using the cost method
Under the cost method a long-term equity investment is measured at the initial
investment cost which is adjusted by the increased or recovered investment. Except
the price actually paid upon acquisition of an investment or the cash dividend or profit
that has been declared but not
granted and included in the consideration for the acquisition cash dividend or profit
in the investee attributable to the Company shall be recognized as income from
investments.* Long-term equity investments accounted for using the equity method
If the long-term equity investment is accounted using the equity method and the initial
cost for the investment is greater than the share of the total fair value of the
identifiable assets of the investee the initial cost for the investment is not adjusted; if
the former is less than the latter the difference is recognized in current profit and loss
and the cost for the long-term equity investment is adjusted accordingly.When accounted for using the equity method the share in the net profits or losses that
have been realized by the investee and which the Company is entitled to receive or
obliged to assume and the share in other comprehensive income are recognized in
income from investments and other comprehensive income respectively and the
book value of the long-term equity investment is adjusted accordingly; the book value
of the long-term investment is adjusted according to the portion of the profit or cash
dividend declared and distributed by the investee; In case of any change in the owners’
3202024 Annual Report of Hengyi Petrochemical Co. Ltd.
equity in the invested equity except the net profits or losses other comprehensive
income and profit distribution the book value of the long-term equity investment is
adjusted and the balance is recognized in the capital surplus. The share in the net
profits or losses of the investee is recognized after adjustment is made on the basis of
the fair values of all identifiable assets of the investee upon the investment is realized.I If the accounting policies and accounting periods adopted by the investee are
inconsistent with those adopted by the Company the financial statements of the
investee are adjusted in accordance with the accounting policies and accounting
period of the Company and the investment income and other comprehensive income
from the investee is recognized according to the adjustment. In case of a transaction
between the Company and its associate or joint venture where the investment or sale
does not constitute a business transaction the unrealized profits or losses within the
scope of the Company are calculated and offset according to the share attributable to
the Company with the balance recognized as profits or losses from investment.However the losses arising from unrealized transactions with the investee within the
Company if being impairment loss of the asset to be transferred may not be offset. In
case of an investment of an asset in a joint venture or an associated enterprise that
constitutes a business transaction and a long-term equity investment without realizing
the control over the investee the fair value of the asset is taken to be the initial
investment cost for the long-term equity investment and the whole difference between
the initial investment cost and the book value of the asset is recognized in current
profit and loss. In case of an investment of an asset sold to a joint venture or an
associated enterprise that constitutes a business transaction the whole difference
between the consideration acquired and the book value of the asset is recognized in
current profit and loss. An asset acquired from a joint venture or an associate if
constitutes a business transaction is treated following Accounting Standards for
Business Enterprises No. 20 - Business Combinations and wholly recognized as
profits or losses related to the transaction.Net loss from an investment in an investee is written down against the total of the
3212024 Annual Report of Hengyi Petrochemical Co. Ltd.
book value of the long-term equity investment and the long-term equity from other
actual net investment in the investee but only to that extent. In addition if the
Company assumes liability for any extra loss of the investee the obligation is
recognized as an estimated liability in Losses from Investment of the period. If the
investee realizes net profit subsequently the share in the profit payable to the
Company is recognized as a share of income after the unrecognized loss arising from
the investment.For the long-term equity investments to joint ventures and associates already held
before the first implementation of the new accounting standards if there is the debit
balance of equity investments related to the investments the amount amortized using
the straight-line method over the remaining period shall be included in the current
profit and loss.* Acquisition of minority equity
When preparing the Consolidated Financial Statements the difference between the
newly increased long-term equity investment due to the acquisition of minority equity
and the share in the net asset of the subsidiary attributable to the Company calculated
at the newly increased shareholding ratio on acquisition date or (the Consolidation
Date) is recognized as an adjustment to the capital surplus and and if the capital
reserve is insufficient to offset such difference the difference will be offset against
retained earnings.* Disposal of long-term equity investment
If the Parent Company disposes of part of its long-term equity investment in a
subsidiary without losing the control over the latter the difference between the price
of the disposal and the share in the net asset of the subsidiary corresponding to the
long-term equity investment disposed of is recognized in Shareholders' Equity in the
Consolidated Financial Statements; if the Parent Company disposes of part of its
long-term equity investment in a subsidiary resulting in the loss of control over the
3222024 Annual Report of Hengyi Petrochemical Co. Ltd.
latter the disposal price is treated following accounting policies described in Note III
7 (2) “Methods for Preparing Consolidated Financial Statements.”
In case of a long-term equity investment disposed of in other circumstances the
difference between the book value and the price actually acquired is recognized in
current profit and loss.In case of a long-term equity investment accounted for using the equity method if the
remaining equity after disposal continues to be accounted for using the equity method
the corresponding share in the other comprehensive income originally recognized in
Shareholders' Equity is treated on the same basis on which the investee directly
disposes of the relevant asset or liability. All other shareholders' equity of the investee
recognized because of changes in the shareholders' equity other than those in the net
profits or losses other comprehensive income and profit distribution are carried over
to current profit and loss in proportion.Long-term equity investments accounted for using the cost method if the remaining
equity after disposal continues to be accounted for using the cost method the other
comprehensive income originally accounted for using the equity method or the
standards for recognition and measurement of financial instruments before the
acquisition of the control over the investee is treated on the same basis on which the
investee directly disposes of the relevant asset or liability and is carried forward in
proportion; all other shareholders’ equity in the net asset of the investee as accounted
for and recognized using the equity method except net profits or losses other
comprehensive income and profit distributions are carried forward in proportion. If
the Company loses the control over the investee due to disposal of part of its equity
investment but the remaining equity constitutes joint control or significant influence
over the investee the remaining equity is re-accounted for using the equity method
and adjustment is made as if the remaining equity were accounted for using the
equity method since the acquisition; the remaining equity if it does not constitute
3232024 Annual Report of Hengyi Petrochemical Co. Ltd.
joint control or significant influence over the investee is re-accounted for following
the standards for recognition and measurement of financial instruments and the
difference between the fair value on the date the control is lost and the book value of
the equity is recognized in current profit and loss. When the control over the investee
is lost the other comprehensive income accounted for using the equity method or
following the standards for the recognition and measurement of financial instruments
before the acquisition of the control over the investee is treated on the same basis on
which the investee directly disposes of the relevant asset or liability. All changes in
other shareholders’ equity in the net asset of the investee as accounted for and
recognized using the equity method except net profits or losses other comprehensive
income and profit distributions are carried forward in proportion upon the loss of
control. If the remaining equity is accounted for using the equity method the other
comprehensive income and other shareholders' equity are carried forward in
proportion; if the remaining equity is accounted for following the standards for
recognition and measurement of the financial instruments the other comprehensive
income and other shareholders' equity are fully carried forward.If the Company loses the joint control or significant influence over the investee due to
partial disposal of equity investments the remaining equity is re-accounted for
following the standards for recognition and measurement of financial instruments and
the difference between the fair value on the date the control or significant effect is lost
and the book value of the remaining equity is recognized in current profit and loss.When the control of the investee is terminated the other comprehensive income from
the original equity investment as accounted for the adoption of equity method or
following the standards for the recognition and measurement of financial instruments
is treated on the same basis on which the investee directly disposes of the relevant
asset or liability; all changes in other shareholders’ equity in the net asset of the
investee as accounted for and recognized because of the adoption of the equity
method except net profits or losses other comprehensive income and profit
distributions are carried forward in proportion upon the loss of control.
3242024 Annual Report of Hengyi Petrochemical Co. Ltd.
If several transactions through which the Company disposes its subsidiary’s
equity investment till losing the right of control belong to “package deal” such
transactions shall be subject to accounting treatment as one transaction for treatment
of the subsidiary’s equity investment and for losing the right of control. Prior to losing
the right of control the balance between every disposal price and the book value of
long-term equity investment corresponding to the disposed equities shall be confirmed
as other comprehensive income. On the point of losing such right it shall be jointly
shifted into current profits and losses of losing the right of control.
16. Fixed assets
(1) Conditions for recognition of fixed assets
The fixed assets of the Company refer to tangible assets held for production of goods
provision of labor services lease or business with a service life of over a fiscal year.A fixed asset is recognized only when the related economic benefit is likely to flow in
and the cost can be reliably measured. A fixed asset is initially measured at cost and
the estimated abandonment cost.
(2) Method for depreciating fixed assets
Provision for depreciation of a fixed asset is retained using the straight-line method
from the month after the fixed asset reaches the expected serviceable condition.Estimated service life estimated residual values and annual depreciation rates of
different types of fixed assets are as follows:
Yearly
Depreciation Period
Category Residual ratio (%) depreciation
(Year)
rate (%)
5.004.75，4.50
20 year 30 year 50
Houses & buildings 3.17，3.00
year
10.001.90，1.80
5.009.50，4.75
Structures 10 year 20 year
10.009.00，4.50
5.00
Machinery equipment 5-30 years 3.00-19.00
10.00
3252024 Annual Report of Hengyi Petrochemical Co. Ltd.
Yearly
Depreciation Period
Category Residual ratio (%) depreciation
(Year)
rate (%)
19.0018.00
5 years 6 years and 5.00
Machinery equipment 15.8315.00
10 years 10.00
9.504.75
5.0031.6730.00
Office facilities and others 3 years and 5 years
10.0019.0018.00
Estimated net residual value refers to the value the Company is expected to acquire by
disposing of the fixed asset in its status upon the expiry of its using life.
(3) Method for impairment test of fixed assets and impairment reserves retention
Refer to Note III 20 “Impairment of Long-term Assets” for methods for depreciation
test and impairment reserves retention for fixed assets.
(4) Other description
Subsequent expenditures relating to fixed assets if the asset's economic benefits are
likely to flow in and its cost can be reliably measured are recognized in cost for fixed
assets and the book value of the substituted part is derecognized. Other subsequent
expenditures are recognized in current profit and loss in which they are incurred.Fixed assets are derecognized if they are disposed of or no economic benefit can be
realized through use or disposal of the same. Income from disposal of fixed assets by
means of sale transfer etc. is accounted as current profit and loss less the book value
and relevant taxes and charges.The Company reviews the serviceable life expected residual value and the method of
depreciation at the latest at the end of the accounting year. If any change is found in
the original estimates adjustment is made to the relevant accounting estimate.
17. Construction in progress
The Company's construction in progress is classified into two types: self-owned
3262024 Annual Report of Hengyi Petrochemical Co. Ltd.
construction and contracted construction. Construction in progress is carried forward
to fixed assets when the construction work is completed and reaches the state of
intended use. The criteria for determining the state of intended use shall be one of the
following: the physical construction (including installation) of the fixed assets has
been completed in full or substantially completed; trial production or trial operation
has been carried out and the results indicate that the assets are capable of normal
operation or capable of producing qualified products on a stable basis or the results of
the trial operation indicate that they are capable of normal operation or business
operation; the expenditures on the constructed fixed assets are minimal or almost no
longer incurred; the purchased fixed asset has met the design or contract requirements
or is in substantial conformity with the design or contract requirements.When the construction in progress reaches the intended state of use it is transferred to
fixed assets at the actual cost of construction. If the project has reached the intended
state of use but has not yet been finalised it will be transferred to fixed assets at the
estimated value first and the original provisional value will be adjusted according to
the actual cost after the finalisation of the project but no further adjustment will be
made to the depreciation that has already been provided for.Refer to Note III 20. “Impairment of Long-term Assets” for methods for depreciation
test and impairment reserves retention for constructions-in-progress.
18. Borrowing costs
Borrowing costs of the Company include the interest accrued on loans the
amortization of discount or premium and auxiliary expenses as well as the translation
differences incurred by loans in foreign currencies. Borrowing costs related to the
purchase construction or production of assets that meet the conditions for
capitalization are capitalized when the asset expenditure has been made the
borrowing costs have been incurred and the purchase construction or production
activities necessary to work the asset into its serviceable or marketable status have
3272024 Annual Report of Hengyi Petrochemical Co. Ltd.
begun; the capitalization ceases when the asset that meets the conditions for
capitalization under construction or production reaches its expected serviceable or
marketable status. Other borrowing costs are recognized as expenses in the period
they are incurred.The interest expenses incurred in the period for special loans less the interest income
from the loan fund deposited in a bank or income from temporary investments made
out of the loans are capitalized; general loans are capitalized on the basis of result of
the accumulated capital expenditures excessive of weighted average of the capital
expenditures of the special loan multiplied by the capitalization ratio of the general
loans. The capitalization rate is determined on the basis of the weighted average
interest rate of general borrowings.During the capitalization the difference arising from special loans in foreign
currencies is fully capitalized while that arising from general loans in foreign
currencies is recognized in current profit and loss.Assets qualified for capitalization refer to fixed assets investment real properties and
inventories that take a reasonable period of purchase construction or production to be
developed into the ready-for-sale or ready-for-use status.If the purchase construction or production of the asset qualified for capitalization is
suspended for over 3 months the capitalization of the borrowing cost is suspended
until the resumption of purchase construction or production.
19. Intangible assets
Intangible asset refers to invisible recognizable non-currency assets owned or
controlled by the Company.
3282024 Annual Report of Hengyi Petrochemical Co. Ltd.
Intangible assets are initially measured at cost. Expenses related to intangible assets
are recognized in cost for intangible assets when related economic gains are likely to
flow in and the cost can be reliably measured. Other subsequent expenditures are
recognized in current profit and loss in which they are incurred.Land use rights acquired are usually accounted for as intangible assets. Expenditures
on the land use right and the cost for the construction of self-developed plants and
other buildings are accounted for as intangible assets and fixed assets. In case of
houses and buildings purchased the purchase price is allocated onto the land use right
and the buildings and treated accordingly; if the allocation cannot be done reasonably
the whole price is treated as fixed assets.In case of an intangible asset of limited serviceable life the original value net of
expected residual value and the accumulated impairment reserves retained is
amortized over the expected serviceable life using the straight-line method. Intangible
assets with uncertain service life are not amortized.The useful lives the basis for determining them and the amortisation method for items
of intangible assets with finite useful lives are as follows:
Item Amortisation
life span Basis for determining useful life
method
Years of use registered on land use Straight-line
land use right 50 years etc.certificates method
Straight-line
Concession 10 years etc. Contractual life span
method
Straight-line
Franchises 10 years Expected duration of benefits
method
Straight-line
Trademark right 10 years Expected duration of benefits
method
Software and others 5 years 10 Estimated useful life and serviceable Straight-line
3292024 Annual Report of Hengyi Petrochemical Co. Ltd.
years etc. life method
The service life and the amortization method adopted for intangible assets of a limited
serviceable life is reviewed at the year end and if any change has occurred
adjustments are made accordingly to the accounting estimates. The serviceable life of
each intangible asset with uncertain serviceable life is reviewed at the end of year. If
there is evidence that the period in which the intangible asset can bring in economic
benefit can be predicted the serviceable life is estimated and the intangible asset is
amortized following the policy for amortization of intangible assets with limited
serviceable life.
(2) R&D expenses
Internal R&D expenses of the Company include expenses on the research stage and
those on the development stage.Expenses incurred on the research stage are recognized in current profit and loss.The Company's specific criteria for classifying research-phase expenditures and
development-phase expenditures for internal research and development projects:
The research phase is the stage of original and planned investigation and research
activities to acquire and understand new scientific or technological knowledge etc.;
the development phase is the stage of activities to apply research results or other
knowledge to a plan or design to produce new or substantially improved materials
devices products etc. prior to commercial production or use.Expenses incurred on the development stage if satisfying all of the following
conditions are recognized as an intangible asset otherwise in current profit and loss.* The expenses contribute to the completion of intangible asset so that it can be
technically usable or salable;
* Having the intention to complete the intangible asset and use or sell it;
* The intangible asset is able to generate economic benefits with evidence that there is
a market for the intangible asset or products produced using the intangible asset or that
the intangible asset is useful if it is intended to be internally used;
3302024 Annual Report of Hengyi Petrochemical Co. Ltd.
* With enough supports from technical/financial and other resources to finish the
development of such intangible assets and be capable of using or selling such
intangible assets;
* The expenditure attributable to the development stage of the intangible asset can be
reliably measured.Expenses on the research stage and the development stage if not able to be
distinguished are both recognized in current profit and loss.
(3) Impairment test of intangible assets and methods for withholding the impairment
reserves. For detail test method and calculation method of provisions for impairmentreserves of intangible assets please refer to Note III (20. “Impairment of Long-termAssets”).
20.Impairment of long-term assets
The Company determines on the balance sheet date whether there are signs that
impairment has occurred to fixed assets constructions-in-progress intangible assets
with limited serviceable life right-of-use assets investment properties measured at
cost and non-current non-financial assets including long-term equity investments in its
subsidiaries joint ventures and associates. If there are signs of impairments the
recoverable amount is estimated and an impairment test is done. Goodwill intangible
assets with uncertain serviceable life and intangible assets that have not reached the
serviceable status are subject to impairment tests every year regardless of whether
there are signs of impairments.If the impairment test results indicate that the recoverable amount of assets is lower
than its book value provisions for impairment reserves shall be calculated in
accordance with its balance and then recorded into impairment loss. The recoverable
amount shall be the higher of the fair value minus disposal expenses and the present
value of expected future cash flows of the asset. The fair value of an asset is
determined based on contract price of fair trade; if there is no sales agreement but
there is an active market the bid price the buyer offers for the asset is taken to be the
3312024 Annual Report of Hengyi Petrochemical Co. Ltd.
fair value; if there is no sales agreement or active market the fair value of the asset is
estimated on the basis of the best information available. Disposal expenses include
legal fees related to assets disposal related taxes carriage expenses and direct
expenses for making the assets reach the marketable condition. The present value of
the expected future cash flow from an asset is determined by discounting the expected
future cash flow from the asset while it is used on an on-going basis and the at the
final disposal at a suitable discount rate. Asset impairment reserves shall be calculated
and confirmed on the basis of single assets. The recoverable amount of this asset
group shall be determined with such assets’ group if it is difficult to estimate the
recoverable amount of single assets. Asset group is the minimum asset portfolio
capable of generating cash inflow independently.When conducting impairment loss of goodwill separately listed in the financial
statements the book value of the goodwill is allocated to the asset group or
combination of asset groups that benefit from the synergies of the business
combination. The corresponding impairment loss shall be recognized when
impairment test indicates that the recoverable amount of the asset group or
combination of asset groups to which goodwill is apportioned is lower than its book
value. Firstly the amount of impairment losses shall be amortized to the book value
of goodwill of this asset group or asset portfolio. Secondly the book value of other
assets shall be amortized in proportion based on the book value of other assets
(excluding goodwill) in the asset group or asset portfolio.Once impairment losses on above assets are confirmed the part with recovered value
cannot be rolled back in subsequent periods.
21. Long-term deferred expenses
Long-term deferred expenses refer to expenses that have been incurred and shall be
amortized over a period of longer than one year including the current period and
periods yet to come. Long-term deferred expenses are recorded at actual expense and
3322024 Annual Report of Hengyi Petrochemical Co. Ltd.
amortized using the straight- line method over estimated period of benefit.
22. Contract liability
Contract liabilities mean the obligation for which the Company shall transfer goods to
customers for the consideration received or receivable from customers. If the
customer has already paid the contract consideration or the Company has obtained the
unconditional right to receive payment before the Company transfers the goods to the
customer the Company shall present the received amounts or receivables as contract
liabilities at the earlier of the time when the actual payment is received by the
Company from the customer and the due date of payment. Contract assets and
contract liabilities under the same contract are presented at net amount. If the net
amount is the debit balance the contract asset and contract liability shall be presented
in the item of "contract assets" or "other non-current assets" according to its liquidity;
if the net amount is the credit balance the contract asset and contract liability shall be
presented in the item of “contract liabilities” or “other non-current liabilities”
according to n its liquidity. Contract assets and contract liabilities under different
contracts are not offset.
23. Staff remuneration
Employee benefits mainly include short-term employee remunerations
post-employment benefits termination benefits and other long-term employee
benefits. Wherein:
The short-term remunerations include salaries bonuses allowance and subsidies
welfare medical insurance premium maternity insurance premium industrial injury
insurance premium housing fund contributions labor union fund contribution
employee education fund contributions and non-monetary benefits. The Company
treats short-term employee remunerations actually incurred during the accounting
period in which employees provide services for the Company as liabilities and
recognizes the same in current profit and loss or relevant cost for assets of the period.Non-monetary benefits are measured at fair value.
3332024 Annual Report of Hengyi Petrochemical Co. Ltd.
Post-employment benefits mainly include basic pension insurance unemployment
insurance and annuities. Post-employment benefit plans include defined contribution
plans. If a defined contribution plan is in place the corresponding amounts payable is
included in relevant costs for assets or current profit and loss in which they are
incurred.If the labor relationship with employees terminates before the employment contracts
expire or if the Company offers compensation with the view of encouraging
employees to voluntarily accept redundancy payroll liabilities arising from the
termination benefits are recognized in current profit and loss on the earlier of the date
on which it is determined that the Company may not withdraw the termination
benefits offered through labor relationship plans or redundancy proposals and the date
on which the Company recognizes the cost for the restructure involving the payment
of termination benefits. However if the demission welfare cannot be completely paid
within 12 months after the termination of the annual report period it shall be dealt
with according to the remuneration of another long-term employee.Internal retirement plans are treated following the same principles related to the
termination benefits as described above. The Company recognizes in current profit
and loss (termination benefits) of the salaries social insurance premiums etc. that are
to be paid between the date the employees stop to provide services for the Company
and the date of normal retirement if satisfying the conditions for the recognition of
estimated liabilities.Other long-term employee benefits provided by the Company to its staff that conform
to the defined contribution plans shall be subject to accounting treatment in
accordance with the defined contribution plans. Others shall be shall be subject to
accounting treatment in accordance with the defined benefit plans.
3342024 Annual Report of Hengyi Petrochemical Co. Ltd.
24. Estimated liabilities
When an obligation arising from contingencies such as guarantees provided to
external parties litigation matters product quality assurance loss contracts etc.becomes a present obligation incurred by the Company and it is probable that the
fulfilment of the obligation will result in an outflow of economic benefits to the
Company and the amount of the obligation can be measured reliably the Company
recognises the obligation as a projected liability.The Company initially measures a projected liability at the best estimate of the
expenditure required to settle the related present obligation and reviews the carrying
amount of the projected liability at the balance sheet date.If the expenditures required to settle the projected liability are expected to be
reimbursed in whole or in part by a third party the amount of reimbursement is
separately recognised as an asset when it is virtually certain that the reimbursement
will be received and the amount of reimbursement recognised does not exceed the
carrying amount of the projected liability.
25. Preference shares perpetual bonds and other financial instruments
In accordance with the relevant standards on financial instruments and the
"Regulations on the Distinction between Financial Liabilities and Equity Instruments
and Related Accounting Treatment" (Caijing [2014] No. 13) for financial instruments
such as convertible corporate bonds issued the Company based on the contractual
terms of the financial instruments issued and their economic substance as reflected in
the contracts rather than in legal form only and in conjunction with the definitions of
financial assets financial liabilities and equity instruments classifies such financial
instruments or their components as financial assets financial liabilities or equity
instruments upon initial recognition. financial instruments or their components are
classified as financial assets financial liabilities or equity instruments at initial
recognition.
3352024 Annual Report of Hengyi Petrochemical Co. Ltd.
At the balance sheet date for financial instruments classified as equity instruments
their interest expense or dividend distribution is treated as profit distribution of the
Company and their repurchase or cancellation is treated as a change in equity; for
financial instruments classified as financial liabilities their interest expense or
dividend distribution is treated as a borrowing cost and their gains or losses arising
from their repurchase or redemption are recognised in profit or loss for the current
period.
26. Revenue
1) Principles of revenue recognition
Revenue from a contract between the Company and a customer is recognised when
the customer obtains control of the underlying commodity when the following
conditions are simultaneously met: the parties to the contract have approved the
contract and have committed themselves to performing their respective obligations;
the contract specifies the rights and obligations of the parties to the contract with
respect to the transferred commodity or the provision of services; the contract has
clear payment terms with respect to the transferred commodity; the contract has a
commercial substance in the sense that the performance of the contract will change
the Company's risk time distribution or amount of future cash flows; and it is
probable that the consideration to which the Company is entitled as a result of the
transfer of goods to customers will be recovered. On the commencement date of the
contract the Company evaluates the contract identifies each individual performance
obligation contained in the contract and determines whether each individual
performance obligation is performed within a certain period of time or at a certain
time point.It belongs to performance within a period when satisfying any one of the following
conditions. Otherwise it belongs to performance at a time point.* The client obtains and consumes corresponding economic benefits while the
Company performs its obligations;
3362024 Annual Report of Hengyi Petrochemical Co. Ltd.
* The client is able to control in-process commodities or services in the process of
performance by the Company;
* Commodities or services in the process of performance by the Company have
irreplaceable usage and the Company has within the entire contract period the right
to collect money for the part performed so far.For the contract performance obligations fulfilled within a certain period of time the
Company recognizes revenue according to the performance progress during that
period of time. When the contract performance progress cannot be reasonably
determined if the cost incurred is expected to be compensated the revenue shall be
recognized according to the amount of cost incurred until the performance progress
can be reasonably determined. For the contract performance obligations fulfilled at a
certain time point revenue is recognized at the time point when the customer obtains
the control over the relevant goods or services. The Company shall take the following
signs into consideration while judging whether the client has obtained the control
right of commodity or not: * The Company has the right of current collection over
such commodity. In other words the client is obligated to pay for this commodity
currently; * The Company has already transferred legal ownership of this
commodity to the client. In other words the client has legal ownership of this
commodity; * The Company has already transferred this commodity to the client.In other words the client has already occupied this commodity in real material; *
The Company has already transferred to the client main risks and remunerations
related to the ownership of this commodity. In other words the client has already
obtained main risks and remunerations related to the ownership of this commodity;
* The client has already accepted this commodity; * Other signs indicating that
the client has already obtained the control right of this commodity
2) Principles of revenue measurement
* The Company measures revenue based on the transaction price allocated to each
individual performance obligation. The transaction price is the amount of
3372024 Annual Report of Hengyi Petrochemical Co. Ltd.
consideration that the Company expects to have the right to receive due to the transfer
of goods or services to the customer excluding the amounts collected on behalf of a
third party and the amounts expected to be returned to the customer.* If there is variable consideration in the contract the Company will determine the
best estimate of the variable consideration according to the expected value or the most
likely amount but the transaction price including the variable consideration shall not
exceed the amount of the accumulated recognized income that is likely to have no
major reversal when the relevant uncertainty is eliminated.* If there is a significant financing component in the contract the Company will
determine the transaction price based on the amount payable that is assumed to be
paid in cash when the customer obtains the control over the goods or services. The
difference between the transaction price and the contract consideration is amortized
by the effective interest method during the contract term. On the commencement date
of the contract the Company expects that the interval between the customer’s
acquisition of control of the goods or services and the customer’s payment of price
will not exceed one year regardless of the significant financing components in the
contract.* If the 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 separate selling price of the goods promised under
each individual performance obligation on the contract commencement date.
3) Specific method of revenue recognition
The Company mainly sells crude oil chemical products PTA PET flakes polyester
yarns etc. and the sales shall be the fulfilment of contract performance obligation at a
certain time point. In combination with the Company’s actual production and
management features its internal product sales revenues shall be confirmed in
accordance with the following conditions: The Company has already delivered
corresponding products to the client in accordance with the contract agreement; the
amount of product sales revenues has been determined already; the Company has
3382024 Annual Report of Hengyi Petrochemical Co. Ltd.
already taken back relevant loans or obtained the receipt voucher and relevant
economic interests are likely to flow in; the product control right has already been
transferred to the acquirer; product-related costs can be measured reliably. For
exported goods the income is recognized when the goods are declared for export. For
the sales of trade goods the income is recognized when the Company has delivered
the goods property in goods to the purchaser in accordance with the contract
provisions. For the goods in the Company’s overseas subsidiary international trade
business the income is recognized according to the time point for the transfer of
goods risk as set out in the contract.
27. Contract cost
Contract costs are classified as contract performance costs and contract acquisition
costs.Costs incurred by the Company's enterprises to perform contracts are recognised as an
asset as contract performance costs when both of the following conditions are met:
(1) The cost is directly related to a current or anticipated acquired contract and
includes direct labour direct materials manufacturing overheads (or similar costs)
costs explicitly attributable to the customer and other costs incurred solely in
connection with that contract;
(2) The cost increases the resources of the business that will be used in the future to
meet its performance obligations;
(3) The cost is expected to be recovered.
Incremental costs incurred by the Company to acquire a contract that are expected to
be recovered are recognised as an asset as contract acquisition costs; however such
assets are amortised over a period not exceeding one year and may be charged to
profit or loss as incurred.Assets related to contract costs are amortised using the same basis as revenue
recognition for the goods or services to which the asset relates.If the carrying amount of an asset related to contract costs is more than the difference
3392024 Annual Report of Hengyi Petrochemical Co. Ltd.
between the following two items the Company will make an allowance for
impairment and recognise an asset impairment loss for the excess:
(1) the remaining consideration expected to be received for the transfer of goods or
services related to the asset;
(2) the estimated costs to be incurred for the transfer of the related goods or services.
In the event of a subsequent reversal of the provision for impairment of an asset the
carrying amount of the asset after the reversal shall not exceed the carrying amount of
the asset at the date of the reversal assuming that no provision for impairment had
been made.
28. Government grants
Government grant refers to monetary or non-monetary assets the Company receives
from the government for free but excludes funds invested in the Company by the
government which enjoys the owners’ equity in the same as a fund owner.Government grants are divided into asset-related government grants and
income-related government grants. Governmental subsidies obtained by the Company
to structure or form long-term assets in other ways shall be defined as assets-related
subsidies and other governmental subsidies as income-related subsidies. If the target
of a government grant is not specified in relevant government documents the grant is
divided into income- and asset-related subsidy in the following manners: (1) if the
project is defined in relevant government document the subsidy is divided in
accordance with the relative proportions of the expense allocated for asset and
expenditure provided that the division is reviewed against the proportions on each
balance sheet date and adjusted if necessary; (2) if only a general direction on the use
of the subsidy but no specific project is stated in relevant government documents the
subsidy is recognized as income-related subsidy. If a government grant is a monetary
asset it shall be measured in the light of the received or receivable amount.Government grants in the form of non-monetary assets are measured at fair value or
if the fair value cannot be reliably obtained at its nominal amount. Government
grants measured at nominal amounts shall be directly included into current profit and
3402024 Annual Report of Hengyi Petrochemical Co. Ltd.
loss.The Company usually recognizes and measures government grants at by the amount
actually received. However the financial support funds that meet the relevant
conditions stipulated by the financial support policy with conclusive evidence at the
end of the period shall be measured according to the amount receivable. Government
grant to be measured at the amount receivable must meet all the following conditions:
(1) The amount of the government grant receivable has been confirmed by a formal
document from competent government authority or can be reasonably calculated
following relevant regulations of formally issued financial fund managementmeasures and there is no significant uncertainty as to the amount to be received;(2）the
government grant is based on a financial support program and its financial fund
management measures formally implemented and disclosed following the Regulations
on Open Government Information and the said measures are inclusive (open to all
eligible entities) rather than specifically formulated for certain entities; (3) a deadline
for the disbursement has been announced in relevant documents and guaranteed with
financial budget so that the receipt of the amount is reasonably certain;(4) the
Company is expected to satisfy other conditions that may be required for such subsidy
(if any).Asset-related government grant is recognized as a deferred income which is included
into current profit and loss in instalments over the life of use of relevant assets in a
reasonable and systematic way. Income-related government grant if used to cover
relevant future expenses or losses is recognized as a deferred income and is included
into current profit and loss in the period when such expenses and losses are
recognized or if used to cover related expenses and losses that have been incurred is
directly included into current profit and loss.If government grants include both asset-related and income-related grants different
accounting methods may be applied for different parts of the grants; government
3412024 Annual Report of Hengyi Petrochemical Co. Ltd.
grants that cannot be differentiated are accounted for as income-related.Government grants related to the daily operations of the Company are included in
other income or used to offset relevant costs and expenses and those irrelevant to the
daily operations are recorded as non-operating income.When the recognized government subsidy needs to be returned if there is a relevant
deferred income balance the book balance of the relevant deferred income will be
offset and the excess will be included in the current profit and loss; in other cases it
will be directly included in the current profit and loss.
29.Deferred income tax assets/deferred income tax liabilities
Deferred tax assets or deferred tax liabilities are recognised based on the difference
between the carrying amount of an asset or liability and its tax basis (if the tax basis
of an item not recognised as an asset or liability can be determined in accordance with
the provisions of the tax laws the difference between such tax basis and its carrying
amount) calculated at the tax rate that is expected to apply in the period in which the
asset is recovered or the liability is settled.Deferred tax assets are recognised to the extent that it is probable that taxable income
will be available against which deductible temporary differences can be utilised.Deferred tax assets not recognised in prior periods are recognised when at the balance
sheet date it is probable that sufficient taxable income will be available in future
periods to allow the deductible temporary differences to be utilised.The carrying amount of deferred tax assets is reviewed at the balance sheet date and
written down to the extent that it is more likely than not that sufficient taxable income
will not be available to allow the benefit of the deferred tax assets to be utilised in
future periods. The amount of the write-down is reversed when it is more likely than
not that sufficient taxable income will be available.
3422024 Annual Report of Hengyi Petrochemical Co. Ltd.
The Company's current income tax and deferred income tax are recorded as income
tax expense or benefit in profit or loss excluding income tax arising from: business
combinations; and transactions or events that are recognised directly in equity.When there is a legal right to settle the financial statements on a net basis and the
intention is to settle the financial statements on a net basis or when the acquisition of
assets and settlement of liabilities are carried out simultaneously the Company's
current income tax assets and current income tax liabilities are presented at the net
amounts after offsetting.
30. leases
(1) The Company as Lessee
The main categories of the Company's leased assets are buildings and structures land
use rights and machinery and equipment.On the commencement date of the lease term the Company recognises a right-of-use
asset and a lease liability for leases other than short-term leases and leases of
low-value assets and recognises depreciation expense and interest expense
respectively over the lease term.The Company accrues lease payments for short-term leases and low-value asset leases
on a straight-line basis over the lease term in each period.* Right-of-Use Assets
A right-of-use asset is the right of the lessee to use the leased asset during the lease
term. At the commencement date of the lease term. Right-of-use assets are initially
measured at cost. This cost includes: (i) the initial measurement amount of the lease
liability; (ii) the amount of lease payments made on or before the commencement date
of the lease term net of the amount relating to the lease incentive already enjoyed if a
3432024 Annual Report of Hengyi Petrochemical Co. Ltd.
lease incentive exists; (iii) the initial direct costs incurred by the lessee; and (iv) the
costs expected to be incurred by the lessee to dismantle and remove the leased asset
to reinstate the site on which the leased asset is located or to restore the leased asset
to the condition agreed under the terms of the lease.The Company classifies and provides depreciation on right-of-use assets using the
straight-line method. For leases where it is reasonably certain that ownership of the
leased asset will be obtained at the end of the lease term depreciation is calculated
over the estimated remaining useful life of the leased asset. For leases where it is not
reasonably certain that ownership will be obtained at the end of the lease term
depreciation is calculated over the shorter of the lease term and the remaining useful
life of the leased asset.The Company determines whether impairment of right-of-use assets has occurred and
conducts accounting treatment in accordance with the relevant provisions of
Accounting Standards for Business Enterprises No. 8 – Asset Impairment.* Lease liabilities
Lease liabilities are initially measured at the present value of the lease payments
outstanding at the commencement date of the lease term. Lease payments include: (i)
fixed payments (including substantially fixed payments) net of amounts related to
lease incentives if any; (ii) variable lease payments that depend on indices or ratios;
(iii) amounts expected to be paid based on the residual value of guarantees provided
by the lessee; (iv) the exercise price of a purchase option if the lessee is reasonably
certain that the option will be exercised; and (v) amounts required to be paid upon
exercise of a termination option provided that the lease term reflects that the lessee
will exercise the termination option; and (vi) amounts required to be paid upon
exercise of a termination option if the lease term reflects that the lessee will exercise
the option. (v) Payments to be made upon exercise of the option to terminate the lease
provided that the lease term reflects that the lessee will exercise the option to
3442024 Annual Report of Hengyi Petrochemical Co. Ltd.
terminate the lease;
The Company uses the interest rate embedded in the lease as the discount rate; if the
interest rate embedded in the lease cannot be reasonably determined the Company's
incremental borrowing rate is used as the discount rate. The Company calculates the
interest expense on the lease liability for each period during the lease term based on a
fixed periodic rate which is included in finance costs. This periodic rate is the
discount rate used by the Company or a revised discount rate.Variable lease payments that are not included in the measurement of the lease liability
are recognised in profit or loss when they are actually incurred.When there is a change in the Company's evaluation of the renewal option the option
to terminate the lease or the option to purchase the lease liability is remeasured at the
present value of the lease payments after the change and at a revised discount rate
and the carrying amount of the right-of-use asset is adjusted accordingly. When there
is a change in the substantive lease payments the amount expected to be payable for
the residual value of the guarantee or variable lease payments that depend on an
index or rate the lease liability is remeasured at the present value calculated using the
changed lease payments and the original discount rate and the carrying amount of the
right-of-use asset is adjusted accordingly.* Short-term leases and leases of low-value assets
The Company has elected not to recognise right-of-use assets and lease liabilities for
short-term leases and leases of low-value assets and to recognize the related lease
payments in profit or loss or in the cost of the related assets on a straight-line basis in
each period during the lease term. Short-term leases are leases with a term of less than
12 months at the commencement date of the lease term and do not include an option
to purchase. Low-value asset leases are leases that have a lower value when the
individual leased asset is a new asset.
3452024 Annual Report of Hengyi Petrochemical Co. Ltd.
(2) The Company as leaser
* Operating lease
The straight-line method is adopted by the Company to confirm the lease receipts as
rental income in different periods within the lease term. Variable lease payment
related to operating lease that is not recorded into lease receipts shall be recorded into
current profits and losses upon the occurrence.* Finance lease
Since the commencement date of the lease term the Company shall confirm the
amount of finance lease receivable and derecognize finance lease assets. The amount
of finance lease receivable shall be initially measured by net lease investment (sum of
present value of unguaranteed balance and un-received lease receipts since the
commencement date of the lease term after being discounted in accordance with the
interest rate implicit in lease). In addition interest incomes within the lease term shall
be calculated and conformed in accordance with fixed periodic rate. Upon its
occurrence variable lease payment not measured as lease liabilities shall be recorded
into current profits and losses or into related asset cost.
(3) Sale-and-leaseback
* Company as lessee
The Company assesses whether the transfer of assets in a sale and leaseback
transaction is a sale in accordance with the provisions of Accounting Standards for
Business Enterprises No. 14 "Revenue".If the transfer of assets in a sale and leaseback transaction is a sale the Company
measures the right-of-use asset resulting from the sale and leaseback at the portion of
the original asset's carrying value that relates to the right-of-use acquired through the
leaseback and recognises the related gain or loss only for the right transferred to the
lessor.
3462024 Annual Report of Hengyi Petrochemical Co. Ltd.
If the transfer of an asset in a sale-and-leaseback transaction is not a sale the
company continues to recognise the transferred asset and at the same time recognises
a financial liability equal to the transfer proceeds and accounts for the financial
liability in accordance with Accounting Standards for Business Enterprises No. 22
"Recognition and Measurement of Financial Instruments".* Company as lessor
The Company assesses whether the transfer of assets in a sale and leaseback
transaction is a sale in accordance with the provisions of Accounting Standards for
Business Enterprises No. 14 "Revenue".If the transfer of assets in a sale and leaseback transaction is a sale the Company
accounts for the purchase of assets in accordance with other applicable corporate
accounting standards and for the lease of assets in accordance with Accounting
Standards for Business Enterprises No. 21 - Leasing.If the transfer of assets in a sale and leaseback transaction is not a sale the company
does not recognise the transferred assets but recognises a financial asset equal to the
transfer proceeds and accounts for the financial asset in accordance with Accounting
Standards for Business Enterprises No. 22 - Recognition and Measurement of
Financial Instruments.
31. Other significant accounting policies and accounting estimates
(1) Hedge accounting
* Hedges include fair value hedges cash flow hedges and hedges of net investments
in foreign operations.* Hedge accounting is applied to hedging instruments that meet the following
conditions: (1) the hedging relationship consists solely of the eligible hedging
instrument and hedged instrument; (2) at the inception of the hedge the Company
3472024 Annual Report of Hengyi Petrochemical Co. Ltd.
formally designates the hedging instrument and hedged item and prepares written
documentation regarding the hedging relationship and the Company's risk
management strategy and risk management objectives for engaging in the hedge; and
(3) the hedging relationship meets the hedge effectiveness requirements.
The Company determines that a hedging relationship meets the requirements for
hedge effectiveness when the following conditions are simultaneously met: (1) an
economic relationship exists between the hedged item and the hedging instrument; (2)
the impact of credit risk does not dominate the change in value resulting from the
economic relationship between the hedged item and the hedging instrument; and (3)
the hedge ratio of the hedging relationship is equal to the ratio of the number of
hedged items that the Company is actually hedging to the actual number of hedging
instruments hedged against the Company but not to the actual number of hedging
instruments hedged against the Company. The ratio of the actual number of
instruments hedged does not reflect an imbalance in the relative weights of the hedged
item and the hedging instrument.The Company evaluates whether a hedging relationship meets the hedge effectiveness
requirements on an ongoing basis at the hedge inception date and in subsequent
periods. If a hedging relationship no longer meets the hedge effectiveness
requirements due to the hedge ratio but the risk management objective for which the
hedging relationship was designated remains unchanged the Company rebalances the
hedging relationship.* Hedge accounting treatment
A. Fair value hedges
a. Gains or losses arising from hedging instruments are recognised in profit or loss. If
the hedging instrument is a hedge of a non-trading equity instrument (or component
thereof) that has been elected to be measured at fair value through other
comprehensive income the gain or loss arising from the hedging instrument is
included in other comprehensive income.
3482024 Annual Report of Hengyi Petrochemical Co. Ltd.
b. Gains or losses arising from the hedged item's exposure are recognised in profit or
loss for the period and the carrying amount of the recognised hedged item that is not
measured at fair value is adjusted. If the hedged item is a debt instrument (or its
component) measured at fair value through other comprehensive income the gain or
loss arising from the hedged risk exposure is recognised in profit or loss for the
current period without adjusting the carrying value; if the hedged item is an
investment in non-trading equity instruments (or its component) measured at fair
value through other comprehensive income the gain or loss arising from the hedged
risk exposure is recognised in other comprehensive income for the current period.Gains or losses arising from the hedged risk exposure are recognised in other
comprehensive income without any adjustment to the carrying amount.If the hedged item is a firm commitment (or a component of a firm commitment) that
has not yet been recognised the cumulative change in the fair value of the hedged
item attributable to the hedged risk subsequent to the designation of the hedging
relationship is recognised as an asset or a liability with the related gain or loss being
recognised in profit or loss in each of the relevant periods. When an asset is acquired
or a liability is assumed as a result of the fulfilment of a firm commitment the initial
recognition amount of the asset or liability is adjusted to include the cumulative
change in fair value of the hedged item recognised.If the hedged item is a financial instrument (or its component) measured at amortised
cost the company amortises the adjustment to the carrying amount of the hedged item
at the effective interest rate recalculated at the date of commencement of amortisation
and recognises it in profit or loss for the period. If the hedged item is a debt
instrument (or its component) that is measured at fair value through other
comprehensive income the cumulative recognised hedging gains or losses are
amortised in the same manner and recognised in profit or loss but the carrying value
of the debt instrument (or its component) is not adjusted.
3492024 Annual Report of Hengyi Petrochemical Co. Ltd.
B. Cash flow hedges
a. The portion of the gain or loss on the hedging instrument that is an effective hedge
is recognised as a cash flow hedge reserve in other comprehensive income while the
ineffective portion is recognised in profit or loss. The amount of the cash flow hedge
reserve is recognised as the lower of: (i) the cumulative gain or loss on the hedging
instrument from the beginning of the hedge; and (ii) the cumulative change in the
present value of the expected future cash flows of the hedged item from the beginning
of the hedge.b. When the hedged item is an anticipated transaction and the anticipated transaction
results in the subsequent recognition of a non-financial asset or non-financial liability
by the Company or when the anticipated transaction of the non-financial asset and
non-financial liability results in a firm commitment for which fair value hedge
accounting is applicable the Company transfers the amount of the cash flow hedge
reserve that would otherwise have been recognised in other comprehensive income to
the amount initially recognised for that asset or liability.c. For other cash flow hedges the amount of cash flow hedge reserve originally
recognised in other comprehensive income is transferred out to profit or loss in the
same period in which the hedged forecast transaction affects profit or loss.C. Hedges of net investment in foreign operations
The portion of gains or losses arising from hedging instruments that are effective
hedges is recognised in other comprehensive income and transferred out to current
profit or loss upon disposal of the foreign operation; the portion of gains or losses
arising from hedging instruments that are ineffective hedges is recognised in current
profit or loss.
(2) Repurchase of Shares
3502024 Annual Report of Hengyi Petrochemical Co. Ltd.
If the Company acquires shares for the purpose of reducing registered capital or
rewarding employees the amount actually paid for the shares is treated as treasury
stock and recorded in the register of treasury stock. If the repurchased shares are
cancelled the difference between the total par value of the shares calculated on the
basis of the nominal value of the cancelled shares and the number of shares cancelled
and the amount actually paid for the repurchase is charged to capital surplus and if
capital surplus is not sufficient to be charged to capital surplus it is charged to
retained earnings; if the award of the repurchased shares to the Company's employees
is an equity-settled share payment the cost of shares and the accumulated amount of
capital surplus (other capital surplus) during the waiting period are treated as treasury
shares and recorded in the register of record. The cost of treasury stock delivered to
employees and the cumulative amount of capital surplus (other capital surplus) during
the waiting period are cancelled when the employees receive the purchase price of the
Company's shares by exercising their options and the capital surplus (share premium)
is adjusted for the difference.
（32）Changes in significant accounting policies and estimates
(1) Changes in Accounting Policies
* On October 25 2023 the Ministry of Finance issued Interpretation No. 17 of
Accounting Standards for Business Enterprises (Cai Kuai [2023] No. 21 hereinafter
"Interpretation No. 17"). The Company adopted Interpretation No. 17 effective
January 1 2024 (the "Effective Date").A. Classification of Current and Non-Current Liabilities
The Company adopted the provisions of Interpretation No. 17 regarding the
"Classification of Current and Non-Current Liabilities" as of the Effective Date. The
adoption of these provisions has no impact on the financial statements for the current
reporting period.B. Disclosure of Supplier Financing Arrangements
3512024 Annual Report of Hengyi Petrochemical Co. Ltd.
Pursuant to Interpretation No. 17 the Company is not required to
disclose:Comparative period information for supplier financing arrangements;
Opening balance information for "financial liabilities where suppliers have received
payments from financing providers"; Opening balance information for "payment due
date ranges of financial liabilities and payment due date ranges of comparable
accounts payable not part of supplier financing arrangements."
C. Accounting Treatment for Sale and Leaseback Transactions
The Company adopted the provisions of Interpretation No. 17 regarding the
"Accounting Treatment for Sale and Leaseback Transactions" as of the Effective Date.The adoption of these provisions has no impact on the financial statements for the
current reporting period.* On December 6 2024 the Ministry of Finance issued Interpretation No. 18 of
Accounting Standards for Business Enterprises (Cai Kuai [2024] No. 24 hereinafter
"Interpretation No. 18"). Interpretation No. 18 clarifies that for warranty-type quality
assurance not qualifying as a distinct performance obligation the Company shall
recognize the estimated liability in accordance with Accounting Standard for Business
Enterprises No. 13—Contingencies (Cai Kuai [2006] No. 3). Specifically the
Company shall: Debit "Cost of Sales" or "Other Operating Costs" and Credit
"Estimated Liabilities"instead of recognizing such amounts under "Selling
Expenses." The adoption of Interpretation No. 18 has no impact on the financial
statements for the current reporting period.
(2) Changes in Accounting Estimates
There were no changes in accounting estimates during the reporting period.III.Taxes
1. Main tax categories and tax rates
3522024 Annual Report of Hengyi Petrochemical Co. Ltd.
Tax Category Specific Tax Rate
The output taxes of taxable income shall be calculated at a tax rate of
Value-added tax 13% 9% and 6% and the VAT shall be calculated and paid based on the
difference after deducting the amount of input tax that can be deducted
for the current period.Urban maintenance and To be paid at 7% 5% of the actually paid turnover tax. Education
construction tax surcharge
Education surcharge To be paid at 3% of the actually paid turnover tax.Local education surcharge To be paid at 2% of the actually paid turnover tax.Calculated and paid at 25% 18.5% 17% 16.5% 15% 5% and 2.5% of
Enterprise income tax
taxable income.The Company has different enterprise income tax rate taxpayers and the specific
conditions are as follows:
Name of tax payer Income tax rate
Domestic subsidiary 25% 20% and 15%
Hong Kong Tianyi International
Holding Co. Ltd.Good Park International
16.5%
Investment Co. Ltd.For offshore trade the offshore profits tax exemption can be applied for.Hong Kong Yisheng
Petrochemical Investment Co.Ltd.The Company is approved to join the Singapore Global Trader
Hengyi Industry International
Programme (GTP) so is entitled to the preferential enterprise income tax
Co. Ltd. rate and payment of enterprise income tax at a tax rate of 5% from 2022
to 2026.Hengyi Industries Sdn. Bhd. 18.5%
3532024 Annual Report of Hengyi Petrochemical Co. Ltd.
Hengyi International Logistics
Co. Ltd.
17%
Hengyi Petrochemical
International Co. Ltd.
2.Tax incentives and approvals
(1) According to the Announcement on Issuing the Measures for the Administration
of Preferential Value-Added Tax Policies for Promoting the Employment of Disabled
Persons (Announcement No. 33 [2016] of the State Administration of Taxation)
released by the State Administration of Taxation Zhejiang Hengyi Polymer Co. Ltd.(Hereinafter “the Polymer Company”) a holding subsidiary of the Company enjoyed
the preferential VAT policy of immediate refund upon payment for the employment of
disabled persons.
(2)Pursuant to the relevant provisions of the Announcement of the Ministry of
Finance and the State Administration of Taxation on the Policy of Value-added Tax
Credits for Enterprises in the Advanced Manufacturing Sector (Announcement No. 43
of 2023) from 1 January 2023 to 31 December 2027 enterprises in the advanced
manufacturing sector are allowed to offset the payable value-added tax (VAT) by
adding 5% to the creditable input tax amount for the current period.
(3) Zhejiang Hengyi High-Tech Materials Co. Ltd. (hereinafter referred to as "Hengyi
High- Tech Materials") the Company’s holding subsidiary and Zhejiang Hengyi
Petrochemical Research Institute Co. Ltd. (hereinafter referred to as the "Institute")
the Company’s wholly- owned subsidiary obtained the High-tech Enterprise
Certificates jointly issued by Zhejiang Provincial Department of Science and
Technology Zhejiang Provincial Department of Finance and Zhejiang Provincial
Taxation Bureau of the State Administration of Taxation on December 24 2022 and
were recognized as high-tech enterprises with a validity period of three years.According to the Enterprise Income Tax Law of the People's Republic of China and
3542024 Annual Report of Hengyi Petrochemical Co. Ltd.
the Implementation Regulations of the Enterprise Income Tax Law of the People's
Republic of China Hengyi High-Tech Materials and the Institute are taxed at a
reduced enterprise income rate of 15% from January 1 2022 to December 31 2024.
(4)Zhejiang Shuangtu New Materials (hereinafter referred to as "Shuangtu New
Materials") a wholly-owned subsidiary of the Company was certified as High and
New Technology Enterprises by the Department of Science and Technology of
Zhejiang Province and the Department of Finance of Zhejiang Province jointly issued
by the State Administration of Taxation of Zhejiang Province. In accordance with the
Enterprise Income Tax Law of the People's Republic of China and the Regulations for
the Implementation of the Enterprise Income Tax Law of the People's Republic of
China Shuangtu New Materials was entitled to a reduction of 15% in enterprise
income tax from 01 January 2023 to 31 December 2025.
(5)The Company's wholly-owned subsidiary Suqian Yida New Materials Co. Ltd.
(hereinafter referred to as "Suqian Yida") obtained the "High-tech Enterprise
Certificate" jointly issued by the Jiangsu Provincial Department of Science and
Technology Jiangsu Provincial Department of Finance and the Jiangsu Provincial
Taxation Bureau of the State Administration of Taxation on November 19 2024.Suqian Yida was recognized as a high-tech enterprise with the certificate valid for
three years. According to the "Enterprise Income Tax Law of the People's Republic of
China " and the "Implementation Regulations of the Enterprise Income Tax Law of
the People's Republic of China " Suqian Yida is eligible for a reduced enterprise
income tax rate of 15% from January 1 2024 to December 31 2026.
(6)The Company's majority-owned subsidiary Haining Hengyi New Materials Co.
Ltd. (hereinafter referred to as "Haining New Materials") and wholly-owned
subsidiary Jiaxing Yipeng Chemical Fiber Co. Ltd. (hereinafter referred to as
"Jiaxing Yipeng") obtained the "High-tech Enterprise Certificate" jointly issued by
the Zhejiang Provincial Department of Science and Technology Zhejiang Provincial
3552024 Annual Report of Hengyi Petrochemical Co. Ltd.
Department of Finance and the Zhejiang Provincial Taxation Bureau of the State
Administration of Taxation on December 6 2024. Both Haining New Materials and
Jiaxing Yipeng were recognized as high-tech enterprises with the certificates valid for
three years. According to the "Enterprise Income Tax Law of the People's Republic of
China " and the "Implementation Regulations of the Enterprise Income Tax Law of
the People's Republic of China " Haining New Materials and Jiaxing Yipeng are
eligible for a reduced enterprise income tax rate of 15% from January 1 2024 to
December 31 2026.
(7)On March 15 2019 the Company’s holding subsidiary Hengyi Industries
International Pte. Ltd. was approved to join the Singapore Global Trader Programme
(GTP). According to the approval document on December 31 2021 Hengyi
Industries International Pte. Ltd. was endowed with Approved Global Trading
Company Status and it will enjoy the applicable preferential enterprise income tax
rate of 5% from 2022 to 2026.
(8) The standard corporate income tax rate in Singapore is 17% but the first 10000
Singapore dollars of taxable income can enjoy 75% tax relief and the taxable income
of 10000~190000 Singapore dollars can enjoy 50% tax relief. The wholly-owned
subsidiaries of the Company Hengyi International Logistics Co. Ltd. and Hengyi
Petrochemical International Co. Ltd. enjoy this preference.
(9)As Brunei PMB Petrochemical Project meets corresponding conditions for
“Pioneer Enterprise” Hengyi Industries Sdn. Bhd. (a holding subsidiary of the
Company) may enjoy tax preference for 11 years: exemption of corporate income tax
and imported apparatus & imported raw material tax.
(10)According to the "Announcement of the Ministry of Finance and the State
Taxation Administration on Preferential Income Tax Policies for Small and Micro
Enterprises and Individual Businesses" (Announcement No. 6 of 2023 by the Ministry
3562024 Annual Report of Hengyi Petrochemical Co. Ltd.
of Finance and the State Taxation Administration) the following subsidiaries of the
Company are eligible for preferential tax treatment for the 2024 fiscal year: Zhejiang
Xiaoyi Supply Chain Management Co. Ltd. (a wholly-owned subsidiary) Zhejiang
Hengyi Resource Recycling Technology Co. Ltd. (a wholly-owned subsidiary)
Wenzhou Hengyi Resource Recycling Co. Ltd. (a wholly-owned subsidiary)
Jingzhou Hengyi Resource Recycling Co. Ltd. (a wholly-owned subsidiary) Suqian
Huida Port Co. Ltd. (a wholly-owned subsidiary) and Hangzhou Lanbiao Testing
Services Co. Ltd. (a majority-owned subsidiary). For the portion of taxable income
not exceeding RMB 1 million 25% of the amount will be included in taxable income
and enterprise income tax will be levied at a rate of 20%.
(11)According to the Circular of the Ministry of Finance and the State Administration
of Taxation on the Policies on Urban Land Use Tax and Other Policies for Units
Placing Disabled Persons in Employment (Article 1 of Cai Shui [2010] No. 121)
Polymer Co. enjoys a preferential policy of 100% reduction in land use tax for the
year 2024 for placing disabled persons in employment.
(12)Pursuant to the ''Notice of the Department of Finance of Guangxi Zhuang
Autonomous Region on Matters Relating to Exemption from Levy of Local Water
Conservancy Construction Fund'' (Gui Cai Shui [2022] No. 11) all levy recipients of
the Guangxi Zhuang Autonomous Region shall be exempted from levy of the local
water conservancy construction fund from 1 April 2022 to 31 December 2026 (the
Affiliated Period) and the Company and the Company's wholly-owned subsidiaries
namely Guangxi Hengyi Shunqi Trading Co. Subsidiary Guangxi Heng Yi New
Materials Company Limited and the controlling subsidiary Guangxi Free Trade Zone
Yihai Harbour Services Company Limited shall enjoy such preferential treatment.
(13)According to the Circular of the Ministry of Finance the General Administration
of Taxation the Ministry of Ex-Servicemen on Tax Policies Related to Further
Supporting the Entrepreneurship and Employment of Independently Employed
3572024 Annual Report of Hengyi Petrochemical Co. Ltd.
Retired Soldiers ((CaiShui2019) No. 21) and the Announcement on Tax Policies
Related to Further Supporting the Entrepreneurship and Employment of Key Groups
(Announcement of the Ministry of Finance the General Administration of Taxation
the Ministry of Human Resources and Social Security and the Ministry of Agriculture
and Rural Affairs No. 14 of 2023) the recruitment of independently employed retired
soldiers If they sign a labour contract with a term of more than 1 year and pay social
insurance premiums in accordance with the law the value-added tax urban
maintenance and construction tax education surcharge local education surcharge and
enterprise income tax shall be deducted in order of the number of people actually
recruited in accordance with the fixed standard of RMB 9000 per person per year for
a period of 3 years starting from the month of signing the labour contract and paying
the social insurance premiums. Hengyi High-tech Materials Research Institute
Shuangtu New Materials a wholly-owned subsidiary of the Company Hengyi
Petrochemicals Polymer Company Hengyi Petrochemical Limited Zhejiang Hengyi
Petrochemicals Sales Company Limited a wholly-owned subsidiary of the Company
Zhejiang Hengyi Engineering Management Company Limited a wholly-owned
subsidiary of the Company Haining Hengyi New Materials Company Limited and
Guangxi Hengyi Environmental Science and Technology Company Limited are
entitled to this tax incentive for FY2024.
(14)According to the Circular of the Ministry of Finance the General Administration
of Taxation the Ministry of Human Resources and Social Security the State Council
Office of Poverty Alleviation on Tax Policies Relating to Further Supporting and
Promoting Entrepreneurship and Employment of Key Groups (Cai Shui [2019] No. 22)
and the Announcement on Tax Policies Relating to Further Supporting
Entrepreneurship and Employment of Key Groups (Announcement of the Ministry of
Finance the General Administration of Taxation the Ministry of Human Resources
and Social Security the Ministry of Agriculture and Rural Affairs Announcement No.
15 of 2023) Taxpayers will account for the total amount of tax reduction and
exemption for their units according to the number of key groups recruited by their
3582024 Annual Report of Hengyi Petrochemical Co. Ltd.
units and their actual number of months of work and within the total amount of tax
reduction and exemption deduct value-added tax urban maintenance and
construction tax education surcharge and local education surcharge sequentially on a
monthly basis at a flat rate of RMB7800 per person per annum. HengYi
Petrochemicals and HengYi High-Tech Materials are entitled to this tax incentive for
the year 2024.
(15)From January 1 2023 to December 31 2027 enterprises that hire individuals
from poverty-alleviated populations or individuals registered as unemployed for over
six months with the public employment service agencies of the human resources and
social security authorities (holding an Employment and Entrepreneurship Certificate
or Employment and Unemployment Registration Certificate annotated with "Tax
Policy for Enterprise Employment Absorption") sign labor contracts with a duration
of one year or longer and legally pay social insurance premiums for them are eligible
to sequentially deduct fixed amounts from Value-Added Tax (VAT) Urban
Maintenance and Construction Tax Education Surcharge Local Education Surcharge
and Corporate Income Tax over a three-year period starting from the month of
contract signing and social insurance payment. The deduction standard is set at 6000
RMB per person per year with a maximum allowable increase of 30%. Provincial
regional and municipal governments can determine the specific deduction standard
within this range based on local circumstances. The tax base for Urban Maintenance
and Construction Tax Education Surcharge and Local Education Surcharge is the
VAT payable amount before applying this tax incentive policy. Hengyi High-Tech
Materials Shuangtu New Materials and Haining Hengyi Thermal Power Co. Ltd. a
subsidiary of the company are beneficiaries of this tax incentive policy.IV.Notes to items of consolidated financial statements
Unless otherwise specified for the following note items (including the main item
notes to the Company’s financial statements) the "end of the period" refers to
3592024 Annual Report of Hengyi Petrochemical Co. Ltd.
December 31 2024 the "end of previous year" refers to December 31 2023 the
"current period" refers to 2024 and the "previous period" refers to 2023.
1.Monetary funds
Item Ending balance Ending balance of
previous year
Cash on hand 698184.72 1065013.70
Bank deposit 8871666704.37 7927366494.60
Other monetary funds 4220809658.37 5899471579.10
Total 13093174547.46 13827903087.40
Wherein: The total amount of funds deposited abroad 2586487126.04 2284767031.67
Note: As of December 31 2024 the monetary capital that the Company’s right to use
was restricted was RMB 3032285927.15 including RMB 2078071659.97 of L/C
guarantee deposit RMB 777004071.80 of acceptance bill deposit RMB
62300000.00 of L/G deposit RMB 67499029.87 of collection for bill pledge RMB
493888.30 of judicially frozen fund RMB 35614900.27 of futures deposit and
RMB 11302376.94 of other restricted funds.
2.Held-for- trading financial assets
Ending balance of
Item Ending balance
previous year
Financial assets measured at fair value through profit and loss 153091745.24 366311518.38
Wherein: Derivative financial assets 153091745.24 366311518.38
Specified as financial assets measured by fair value and whose
0.000.00
changes included in current profits and losses
Total 153091745.24 366311518.38
Wherein: Portion reclassified to other non-current financial
0.000.00
assets
3.Derivative financial assets
Item Ending balance Ending balance of
previous year
Foreign exchange derivatives 0.00 0.00
Commodity derivatives 4783678.80 0.00
4783678.80
360
0.002024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Ending balance Ending balance of
previous year
Total: 4783678.80 0.00
Cash-flow hedge: 4783678.80 4783678.80
In order to avoid the risk of cash flow changes related to commo d0it.0y0 p rices in product 0.00
sales that are likely to occur in the future the Company designates a series of
commodity futures and paper market contracts held by it as hedging instruments for
expected commodity sales. Commodity futures and paper market contracts designated
as hedging instruments have an economic relationship with the expected sales of
commodities under the hedging. The hedge ratio is reasonable if the hedge ratio of
hedging relationship is the same as the hedge ratio set from the perspective of risk
management.In order to avoid the risk of cash flow changes related to foreign currency borrowings
in the future the Company designates a series of foreign currency derivative contracts
held by the Company as hedging instruments for foreign currency borrowings. The
underlying assets of foreign currency derivatives designated as hedging instruments
have an economic relationship with the hedged foreign currency borrowings. The
hedge ratio is reasonable if the hedge ratio of hedging relationship is the same as the
hedge ratio set from the perspective of risk management.In this year an amount of RMB 421087.50 was recorded into stockholders' equity as
cash- flow hedge reserves in the Company. Details are described as follows:
Item Current-period Quantity
Total gains of fair value recorded into stockholders' equity 561450.00
Minus: Deferred income tax from the gains of fair value 140362.50
Minus: Other comprehensive income is reclassified into
0.00
current profit and loss
Minus: Deferred income tax reclassified into current
0.00
profit and loss
3612024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Current-period Quantity
Minus: Assigned to Minority Shareholders after Tax 0.00
Net profits from cash-flow hedge 421087.50
4.Notes receivable
(1)Classified presentation of notes receivable
Item Ending balance Ending balance of previous year
Bank acceptance bills 6833997.24 167871662.32
Commercial acceptance bills 0.00 0.00
Domestic letter of credit 0.00 0.00
Subtotal 6833997.24 167871662.32
Minus: Provision for bad debts 0.00 0.00
Total 6833997.24 167871662.32
(2)Pledged notes receivable at the end of the year
There was no pledged notes receivable at the end of the year.
(3)The amount of endorsed or discounted notes receivable that become mature after
the date of balance sheet at the end of the year
Ending balance of those Ending balance of those not
Item
derecognized derecognized
Bank acceptance bills 724117175.96 0.00
(4)Notes converted to accounts receivable at the year end due to the non-performance
of the drawer
There are not notes converted to accounts receivable at the year end due to the
non-performance of the drawer.
5.Accountable receivable
(1)Disclosure by aging
Ending balance of previous
Aging Ending balance
year
Within 1 year 5936909719.60 5922412767.50
Wherein: Within 6 months 5934976646.98 5916751635.07
3622024 Annual Report of Hengyi Petrochemical Co. Ltd.
Ending balance of previous
Aging Ending balance
year
7-12 months 1933072.62 5661132.43
1-2 years 10854722.72 9444117.81
2-3 years 952317.00 606578.77
Over three years 9091513.28 8569211.47
Subtotal 5957808272.60 5941032675.55
Minus: Provision for bad debts 13514987.12 15857715.96
Total 5944293285.48 5925174959.59
(2)Presented based on bad debt reserve provision method
Ending balance
Book Balance Provision for bad debts
Category
Proportio Allotmen Book Balance
Amount Amount
n (%) t rate (%)
Accounts receivable with single
9359133.290.169359133.29100.000.00
provision for bad debt
Wherein: Hangzhou Hengchuang
8510212.000.148510212.00100.000.00
Chemical Fibre Co. Ltd.A A YARN MILLS
848921.290.01848921.29100.000.00
LTD/SAYEM
Receivables with bad debt
provision made as per different 5948449139.31 99.84 4155853.83 0.07 5944293285.48
groups
Wherein: This credit risk
characteristic of this portfolio of
5948449139.3199.844155853.830.075944293285.48
receivables is defined by account
receivable aging.Total 5957808272.60 100.00 13514987.12 0.23 5944293285.48
3632024 Annual Report of Hengyi Petrochemical Co. Ltd.
(Continued)
Ending balance of previous year
Book Balance Provision for bad debts
Category
Proportio Allotmen Book Balance
Amount Amount
n (%) t rate (%)
Accounts receivable with single
14037245.000.2414037245.00100.000.00
provision for bad debt
Wherein: Hangzhou Hengchuang
8510212.000.148510212.00100.000.00
Chemical Fibre Co. Ltd.Changzhou Anding Textile
4778562.200.084778562.20100.000.00
Co.Fujian Yuanye Logistics Co. 748470.80 0.01 748470.80 100.00 0.00
Receivables with bad debt provision
5926995430.5599.761820470.960.035925174959.59
made as per different groups
Wherein: This credit risk
characteristic of this portfolio of
5926995430.5599.761820470.960.035925174959.59
receivables is defined by account
receivable aging.Total 5941032675.55 100.00 15857715.96 0.27 5925174959.59
* Accounts receivable with single provision for bad debt
Ending balance
Accounts Receivable (by Unit) Bad debt Allotment
Book balance Reason for provision
provision rate
Hangzhou Hengchuang Chemical Fibre Expected to be less likely
8510212.008510212.00100%
Co. Ltd. to be recovered
Expected to be less likely
A A YARN MILLS LTD/SAYEM. 848921.29 848921.29 100%
to be recovered
Total 9359133.29 9359133.29 -- --
3642024 Annual Report of Hengyi Petrochemical Co. Ltd.
(Continued）
Ending balance of previous year
Accounts Receivable (by Unit) Bad debt Allotment
Book balance Reason for provision
provision rate
Hangzhou Hengchuang Chemical Fibre Expected to be less likely
8510212.008510212.00100%
Co. Ltd. to be recovered
Expected to be less likely
Changzhou Anding Textile Co. 4778562.20 4778562.20 100%
to be recovered
Expected to be less likely
Fujian Yuanye Logistics Co. 748470.80 748470.80 100%
to be recovered
Total 14037245.00 14037245.00 -- --
* Accounts receivable with bad debt provision made based on aging combination in
the combination
Ending balance
Aging
Accounts receivable Bad debt provision Allotment rate (%)
Within 6 months 5934976646.98 0.00 0.00
7-12 months 1933072.62 96653.63 5.00
1-2 years 10005801.43 3001740.42 30.00
2-3 years 952317.00 476158.50 50.00
Over three years 581301.28 581301.28 100.00
Total 5948449139.31 4155853.83 --
(Continued)
Ending balance of previous year
Aging
Accounts receivable Bad debt provision Allotment rate (%)
Within 6 months 5916751635.07 0.00 0.00
7-12 months 5661132.43 283056.63 5.00
1-2 years 3917084.81 1175125.44 30.00
2-3 years 606578.77 303289.42 50.00
Over three years 58999.47 58999.47 100.00
3652024 Annual Report of Hengyi Petrochemical Co. Ltd.
Ending balance of previous year
Aging
Accounts receivable Bad debt provision Allotment rate (%)
Total 5926995430.55 1820470.96 --
(3)Bad debt preparation
Amount of changes in current period
Ending
Amount Ending
Category balance of Resell or
Provision recovered or balance
previous year write off
written back
Accounts receivable with single
14037245.00848921.29587594.004939439.009359133.29
provision for bad debt
This credit risk characteristic of this
portfolio of receivables is defined by 1820470.96 4166114.51 1273983.92 556747.72 4155853.83
account receivable aging.Total 15857715.96 5015035.80 1861577.92 5496186.72 13514987.12
Among them: Significant amounts of bad debt provisions recovered or reversed
during the current period.Recovered or reversed
Company name Recovery method:
amount
Cash installment
Fujian Yuanye Logistics Co. 587594.00
payment
(4)The status of accounts receivable actually written off in this period
Item Write-off amount
Actual written-off accounts receivable 5496186.72
Among them: Significant accounts receivable write-off details
Whether it
is
Nature of Procedure generated
accounts Write-off s carried due to
Company name Reasons for write-off
receivabl amount out for the related-par
e write-off ty
transaction
s
Changzhou Anding Payment Unable to complete the Internal
4778562.20 No
Textile Co. for goods collection for it most of Procedure
3662024 Annual Report of Hengyi Petrochemical Co. Ltd.
Whether it
is
Nature of Procedure generated
accounts Write-off s carried due to
Company name Reasons for write-off
receivabl amount out for the related-par
e write-off ty
transaction
s
which is compensated s
separately by the insurance
company.Civil
Fujian Yuanye Payment Civil mediation reduces the
160876.80 Mediation No
Logistics Co. for goods payment amount
Document
Total -- 4939439.00 -- -- --
(5)The top five ending amounts (totals by borrower) of accounts receivable
The top five ending amounts (totals by borrower) of the Company’s accounts
receivable amounted to RMB 2465047964.09 in total accounting for 41.38% of the
year-end balance of accounts receivable and the corresponding year-end balance of
the provision for bad debts was RMB 0.00.
6.Accounts receivable financing
(1) Classified presentation of receivables financing
Item Ending balance Ending balance of previous
year
8782497.3536904996.06
Notes receivable
Accounts receivable 0.00 0.00
8782497.3536904996.06
Total
(2)Changes of increase or decrease of financing of receivables in current period and
changes in fair value thereof
Ending balance of previous
Item Changes in current period Ending balance
year
3672024 Annual Report of Hengyi Petrochemical Co. Ltd.
Changes
Changes of Changes of
Cost of fair Cost Cost
fair value fair value
value
Notes receivable 36904996.06 0.00 -28122498.71 0.00 8782497.35 0.00
Accounts receivable 0.00 0.00 0.00 0.00 0.00 0.00
Total 36904996.06 0.00 -28122498.71 0.00 8782497.35 0.00
(3)The amount of endorsed or discounted accounts receivable that become mature
after the date of balance sheet at the end of the year.Ending balance of those Ending balance of those not
Item
derecognized derecognized
Bank acceptance bills 1812224565.87 0.00
Domestic letter of credit 316561782.00 0.00
Total 2128786347.87 0.00
(4)Other description
During the current period the Company discounted bank acceptance bills of RMB
2232443983.65 (RMB 2560062129.52 in the previous year) under the financing of
receivables to banks. Main risks (e.g. interest rate risk) and remunerations related to
these bank acceptance bills have been transferred to the bank. Therefore the
Company shall derecognize discounted immature bank acceptance bills. According to
the cashing agreement if the banker’s acceptance failed to be cashed upon maturity
the bank has the right to ask the Company to pay off the unsettled balance. Therefore
the Company continued to involve in cashing the banker’s acceptance. On December
31 2024 the cashed but not mature banker’s acceptance was RMB 1289014668.95
in total (RMB 1102109044.00 on December 31 2023).
7.Advance payment
(1)Presentation of advance payment based on aging
Ending balance Ending balance of previous year
Aging
Amount Proportion (%) Amount Proportion (%)
Within 1 year 1526591190.88 97.19 1789373451.85 98.28
3682024 Annual Report of Hengyi Petrochemical Co. Ltd.
Ending balance Ending balance of previous year
Aging
Amount Proportion (%) Amount Proportion (%)
1-2 years 21504563.01 1.37 19255479.29 1.06
2-3 years 13714211.05 0.87 3028163.48 0.17
Over three years 8951749.01 0.57 8837381.11 0.49
Total 1570761713.95 100.00 1820494475.73 100.00
(2)Important advance payment with aging >1 year
At the end of the term there is no important advance payment with aging >1 year in
the Company.
(3)Advance payment with top five ending balance collected by object of prepayment
The top five ending amounts (totals by prepayment objects) of the Company’s
advance payments amounted to RMB 1065883507.32 accounting for 67.86% in the
total balance of prepayments at the year-end balance.
8.Other receivables
Ending balance of previous
Item Ending balance
year
Interest receivable 0.00 0.00
Dividends receivable 0.00 0.00
Other receivables 262407082.57 187541184.46
Total 262407082.57 187541184.46
(1)Other receivables
* Disclosure by aging
Ending balance of previous
Aging Ending balance
year
Within 1 year 195420165.44 157253512.38
1-2 years 45931111.91 4033004.26
2-3 years 1427868.49 1390154.45
Over three years 59251722.27 61190426.54
Subtotal 302030868.11 223867097.63
3692024 Annual Report of Hengyi Petrochemical Co. Ltd.
Ending balance of previous
Aging Ending balance
year
Minus: Bad debt provision 39623785.54 36325913.17
Total 262407082.57 187541184.46
* Classification based on nature of fund
Ending balance of previous
Nature of account Ending balance
year
Receivables and payable such as advances from 68078241.54 27184746.69
entities beyond the scope of consolidation
Combination of tax refunds receivable and other
10263489.7115897035.30
government subsidies
Portfolio of deposits and security 159967909.41 119507155.21
Employee loan and petty cash 9646041.63 6383068.94
Other groups 54075185.82 54895091.49
Subtotal 302030868.11 223867097.63
Minus: Bad debt provision 39623785.54 36325913.17
Total 262407082.57 187541184.46
* Accrual of bad debt reserves
Stage 1 Stage 2 Stage 3
Expected credit loss
Expected credit loss
Expected credit loss over the lifetime
Bad debt provision over the lifetime (no Total
of the future twelve (credit impairment
credit impairment
months occurred has
has occurred)
occurred)
Balance at end of
8213137.3541700.0028071075.8236325913.17
previous year
Book balance of other
receivables at the end of
the previous year:
3702024 Annual Report of Hengyi Petrochemical Co. Ltd.
- Transferred to Stage 2 0.00 -- -- 0.00
- Transferred to Stage 3 0.00 0.00 -- 0.00
- Transferred back to
----0.000.00
Stage 2
- Transferred back to
--0.000.000.00
Stage 1
Provision in current
4078920.560.000.004078920.56
period
Roll-back in current
757391.7010000.000.00767391.70
period
Write-off in current
0.000.000.000.00
period
Cancellation after
verification in current 13656.49 0.00 0.00 13656.49
period
Other changes 0.00 0.00 0.00 0.00
Ending balance 11521009.72 31700.00 28071075.82 39623785.54
* Situation of bad debt reserves
Amount of changes in current period
Write-off or
Ending balance Amount Cancellation Ending
Category
of previous year Provision recovered or after balance
written back Verification and
Others
Receivables and payables
such as advances from
815290.361227323.05266.160.002042347.25
entities beyond the scope of
consolidation
Portfolio of deposits and 6004823.06 2656123.55 641103.41 0.00 8019843.20
3712024 Annual Report of Hengyi Petrochemical Co. Ltd.
security
Employee loan and petty
191492.02158473.4646927.7813656.49289381.21
cash
Other groups 29314307.73 37000.50 79094.35 0.00 29272213.88
Total 36325913.17 4078920.56 767391.70 13656.49 39623785.54
* Other receivables with top five ending balance collected by debtor
Proportions in
the total other Bad
Nature of accounts debt
Name of organization Ending balance Aging
account receivable at provision
the year ended Ending balance
(%)
Baiduri Bank Berhad Margin 68562654.05 Within 1 year 22.70 3428132.70
43140000.00 Within 1 year
Zhengzhou Commodity
Margin 600000.00 2-3 year 14.88 2247000.00
Exchange (ZCE)
1200000.00 Over 3 years
China (Guangxi) Pilot Free
Trade Zone Qinzhou Port Area Margin 40000000.00 1-2 year 13.24 2000000.00
Investment Service Centre
Claim for 1719275.62 1-2 year
Wang XX
9.2627956250.71
indemnity 26236975.09 Over 3 years
Fulida Group and Xinghui 35157.60 Within 1 year
Compensatio
Chemical Fibre Group Co. 1260157.61 1-2 year 8.24 1243771.52
n
Ltd.
23580115.13 Over 3 years
Total — 206334335.10 -- 68.32 36875154.93
Note: The relevant description on balance formation of the Company’s "other
receivables - Wang" and full provision for bad debts at the end of current period can
be found in Note XI. 1 (1).* Accounts receivable involving government grants
3722024 Annual Report of Hengyi Petrochemical Co. Ltd.
Aging at the Time amount and
Name of government
Name of organization Ending balance end of the basis of estimated
grants
period collection
Within 6
Tax Bureau of Xiaoshan District Value-added tax refund 10263489.71 Before May 2025
months
Note: As of the date of this financial report RMB 10157755.59 has been recovered
from "VAT refunds".
9. Inventory
(1) Classification of inventory
Ending balance
Inventory depreciation
Item reserves/Impairment
Book balance Book value
reserves for contract
performance cost
Materials in transit 1132593583.62 0.00 1132593583.62
Raw materials 4915655553.20 334764.20 4915320789.00
Goods in process 953201280.01 6681067.38 946520212.63
Commodity stocks 5432963593.45 27546541.09 5405417052.36
Contract performance cost 7585477.49 0.00 7585477.49
Total 12441999487.77 34562372.67 12407437115.10
(Continued)
Ending balance of previous year
Inventory depreciation
Item reserves/Impairment
Book balance Book value
reserves for contract
performance cost
Materials in transit 619097411.51 129177.90 618968233.61
Raw materials 5057860629.36 2477361.36 5055383268.00
Goods in process 1423940390.58 19196332.00 1404744058.58
3732024 Annual Report of Hengyi Petrochemical Co. Ltd.
Ending balance of previous year
Inventory depreciation
Item reserves/Impairment
Book balance Book value
reserves for contract
performance cost
Commodity stocks 6029526106.66 49698635.18 5979827471.48
Contract performance cost 1272831.70 0.00 1272831.70
Total 13131697369.81 71501506.44 13060195863.37
(2)Inventory depreciation reserves
Increase in current period Decrease in current period
Ending balance
Item Write-back or Ending balance
of previous year Provision Others Others
write-off
Materials in transit 129177.90 0.00 0.00 129177.90 0.00 0.00
Raw materials 2477361.36 334764.20 0.00 2477361.36 0.00 334764.20
Goods in process 19196332.00 6613961.37 0.00 19279874.53 -150648.54 6681067.38
Commodity stocks 49698635.18 27396092.05 0.00 49835759.20 -287573.06 27546541.09
Total 71501506.44 34344817.62 0.00 71722172.99 -438221.60 34562372.67
Note: The reason for the reversal of inventory write-downs during this period by the
company is the external sale of inventory for which inventory write-downs had been
previously recognized.
10.Non-current assets due within one year
Item Ending balance Ending balance of previous year
Long-term receivables due
68036685.670.00
within one year
11.Other current assets
Item Ending balance Ending balance of previous year
Unamortized expense 171024774.64 149807903.33
Input tax retained 503270173.56 246014337.84
Excess tax paid 6279179.63 26449284.90
3742024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Ending balance Ending balance of previous year
Input tax to be certified 451951222.16 324194945.70
Principal and interest of entrusted
0.00787149197.50
loan
Others 457063.42 269739.82
Total 1132982413.41 1533885409.09
12.Long-term receivable
Long-term accounts receivable
Ending balance Ending balance of previous year
Impairme
Item Impairm
Book balance nt Book value Book balance ent Book value
Reserve Reserve
Financing lease 86100208.02 0.00 86100208.02 137312857.42 0.00 137312857.42
Wherein:Unrealized
-8891279.890.00-8891279.89-12675889.680.00-12675889.68
financing income
Long-term deposits 5576906.36 0.00 5576906.36 3674423.03 0.00 3674423.03
Minus: Portion due
68036685.670.0068036685.670.000.000.00
within one year
Total 23640428.71 0.00 23640428.71 140987280.45 0.00 140987280.45
13.Long-term equity investments
Ending balance Ending balance of previous year
Impair Impairm
Item
Book balance ment Book value Book balance ent Book value
Reserve Reserve
Investments in
joint ventures and 13911759800.05 0.00 13911759800.05 13669254123.61 0.00 13669254123.61
associates
Investments in joint ventures and associates
Investee Ending balance Changes of increase or decrease in current period
3752024 Annual Report of Hengyi Petrochemical Co. Ltd.
of previous year
Investment
Other
profits and losses
Additional Negative recognized comprehensive Changes in
under the equity
investment investment income other equity
method
Investment adjustment
profits and losses
I. Joint ventures
Zhejiang Baling Hengyi
1132861826.510.000.0057391043.090.000.00
Caprolactam Co. Ltd.Hainan Yisheng
3475606910.510.000.0080665841.03-27464169.050.00
Petrochemical Co. Ltd.Subtotal 4608468737.02 0.00 0.00 138056884.12 -27464169.05 0.00
II. Associated companies
Dalian Yisheng
2050684657.660.000.00-35417943.57-5944475.870.00
Investment Co. Ltd.Zhejiang Yisheng New
1123075690.050.000.00-250127984.46826930.190.00
Materials Co. Ltd.China Zheshang Bank Co.
5704991961.710.000.00503540971.15104005200.000.00
Ltd.Ningbo Jinhou Industry
14156002.820.000.00-305204.200.000.00
Investment Co. Ltd.Dongzhan Shipping Co.
167877074.350.000.004842830.481188932.510.00
Ltd.Subtotal
9060785386.590.000.00222532669.40100076586.830.00
Total
13669254123.610.000.00360589553.5272612417.780.00
(Continued)
Investee Changes of increase or decrease in current period Ending balance Impairment
3762024 Annual Report of Hengyi Petrochemical Co. Ltd.
Provisions for reserves
Announcement of
Ending
release Cash impairment Others
dividend or profit balance
reserves
I. Joint ventures
Zhejiang Baling Hengyi Caprolactam
22207923.710.000.001168044945.890.00
Co. Ltd.Hainan Yisheng Petrochemical Co.
0.000.000.003528808582.490.00
Ltd.Subtotal 22207923.71 0.00 0.00 4696853528.38 0.00
II. Associated companies
Dalian Yisheng Investment Co. Ltd. 0.00 0.00 0.00 2009322238.22 0.00
Zhejiang Yisheng New Materials Co.
0.000.000.00873774635.780.00
Lt
China Zheshang Bank Co. Ltd. 159488371.15 0.00 0.00 6153049761.71 0.00
Ningbo Jinhou Industry Investment
0.000.000.0013850798.620.00
Co. Ltd.Dongzhan Shipping Co. Ltd. 9000000.00 0.00 0.00 164908837.34 0.00
Subtotal 168488371.15 0.00 0.00 9214906271.67 0.00
Total 190696294.86 0.00 0.00 13911759800.05 0.00
14.Other equity instrument investments
(1) Investment in other equity instruments
Ending
Item Ending balance balance of
previous year
Zhejiang Hengchuang Advanced Functional Fibre Innovation Center Co. Ltd. 600000.00 600000.00
Jiangsu New Horizon Advanced Functional Fibre Innovation Center Co. Ltd. 5000000.00 5 000000.00
Total 5600000.00 5 600000.00
15.Fixed assets
3772024 Annual Report of Hengyi Petrochemical Co. Ltd.
Ending balance of previous
Item Ending balance
year
Fixed assets 43686502928.39 45430020661.94
Liquidation of fixed assets 104000.00 0.00
Total 43686606928.39 45430020661.94
(1)Fixed assets
* Information of fixed assets
Houses and Machinery Transportation Office facilities
Item Structures Total
buildings equipment equipment and others
I. Original book
value
1. Ending balance
13145179276.031510319882.6851188760479.19368893309.67336663728.5466549816676.11
(previous year)
2. Increase in current
251092921.3547670623.631308818843.355100765.8916799624.641629482778.86
period
(1) Acquisition
110209766.904747911.10135923326.413430324.3913699690.96268011019.76
（2）Transfer from
construction in
32366708.7842920914.25770377142.2741758.272115864.35847822387.92
progress
（3）Translation of
foreign currency 108516445.67 1798.28 295519536.23 1628683.23 984069.33 406650532.74
statements
(1) Reversal of
reconstructed fixed
0.000.00106998838.440.000.00106998838.44
assets
3、Decrease in current
0.000.00371723722.092490963.082208008.27376422693.44
period
（1）Disposal or
0.000.00276479052.042489575.692208008.27281176636.00
retirement
3782024 Annual Report of Hengyi Petrochemical Co. Ltd.
Houses and Machinery Transportation Office facilities
Item Structures Total
buildings equipment equipment and others
(2)Transfer to
0.000.00112360932.840.000.00112360932.84
construction in progress
(3)Others 0.00 0.00 -17116262.79 1387.39 0.00 -17114875.40
4. Balance at the end
13396272197.381557990506.3152125855600.45371503112.48351255344.9167802876761.53
of current year
II.Accumulated
depreciation
1. Ending balance
1844284414.36779401428.5618065567316.54204595973.37225946881.3421119796014.17
(previous year)
2. Increase in current
343418442.3187289598.892616576806.0047117985.7230977736.583125380569.50
period
(1) Provision
332935839.8287288496.332572815365.8345914728.4030091717.273069046147.65
(2)Conversion of
foreign currency 10482602.49 1102.56 43761440.17 1203257.32 886019.31 56334421.85
statements
3、Decrease in current
0.000.00124784468.811939988.362078293.36128802750.53
period
（1）Disposal or
0.000.00119422374.411939988.362078293.36123440656.13
retirement
（2）Transfer to
0.000.005362094.400.000.005362094.40
construction in progress
4. Balance at the end
2187702856.67866691027.4520557359653.73249773970.73254846324.5624116373833.14
of current year
I. Impairment reserves
1. Ending balance
0.000.000.000.000.000.00
(previous year)
3792024 Annual Report of Hengyi Petrochemical Co. Ltd.
Houses and Machinery Transportation Office facilities
Item Structures Total
buildings equipment equipment and others
2.Increase in current
0.000.000.000.000.000.00
period
(1) Provision
0.000.000.000.000.000.00
3.Decrease in current
0.000.000.000.000.000.00
period
(1)Disposal or
0.000.000.000.000.000.00
retirement
4. Balance at the end
0.000.000.000.000.000.00
of current year
IV. Book value
1. Book value at the
11208569340.71691299478.8631568495946.72121729141.7596409020.3543686502928.39
end of this year
2. Book value at the
end of the previous
11300894861.67730918454.1233123193162.65164297336.30110716847.2045430020661.94
year
* Temporarily idle fixed assets
Original Book Accumulated Impairment
Item Book value
Value depreciation reserves
Houses and buildings 8710289.69 1066662.37 0.00 7643627.32
Machinery equipment 14657618.82 4899616.03 0.00 9758002.79
Transportation means 1819911.02 1728915.51 0.00 90995.51
Total 25187819.53 7695193.91 0.00 17492625.62
* Situation of fixed assets with uncompleted certificate of title
Reasons for failure to complete
Item Book value relevant affairs of property right
certificate
Fujian Yi Jin Chemical Fibre Co. 29806118.59 In process
3802024 Annual Report of Hengyi Petrochemical Co. Ltd.
Ltd.Guangxi Hengyi New Material Co.
31980721.07 In process
Ltd
Haining Hengyi Thermal Power Co.
136701582.14 In process
Ltd.Jiaxing Yipeng Chemical Fibre Co.
417119855.53 In process
Ltd.Suqian Hengyuan Thermal Energy
167303904.67 In process
Co. Ltd.Suqian Yida New Materials Co. Ltd. 351683694.43 In process
Taicang Yifeng Chemical Fibre Co.Property obtained by auction in
12293368.59
Ltd. progress
Zhejiang Shuangtu New Materials
7075420.97 Makeshift house
Co. Ltd.
(2)Liquidation of fixed assets
Machinery equipment Ending balance Ending balance of previous year
Machinery equipment 104000.00 0.00
16.Construction in progress
Item Ending balance Ending balance of previous year
Construction in progress 8314604283.57 4005782015.72
Engineering materials 398287215.20 604523744.30
Total 8712891498.77 4610305760.02
(1)In-process construction
* Situation of in-process construction
Ending balance Ending balance of previous year
Item Impairment Impairment
Book balance Book value Book balance Book value
Reserve reserves
3812024 Annual Report of Hengyi Petrochemical Co. Ltd.
Phase II of the refining-
petrochemical project in 2930636892.41 0.00 2930636892.41 2713040992.62 0.00 2713040992.62
Brunei
Hangzhou Yitong's
Annual Production of
1.4 Million Tons
0
Functional Fiber New 435059043.34 435059043.34 60196827.65 0..00 60196827.65
0.00
Material Upgrading
and Renovation
Project
Guangxi Jijin Project (Phase
4614778432.820.004614778432.82875865394.430.00875865394.43
I)
Suqian Yida Phase II
Capacity Expansion 42928837.52 0.00 42928837.52 14143692.44 0.00 14143692.44
Project
The project of centralized
heating for Suqian Yida
0.000.000.00232083426.900.00232083426.90
Project
Others
291201077.480.00291201077.48110451681.680.00110451681.68
Total
8314604283.570.008314604283.574005782015.720.004005782015.72
* Changes of major construction projects in progress in current period
Amount of transferred
Budget (RMB Ending balance of Other decrease in
Item Increase in current into fixed assets in Ending balance
10000) previous year period amount current period
current period
Phase II of the refining-
$1365389.0
petrochemical project in 2713040992.62 175237351.63 0.00 -42358548.16 2930636892.41
0
Brunei
Hangzhou Yitong's
Annual Production of
1.4 Million Tons
300000.0060196827.65374862215.690.000.00435059043.34
Functional Fiber New
Material Upgrading
and Renovation Project
3822024 Annual Report of Hengyi Petrochemical Co. Ltd.
Guangxi Jijin Project (Phase I) 1054737.57 875865394.43 3759742429.61 20829391.22 0.00 4614778432.82
Suqian Yida Phase II
Capacity Expansion 385000.00 14143692.44 119185163.77 90400018.69 0.00 42928837.52
Project
The project of centralized
heating for Suqian Yida 65000.00 232083426.90 5801164.49 237884591.39 0.00 0.00
Project
Others -- 110451681.68 805172456.60 605707225.06 18715835.74 291201077.48
Total -- 4005782015.72 5240000781.79 954821226.36 -23642712.42 8314604283.57
(Continued)
Proportion of Interest Capitalization
Progress of Wherein: Interest
project accumulated capitalization rate of interest
Works (%) for the current
Project name Sources of funds
investment in Project accumulative period Capitalized in current
progress amount
budget (%) amount period (%)
Phase II of the refining-
petrochemical project in 2.99 2.99% 0.00 0.00 -- Self-raised funds
Brunei
Hangzhou Yitong's
Annual Production of
1.4 Million Tons Self-raised
14.5327.93%0.000.00--
Functional Fiber New funds
Material Upgrading
and Renovation Project
Guangxi Jijin Project (Phase I) Self-raised and
44.1765.00%201814799.60143265455.024.10
Loan-raised
Suqian Yida Phase II
Self-raised and
Capacity Expansion 28.77 33.20% 24971018.35 0.00 --
Loan-raised Funds
Project
The project of centralized
heating for Suqian Yida 102.27 100.00% 0.00 0.00 -- Self-raised funds
Project
Others -- -- 0.00 0.00 -- Self-raised funds
Total -- -- 226785817.95 143265455.02 -- --
(2)Engineering materials
3832024 Annual Report of Hengyi Petrochemical Co. Ltd.
Ending balance Ending balance of previous year
Item Impairment Impairment
Book balance Book value Book balance Book value
reserves reserves
Special
60081003.130.0060081003.1365427244.670.0065427244.67
materials
Special
338206212.070.00338206212.07539096499.630.00539096499.63
equipment
Total 398287215.20 0.00 398287215.20 604523744.30 0.00 604523744.30
17.Right-of-use assets
Houses and Machinery
Item Land use right Total
buildings equipment
I. Original book value
1.Ending balance (previous
72212258.380.00422008568.99494220827.37
year)
2. Increase in current period 30338166.37 0.00 6297923.92 36636090.29
(1) Increase in rental income 29820465.68 0.00 0.00 29820465.68
(2)Conversion of foreign
517700.690.006297923.926815624.61
currency statements
3. Decrease in current period 23344047.06 0.00 0.00 23344047.06
(1)Decrease due to
23344047.060.000.0023344047.06
contract expiration
(2)Conversion of foreign
0.000.000.000.00
currency statements
4.Balance at the end of
79206377.690.00428306492.91507512870.60
current year
II..Accumulated
depreciation
1.Ending balance (previous
32648647.250.0046789874.3979438521.64
year)
3842024 Annual Report of Hengyi Petrochemical Co. Ltd.
Houses and Machinery
Item Land use right Total
buildings equipment
2.Increase in current period 23665343.23 0.00 16332623.20 39997966.43
(1) Provision 23358966.25 0.00 15472530.13 38831496.38
(2)Conversion of foreign
306376.980.00860093.071166470.05
currency statements
3. Decrease in current period 23344047.06 0.00 0.00 23344047.06
(1)Decrease due to
23344047.060.000.0023344047.06
contract expiration
(2)Conversion of foreign
0.000.000.000.00
currency statements
4.Balance at the end of
32969943.420.0063122497.5996092441.01
current year
III. Impairment reserves
1.Ending balance
0.000.000.000.00
(previous year)
2. Increase in current period 0.00 0.00 0.00 0.00
(1) Provision 0.00 0.00 0.00 0.00
3. Decrease in current period 0.00 0.00 0.00 0.00
(1) Disposal 0.00 0.00 0.00 0.00
4.Balance at the end of
0.000.000.000.00
current year
IV. Book value
1.Book value at the end of
46236434.270.00365183995.32411420429.59
this year
2.Book value at the end of
39563611.130.00375218694.60414782305.73
the previous year
18.Intangible assets
(1) Situation of intangible assets
3852024 Annual Report of Hengyi Petrochemical Co. Ltd.
Patents and Software and
Item Land use right Mark Total
Licences others
I. Original book value
1.Ending balance (previous
2764348595.07664874202.0519740.00182668183.753611910720.87
year)
2.Increase in current period 17711844.66 5237654.30 0.00 4739635.00 27689133.96
(1) Acquisition 17711844.66 0.00 0.00 3891227.84 21603072.50
(2) Internal R&D 0.00 0.00 0.00 0.00 0.00
(3)Conversion of foreign
0.005237654.300.00848407.166086061.46
currency statements
3.Decrease in current period 0.00 0.00 0.00 11861653.70 11861653.70
(1)Disposal 0.00 0.00 0.00 11861653.70 11861653.70
(2)Others 0.00 0.00 0.00 0.00 0.00
4.Balance at the end of
2782060439.73670111856.3519740.00175546165.053627738201.13
current year
II..Accumulated amortization
1.Ending balance (previous
328185844.35448525433.4019740.00100841097.24877572114.99
year)
2.Increase in current period 64197687.44 38844769.11 0.00 16987692.74 120030149.29
(1)Provision 64197687.44 36349274.41 0.00 16564035.95 117110997.80
(2)Conversion of foreign
0.002495494.700.00423656.792919151.49
currency statements
3. Decrease in current
0.000.000.004941867.374941867.37
period
(1)Disposal 0.00 0.00 0.00 4941867.37 4941867.37
(2)Others 0.00 0.00 0.00 0.00 0.00
4.Balance at the end of
392383531.79487370202.5119740.00112886922.61992660396.91
current year
III. Impairment reserves
3862024 Annual Report of Hengyi Petrochemical Co. Ltd.
Patents and Software and
Item Land use right Mark Total
Licences others
1.Ending balance (previous
0.000.000.000.000.00
year)
2.Increase in current period 0.00 0.00 0.00 0.00 0.00
(1) Provision 0.00 0.00 0.00 0.00 0.00
3.Decrease in current period 0.00 0.00 0.00 0.00 0.00
(1) Disposal 0.00 0.00 0.00 0.00 0.00
4. Balance at the end of
0.000.000.000.000.00
current year
IV. Book value
1.Book value at the end of
2389676907.94182741653.840.0062659242.442635077804.22
this year
2.Book value at the end of
2436162750.72216348768.650.0081827086.512734338605.88
the previous year
(2)Situation of intangible assets with limited ownership or use right
Amortization amount in Reason for
Item Book value at the end of the period
current period restriction
Mortgage
Land use right 1917089516.79 52459004.69
guarantee
19. Development expenditure
Increase in current period Decrease in current period
Ending balance Internal
Item Recognized Transferred to Ending Balance
of previous year development Others as Intangible current profit and
expenditures assets loss
3000 t/a Caprolactam
Gas-Phase Rearrangement 45383802.60 29615116.33 0.00 0.00 0.00 74998918.93
and Crystallization Project
Research and Application
3437417.640.000.000.003437417.640.00
Development of Bio-based
3872024 Annual Report of Hengyi Petrochemical Co. Ltd.
PTT Elastic Memory Fiber
Series Products
2000 t/a (35%) Hydrogen
0.005457990.750.000.000.005457990.75
Peroxide Project
Key Technologies and
Industrialization for Green 0.00 3566768.25 0.00 0.00 0.00 3566768.25
Polyester Preparation
Green Production Process
Project for Nylon 0.00 5169966.92 0.00 0.00 0.00 5169966.92
(Polyamide)
Total 48821220.24 43809842.25 0.00 0.00 3437417.64 89193644.85
20. Goodwill
(1)Original book value of goodwill
Increase in current Decrease in current
Name or formation of investee Ending balance of period period
Ending balance
goodwill matters previous year Business
Disposal
combination
Zhejiang Shuangtu New Material Co. 221865586.69 0.00 0.00 221865586.69
Ltd.
(2) Impairment test process of goodwill
In November 2018 with an amount of RMB 2105 million the Company purchased
all stocks of Zhejiang Shuangtu New Materials Co. Ltd. and amortized the merger
prices in accordance with relevant accounting standards. On the combination date the
fair value is RMB 1883134400 for the acquiree’s net identifiable assets. As a result
an amount of RMB 221865600 goodwill is formed in the consolidated accounting
statement.This year the Company assessed the recoverable amount of goodwill and conducted
impairment tests on various asset groups related to goodwill. In the process of
goodwill impairment test the Company determined the composition of the assets of
the asset groups related to the goodwill reflected in the Company’s consolidated
financial statements and their book value of RMB 1554492200 based on the
consolidated financial statement as on December 31 2024 and the assets and
3882024 Annual Report of Hengyi Petrochemical Co. Ltd.
operating conditions of the merged party Shuangtu. It is found after impairment test
that the present value of the expected future cash flow of this goodwill and related
asset group on December 31 2024 was RMB 1646000000 and no impairment
occurred. Details are as follows:
Unit: 10000
Item Book number of consolidated statements
Fixed assets 114785.50
Construction in progress 11.50
Intangible assets 18423.35
Long-term unamortized expenses 42.30
Goodwill recognized in consolidated statements 22186.56
Subtotal of book value of asset groups containing
155449.22
goodwill
Vale of goodwill not recognized as attributable to minority
0.00
shareholders’ equity
Total adjusted book value of asset groups containing
155449.22
goodwill
Present value (recoverable amount) of the estimated
164600.00
future cash flow of the asset group
Note: For the present value (recoverable amount) of the expected future cash flow of
the asset groups above the results of assessment set out in the HYZXPBZ [2025] No.A01-0046 Asset Appraisal Report issued by Beijing Huaya Zhengxin Assets Appraisal
Co. Ltd. on April 18 2025 was used.The recoverable amount of the asset groups above is determined according to the
present value of the expected future cash flow. Based on its current operating
conditions business characteristics and market supply & demand and upon an overall
analysis and consideration of various factors such as residual service life of main
assets included in the asset group the acquirer is estimated to enter a stable period in
2030. Therefore the predictive period is determined from January 2025 to December
2029 (five years in total) and the discount rate of 9.67% is adopted.
Important assumptions for goodwill impairment test:
3892024 Annual Report of Hengyi Petrochemical Co. Ltd.
* Assumption of orderly transaction: Orderly transaction refers to the transaction that
related assets or liabilities have usual marketing activities within a period of time prior
to the measurement date.* Assumption of open market: It means that assets can be traded freely in the fully
competitive market and that its price depends on independent buyer’s and seller’s
value judgment under certain market supply and demand conditions. It is an assumption
about the conditions of the target assets market and about the influence of assets under
relatively complete market conditions.* Going concern assumption: Assume no unforeseeable factor leading to a failure to
continue operations when the entrusted asset group is continuously operated in
accordance with the current situation purpose usage mode and management level on
the base date;
* No significant change in the existing editions of applicable national laws &
regulations and macro-economic situation; No unforeseeable significant change in
external economic environment (e.g. interest rate exchange rate tax base & rate and
policy collection expenses);
* Assume that the Company’s current business model can be continuously maintained
in the future and predict the future cash flow of assets based on current asset conditions
excluding the prediction of the future cash flow related to restructuring or modification
that will probably occur in the future and that has not been promised yet;
* Assume that cash inflow and outflow of the asset group occur in the middle of the
year after the assessment base date.* Assume that the management of the acquired party after the assessment base date is
responsible stable and capable of assuming their positions.
21.Long-term deferred expenses
Ending balance Amortization
Increase in Other decreases in
Item of previous amount in Ending balance
current period amount
year current period
Renovation costs 8236035.55 3133027.47 2183602.09 0.00 9185460.93
3902024 Annual Report of Hengyi Petrochemical Co. Ltd.
Ending balance Amortization
Increase in Other decreases in
Item of previous amount in Ending balance
current period amount
year current period
Storage tank use right
466880.540.00147435.960.00319444.58
transfer fees
Catalyst 442889284.60 28030373.58 108057989.75 6639273.91 356222394.52
Others 9066830.09 2446456.80 3191640.49 -0.74 8321647.14
Total 460659030.78 33609857.85 113580668.29 6639273.17 374048947.17
22.Deferred income tax assets/ deferred income tax liabilities
(1)Details of deferred income tax assets
Ending balance Ending balance of previous year
Item Deductible temporary Deferred income tax Deductible temporary Deferred income
difference assets difference tax assets
Impairment loss on credit
45825256.047672883.0246422101.577825529.70
assets
Asset impairment reserves 9638402.58 2215522.66 13950243.69 3487560.92
Changes in fair value of
held-for-trading financial 12454536.69 3113634.17 16480122.16 4120030.54
assets
Unrealized Profit from
16063.322409.500.000.00
Internal Transactions
Accrued expenses 430823.27 84721.34 819949.97 145104.74
Deferred income 102456553.49 18387169.51 51550425.74 9438555.06
Deductible Against Losses 1404860636.46 267039485.91 1394478280.40 313916414.42
Differences in right-of- use
6666907.121693217.522577536.77644384.20
assets
Total 1582349178.97 300209043.63 1526278660.30 339577579.58
(2)Details of deferred income tax liabilities
Item Ending balance Ending balance of previous year
3912024 Annual Report of Hengyi Petrochemical Co. Ltd.
Taxable temporary Deferred income tax Taxable temporary Deferred income tax
differences liabilities differences liabilities
Appreciation of assets
appraisal for business
241294333.1336194149.97269591564.8040438734.72
merger not under the
same control
Changes in fair value of
held-for-trading 4418800.00 1095934.00 24503635.04 4663526.26
financial assets
Deduction differences of
fixed assets before one- 143505404.15 25828897.14 165154726.26 34841693.13
off income tax
Differences in
7951196.951987799.243127960.70781990.18
right-to-use assets
Cash-flow hedging 30939981.42 2761847.58 12545133.80 3136283.45
Unrealized profits
arising from intra-group 561450.00 140362.50 0.00 0.00
trading
Total 428671165.65 68008990.43 474923020.60 83862227.74
(3)Details of unconfirmed deferred income tax assets
Item Ending balance Ending balance of previous year
Deductible temporary
200876259.18200772191.45
difference
Deductible losses 2705273094.78 2441391427.09
Total 2906149353.96 2642163618.54
(4)Deductible losses of unconfirmed deferred income tax assets will be mature in the
following years
Year Ending balance Ending balance of previous year
3922024 Annual Report of Hengyi Petrochemical Co. Ltd.
Year Ending balance Ending balance of previous year
2024--112798534.47
20253193760.643192986.38
2026444503261.08466167211.51
2027587179946.191017609025.68
2028528344796.98657643374.53
2029 and beyond 1142051329.89 183980294.52
Total 2705273094.78 2441391427.09
23.Other non-current assets
Item Ending balance Ending balance of previous year
Payment for long-term
2464018778.193042674890.57
assets
Taxes for right-of-use
2001467.852134899.05
assets
Others 37908939.74 4801825.00
Total 2503929185.78 3049611614.62
24.Short- term borrowing
(1) Classification of short-term loans
Item Ending balance Ending balance of previous year
Pledge loan 13294139000.00 15270452358.06
Mortgage loan 400000000.00 600000000.00
Guarantee loan 23221159389.97 23405449966.48
Fiduciary loan 1034228430.65 1745634031.66
Loan interest 81666551.41 100721912.66
Total 38031193372.03 41122258268.86
Note: For asset classes and amounts of mortgaged loans please refer to Note V. (66).For detail category and amount of assets pledged for loan please refer to Notes V
(66).
3932024 Annual Report of Hengyi Petrochemical Co. Ltd.
25.Held-for-trading financial liabilities
Ending balance Increase in Decrease in
Item Ending balance
of previous year current period current period
Trading financial liabilities 108194619.69 111807028.90 217455049.70 2546598.89
Wherein:Exchangeable bonds issued 0.00 0.00 0.00 0.00
Derivative financial liabilities 108194619.69 111807028.90 217455049.70 2546598.89
Others 0.00 0.00 0.00 0.00
Refers to financial liabilities classified 0.00 0.00 0.00 0.00
as at fair value through profit or loss
Total 108194619.69 111807028.90 217455049.70 2546598.89
26.Notes payable
Category Ending balance Ending balance of previous year
Commercial acceptance bills 0.00 0.00
Bank acceptance bills 209520837.33 740998553.81
Domestic letter of credit 939861800.00 0.00
Total 1149382637.33 740998553.81
27.Accounts payable
(1)Presentation of accounts payable
Item Ending balance Ending balance of previous year
Within 1 year 5460906933.99 5541601283.94
1-2 years 386697052.36 225665423.99
2-3 years 146144505.84 416065535.80
Over three years 522644661.85 378791124.86
Total 6516393154.04 6562123368.59
(2)There were no significant accounts payable with an aging of over one year during
the current period
28.Contract liabilities
(1)Situation of contract liabilities
Item Ending balance Ending balance of previous year
3942024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Ending balance Ending balance of previous year
Advance receipts for non-performance of
1386822788.84833244701.76
contracts
Minus: Those included in other current liabilities
133419904.4676672908.46
(Note V.33)
Total 1253402884.38 756571793.30
(2)The amounts and reasons for significant changes in the book value during the
current period
Item Amount for change Reason for change
Increase in advance
Advances for contracts not yet fulfilled 496831091.08
payments received
29.Payroll payable
(1)Presentation of payroll payable
Ending balance of Increase in current Decrease in
Item Ending balance
previous year period current period
I. Short-term remuneration 168067800.49 2570275813.22 2558694892.13 179648721.58
II.post-employment benefits -
9351397.76134562014.17140918644.622994767.31
defined contribution plans
III. Termination benefits 0.00 5606559.62 5606559.62 0.00
IV. Other benefits due within one
0.000.000.000.00
year
Total 177419198.25 2710444387.01 2705220096.37 182643488.89
(2)Presentation of short-term salaries
Ending balance of Increase in current Decrease in
Item Ending balance
previous year period current period
1. Wage bonus allowances and
164852140.982334020618.192321871771.91177000987.26
subsidies
2. Employee welfare expenses 101916.52 95543282.97 95538672.11 106527.38
3952024 Annual Report of Hengyi Petrochemical Co. Ltd.
Ending balance of Increase in current Decrease in
Item Ending balance
previous year period current period
3. Social insurance charges 1124471.34 77146690.90 77644513.79 626648.45
Wherein: Medical insurance 768667.82 68750648.08 68930141.10 589174.80
Industrial injury insurance
355803.527449376.447767706.3137473.65
premiums
Birth insurance premiums 0.00 946666.38 946666.38 0.00
4. Housing fund 65826.10 40121286.90 40153092.96 34020.04
5. Labor union dues and personnel
1923445.5522868763.5922911670.691880538.45
education fund
6.Short-term compensated absences 0.00 0.00 0.00 0.00
7. Short-term profit-sharing plan 0.00 0.00 0.00 0.00
8. Others 0.00 575170.67 575170.67 0.00
Total 168067800.49 2570275813.22 2558694892.13 179648721.58
(3)Presentation of defined contribution plans
Ending balance of Increase in current Decrease in
Item Ending balance
previous year period current period
1. Basic endowment insurance 9096875.47 130635672.21 136768811.88 2963735.80
2.Unemployment insurance expenses 254522.29 3926341.96 4149832.74 31031.51
3. Enterprise annuities 0.00 0.00 0.00 0.00
Total 9351397.76 134562014.17 140918644.62 2994767.31
30.Tax payable
Item Ending balance Ending balance of previous year
Value-added tax 403029956.29 170678334.27
Enterprise income tax 39307649.29 35357064.36
Urban maintenance and construction
4758116.281362481.67
tax
3962024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Ending balance Ending balance of previous year
Education surcharge 2100734.50 690626.52
Land use tax 23140928.35 23073288.28
Property tax 46445253.07 38270663.18
Individual income tax 2031775.82 1734026.33
Stamp tax 28451319.26 34122581.48
Local education surcharge 1400489.68 460417.69
Disabled security fund 996901.48 611922.97
Others 125993.90 359963.56
Total 551789117.92 306721370.31
31.Other payable
Item Ending balance Ending balance of previous year
Interests payable 0.00 0.00
Dividends payable 0.00 0.00
Other payable 211562059.73 188374004.43
Total 211562059.73 188374004.43
(1)Other payables
* Listed by nature of amount
Item Ending balance Ending balance of previous year
Receivables and payables 2419833.00 22826305.18
Deposit and security fund 141282807.23 115320416.26
Unliquidated expense funds 43737082.16 23377964.42
Agency fund 18514126.39 16179087.78
Others 5608210.95 10670230.79
Total 211562059.73 188374004.43
3972024 Annual Report of Hengyi Petrochemical Co. Ltd.
* Listed by aging
Ending balance of previous
Item Ending balance
year
Within 1 year 138483052.83 132424825.33
1-2 years 27398652.83 14474680.39
2-3 years 8937441.54 22285643.69
Over three years 36742912.53 19188855.02
Total 211562059.73 188374004.43
* There was no significant accounts payable with aging exceeding 1 year during the
current period.
32.Non-current liabilities due within one year
Ending balance of previous
Item Ending balance
year
Long-term loans and interests mature within one
5984942535.904916491740.40
year (Notes V. 34)
Bonds payable and interests mature within one
13206855.2110092304.09
year (Notes V. 35)
Lease liabilities mature within one year (Notes V.
16180159.3211080739.86
36)
Long-term payables and interests mature within
884692763.68872044031.44
one year (Notes V5. 37)
Total 6899022314.11 5809708815.79
33.Other current liabilities
Ending balance Ending balance of previous
Item
year
Taxes of items for write-off 133419904.46 76672908.46
3982024 Annual Report of Hengyi Petrochemical Co. Ltd.
34.Long-term borrowings
Ending balance of
Item Ending balance Interest rate range(%)
previous year
Pledge loan 0.00 116793723.00
Mortgage loan 11531501020.31 10974343200.55 2.70~6.16
Guarantee loan 9927554274.90 8496751227.48 2.50~4.60
Interests payable 29974724.71 68045453.29
Minus: Long-term loans and interests
5984942535.904916491740.40
due within one year (Notes V 32)
Total 15504087484.02 14739441863.92
Note: For asset classes and amounts of mortgaged loans please refer to Note V. (66).For detail category and amount of assets pledged for loan please refer to Notes
V (66).
35.Bonds payable
(1)Bonds payable
Item Ending balance Ending balance of previous year
Corporate bonds 4494979631.55 4278805701.33
(2)Increase/decrease in bonds payable (excluding other financial instruments divided
into financial liabilities such as preferred stock and perpetual bond)
Bond Ending balance of
Bond name Nominal Value Date of issue Issue Amount
Deadline previous year
Hengyi Convertible Bond 127022 2000000000.00 2020-10-16 6 years 1508831199.68 1796656119.47
Hengyi Convertible Bond 127067 3000000000.00 2022-07-21 6 Years 2303101412.70 2492241885.95
Subtotal 5000000000.00 -- - 3811932612.38 4288898005.42 -
3992024 Annual Report of Hengyi Petrochemical Co. Ltd.
Minus: Partial year-end balance due
10092304.09
within one year (Note V. 32) --- -- - --
Total 5000000000.00 -- - 3811932612.38 4278805701.33 -
(Continued)
Repayment or
Issuance in current Accrued interest Discounted Interest paid in
Bond name stock conversion Ending balance
period at face value amortization current period
in current period
Hengyi Convertible Bond
0.0025575577.17-82675137.219000.0023997674.401880900159.45
127022
Hengyi Convertible Bond
0.0010536003.65-133626093.01118300.008999355.302627286327.31
127067
Subtotal
0.0036111580.82-216301230.22127300.0032997029.704508186486.76
Minus: Partial year-end
balance due within one year 13206855.21
----------
(Note V. 32)
Total
0.0036111580.82-216301230.22127300.0032997029.704494979631.55
36.Lease liabilities
Increase in current period
Ending balance Decrease in
Item Interest for Ending balance
of previous year current period
New Lease the current Others
period
Land use right 445140153.27 0.00 0.00 0.00 -4684444.77 449824598.04
Buildings 15104383.09 30344290.40 -123946.07 0.00 22829571.60 22495155.82
Minus: Lease liabilities due
within one year (Note V. 11080739.86 16180159.32
--------
32.)
Total 449163796.50 30344290.40 -123946.07 0.00 18145126.83 456139594.54
37.Long-term payable
Item Ending balance Ending balance of previous year
4002024 Annual Report of Hengyi Petrochemical Co. Ltd.
Long-term payables 1070496662.83 464759585.87
Special payables 0.00 0.00
Total 1070496662.83 464759585.87
(1)Long-term payable
Ending balance of
Item Ending balance
previous year
Financing lease payable 1955189426.51 1336803617.31
Minus: Partial balance due within one year (Note V. 32) 884692763.68 872044031.44
Total 1070496662.83 464759585.87
38.Estimated liabilities
Item Ending balance of previous year Ending balance Reason
819949.97 2630823.25 See Notes XI 1 for
Pending action
detail.
39. Deferred income
Ending
Increase in Decrease in
Item balance of Ending balance Reason
current period current period
previous year
Government grants 216723926.63 60208262.79 18395989.26 258536200.16 Assets-related
Government grants 6998301.75 8608324.00 5121034.97 10485590.78 Income-related
Total 223722228.38 68816586.79 23517024.23 269021790.94
40. Share capital
Increase/decrease in current period (+ -)
Ending balance of
Item Ending balance
previous year Issue of new Bonus Capital reserve
Others Subtotal
shares shares converted into
4012024 Annual Report of Hengyi Petrochemical Co. Ltd.
share capital
Sum of 3666302025.00 0.00 0.00 0.00 12182.00 12182.00 3666314207.0
shares 0
Note: The conversion period for "Hengyi Convertible Bond" (Bond Code: 127022) is
from April 22 2021 to October 15 2026 and the conversion period for "Hengyi
Convertible Bond 2" (Bond Code: 127067) is from January 30 2023 to July 20 2028.In the year 2024 a total of 90 "Hengyi Convertible Bond" units were converted
resulting in a total conversion into 822 shares of "Hengyi Petrochemical" stock; a
total of 1183 "Hengyi Convertible Bond 2" units were converted resulting in a total
conversion into 11360 shares of "Hengyi Petrochemical" stock. The company
increased its share capital by RMB 12182.00 and simultaneously increased "Capital
Reserve - Share Premium" by RMB 127298.56.
41. Other equity instruments
Increase in
Decrease in
Outstanding Ending balance of previous year
Ending balance
current period current period
Financia
Quant Book
Book
l Instruments Quantity Book value Quantity Quantity Book value
ity value value
Equity part of
convertible 49996036.00 1159031770.29 0.00 0.00 1273.00 28990.91 49994763.00 1159002779.38
corporate bonds
Note: For the equity part of convertible corporate bonds decreased in current
period please refer to Note V. 40.
42.Capital surplus
Ending balance of Increase in current Decrease in current
Item Ending balance
previous year period period
Capital premiums 11264297206.44 127298.56 330945656.32 10933478848.68
Other capital reserves 150233079.04 0.00 814093.57 149418985.47
4022024 Annual Report of Hengyi Petrochemical Co. Ltd.
Capital reserves generated by
simulation of shareholding structure -2329301104.61 0.00 0.00 -2329301104.61
and quantity
Total 9085229180.87 127298.56 331759749.89 8753596729.54
Note 1: During this period the capital reserve - share premium increased by RMB
127298.56. Refer to Note V. 40.
Note 2: During this period the capital reserve - share premium decreased by RMB
330945656.32. This includes a decrease of RMB 169040.52 due to fees incurred
from the repurchase of shares; the sixth employee stock ownership plan acquired the
company's repurchased treasury shares through a non-transactional transfer method
and the difference between the transfer price and the repurchase cost price reduced the
capital reserve - share premium by RMB 264480474.41; the difference between the
purchase cost consideration incurred for acquiring minority shareholder equity in a
subsidiary and the subsidiary's net asset share calculated according to the acquired
equity proportion reduced the capital reserve - share premium by RMB
66296141.39.
Note 3: During this period the capital reserve - others decreased by RMB 814093.57
due to Double Rabbit New Materials settling with a client involved in litigation before
the company's acquisition which reduced the losses of Double Rabbit New Materials
thus decreasing the capital reserve in the consolidated financial statements.
43.Treasury stock
Ending balance of Increase in current Decrease in current
Item Ending balance
previous year period period
Stock repurchases via centralized
2368941966.92817685803.20509988586.912676639183.21
bidding
Note 1: During this reporting period the company repurchased shares through a
centralized bidding transaction method increasing treasury stock by RMB
817685803.20.
4032024 Annual Report of Hengyi Petrochemical Co. Ltd.
Note 2: During this reporting period the company implemented the sixth employee
stock ownership plan with the source of the shares being the company's repurchased
shares and shares purchased through the secondary market reducing treasury stock by
RMB 509988586.91.
44. Other comprehensive income
Amount incurred in current period
Minus:
Recorded into
Amount other
Assigned to
At end of
incurred before comprehensive Minus: Assigned to
Item the previous minority Ending Balance
income tax for income in the Income tax Parent Company
year Balance
shareholders
the current earlier stage expenses after tax
after tax
period and rolled into
current profits
and losses
I.Other
comprehensive
income that
790515.392017800.000.000.002017800.000.002808315.39
cannot be re-
classified into
profit and loss
Wherein:Re-
measurement
profits or losses 0.00 0.00 0.00 0.00 0.00 0.00 0.00
of a defined
benefit plan
Other
comprehensive 790515.39 2017800.00 0.00 0.00 2017800.00 0.00 2808315.39
income
4042024 Annual Report of Hengyi Petrochemical Co. Ltd.
Amount incurred in current period
Minus:
Recorded into
Amount other
Assigned to
At end of
incurred before comprehensive Minus: Assigned to
Item the previous minority Ending Balance
income tax for income in the Income tax Parent Company
year Balance
shareholders
the current earlier stage expenses after tax
after tax
period and rolled into
current profits
and losses
cannot be
recognized in
profit and loss
by equity law
II.Other
comprehensive
income to be
-8730108.3
679941844.79264421518.040.00140362.50273011263.92952953108.71
re- classified 8
into profit and
loss
Wherein: Other
comprehensive
income can be
-8239250.7
recognized in 164995844.49 70594617.78 0.00 0.00 78833868.50 243829712.99
2
profit and loss
under equity
method
Effective part
0.00561450.000.00140362.50421087.500.00421087.50
of cash-flow
4052024 Annual Report of Hengyi Petrochemical Co. Ltd.
Amount incurred in current period
Minus:
Recorded into
Amount other
Assigned to
At end of
incurred before comprehensive Minus: Assigned to
Item the previous minority Ending Balance
income tax for income in the Income tax Parent Company
year Balance
shareholders
the current earlier stage expenses after tax
after tax
period and rolled into
current profits
and losses
hedge profits
and losses
Exchang
e
differen
ces from
translati 514946000.30 193265450.26 0.00 0.00 193756307.92 -490857.66 708702308.22
on of
financial
stateme
nts
Total (other
-8730108.3
comprehensive 680732360.18 266439318.04 0.00 140362.50 275029063.92 955761424.10
8
income)
45.Appropriative reserve
Ending balance of Increase in current Decrease in current
Item Ending balance
previous year period period
Production safety expenses 0.00 50731580.68 50731580.68 0.00
Note: Both increase and decrease in special reserves in this reporting period are
calculated and utilized production safety expenses.
46.Earned surplus
4062024 Annual Report of Hengyi Petrochemical Co. Ltd.
Ending balance of Increase in current Decrease in current
Item Ending balance
previous year period period
Legal surplus 807136900.99 0.00 0.00 807136900.99
Note: In accordance with the Company Law and the Articles of Association of the
Company the Company shall withdraw legal surplus by 10% of its net profits. Legal
surplus will not be withdrawn any more when its accumulated amount reaches over
50% of the Company’s registered capital.
47.Undistributed profit
Item Current Period Prior Period
Undistributed profits at the end of previous year
12181660569.6811771637510.92
before adjustment
Total amount of undistributed profits at the end of the
0.000.00
previous year after adjustment (+/-)
Undistributed profits at the end of the previous year
12181660569.6811771637510.92
after adjustment
Plus: Net profits assigned to the parent company’s
233939342.84435458340.57
shareholders in current period
Minus: Legal surplus withdrawal 0.00 25435281.81
Withdrawal of any legal surplus 0.00 0.00
Withdrawal of common risk reserves 0.00 0.00
Common stock dividends payable 338720933.20 0.00
Dividends transferred to capital 0.00 0.00
Plus: Others 0.00 0.00
Undistributed profits at the end of the period 12076878979.32 12181660569.68
48.Operating income and operating cost
4072024 Annual Report of Hengyi Petrochemical Co. Ltd.
Amount incurred in current period Amount incurred in previous period
Item
Revenue Cost Revenue Cost
Main business 123785076621.57 119334496026.74 134516059362.49 129629554889.25
Other businesses 1678160476.60 1537644356.77 1632054719.85 1400678793.63
Total 125463237098.17 120872140383.51 136148114082.34 131030233682.88
49.Tax and associate charge
Item Amount incurred in current Amount incurred in previous
period period
Consumption tax 2198490.85 3035691.33
Urban maintenance and construction tax 19258890.98 22513751.09
Education surcharge 8943615.08 10382113.28
Property tax 56172781.10 45739257.62
Land use tax 28848721.27 30084436.29
Vehicle and vessel use tax 132251.06 115925.99
Stamp tax 114182311.58 129021455.41
Local education surcharge 5962410.04 6921408.85
Others 1488994.95 1727250.02
Total 237188466.91 249541289.88
Note: For detail payment standard for various taxes and surcharges please refer to
Note IV. “Taxes”.
50.Selling expenses
Item Amount incurred in current period Amount incurred in previous period
Import & export charges 83630784.57 78314347.37
Staff Salaries 104995983.19 98266014.49
4082024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Amount incurred in current period Amount incurred in previous period
Insurance 13011788.86 14105980.26
Storage charges 4758643.63 6848857.07
Business entertainment 2135258.45 1796525.52
Travel expenses 5146569.34 4985577.18
Vehicle expenses 958711.83 1510011.64
Rental expenses 3308.16 2800.00
Office expenses 3566414.84 1262715.92
Handling charges 13683330.20 5786721.28
Agency fees 4107539.38 5249744.25
Others 7764068.93 11154994.11
Total 243762401.38 229284289.09
51.Administration expenses
Item Amount incurred in current period Amount incurred in previous period
Staff Salaries 402358417.97 403725775.77
Intangible assets
40142770.4345052660.96
amortization cost
Fixed assets depreciation
249635542.46265706471.75
expenses
Business entertainment 11169779.68 8422226.85
Vehicle expenses 13589765.67 13767451.92
Safety and Environmental
16404094.4613995242.27
Protection Fee
Office expenses 6656605.78 10691860.18
Agency fees 24200722.76 22896767.26
Travel expenses 15712688.32 30398870.01
Rental expenses 23044995.19 13972415.31
Repair charges 109772563.89 416808822.16
4092024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Amount incurred in current period Amount incurred in previous period
Premiums for property
42389019.7828510503.37
insurance
Transportation and storage
46158021.0359767369.80
fees
Operating licence fee 11770439.53 11908662.76
Others 89846195.41 88602835.36
Total 1102851622.36 1434227935.73
52.R&D expenses
Item Amount incurred in current period Amount incurred in previous period
Direct investment cost 430505771.47 411739313.04
Staff Salaries 151995162.81 148843373.25
Depreciation expenses 50943926.05 64325403.87
Technical development cost 13849728.84 17636809.83
Other expenses 76071200.86 73774627.67
Total 723365790.03 716319527.66
53.Financial expenses
Item Amount incurred in current period Amount incurred in previous period
Interest expense 2938880617.79 3306322914.56
Minus: Interest income 208017001.29 217648751.41
Profit or loss on exchange -110500609.39 -140346056.78
Bank charges 263482148.90 295574639.10
Total 2883845156.01 3243902745.47
54.Other income
4102024 Annual Report of Hengyi Petrochemical Co. Ltd.
Amount included in
Amount incurred in Amount incurred in non-recurring
Item profits and losses
current period previous period
for the current
period
Government Grants Related to
18395989.2661959916.540.00
Assets
Deferred Income Related to
173857795.38138232373.3873095406.26
Revenue
Additional Deduction of Input
VAT for Advanced Manufacturing 118222022.67 136119291.38 0.00
Industry
efund of Handling Fees for
331157.10649467.480.00
Withholding Personal Income Tax
Total 310806964.41 336961048.78 73095406.26
55. Investment income
Amount incurred in Amount incurred in
Item
current period previous period
Income from long-term equity investment checked with
351824646.06490890359.42
equity method
Investment income generated by disposal of long-term equity
56084.57448973414.86
investment
Investment income generated by disposal of held-for-trading
129458217.6245612962.20
financial assets
Total 481338948.25 985476736.48
56.Income from fair value changes
Amount incurred in Amount incurred in
Source of income from fair value changes
current period previous period
Financial assets measured at fair value through profit and
-18902912.3335044790.52
loss
4112024 Annual Report of Hengyi Petrochemical Co. Ltd.
Wherein: Income from fair value change generated by
-18902912.3335044790.52
derivative financial instruments
Financial liabilities measured by fair value and whose
0.00-82757620.02
changes included in current profits and losses
Hedging business 341472.00 2591630.82
Total -18561440.33 -45121198.68
57.Credit impairment losses
Amount incurred in Amount incurred in
Item
current period previous period
Bad debt loss on receivables -3153283.65 -7103558.34
Bad debt loss on other receivables -3236268.87 -4323174.58
Total -6389552.52 -11426732.92
58. Assets impairment loss
Amount incurred in Amount incurred in
Item
current period previous period
Loss on inventory depreciation -34344817.62 -71262509.77
Total -34344817.62 -71262509.77
59.Income from assets disposal
Amount included in
Amount incurred in Amount incurred in non-recurring profits
Item
current period previous period and losses for the
current period
Gains or losses from disposal of
-51236437.06-9399633.84-51236437.06
fixed assets
Gains or losses from disposal of -350177.83 56843.35 -350177.83
4122024 Annual Report of Hengyi Petrochemical Co. Ltd.
intangible assets
Total -51586614.89 -9342790.49 -51586614.89
60.Non-operating income
Amount included in
Amount incurred in Amount incurred in
Item non-recurring profits and
current period previous period
losses for the current period
Gains from damage and scrapping of
3136.75524905.443136.75
non-current assets
Wherein: Fixed assets 3136.75 524905.44 3136.75
Governmental subsidies irrelevant to
588072.12373507.13588072.12
daily enterprise activities
Income from indemnities and fines 5108368.58 12920943.66 5108368.58
Non-payable current accounts 914895.21 202885.35 914895.21
The cost of acquisition of an
investment in an associate is less
than the gain arising from the fair
value of the identifiable net assets of 0.00 16534148.40 0.00
the investee at the time the
investment is acquired
Others 2924598.24 5364119.48 2924598.24
Total 9539070.90 35920509.46 9539070.90
61.Non-operating expenses
Amount included in
Amount incurred in Amount incurred in non-recurring profits and
Item
current period previous period losses for the current
period
Loss on damage and scrapping of
17820127.4123368528.9717820127.41
non-current assets
4132024 Annual Report of Hengyi Petrochemical Co. Ltd.
Amount included in
Amount incurred in Amount incurred in non-recurring profits and
Item
current period previous period losses for the current
period
Wherein: Fixed assets 17820127.41 23368528.97 17820127.41
Expenditure of donation 509300.00 6858000.00 509300.00
Late fees penalties and
16540050.4023519641.4816540050.40
liquidated damages
Others 26514462.67 12225333.01 26514462.67
Total 61383940.48 65971503.46 61383940.48
62.Income tax expenses
(1)Table of income tax expenses
Amount incurred in previous
Item Amount incurred in current period
period
Income tax expenses in current period 71736486.70 46126222.53
Deferred income tax expenses 23518599.71 -14966761.28
Total 95255086.41 31159461.25
(2)Accounting profit and income tax expense adjustment process
Amount incurred in current
Item
period
Total profits 29501895.69
Income tax expenses calculated by legal/applicable tax rate 7375473.92
Influence of subsidiary applicable to different tax rates 107645993.15
Influence of adjustment to income tax in previous periods 3742069.84
Influence of nontaxable income -170588509.35
Influence of non-deductible cost expense and loss 2561913.63
Influence of deductible loss on the use of previously unconfirmed deferred -98557685.80
4142024 Annual Report of Hengyi Petrochemical Co. Ltd.
Amount incurred in current
Item
period
income tax assets
Influence of deductible temporary difference or deductible loss on
259073859.66
unconfirmed deferred income tax assets in current period
The remeasurement of deferred tax assets/liabilities at the beginning of the
41750352.79
period reflects the impact of enacted changes in tax rates
Influence of weighted deduction cost expense and other items allowed to
-50777538.12
deduct by tax law
Others -6970843.31
Income tax expenses 95255086.41
63.Other comprehensive income
See Notes V. 44 for detail.
64.Items in cash flow statement
(1)Reception of other cash related to business activities
Amount incurred in Amount incurred in
Item
current period previous period
Receivables and payables 18697911.64 25922960.56
Margin and deposit 80847630.41 115436902.90
Government grants 200591701.92 141665269.80
Interest income 181786742.59 167866162.76
Indemnities and fines 4778172.24 10812516.37
Judicial freezing 25169796.00 0.00
Bank bill margin 14414467.76 6230.51
Others 4569918.80 5041293.05
Total 530856341.36 466751335.95
4152024 Annual Report of Hengyi Petrochemical Co. Ltd.
(2)Payment of other cash related to business activities
Amount incurred in current Amount incurred in previous
Item
period period
Bank service charges 211911325.04 252738019.47
Entertainment expenses 13212628.19 10480905.30
Vehicle expenses 15210717.96 15134956.54
Safety and environmental protection fees 16919662.82 13991862.40
Deposits and guarantees 115956758.65 187229453.52
Insurance premiums 50873786.14 47423146.87
Transportation warehousing & handling
70060321.1456845928.25
costs
Third-party agency fees 31608766.74 40363230.33
Travel expenses 21164104.71 36465208.62
Leasing expenses 22608839.45 14598058.03
Office expenses 10576243.66 11516869.98
Import/export fees (Port charges inspection
66627304.6066156351.22
fees)
Repair and maintenance costs 58933151.05 403455069.89
Operating license fees 11774612.61 11912838.75
Utilities 16841465.14 24069440.08
IT system maintenance & operation costs 7249694.85 6002991.36
Security and fire protection expenses 8020263.77 5039802.76
Fuel costs 6560286.68 4899588.22
Consumables and materials 7460183.90 10770469.44
Corporate Social Responsibility (CSR)
8715231.4312122001.53
expenses
Other miscellaneous expenses 84710331.44 58775998.11
Total 856995679.97 1289992190.67
(3)Reception of other cash related to investment activities
Amount incurred in Amount incurred in
Item
current period previous period
4162024 Annual Report of Hengyi Petrochemical Co. Ltd.
Income from consigned loan and interest on capital
18453086.6540982195.82
lending by related parties
Futures margin recovery 237895540.64 105530878.67
VAT Credit Refund During Project Construction Period 88635663.12 0.00
Total 344984290.41 146513074.49
(4)Payment of other cash related to investment activities
Amount incurred in current Amount incurred in previous
Item
period period
Futures margin recovery 50495239.10 144345965.50
Total 50495239.10 144345965.50
(5)Reception of other cash related to financing activities
Amount incurred in Amount incurred in
Item
current period previous period
Withdrawal of monetary funds pledged for financing 3656083599.80 1556261828.88
Collection of financing leaseback 1864533558.93 100000000.00
Interbank borrowing from Hengyi Group 5759650000.00 5588422499.99
Employee Stock Ownership 245668112.69 0.00
Total 11525935271.42 7244684328.87
(6)Payment of other cash related to financing activities
Amount incurred Amount incurred
Item
in current period in previous period
Monetary funds pledged for financing 1326783127.29 2696022987.63
Repayment of loan principal and interest of Hengyi Group 5759650000.00 5578409681.37
Stock repurchases 817854843.72 885461636.25
4172024 Annual Report of Hengyi Petrochemical Co. Ltd.
Rental expenses and commission charges paid for financing leaseback 1268438688.16 1368484777.98
Lease margin for financing leaseback 0.00 5000000.00
Loan commission 96922080.86 102882954.07
Expenses Related to Issuing Shares 220000.00 950000.00
Rental expenses paid for lease liabilities 30508100.08 32340033.50
Purchase of Minority Shareholders' Equity 519255616.44 0.00
Others 160200.19 0.00
Total 9819792656.74 10669552070.80
65.Further information about cash flow statements
(1) Further information about cash flow statement
Amount incurred in Amount incurred in previous
Further Information
current period period
1.Adjust net profit to operating cash flow:
Net profit -65753190.72 368678709.78
Plus: Asset impairment reserves 34344817.62 71262509.77
Impairment loss on credit assets 6389552.52 11426732.92
Depreciation of fixed assets 3049213417.43 3171949886.05
Depreciation of right-of-use assets 36243749.75 38811361.86
Amortization of intangible assets 80426071.41 84384861.47
Amortization of long-term deferred expenses 111285665.40 118793677.98
Loss on disposal of fixed assets intangible
assets and other long-term assets (income listed 51586614.89 9342790.49
with “-”)
Loss on scrapping of fixed assets (income
17816990.6622843623.53
listed with “-”)
4182024 Annual Report of Hengyi Petrochemical Co. Ltd.
Amount incurred in Amount incurred in previous
Further Information
current period period
Loss on fair value change (income listed
18561440.3345121198.68
with “-”)
Financial cost (income listed with “-”) 2558835534.12 3062809389.14
Investment losses (income listed with “-”) -481338948.25 -985476736.48
Decrease in deferred income tax assets
39368535.95-16340029.81
(increase listed with “+”)
Increase in deferred income tax liabilities
-15849936.241373268.53
(decrease listed with “-”)
Decrease in inventory (increase listed with
691038869.39969448083.78
“-”)
Decrease in operating receivables (increase
-502741148.891327681725.88
listed with “-”)
Increase in operating payables (decrease
370959597.58-3731423035.99
listed with “-”)
Others -3376077.19 -38853212.43
Net cash flow from operating activities 5997011555.76 4531834805.15
2.Significant investment and financing
activities involving no cash receipt and
payment:
Conversion of debt into capital 0.00 0.00
Convertible corporate bonds mature within one
0.000.00
year
Fixed assets under financing lease 0.00 0.00
3.Net changes in cash and cash equivalents:
Ending balance of cash 10060888620.31 8518118122.12
Minus: Cash balance at the end of previous year 8518118122.12 12934069613.03
Plus: Ending balance of cash equivalents 0.00 0.00
4192024 Annual Report of Hengyi Petrochemical Co. Ltd.
Amount incurred in Amount incurred in previous
Further Information
current period period
Minus: Cash equivalent balance at the end of
0.000.00
previous year
Net increase in cash and cash equivalents 1542770498.19 -4415951490.91
(2)Net cash on subsidiary disposal received in current period
4202024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Amount
Cash or cash equivalents on subsidiary disposal received in current period 12824043.92
Wherein:Hengyi Industries International (Singapore) Co. Ltd. 12824043.92
Minus: Cash and cash equivalents held by subsidiary on the date of losing
12767959.35
control right
Wherein: Hengyi Industries International (Singapore) Co. Ltd. 12767959.35
Less: Unpaid amounts due at the date of loss of control paid in the
0.00
current period after the date of loss of control
Wherein: Hengyi Industries International (Singapore) Co. Ltd. 0.00
Net cash received by subsidiary disposal 56084.57
(3)Composition of cash and cash equivalents
Item Ending balance Ending balance of previous year
I. Cash 10060888620.31 8518118122.12
Wherein: Cash on hand 698184.72 1065013.70
Bank deposit payable at any time 8871165316.07 7887839429.74
Other monetary fund payable at any time 1189025119.52 629213678.68
Payable due from Central Bank 0.00 0.00
Deposits in other banks 0.00 0.00
Due from banks 0.00 0.00
II. Cash Equivalents 0.00 0.00
Wherein: Bond investments mature within
0.000.00
three months
III. Ending balance of cash and cash equivalents 10060888620.31 8518118122.12
Wherein: Cash and cash equivalents used
by the parent company or group subsidiaries 0.00 0.00
under certain limitation
(4)Classification of changes in liabilities arising from financing activities from
opening to closing balances
4212024 Annual Report of Hengyi Petrochemical Co. Ltd.
Beginning Increase during the period Decrease during the period
Item Ending balance
balance Changes in cash Non-cash changes Changes in cash Non-cash changes
Bank
Borrowings 60778191873.18 60784299457.25 15878970487.47 60911284372.07 17009954053.88 59520223391.95
Other
payable
-Dividends 0.00 0.00 338720933.20 338720933.20 0.00 0.00
payable
Bonds
payable(inclu
ding within 4278805701. -216173930.2 4494979631.
0.000.000.00
one year) 33 2 55
Lease
liabilities(inc
luding within 460244536.3 472319753.8
0.0030220344.3330508100.08-12362973.25
one year) 6 6
Long-term
accounts
payable(inclu
1336803617.1864533558.1268438688.1955189426.
ding within 41371151.20 19080212.77
31931651
one year)
Total
66442513467.5254467260691.8024712415243.4753410422908.4725347628462.0566864138032.27
(5)Not classified as cash and cash equivalents in monetary funds
Item Amount incurred in Amount incurred in Reason
current period previous period
* Not Available for
* Credit Letter Margin 2078071659.97 4033300928.58
Immediate Use
* Not Available for
Bank Acceptance Bill Margin 777004071.80 1015191038.98
Immediate Use
* Not Available for
Guarantee Margin 62300000.00 61920000.00
Immediate Use
* Not Available for
Pledged Bill Collection Funds 67499029.87 69482993.32
4222024 Annual Report of Hengyi Petrochemical Co. Ltd.
Immediate Use
* Not Available for
Judicial Frozen Funds 493888.30 25169796.00
Immediate Use
* Not Available for
Judicial Frozen Funds 35614900.27 64140677.71
Immediate Use
* Not Available for
Other Restricted Funds 11302376.94 40579530.69
Immediate Use
3032285927.155309784965.28
(6)Supplier Financing Arrangements
* Terms and Conditions of Supplier Financing Arrangements
The company enters into an agreement with the bank and suppliers for
interest-bearing domestic factoring services: Suppliers apply to transfer their accounts
receivable claims arising from the sale of goods to the company to the bank. After
the bank approves the documentation the financing funds are promptly transferred to
the account designated by the company. Financing interest and related costs are
settled in a lump sum by the company when the bank disburses the financing funds.The company commits to unconditionally remit the corresponding amount to the
bank's designated account on the due date and complete the repayment.* Presentation Items in the Balance Sheet and Related Information
Closing balance of previous
Presentation Items Closing balance
year
No disclosure required
Short-term Borrowings 262300000.00 upon initial
implementation.Including: Funds received by suppliers
262300000.00
from the financing provider
* Payment Due Date Interval
The company typically adopts a prepayment method for the settlement of (PTA) raw
material purchases which does not fall under financing arrangements and involves no
liabilities. For short-term borrowings under financing arrangements the company
4232024 Annual Report of Hengyi Petrochemical Co. Ltd.
pays the supplier through the factoring institution and subsequently repays the
factoring institution within 365 days. The financing arrangement effectively extends
the company's actual payment period..* Non-Cash Changes in the Current Period
There are no impacts from business combinations or exchange rate changes in the
above-mentioned changes to the company's financial liabilities. Due to supplier
financing arrangements the company derecognized accounts payable and
simultaneously recognized short-term borrowings amounting to RMB 412300000.00
in 2024.
(7)Significant activities and financial impacts that do not involve current cash inflows
or outflows but affect the company's financial position or may impact the company's
cash flows in the future.Amount incurred in Amount incurred in previous
Presentation Items
current period period
Amount of commercial bills endorsed and
324599425.432406290522.00
transferred
Including: Payment for goods 259179624.26 2318235317.16
Payment for purchase of fixed assets
65419801.1788055204.84
and other long-term assets
66.Assets with limited ownership or use right
Book value at the end of the
Item Reason for restriction
period
Monetary funds 3031792038.85 Margin
Monetary funds 493888.30 Judicial freezing
Long-term equity investments 4753215991.44 Mortgage pledge borrowing
2755360395.44 Leaseback financing
Fixed assets
lease
Fixed assets 19433943816.31 Mortgage loan
Intangible assets 1917089516.79 Mortgage loan
Construction in progress 17671369.60 Mortgage loan
4242024 Annual Report of Hengyi Petrochemical Co. Ltd.
Book value at the end of the
Item Reason for restriction
period
Total 31909567016.73
67.Monetary items in foreign currency
(1) Monetary items in foreign currency
Monetary funds
Wherein: HKD 3626649.74 0.9260 3358277.66
USD 394357716.75 7.1884 2834801011.01
EUR 832.20 7.5257 6262.87
BND 16516921.62 5.3214 87893146.71
SGD 927690.05 5.3214 4936609.83
Accounts receivable
Wherein: USD 460697534.16 7.1884 3311678154.56
BND 41395520.20 5.3214 220282121.19
Other receivables
Wherein: USD 17068114.96 7.1884 122692437.58
HKD 1779600.00 0.9260 1647909.60
BND 2024462.92 5.3214 10772976.98
SGD 1025686.81 5.3214 5458089.79
Long-term receivables
Wherein: BND 1047978.00 5.3214 5576710.13
Short-term loans
Wherein: USD 1216942346.06 7.1884 8747868360.40
BND 76030792.23 5.3214 404590257.77
4252024 Annual Report of Hengyi Petrochemical Co. Ltd.
Accounts payable
Wherein：USD 581163548.84 7.1884 4177636054.48
EUR 3359260.96 7.5257 25280790.21
HKD 190800.00 0.9260 176680.80
BND 2440564.38 5.3214 12987219.29
Other payable
Wherein：USD 4825821.02 7.1884 34689931.83
BND 460154.34 5.3214 2448665.30
Non-current liabilities due
within one year
Wherein：USD 168491781.70 7.1884 1211186323.57
EUR 14055069.08 7.5257 105774233.38
BND 1336887.90 5.3214 7114115.29
SGD 975424.35 5.3214 5190623.14
Lease liabilities
Wherein: BND 84666942.57 5.3214 450546668.22
SGD 506501.02 5.3214 2695294.53
Long-term loans
Wherein: USD 599811683.66 7.1884 4311686306.82
EUR 57736021.00 7.5257 434503973.24
(2)Explanation of Overseas Operating Entity
Principal Place of Functional
Company Basis for selection
Business currency
Hong Kong Tianyi International The main currency used in the
Hong Kong USD
Holding Co. Ltd. operating environment
4262024 Annual Report of Hengyi Petrochemical Co. Ltd.
Hong Kong Hengyi Logistics Co. The main currency used in the
Hong Kong USD
Ltd. operating environment
Good Park International Investment The main currency used in the
Hong Kong USD
Co. Ltd. operating environment
Hong Kong Yisheng Petrochemical The main currency used in the
Hong Kong USD
Investment Co. Ltd. operating environment
The main currency used in the
Hengyi Industries Sdn. Bhd. Brunei USD
operating environment
Hengyi Industries International The main currency used in the
Singapore USD
(Singapore) Co. Ltd. operating environment
Hengyi International Logistics Co. The main currency used in the
Singapore USD
Ltd. operating environment
68.Hedging
Please refer to Notes VI (3. Notes to derivative financial assets).
69.Government grants
(1)Basic information about governmental subsidies
Category Amount Reported Item Amount recorded into
current profits and losses
286958783.08 Other incomes 286958783.08
Income-related subsidies used to
Non-operating
compensate for related costs or 588072.12 588072.12
income
losses incurred
Financial
23315100.0023315100.00
expense
Income-related subsidies used to
compensate for related costs or 15606625.75 Deferred income 5121034.97
losses in subsequent periods
Assets-related subsidies 276932189.42 Deferred income 18395989.26
--
Total 603400770.37 334378979.43
70.The Company as Lessee
* Refer to Notes V 17 and 36 of this Note for right-of-use assets and lease liabilities.* Charged to current year's profit or loss
4272024 Annual Report of Hengyi Petrochemical Co. Ltd.
Charged to profit or loss for the year
Item
Presentation of items Amount
Interest on lease liabilities Financial expense 9180404.34
Administrative
Short-term lease costs (simplified
expenses selling expenses 23686617.40
treatment applied)
Operating costs etc.Lease costs for low-value assets
Administrative expense 8145.32
(simplified treatment applied)
Sale and leaseback transactions Financial expense 76701937.60
* Cash flow outflows related to leases
Item Category of cash flow Amount for the year
Cash payments for principal and interest Cash outflows from
30508100.08
on lease liabilities financing activities
Payments made on short-term leases
Cash outflows from
and low-value assets (simplified 23261865.22
operating activities
treatment applies)
Total -- 53769965.30
* Other information
A. At the end of the reporting period the Company's right-of-use assets mainly
consisted of buildings and structures and land use rights of which land use rights
included:
a. 260 hectares of land use rights for production area: the leased land is located in
Pulau Grande Mora Brunei Darussalam with a lease period of 30 years (from 26
March 2017 to 27 March 2047) with the possibility of applying for a renewal of the
lease for a period of 30 years prior to expiry.b. 69.7978 hectares of Western Irrigation Wharf and other land use rights: the
leasehold land is situated in Pulau Grande Mora Brunei Darussalam for a term of 27
years (from 1 November 2019 to 27 March 2047) with the possibility of applying for
a renewal of the lease for a period of 30 years prior to expiry.
4282024 Annual Report of Hengyi Petrochemical Co. Ltd.
B.Sale and leaseback transactions
Some subsidiaries of the Company entered into leasing agreements with financial
leasing companies to carry out financial leasing business by way of sale and leaseback
of their own specialised production equipment as leased goods. The Company has
been using the above assets since the beginning and has agreed to a forward retention
in the said contract indicating that the financial leasing company did not obtain
control of the relevant goods at the point of sale and therefore the transfer of assets in
the transaction is not a sale.Effect of sale and leaseback transactions on current cash flows:
Item Category of cash flow Amount for the year
Cash inflow from
Finance leaseback receipts 1864533558.93
financing activities
Lease payments and handling fees
Cash outflow from
paid for financing sale and leaseback 1268438688.16
financing activities
transactions
(2)The Company as Lessor
* Charged to profit or loss for the year
Charged to profit or loss for the year
Item
Presentation of items Amount
Lease income Other operating income 10772494.68
Total -- 10772494.68
* Major operating lease assets
Item Carrying value at end of period
Houses and buildings 34037325.58
Site Not applicable (Note)
Note: Haining Hengyi New Material Co. Ltd Suqian Yida New Materials Co. Ltd.and other subsidiaries lease out certain areas within their factories to external parties
and charge the tenants for site usage fees in accordance with the lease agreements.
4292024 Annual Report of Hengyi Petrochemical Co. Ltd.
V.R&D expenditure
1.R&D expenditure incurred during the period
Item Amount for the current period Prior period amount
Direct input costs 433221121.72 413676993.35
Salary of employees 160847283.31 155535899.95
Depreciation 71025663.20 76541593.04
Technology development costs 14140990.98 17636809.83
Other expense 87940573.07 80406482.69
Total 767175632.28 743797778.86
Wherein:Expensed R&D expenditure 723365790.03 716319527.66
Capitalised R&D expenditure 43809842.25 27478251.20
(1)Expensed R&D expenditure
Item Amount for the current period Prior period amount
Direct input costs 430505771.47 411739313.04
Salary of employees 151995162.81 148843373.25
Depreciation 50943926.05 64325403.87
Technology development costs 13849728.84 17636809.83
Other expense 76071200.86 73774627.67
Total 723365790.03 716319527.66
(2)Capitalised R&D expenditure
Item Amount for the current period Prior period amount
Direct input costs 2715350.25 1937680.31
Salary of employees 8852120.50 6692526.70
Depreciation 20081737.15 12216189.17
Technology development costs 291262.14 0.00
Other expense 11869372.21 6631855.02
Total 43809842.25 27478251.20
2.Status of capitalised development projects
4302024 Annual Report of Hengyi Petrochemical Co. Ltd.
Decrease in current
Item Beginning balance Increase in current period Closing balance
period
Research and application development of
bio-based PTT elastic memory fibre series 3437417.64 0.00 3437417.64 0.00
products
3000t/a Caprolactam Gas Phase Reworking and
45383802.6029615116.330.0074998918.93
Crystallisation Project
2000 t/a Hydrogen Peroxide Project (35%) 0.00 5457990.75 0.00 5457990.75
Key Technologies and Industrialization for Green
0.003566768.250.003566768.25
Polyester Preparation
Green Nylon Production Process Project 0.00 5169966.92 0.00 5169966.92
Total 48821220.24 43809842.25 3437417.64 89193644.85
The research and application development of bio-based PTT elastic memory fiber
series products for this period has been converted into current expenses.
(1)Status of significant capitalised development projects
Point of
Estimated Projected manner of commence
Item R&D progress completio generation of ment of Specific basis
n time economic benefits capitalisati
on
4312024 Annual Report of Hengyi Petrochemical Co. Ltd.
Point of
Estimated Projected manner of commence
Item R&D progress completio generation of ment of Specific basis
n time economic benefits capitalisati
on
Formulate a
technical process
package and core
3000t/a Caprolactam patented The pilot device is
The first stage of the pilot
Gas Phase Reworking Septembe technologies operating stably and
testing task has been July 2022
and Crystallisation r 30 2025 authorize external the product indicators
completed
Project usage and collect meet the standards
licensing fees and
technical service
fees.Formulate a
technical process
package and core
patented The pilot device is
The first stage of the pilot
2000 t/a Hydrogen April 30 technologies January operating stably and
testing task has been
Peroxide Project (35%) 2025 authorize external 2024 the product indicators
completed.usage and collect meet the standards
licensing fees and
technical service
fees.Key Technologies and Develop a process
Industrialization for The trial task in the first stage December technology package March Completion of pilot
Green Polyester has been completed 31 2025 and apply it to 2024 plant construction.Preparation workshop
4322024 Annual Report of Hengyi Petrochemical Co. Ltd.
Point of
Estimated Projected manner of commence
Item R&D progress completio generation of ment of Specific basis
n time economic benefits capitalisati
on
production
Develop a process
The pilot device is
The first stage of the pilot technology package
Green Nylon Production June 30 January operating stably and
testing task has been and apply it to
Process Project 2025 2024 the product indicators
completed workshop
meet the standards
production
(2)Changes in the provision for impairment of development expenditures and
impairment testing
As at 31 December 2024 the Company's development expenditure was not impaired.
4332024 Annual Report of Hengyi Petrochemical Co. Ltd.
VI.Interests in other entities
1. Composition of enterprise group
Shareholding ratio
Main Place
Name of subsidiary Domicile Nature of business (%) Gaining method
of Business
Direct Indirect
Manufacturing of
Zhengjiang Hengyi Establishment or
Hangzhou Hangzhou chemical fibre 100.00 0.00
Petrochemical Investment
products
Manufacturing of
Zhengjiang Hengyi Polymer Business merger under
Hangzhou Hangzhou chemical fibre 0.00 60.00
Co. the same control
products
Manufacturing of
Zhengjiang Yisheng Business merger under
Ningbo Ningbo petrochemicalp 0.00 70.00
Petrochemical the same control
roducts
Zhengjiang Yixin Chemical Establishment or
Hangzhou Hangzhou Commerce and trade 0.00 70.00
Fibre Investment
Hong Kong Yisheng
Establishment or
Petrochemical Investment Co. Hong Kong Hong Kong Trade and consulting 0.00 70.00
Investment
Ltd.Manufacturing of
Zhejiang Hengyi High-Tech Establishment or
Hangzhou Hangzhou chemical fibre 0.00 100.00
Materials Co. Ltd. Investment
products
Establishment or
Ningbo Hengyi Trading Co. Ltd. Ningbo Ningbo Commerce and trade 0.00 70.00
Investment
Hong Kong Tianyi International Establishment or
Hong Kong Hong Kong Trade and investment 0.00 100.00
Holding Co. Ltd. Investment
Good Park International Establishment or
Hong Kong Hong Kong Trade and investment 0.00 100.00
Investment Co. Ltd. Investment
4342024 Annual Report of Hengyi Petrochemical Co. Ltd.
Shareholding ratio
Main Place
Name of subsidiary Domicile Nature of business (%) Gaining method
of Business
Direct Indirect
Manufacturing of
Business merger under
Hengyi Industries Sdn. Bhd. Brunei Brunei petrochemical 0.00 70.00
the same control
products
Ningbo Hengyi Engineering Engineering Business merger under
Ningbo Ningbo 0.00 70.00
Management Co. Ltd. management the same control
Hengyi Industry International Establishment or
Singapore Singapore Commerce andtrade 0.00 70.00
Co. Ltd. Investment
Zhejiang Hengyi Petrochemical Establishment or
Hangzhou Hangzhou Commerce and trade 0.00 100.00
Sales Co. Ltd. Investment
Manufacturing of
Haining Hengyi New Materials Establishment or
Haining Haining chemical fibre 0.00 100.00
Co. Ltd. Investment
products
Electri & heat
Haining Hengyi Thermal Power Establishment or
Haining Haining production and 0.00 90.00
Co. Ltd. Investment
supply
Manufacturing of
Suqian Yida New Materials Co. Establishment or
Suqian Suqian chemical fibre 0.00 91.00
Ltd. Investment
products
Quanzhou Quanzhou Manufacturing of
Fujian Yijin Chemical Fibre Co. Establishment or
Fujian Fujian chemical fibre 0.00 90.00
Ltd. Investment
Province Province products
Wrap page
Shaoxing Shengong Packaging Establishment or
Shaoxing Shaoxing production and 0.00 51.00
Co. Ltd. Investment
processing
Zhejiang Hengyi Logistics Co. Logistics Business merger under
Hangzhou Hangzhou 0.00 100.00
Ltd. transportation the same control
4352024 Annual Report of Hengyi Petrochemical Co. Ltd.
Shareholding ratio
Main Place
Name of subsidiary Domicile Nature of business (%) Gaining method
of Business
Direct Indirect
Zhejiang Hengyi International Commerce and Establishment or
Hangzhou Hangzhou 100.00 0.00
Trade Co. Ltd. trade Investment
Zhejiang Hengkai Energy Co. Commerce and Establishment or
Hangzhou Hangzhou 0.00 60.00
Ltd. trade Investment
Zhejiang Hengyi Engineering Engineering Establishment or
Hangzhou Hangzhou 100.00 0.00
Management Co. Ltd. management Investment
Manufacturing of
Zhejiang Hengyi Petrochemical Establishment or
Hangzhou Hangzhou chemical fibre 100.00 0.00
Research Institute Co. Ltd. Investment
products
Manufacturing of
Jiaxing Yipeng Chemical Fibre Business merger under
Jiaxing Jiaxing chemical fibre 100.00 0.00
Co. Ltd. the same control
products
Manufacturing of
Taicang Yifeng Chemical Fibre Business merger under
Taicang Taicang chemical fibre 100.00 0.00
Co. Ltd. the same control
products
Manufacturing of
Zhejiang Shuangtu New Materials Business merger not
Hangzhou Hangzhou chemical fibre 100.00 0.00
Co. Ltd. under the same control
products
Hong Kong Hengyi Logistics Logistics Establishment or
Hong Kong Hong Kong 0.00 100.00
Co. Ltd. transportation Investment
Hengyi International Logistics Logistics Establishment or
Singapore Singapore 0.00 100.00
Co. Ltd. transportation Investment
Haining Junbo Shengming Commerce and Establishment or
Haining Haining 0.00 100.00
Trading Co. Ltd. trade Investment
Hangzhou Yitong New Materials Manufacturing of Establishment or
Hangzhou Hangzhou chemical fibre 0.00 100.00
Co. Ltd. Investment
products
4362024 Annual Report of Hengyi Petrochemical Co. Ltd.
Shareholding ratio
Main Place
Name of subsidiary Domicile Nature of business (%) Gaining method
of Business
Direct Indirect
Shaoxing Hengyi Logistics Co. Logistics Establishment or
Shaoxing Shaoxing 0.00 100.00
Ltd. transportation Investment
Guangxi Hengyi Environmental Qinzhou Qinzhou Science and Establishment or
0.00100.00
Technology Co. Ltd. Guangxi Guangxi technology service Investment
Zhejiang Hengyi Hanlin
Commercial service Establishment or
Enterprise Management Co. L Hangzhou Hangzhou 0.00 75.00
industry Investment
td .Hainan Hengjing Trading Co. Hainan Hainan Establishment or
Commerce and trade 0.00 100.00
Ltd. Province Province Investment
Guangxi Hengyi Shunqi Trading Qinzhou Qinzhou Establishment or
Commerce andtrade 0.00 100.00
Co. Ltd. Guangxi Guangxi Investment
Hangzhou Lantai New Materials Manufacturing of Establishment or
Hangzhou Hangzhou chemical fibre 0.00 74.00
Co. Ltd. Investment
products
Establishment or
Jiaxing Hengyu Trading Co. Ltd. Jiaxing Jiaxing Commerce and trade 0.00 100.00
Investment
Guangxi Hengyi New Materials Manufacturing of Business merger under
Qinzhou Qinzhou
chemical fibre 0.00 100.00
Co. Ltd. Guangxi Guangxi the same control
products
Zhejiang Xiaoyi Supply Chain Commercial service Establishment or
Hangzhou Hangzhou 0.00 100.00
Management Co. Ltd. industry Investment
Ningbo Shengmao Trading Co. Establishment or
Ningbo Ningbo Commerce and trade 0.00 70.00
Ltd. Investment
Suqian Hengyuan Thermal Electri & heat Establishment or
Suqian Suqian production and 0.00 100.00
Energy Co. Ltd. Investment
supply
4372024 Annual Report of Hengyi Petrochemical Co. Ltd.
Shareholding ratio
Main Place
Name of subsidiary Domicile Nature of business (%) Gaining method
of Business
Direct Indirect
Establishment or
Water transportation
Suqian Huida Port Co. Ltd. Suqian Suqian 0.00 100.00
in dustry Investment
Guangxi Free Trade Zone Yihai Establishment or
Water transportation
Qinzhou Qinzhou 0.00 66.00
Port Co. Ltd. industry Investment
Hangzhou Lanxing Chemical Establishment or
Hangzhou Hangzhou Wholesale business 0.00 80.00
Fibre Oiling Agent Co. Ltd. Investment
Lianyungang Junbo Shengda Establishment or
Road transportation
Lianyungang Lianyungang 0.00 100.00
Logistics Co. Ltd. industry Investment
Manufacture of
Hangzhou Lantong Technology Establishment or
Hangzhou Hangzhou chemical materials 0.00 80.00
Co. Ltd. Investment
and products
Manufacture of
Hangzhou Lanfang High-tech Establishment or
Hangzhou Hangzhou chemical materials 0.00 75.00
Material Co. Ltd. Investment
and products
Hangzhou Lanshun Technology Chemical fibre Establishment or
Hangzhou Hangzhou 0.00 70.00
Co. Ltd. manufacturing Investment
Hangzhou Lanbiao Testing Professional and Establishment or
Hangzhou Hangzhou 0.00 70.00
Service Co. Ltd. technical services Investment
Energy storage
Hangzhou Yixian Energy Establishment or
Hangzhou Hangzhou technical services 100.00 0.00
Technology Co. Ltd. Investment
etc.Manufacture of
Hangzhou Lanjin New Material Establishment or
Hangzhou Hangzhou chemical materials 0.00 75.00
Technology Co. Ltd. Investment
and products
4382024 Annual Report of Hengyi Petrochemical Co. Ltd.
Shareholding ratio
Main Place
Name of subsidiary Domicile Nature of business (%) Gaining method
of Business
Direct Indirect
Zhejiang Hengyi Resource Resource Establishment or
Hangzhou Hangzhou 0.00 100.00
Recycling Technology Co. Ltd. Regeneration Investment
Wenzhou Hengyi Resource Resource Establishment or
Wenzhou Wenzhou 0.00 100.00
Regeneration Co. Ltd. Regeneration Investment
Jingzhou Hengyi Resource Resource Establishment or
Jingzhou Jingzhou 0.00 100.00
Recycling Co. Ltd. Regeneration Investment
2.Combination of enterprises not under the same control
In current period there was no combination of enterprises not under the same control
in the Company.
3.Business merger under the same control
In current period there was no business merger under the same control in the
Company.
4.Disposal of Subsidiary
(1) Control right lost by single disposal of subsidiary investment
Balance between disposal
Equity Basis for price and the subsidiary’s
Equity Equity Control right
disposal determination of net asset shares at the level
Name of subsidiary disposal price disposal losing time-
proportion control right of consolidated statements
(RMB) mode point
(%) losing time-point corresponding to disposal
investment
Hengyi Petrochemical Completion of
International Co. Ltd. 12824043.92 100.00 Transfer May 29 2024 shareholding 56084.57
(Singapore) rights transfer
(Continued)
4392024 Annual Report of Hengyi Petrochemical Co. Ltd.
Determination
Proportion Gains or Amount of other
Book value of Fair value of method and main
of residual Losses on comprehensive income
residual residual assumption of fair
equities on Remeasureme (related to original subsidiary
Name of subsidiary equities on the equities on the value of residual
the control nt of Residual equity investment) shifted
control right control right equities on the
right losing Equities by into investment profits and
losing date losing date control right
date (%) Fair Value losses
losing date
Hengyi Petrochemical
International Co. Ltd. 0.00 -- -- -- -- 0.00
(Singapore).
5.Consolidation Scope Change due to Other Reasons
In the current year our company has invested in and established the following four
subsidiaries with details as follows:
Zhejiang Hengyi Petrochemical Research Institute Co. Ltd. a subsidiary of our
company invested in and established Hangzhou Lanjin New Materials Technology
Co. Ltd. holding a 75% equity stake.Hengyi Limited another subsidiary of our company invested in and established
Zhejiang Hengyi Resource Recycling Technology Co. Ltd. holding a 100% equity
stake.Zhejiang Hengyi Resource Recycling Technology Co. Ltd. further invested in and
established Wenzhou Hengyi Resource Regeneration Co. Ltd. and Jingzhou Hengyi
Resource Recycling Co. Ltd. holding 100% equity stakes in both.As a result during the reporting period the number of subsidiaries included in the
consolidated financial statements of our company increased by the aforementioned
four entities.In addition during the current year Hangzhou Yigao Environmental Technology Co.Ltd. a subsidiary of our company completed its deregistration. Therefore the number
of subsidiaries included in the consolidated financial statements decreased by one
entity for the current year.
4402024 Annual Report of Hengyi Petrochemical Co. Ltd.
6.Transactions in which the share of ownership interest in subsidiary changes
and the subsidiary is still controlled
(1)Explanation of changes in the share of ownership interest in subsidiaries
* In September 2024 Hengyi Limited a subsidiary of the company signed an equity
transfer agreement with Hengyi Group. Under the agreement Hengyi Group
transferred its 25% equity stake in Zhejiang Hengyi Hanlin Enterprise Management
Co. Ltd. a subsidiary of the company to Hengyi Limited at a transfer price of RMB
315300000. Hengyi Limited fully paid the equity transfer amount on September 29
2024. After the completion of the equity acquisition Zhejiang Hengyi Hanlin
Enterprise Management Co. Ltd. became a wholly-owned subsidiary of the company.* In April 2024 Hengyi Limited a subsidiary of the company signed an equity
transfer agreement with the Suqian City Industrial Development Fund. Under the
agreement the Suqian City Industrial Development Fund transferred its entire 8.3721%
equity stake in Suqian Yida New Materials Co. Ltd. to Hengyi Limited at a transfer
price of RMB 204255600. Hengyi Limited fully paid the equity transfer amount on
June 14 2024. After the completion of the equity acquisition Suqian Yida New
Materials Co. Ltd. and its subsidiaries Suqian Hengyuan Thermal Energy Co. Ltd.and Suqian Huida Port Co. Ltd. became wholly-owned subsidiaries of the company.
(2)Impact of the transaction on minority shareholders' equity and equity attributable to
owners of the parent company
Hengyi Hanlin Enterprise Suqian Yida New Materials
Item
Management Co. Ltd. Co. Ltd.Purchase cost consideration 315000000.00 204255616.44
-Cash 315000000.00 204255616.44
Total purchase cost consideration 315000000.00 204255616.44
Less: Share of net assets of subsidiaries in
265835759.10187123715.95
proportion to equity acquired
Balance 49164240.90 17131900.49
Wherein: Adjustments to capital surplus 49164240.90 17131900.49
4412024 Annual Report of Hengyi Petrochemical Co. Ltd.
Hengyi Hanlin Enterprise Suqian Yida New Materials
Item
Management Co. Ltd. Co. Ltd.Adjustments to surplus reserves 0.00 0.00
Adjustments to unallocated profits 0.00 0.00
Amounts affecting minority interests -265835759.10 -187123715.95
7.Interests held by minority shareholders in subsidiaries
(1)Important non-wholly owned subsidiaries
Dividends
Minority
Profits and losses assigned to distributed to Balance of minority
shareholders’
Name of subsidiary minority shareholder in current minority shareholders’ equities at the
shareholding
period shareholder in end of current period
ratio (%)
current period
Ningbo Hengyi Trading Co.
30.00-81450853.130.0036961816.20
Ltd.Zhejiang Hengyi Polymer
40.00-797299.780.00365401884.18
Co. Ltd.Zhejiang Yisheng
30.0064376380.080.002822936838.77
Petrochemical Co. Ltd.Hengyi Industries Sdn. Bhd. 30.00 -298677686.09 0.00 2678071799.64
Fujian Yi Jin Chemical
10.0011433202.800.0018728275.59
Fibre Co. Ltd.
(2)Main financial information about Important Non-wholly Owned Subsidiaries
Unit:10.000
Ending balance
Name of subsidiary Non-current Current Non-current
Current Assets Total assets Total liabilities
assets liabilities liabilities
Ningbo Hengyi Trading Co.
49701.56367279.13416980.69391435.780.00391435.78
Ltd.
4422024 Annual Report of Hengyi Petrochemical Co. Ltd.
Name of subsidiary Ending balance
Zhejiang Hengyi Polymer
199308.3135318.57234626.88143110.68165.73143276.41
Co. Ltd.Zhejiang Yisheng
1800794.35274196.162074990.511057354.6698423.001155777.66
Petrochemical Co. Ltd.Hengyi Industries Sdn. Bhd. 1222468.61 2783815.94 4006284.55 2401983.57 680892.37 3082875.93
Fujian Yi Jin Chemical
75612.25151521.90227134.15143765.9214394.95158160.87
Fibre Co. Ltd.
(Continued)
Ending balance of previous year
Name of subsidiary Non-current Current Non-current
Current Assets Total assets Total liabilities
assets liabilities liabilities
Ningbo Hengyi Trading Co.
66293.06362835.45429128.52373686.900.00373686.90
Ltd.Zhejiang Hengyi Polymer
279560.7929636.31309197.10196740.7520906.56217647.31
Co. Ltd.Zhejiang Yisheng
1649863.75313769.131963632.89922048.55143690.001065738.56
Petrochemical Co. Ltd.Hengyi Industries Sdn. Bhd. 1447702.72 2815925.17 4263627.88 2403551.51 850331.94 3253883.45
Fujian Yi Jin Chemical
56226.55164503.15220729.70140018.7423170.89163189.63
Fibre Co. Ltd.
(Continued)
Amount incurred in current period Balance of previous period
Total Total
Name of subsidiary Operating Operating Operating Operating
Net profit comprehens Net profit comprehens
income cash flow income cash flow
ive income ive income
Ningbo Hengyi Trading Co.
1405008.71-27150.28-29896.70-1207.951799643.68-20990.51-21389.923030.31
Ltd.
4432024 Annual Report of Hengyi Petrochemical Co. Ltd.
Name of subsidiary Amount incurred in current period Balance of previous period
Zhejiang Hengyi Polymer
343049.72-199.32-199.3232485.29349128.661728.451728.45-60001.73
Co. Ltd.Zhejiang Yisheng
1524658.3221458.7921318.52140022.712259138.292781.264399.63-128706.13
Petrochemical Co. Ltd.Hengyi Industries Sdn. Bhd. 4620525.72 -100332.04 -86335.82 351066.62 4468000.63 -7538.29 8944.28 147955.36
Fujian Yi Jin Chemical Fibre
412247.1511433.2011433.209204.72337451.11-1005.02-1005.0214293.55
Co. Ltd.
8.Equities in cooperative enterprise or associated enterprise
(1) Significant joint ventures or associates
Shareholding ratio (%) Accountant
arrangement method
Name of cooperative enterprise or Main place for investment in
Domicile Nature of business
associated enterprise of business Direct Indirect cooperative enterprise
or associated
enterprise
Chemical raw
materials and
Zhejiang Baling Hengyi Caprolactam
chemical products
Hangzhou Hangzhou 0.00 50.00 Equity method
Co. Ltd.manufacturing
industry
Trade and
Dalian Yisheng Investment Co. Ltd. Dalian Dalian 0.00 30.00 Equity method
investment
Chemical raw
materials and
Hainan Yisheng Petrochemical Co.chemical products
Hainan Hainan 0.00 50.00 Equity method
Ltd.manufacturing
industry
China Zheshang Bank Co. Ltd. Hangzhou Hangzhou Finance 0.00 3.54 Equity method
4442024 Annual Report of Hengyi Petrochemical Co. Ltd.
Name of cooperative enterprise or Main place Domicile Nature of business Shareholding ratio (%) Accountant
associated enterprise of business arrangement method
Chemical raw
materials and for investment in
Zhejiang Yisheng New Materials
Ningbo Ningbo chemical products 0.00 49.00 coopEeqruaittiyv em eenttheorpdr ise
Co. Ltd.manufacturing
or associated
industry
enterprise
Note: The Company holds 3.54% stocks of China Zheshang Bank Co. Ltd. and sent
a representative to CZB’s BOD. The Company enjoys substantial right of
participation in decision making. The Company may exert significant impact on CZB
by such representative’s participating into CZB’s financial and business policy
formulation.
(2)Main financial information about important cooperative enterprises
Unit: 10000
Ending balance/ amount in current Balance at end of the previous year/
Item period amount in previous period
Caprolactam Hainan Yisheng Caprolactam Hainan Yisheng
Current assets 163969.51 813105.33 150136.38 616295.60
Wherein: Cash and cash
16085.93121594.9213037.1297422.24
equivalents
Non-current assets 492168.92 1158520.83 548138.82 1072339.62
Total assets 656138.43 1971626.16 698275.20 1688635.21
Current liabilities 334757.76 808981.60 414346.75 577746.58
Non-current liabilities 91643.35 475520.81 61227.74 432652.24
Total liabilities 426401.10 1284502.41 475574.50 1010398.82
Minority stockholders’ equity 148.50 0.00 148.50 0.00
Stockholders’ equity attributable
229588.83687123.74222552.21678236.39
to parent company
Net assets calculated by
114794.41343561.87111276.10339118.20
shareholding ratio
4452024 Annual Report of Hengyi Petrochemical Co. Ltd.
Ending balance/ amount in current Balance at end of the previous year/
Item period amount in previous period
Caprolactam Hainan Yisheng Caprolactam Hainan Yisheng
Adjusting events
- Goodwill 0.00 0.00 0.00 0.00
- Unrealized profit of internal
0.00-414.720.00-1291.21
transaction
- Others 2010.08 9733.71 2010.08 9733.71
Carrying value of equity
116804.49352880.86113286.18347560.69
investments in joint ventures
Fair value of cooperative
enterprise equity investment with
-------
-
public offer
Operating income 771525.16 3213406.32 746659.86 1799579.10
Financial expenses 11362.35 14666.91 11628.06 12423.80
Income tax expenses 3777.50 2639.94 3673.62 5020.46
Net profit 11491.71 14380.19 11273.81 36436.78
Net profits of discontinuing
0.000.000.000.00
operation
Other comprehensive income 0.00 -5492.83 0.00 -798.75
Total comprehensive income 11491.71 8887.35 11273.81 35638.03
Dividends from cooperative
2220.790.000.000.00
enterprise received this year
(3)Main financial information about important associated enterprises
Unit: 10000
Balance at end of the previous year/ amount
Item Ending balance/ amount in current period
in previous period
4462024 Annual Report of Hengyi Petrochemical Co. Ltd.
Yisheng Yisheng New China Yisheng Yisheng New China Zheshang
Investment Materials Zheshang Bank Investment Materials Bank
Current assets
714738.20227414.65--604338.28309241.66--
Non-current assets
1052990.63846071.99--1017300.20884747.79--
Total assets 1767728.83 1073486.64 332553900.0 1621638.48 1193989.45 314387900.00
0
Current liabilities
883681.03680150.07--750987.62697732.79--
Non-current liabilities
131225.34215014.95--100636.60267057.26--
Total liabilities 1014906.37 895165.02 312279600.0 851624.22 964790.06 295430200.00
0
Minority stockholders’ equity
101363.200.00384000.00104767.530.00333200.00
Stockholders’ equity attributable to
651459.26178321.6319890300.00665246.73229199.3918624500.00
parent company
Net assets calculated by shareholding
195437.7787377.59704116.62199574.02112307.70659307.30
ratio
Adjusting events
- Goodwill
0.000.000.000.000.000.00
-Unrealized profit of internal
0.000.000.000.000.000.00
transaction
- Others
5494.45-0.13-88807.835494.45-0.13-88807.83
Book value of equity investment in
200932.2287377.46615304.98205068.47112307.57570499.20
associated enterprise
4472024 Annual Report of Hengyi Petrochemical Co. Ltd.
Balance at end of the previous year/ amount
Ending balance/ amount in current period
in previous period
Item
Yisheng Yisheng New China Yisheng Yisheng New China Zheshang
Investment Materials Zheshang Bank Investment Materials Bank
Fair value of associated enterprise 282994.61 245067.50
equity investment with public offer
--------
Operating income
3181974.273226652.456765000.003008139.143438987.616370400.00
-15349.59-51046.531569300.005756.78-56744.881549300.00
Net profit
Net profits of discontinuing operation 0.00 0.00 0.00 0.00 0.00 0.00
Other comprehensive income
-1842.22168.76294000.00603.60-58.67121800.00
Total comprehensive income
-17191.81-50877.771863300.006360.38-56803.551671100.00
Dividends from associated enterprise
0.000.0015948.840.000.0015709.45
received this year
(4)Summary of financial information about unimportant associated enterprises
Unit: 10.000
Ending balance/ amount in Balance at end of the previous
Item
current period year/ amount in previous period
Associated enterprise:
Total book value of investment 17751.90 18203.31
Total (calculated by shareholding ratio)
- Net profit 453.76 1006.67
4482024 Annual Report of Hengyi Petrochemical Co. Ltd.
- Other comprehensive income 118.89 82.58
- Total comprehensive income 572.66 1089.25
(5) Excess losses in cooperative enterprise or associated enterprise
By the end of December 31 2024 no excess loss takes place in the Company’s
cooperative enterprises and associated enterprises.
(6) Unconfirmed commitment related to cooperative enterprise investment
By the end of December 31 2024 there is no unconfirmed commitment related to
cooperative enterprise investment in the Company.
(7)Contingent liabilities related to cooperative enterprise or associated enterprise
investment.By the end of December 31 2024 there is no contingent liability related to
cooperative enterprise or associated enterprise investment in the Company.
9. Equities in structural subjects excluded in the scope of consolidated financial
statement
In the Company there is no equity in structural subject excluded in the scope of
consolidated financial statement.VII.Risks related to financial instruments
The Company’s main financial instruments include monetary capital financial assets
measured by fair value and whose changes included in current profits and losses loan
accounts receivable and accounts payable. For detail description of different financial
instruments please refer to related items in Note V. Risks related to these financial
instruments and corresponding risk management policies taken by the Company to
mitigate such risks are described in detail as follows. The Company’s management
shall manage and monitor these risk exposures so as to control above risks within a
limited scope.Sensitivity analysis techniques are used by the Company to analyze probable
influence of rational and probable changes in risk variables on current profit and loss
4492024 Annual Report of Hengyi Petrochemical Co. Ltd.
or stockholders' equity. Risk variables seldom change separately. Correlation between
different variables will have great effect on the final influence amount of a risk
variable. Therefore the following contents are stated upon the assumption that change
of every variable takes place independently.(I)Risk management objective and policy
The Company’s risk management objective is to appropriately balance risk and
income minimize adverse impact of risk on the Company’s business performance
and maximize benefits of its stockholders and other equity investors. Based on this
risk management objective the Company’s basic strategy for the risk management is
to determine and analyze different risks set up an appropriate risk tolerance baseline
for risk management supervise various risks in time and reliably and control all risks
within a limited scope.
1.Market risk
(1) Foreign exchange risk
Foreign exchange risk refers to the risk of loss generated by fluctuations in exchange
rate. The Company’s foreign exchange risk is mainly correlated with USD and BND.Except the Company’s several subsidiaries that purchase and sell in USD other main
business activities of the Company shall be settled in RMB. On December 31 2024
most assets and liabilities of the Company are of RMB balance (excluding the
following assets or liabilities in USD and BND). Foreign exchange risk generated by
assets and liabilities in such foreign currency may influence the Company’s business
performance.Ending balance Balance at the end of previous year
Item
USD BND USD BND
Cash and cash equivalents 394357716.75 16516921.62 490067263.72 11371328.85
Accounts receivable 460697534.16 41395520.20 608193939.66 53547754.04
4502024 Annual Report of Hengyi Petrochemical Co. Ltd.
Other receivables 17068114.96 2024462.92 8924007.85 5274274.23
Long-term receivables 0.00 1047978.00 518788.46 0.00
Short-term loans 1216942346.06 76030792.23 1286616775.17 0.00
Accounts payable 581163548.84 2440564.38 567677254.66 3191737.90
Other payable 4825821.02 460154.34 3140568.35 3848062.37
Non-current liabilities due 168491781.70 1336887.90 188339242.85 1385745.68
within one year
Long-term loans 599811683.66 0.00 950220000.00 0.00
Lease liabilities 0.00 84666942.57 0.00 83328762.28
The Company pays close attention to the influence of exchange rate fluctuations on its
foreign exchange risk. In accordance with relevant provisions the Company shall not
be engaged in any transaction of foreign exchange derivatives for the purpose of
speculation. Based on normal production and management all foreign exchange
derivatives transactions shall depend on specific business so as to avoid and prevent
corresponding exchange rate or interest rate risks.Foreign exchange risk sensitivity analysis:
The Company’s foreign exchange risk is mainly correlated with changes in the
exchange rate between USD & BND and RMB. The following table shows sensitivity
analysis upon the assumption of 1% exchange rate change between foreign currency
and RMB related to the Company. In the process of sensitivity analysis made by the
management 1% increase or decrease is deemed as rational reflection of probable
exchange rate change scope. On the basis of above assumption under the
circumstance that other variables are maintained unchanged the influence of probable
rational changes in exchange rate on current profit & loss and stockholders' equity
(before tax) is shown as follows:
4512024 Annual Report of Hengyi Petrochemical Co. Ltd.
Influence on Current Profit & Loss and
Fluctuation in
Item Stockholders' Equity (Before Tax)
Exchange Rate
Current Period Previous Period
Monetary assets (USD) 62691716.03 78455351.19
Appreciation of RMB
Monetary liabilities (USD) -184830669.77 -212197255.78
by 1%
Net influence -122138953.74 -133741904.59
Monetary assets (USD) -62691716.03 -78455351.19
Depreciation of RMB
Monetary liabilities (USD) 184830669.77 212197255.78
by 1%
Net influence 122138953.74 133741904.59
Monetary assets (BND) 3245249.55 3774437.20
Appreciation of RMB
Monetary liabilities (BND) -8776869.26 -4933812.66
by 1%
Net influence -5531619.71 -1159375.46
Monetary assets (BND) -3245249.55 -3774437.20
Depreciation of RMB
Monetary liabilities (BND) by 1% 8776869.26 4933812.66
Net influence 5531619.71 1159375.46
4522024 Annual Report of Hengyi Petrochemical Co. Ltd.
(2)Interest rate risk–cash-flow change risk
The Company’s risk at fair value change of financial instruments caused by interest
rate change mainly comes from: When the financial market interest rate is at a
downward trend the Company cannot enjoy cost saving for fixed-rate loans that are
brought by interest-rate reduction. On the contrary cost will be increased for its loans
at floating interest rates due to rate hiking when the financial market interest rate is at
an upward trend. The Company’s short- term loans and mid-and-long-term loans
account for approximately 50% of its liabilities with interest respectively. Moreover
interest is at a fixed rate for most short-term loans and floating interest rates for
mid-and-long-term loans. According to the Company’s management therefore the
Company’s interest rate risk – fair value change risk is insignificant under the current
tendency of interest rate change in macroscopic financial market. At present there is
no interest rate hedging policy in the Company.Interest rate risk sensitivity analysis:
Interest rate risk sensitivity shall be analysed upon the following assumption:
influence of market interest rate changes on interest income or expense of financial
instruments at variable interest rates. For short-term loans sensitivity analysis shall be
based on continuously circulating borrowing of such loan in an integral accounting
year. During sensitivity analysis by the management increase/ decrease in 50 base
points will be deemed as reasonable reflection on the feasible range of interest rate
change. On the basis of above assumption under the circumstance that other variables
are maintained unchanged and that the interest rate is increased/decreased by 50 base
points probably rational interest rate changes may have the following influence on
current profit & loss and stockholders' equity (before tax):
Profit increase in Profit decrease in
Item Interest rate change
current period current period
4532024 Annual Report of Hengyi Petrochemical Co. Ltd.
Short-term loans and mid-and-
Increase in every 50 base points at an 227650351.78
long-term liabilities at fixed
interest rate upward trend of interest rate --
Short-term loans and mid-and- 227650351.78
Decrease in every 50 base points at a
long-term liabilities at fixed
downward trend of interest rate --
interest rate
Mid-and-long-term liabilities at Increase in every 50 base points at an -- 102274200.18
floating interest rates upward trend of interest rate
Mid-and-long-term liabilities at Decrease in every 50 base points at a 102617358.62 --
floating interest rates downward trend of interest rate
(3)Other price risks
The Company’s investments classified into held-for-trading financial assets shall be
measured by fair value on the balance sheet. Therefore the Company undertakes the
risk of related assets price variation The Company has established an investment
management department in which members are assigned to closely monitor the price
variation of investment products. In consideration of the necessity of futures
investment and relevant features of leverage risk the Company’s BOD authorized the
president to set up a futures leading group and authorized this group to take charge of
the Company’s futures. In addition the Company also formulated the train of thought
of futures specified to establish a futures trading group in the Investment
Management Department (responsible for organization and implementation of
transaction in accordance with decisions made by the futures trading group) specified
to establish a futures settlement group in the Financial Management Department
(responsible for such works as funds management accounting treatment transaction
confirmation and settlement management) and specified to establish a futures
supervision group in the Auditing Department (responsible for futures trading risk
management & control and periodic review for transaction behaviors). In order to
strengthen its internal control over futures and to effectively prevent and relieve
4542024 Annual Report of Hengyi Petrochemical Co. Ltd.
probable risks in the transaction process the Company also formulated the Futures
Business Management System requiring all futures business participants to operate in
strict accordance with related provisions and processes. All personnel participating
into futures business in the Company have received special training and have an
adequate understanding of corresponding features and risks of futures involved.According to the Company’s directors therefore its price risk has been mitigated
already.
2. Credit risks
Credit risk refers to the risk of financial loss on the other party as one party of
financial instruments fails to perform its obligations. The Company’s credit risk
mainly comes from bank deposit and receivables. In order to control above risk the
Company took the following measures.In order to lower its credit risk the Company established a group for determination of
credit limit and for credit approval. The policy of payment before delivery is adopted
for unapproved clients. In addition the Company shall also review on every balance
sheet date recovery of every single receivable making sure to withdraw adequate bad
debt reserves for unrecyclable funds. According to the Company’s management
therefore its credit risk has been reduced substantially.The Company’s working capital is saved in the bank at high credit rating. Therefore
its working capital is at relatively low credit risk.
3.Liquidity risks
According to the Company’s management adequate cash and cash equivalents shall
be prepared to monitor liquidity risk so as to meet the Company’s operation needs
and to lower the influence from cash flow fluctuations. The Company’s management
shall monitor the use of bank loans and make sure to abide by the loan agreement.
4552024 Annual Report of Hengyi Petrochemical Co. Ltd.
The Company takes bank loan as the main source of funding. On December 31 2024
the Company’s available credit line is RMB 30.734 billion (RMB 42.348 billion on
December 31 2023).Based on maturity of undiscounted residual contract obligations the Company’s
financial assets and financial liabilities are analyzed as follows:
Item Within 6 months 7-12 months 1-3 Years Over three years
Non-derivative financial
assets and liabilities:
Notes receivable 6833997.24 0.00 0.00 0.00
Short-term loans 27997799607.15 10033393764.88 0.00 0.00
Notes payable 738382637.33 411000000.00 0.00 0.00
Long-term loans mature
1917609611.653492332924.25575000000.000.00
within one year
Long-term loans 0.00 0.00 7505685390.64 7998402093.38
Accounts receivable
8782497.350.000.000.00
financing
Derivative financial assets
and liabilities:
Forward foreign exchange
0.000.000.000.00
contract
Futures contract 155328825.15 0.00 0.00 0.00
Note: For the maturity of the Company’s other undiscounted financial assets and
liabilities please refer to corresponding items in Note V to the financial statement for
details.
4562024 Annual Report of Hengyi Petrochemical Co. Ltd.
(II)Transfer of financial assets
1. Financial assets transferred but not derecognized integrally
This year it is unnecessary for the Company to disclose financial assets transferred
but no derecognized integrally.
2.Transferred financial assets derecognized integrally already but still involving
the assignor
In current period the Company accumulatively discounted an amount of RMB
2542149454.39 bank acceptance bills (RMB 3126325566.01 in 2023. Main risks
(e.g. interest rate risk) and remunerations related to these bank acceptance bills have
been transferred to the bank. Thus the Company shall derecognize discounted
immature bank acceptance bills. According to the cashing agreement if the banker’s
acceptance failed to be cashed upon maturity the bank has the right to ask the
Company to pay off the unsettled balance. Therefore the Company continued to
involve in cashing the banker’s acceptance. On December 31 2024 the cashed but not
mature banker’s acceptance was RMB1387664668.95 in total (RMB
1313709044.00 on December 31 2023).
VIII.Disclosure of fair value
1. Ending fair value of assets and liabilities measured at fair value
Ending Fair Value
The second- tier
Item The first-tier fair The third-tier fair
fair value Total
value measurement value measurement
measurement
I. Continuous fair value measurement
(I) Held-for-trading financial assets 153091745.24 0.00 0.00 153091745.24
1. Financial assets measured by fair value
and whose changes included in current 153091745.24 0.00 0.00 153091745.24
profits and losses
4572024 Annual Report of Hengyi Petrochemical Co. Ltd.
Ending Fair Value
The second- tier
Item The first-tier fair The third-tier fair
fair value Total
value measurement value measurement
measurement
(1) Debt instrument investment 0.00 0.00 0.00 0.00
(2) Equity instrument investment 0.00 0.00 0.00 0.00
(3) Derivative financial assets 153091745.24 0.00 0.00 153091745.24
2.Specified as financial assets measured
by fair value and whose changes included 0.00 0.00 0.00 0.00
in current profits and losses
(1) Debt instrument investment 0.00 0.00 0.00 0.00
(2) Equity instrument investment 0.00 0.00 0.00 0.00
(II) Derivative financial assets 4783678.80 0.00 0.00 4783678.80
Wherein: 4783678.80 0.00 0.00 4783678.80
(III) Held-for-trading financial liabilities 2546598.89 0.00 0.00 2546598.89
Wherein: Issued bonds held for trading 0.00 0.00 0.00 0.00
Derivative financial liabilities 2546598.89 0.00 0.00 2546598.89
Others 0.00 0.00 0.00 0.00
(IV) Derivative financial liabilities 0.00 0.00 0.00 0.00
2.Determination basis for market price of continuous and non-continuous
first-tier fair value measurement items
The Company’s continuous first-tier fair value measurement items mainly include its
derivative financial instruments with an active market that can obtain unadjusted offer
of the same assets or liabilities in the active market.
4582024 Annual Report of Hengyi Petrochemical Co. Ltd.
IX.Related parties and related-party transaction
1. Information about the Company’s parent company
Shareholding Percentage of
ratio of the the parent
Nature of Registered parent company's
Name of parent company Domicile
business capital company in voting rights in
the Company the Company
(%)(%)
Zhejiang Hengyi Group Co. Investment and RMB 51.8
Hangzhou 40.61 47.60
Ltd. trade million
Note: The Company’s ultimate controller is Qiu Jianlin.
2.Information about the Company’s subsidiaries
For detail information please refer to Notes VII .1.Equities in Subsidiary.
3.Information about the Company’s cooperative and associated enterprises
Shareholding Accountant
ratio (%) Arrangement
Method for
Name of cooperative
Main place Investment in
enterprise or associated Domicile Nature of business
of business Cooperative
enterprise Direct Indirect
Enterprise or
Associated
Enterprise
Ningbo Jinhou Industry Investment
Hangzhou Ningbo 25.00 0.00 Equity method
Investment Co. Ltd. and consulting
Water
Dongzhan Shipping Co. Ltd. Zhoushan Zhoushan transportation 0.00 30.00 Equity method
industry
For important cooperative and associated enterprises of the Company please refer to
4592024 Annual Report of Hengyi Petrochemical Co. Ltd.
Notes VII (8. Equities in Cooperative or Associated Enterprise).Name of Other Related Party Relationship between Other Related Parties and the Company
Zhejiang Hengyi Polyamide Co. Ltd. A holding subsidiary of the ultimate parent company
Hangzhou Yichen Chemical Fibre Co. Ltd. A holding subsidiary of the ultimate parent company
Hangzhou Yiqing Chemical Fibre Co. Ltd. A holding subsidiary of the ultimate parent company
Hong Kong Yitian Company Limited A holding subsidiary of the ultimate parent company
Hengyi Industries International (Singapore)
A holding subsidiary of the ultimate parent company
Co. Ltd. (Note)
Shaoxing Keqiao Hengming Chemical Fibre
Associated company of ultimate parent company
Co. Ltd.Haining Hengqi Environmental Protection
Joint venture of ultimate parent company
Technology Co. Ltd.Hong Kong Xinhengrong Co. Ltd. Wholly-owned subsidiary of a joint venture
Hangzhou Bayi Energy Co. Ltd. Holding subsidiary of the joint venture
Yisheng Dahua Petrochemical Co. Ltd. Holding subsidiary of the associated enterprise
Zhejiang Rongtong Chemical Fibre New
Holding subsidiary of the associated enterprise
Material Co. Ltd.Hong Kong Yisheng Dahua Co. Ltd Holding subsidiary of the associated enterprise
Ningbo Rongxincheng Trading Co. Ltd. Wholly-owned subsidiary of associated enterprise
Yisheng New Materials Trading Co. Ltd. Wholly-owned subsidiary of associated enterprise
Ningbo Qingzhi Chemical Terminal Co. Ltd. Connected natural persons as directors
4.Information about other related parties
Note: Hengyi industries International Co. Ltd. (Singapore) has been added as a
related party of the Company on December 2024.
5.Related-party transaction of commodity purchase & sale and labor provision
& reception
* Information about commodity purchase / labor reception
4602024 Annual Report of Hengyi Petrochemical Co. Ltd.
Contents of
Amount incurred in Amount incurred in
Related party related-party
current period previous period
transactions
Hainan Yisheng Petrochemical Co.Procurement of goods 1053028929.20 20005238.94
Ltd.Yisheng Dahua Petrochemical Co.Procurement of goods 9917522.12 0.00
Ltd.Zhejiang Baling Hengyi
Procurement of goods 328559821.54 311180720.25
Caprolactam Co. Ltd.Zhejiang Baling Hengyi
Labor reception 4511745.29 2945499.49
Caprolactam Co. Ltd.Zhejiang Hengyi Polyamide CO.Procurement of goods 60904618.51 3457927.39
Ltd.Hangzhou Yichen Chemical Fibre
Procurement of goods 173852040.20 115012477.80
Co. Ltd.Zhejiang Yisheng New Material
Procurement of goods 8156738680.86 15213825593.72
Co. Ltd.Shaoxing Keqiao Hengming
Procurement of goods 10121934528.38 8881144362.80
Chemical Fibre Co. Ltd.Hangzhou Bayi Energy Co. Ltd. Procurement of goods 145585516.33 147355009.33
Haining Hengqi Environmental
Procurement of goods 3537361.87 1886335.85
Protection Technology Co. Ltd.Hangzhou Yijing Chemical Fibre
Procurement of goods 24907507.26 2986764.93
Co. Ltd.Hangzhou Yijing Chemical Fibre
Labor reception 8546945.08 2020554.09
Co. Ltd.Ningbo Qingchi Chemical Terminal
Labor reception 23362536.08 13521634.13
Co.Ltd
Hong Kong Yitian Company
Procurement of goods 11179357029.32 1525810777.02
Limited
4612024 Annual Report of Hengyi Petrochemical Co. Ltd.
Zhejiang Rongtong Chemical Fibre
Procurement of goods 371606260.02 154592511.47
New Material Co. Ltd.Hengyi Industries International
Labor reception 42593.79 --
(Singapore) Co. Ltd.Ningbo Rongxincheng Trading
Procurement of goods 3959666589.54 0.00
Co. Ltd.* Information about commodity sale/ labor provision
Contents of
Amount incurred in Amount incurred in
Related party related-party
current period previous period
transactions
Zhejiang Baling Hengyi 987413866.42 1008802975.63
Sales of goods
Caprolactam Co. Ltd.Zhejiang Baling Hengyi 37711048.66 37439423.67
Provision of services
Caprolactam Co. Ltd.Hainan Yisheng Petrochemical Co. 2162116319.91 1253839220.98
Sales of goods
Ltd
Hainan Yisheng Petrochemical Co. 43346449.46 1796386.36
Provision of services
Ltd
Zhejiang Hengyi Polyamide CO 28064405.34 26966224.78
Sales of goods
Ltd
Zhejiang Hengyi Polyamide CO 13916209.16 14398564.97
Provision of services
Ltd
Yisheng Dahua Petrochemical Co. 4116674.39 3119.27
Provision of services
Ltd.Yisheng Dahua Petrochemical Co. 402236670.65 102296411.49
Sales of goods
Ltd.Hangzhou Yichen Chemical Fibre 25160871.83 30478797.91
Provision of services
Co. Ltd.Hangzhou Yichen Chemical Fibre 29459708.80 23289840.16
Sales of goods
Co. Ltd.Shaoxing Keqiao Hengming 392684319.81 385958886.01
Sales of goods
Chemical Fibre Co. Ltd
Shaoxing Keqiao Hengming 127395137.02 128033960.04
Provision of services
Chemical Fibre Co. Ltd
Shaoxing Keqiao Hengming Trademark use license 13987218.78 11784356.33
Chemical Fibre Co. Ltd fee
4622024 Annual Report of Hengyi Petrochemical Co. Ltd.
Zhejiang Yisheng New Materials 67633908.72 71010316.16
Provision of services
Co. Ltd.Hangzhou Bayi Energy Co. Ltd. Sales of goods 569061313.89 734737484.94
Hangzhou Bayi Energy Co. Ltd. Provision of services 17797551.97 0.00
Haining Hengqi Environmental 36473471.61 20617481.18
Sales of goods
Protection Technology Co. Ltd.Haining Hengqi Environmental 981322.76 0.00
Provision of services
Protection Technology Co. Ltd.Ningbo Qingzhi Chemical Terminal 6735807.93 2996198.66
Sales of goods
Co. Ltd.Hangzhou Yijing Chemical 183503.31 0.00
Sales of goods
Fibre Co. Ltd.Hangzhou Yijing Chemical 5794428.67 648331.19
Provision of services
Fibre Co. Ltd.Hengyi industries International 1213923.57 --
Provision of services
Co. Ltd. (Singapore)
Hong Kong Xinhengrong Co. Ltd. Sales of goods 2037063832.75 0.00
Hong Kong Xinhengrong Co. Ltd. Provision of services 65424493.24 0.00
Yisheng New Materials Trading 61501725.58 0.00
Sales of goods
Co. Ltd.Yisheng New Materials Trading 2032809.42 0.00
Provision of services
Co. Ltd.Zhejiang Hengyi Group Co. Ltd Provision of services 123433.96 0.00
(2)Information about related trusteeship management/ mandatory management
The Company as trustee
Custody
Starting fee
Type of Entrusted Date of recogniz
Name of the Client Name of the Trustee
Assets Entrustm ed in
ent current
period
Shaoxing Keqiao Hengming Chemical Zhejiang Hengyi Petrochemical Entrustment of
July 25 169811
Fibre Co. Ltd. Co. Ltd. operation
4632024 Annual Report of Hengyi Petrochemical Co. Ltd.
20183.16
Note: Zhejiang Hengyi Petrochemical Co. Ltd. (a subsidiary of the Company) is
entrusted to provide management advisory services to the production and operating
activities of Shaoxing Keqiao Hengming Chemical Fibre Co. Ltd. However the
former will not undertake any business risk of the client. The termination date of
entrust is the date of completion when the client is purchased by the Company or the
Company’s non-related parties.
(3)Information about related-party lease
* The Company as lessee
Rental expenses Rental expenses
Name of lessor Category of leased assets recognized in current confirmed in the
period previous year
Hangzhou Yijing Chemical Fibre
Property 1393348.64 994555.81
Co. Ltd.Hangzhou Yijing Chemical Fibre
Property 14498.84 1445624.69
Co. Ltd.Shaoxing Keqiao Hengming Chemical
Property 8820.00 2935.78
Fibre Co. Ltd.Shaoxing Keqiao Hengming Chemical
Property 1280000.00 1280000.00
Fibre Co. Ltd. (Note)
Note: On January 1 2024 our company signed a house lease contract with Shaoxing
Keqiao Hengming Chemical Fiber Co. Ltd. The lease term is from January 1 2024
to December 31 2026 with an annual rent of RMB 1.28 million.* The Company as the leaser
Rental expenses Rental expenses
Name of the lessee Category of leased assets recognized in current confirmed in the
period previous year
Haining Hengqi Environmental
Premises 912563.42 910741.10
Protection Technology Co. Ltd.
4642024 Annual Report of Hengyi Petrochemical Co. Ltd.
Rental expenses Rental expenses
Name of the lessee Category of leased assets recognized in current confirmed in the
period previous year
Hainan Yisheng Petrochemical Co.Property 1385296.06 1346678.51
Ltd.Zhejiang Yisheng New Materials Co.Property 1031670.22 365845.33
Ltd.Hangzhou Yijing Chemical Fibre Co.Vehicle 26548.67 0.00
Ltd.Ningbo Qingchi Chemical Terminal
Tank 200332.42 0.00
Co.Ltd
(4)Information about related-party guarantee
* The Company as guarantor
Amount guaranteed (RMB Starting date Maturity date of Guarantee finished
Warrantee
10000) of guarantee guarantee or not
Hainan Yisheng March 06 2
70000.00 November 17 2025 No
Petrochemical Co. Ltd. 024
* The Company as the warrantee
Mortgage
Guarant
Amount provided
Borrowing Repaymen ee
Guarantor Warrantee (RMB by the
date t date finished
10000) Company
or not
or not
Zhejiang Hengyi Group Co. Fujian Yijin Chemical Fiber
10000.00 2024-10-16 2025-04-24 No No
Ltd. Co. Ltd
Zhejiang Hengyi Group Co. Haining Hengyi New Materials
40000.00 2024-11-29 2027-11-29 Yes No
Ltd. Co. Ltd.Zhejiang Hengyi Group Co. Haining Hengyi New Materials
138000.00 2024-10-11 2026-12-24 No No
Ltd. Co. Ltd.Zhejiang Hengyi Group Co. Haining Hengyi New Materials
40000.00 2024-03-20 2025-11-07 No No
Ltd. Co. Ltd.Zhejiang Hengyi Group Co. Hengyi Petrochemical Co. Ltd. 33200.00 2024-09-25 2025-10-27 No No
4652024 Annual Report of Hengyi Petrochemical Co. Ltd.
Mortgage
Guarant
Amount provided
Borrowing Repaymen ee
Guarantor Warrantee (RMB by the
date t date finished
10000) Company
or not
or not
Ltd.Zhejiang Hengyi Group Co.Hengyi Petrochemical Co. Ltd. 86664.48 2024-01-11 2025-06-13 No No
Ltd.Zhejiang Hengyi Group Co.Hengyi Industries Sdn. Bhd. $11468.74 2024-08-07 2025-02-07 No No
Ltd.Zhejiang Hengyi Group Co.Hengyi Industries Sdn. Bhd. 190000.00 2024-01-30 2025-06-10 No No
Ltd.Zhejiang Hengyi Group Co.Ltd.、Hengyi Petrochemical
Co. Ltd.、Hengyi Industries
Sdn. Bhd.、Zhejiang Hengyi
Petrochemial Co. Ltd.、
Zhejiang Hengyi High-Tech
Hengyi Industries Sdn. Bhd. $63452.52 2024-12-05 2030-08-22 Yes No
Materials Co. Ltd、Good Park
International Investment Co.Ltd.、Zhejiang Yisheng
Petrochemical Co. Ltd.、Hong
Kong Tianyi International
Holding Co. Ltd、Qiu Yibo
Zhejiang Hengyi Group Co.Ltd.、Hengyi Petrochemical
Co. Ltd.、Hengyi Industries
Sdn. Bhd.、Zhejiang Hengyi
Petrochemial Co. Ltd.、
Zhejiang Hengyi High-Tech
Hengyi Industries Sdn. Bhd. 250100.30 2024-12-05 2030-08-22 Yes No
Materials Co. Ltd、Good Park
International Investment Co.Ltd.、Zhejiang Yisheng
Petrochemical Co. Ltd.、Hong
Kong Tianyi International
Holding Co. Ltd、Qiu Yibo
Zhejiang Hengyi Group Co. Hengyi Industries International
$8878.87 2024-09-13 2025-06-05 No No
Ltd. Co. Ltd.Zhejiang Hengyi Group Co. Jiaxing Yipeng Chemical Fiber
67152.78 2022-04-15 2027-06-21 Yes No
Ltd. Co. Ltd.Zhejiang Hengyi Group Co. Jiaxing Yipeng Chemical Fiber 30000.00 2024-08-13 2025-03-02 No No
4662024 Annual Report of Hengyi Petrochemical Co. Ltd.
Mortgage
Guarant
Amount provided
Borrowing Repaymen ee
Guarantor Warrantee (RMB by the
date t date finished
10000) Company
or not
or not
Ltd. Co. Ltd.Zhejiang Hengyi Group Co. Jiaxing Yipeng Chemical Fiber
10000.00 2024-09-04 2025-09-04 No No
Ltd. Co. Ltd.Zhejiang Hengyi Group Co. Ningbo Hengyi Trading Co.
12600.00 2024-06-20 2025-06-16 No No
Ltd. Ltd.Zhejiang Hengyi Group Co. Ningbo Hengyi Trading Co.
29400.00 2024-09-12 2025-05-11 No No
Ltd. Ltd.Zhejiang Hengyi Group Co. Ningbo Shengmao Trading Co.
1000.00 2024-08-13 2025-08-12 No No
Ltd. Ltd
Zhejiang Hengyi Group Co. Suqian Hengyuan Thermal
18333.33 2024-07-31 2027-07-17 Yes No
Ltd. Energy Co. Ltd.Zhejiang Hengyi Group Co. Suqian Yida New Materials
41000.00 2024-02-28 2027-08-28 Yes No
Ltd. Co. Ltd.Zhejiang Hengyi Group Co. Suqian Yida New Materials
13200.00 2024-04-30 2025-10-29 No No
Ltd. Co. Ltd.Zhejiang Hengyi Group Co. Suqian Yida New Materials
5000.00 2024-03-26 2025-03-21 No No
Ltd. Co. Ltd.Zhejiang Hengyi Group Co. Taicang Yifeng Chemical Fiber
9600.00 2024-06-21 2025-09-26 No No
Ltd. Co. Ltd.Zhejiang Hengyi Group Co. Taicang Yifeng Chemical Fiber
400.00 2024-03-26 2025-03-25 No No
Ltd. Co. Ltd.Zhejiang Hengyi Group Co. Taicang Yifeng Chemical Fiber
49482.00 2024-01-02 2025-10-23 Yes No
Ltd. Co. Ltd.Zhejiang Hengyi Group Co. Hong Kong Tianyi International
44000.00 2024-12-24 2025-12-30 No No
Ltd. Holding Co. Ltd
Zhejiang Hengyi Group Co. Zhejiang Hengyi High-Tech
19809.81 2022-02-22 2027-03-25 Yes No
Ltd. Materials Co. Ltd
Zhejiang Hengyi Group Co. Zhejiang Hengyi High-Tech
65000.00 2024-06-27 2025-06-27 No No
Ltd. Materials Co. Ltd
Zhejiang Hengyi Group Co. Zhejiang Hengyi High-Tech
35000.00 2024-02-01 2025-04-21 No No
Ltd. Materials Co. Ltd
Zhejiang Hengyi Group Co.Zhejiang Hengyi High-Tech
Ltd.、Hangzhou Yitong New 41500.00 2024-01-02 2026-12-30 Yes No
Materials Co. Ltd
Materials Co. Ltd.Zhejiang Hengyi Group Co. Zhejiang Hengyi Polyamide
10000.00 2024-08-14 2025-02-14 No No
Ltd. Co. Ltd.
4672024 Annual Report of Hengyi Petrochemical Co. Ltd.
Mortgage
Guarant
Amount provided
Borrowing Repaymen ee
Guarantor Warrantee (RMB by the
date t date finished
10000) Company
or not
or not
Zhejiang Hengyi Group Co. Zhejiang Hengyi Petrochemial
60000.00 2024-02-29 2025-11-06 No No
Ltd. Co. Ltd.Zhejiang Hengyi Group Co.Zhejiang Hengyi Petrochemial
Ltd.、Zhejiang Southeast 5000.00 2024-11-19 2025-11-13 No No
Co. Ltd.Space Frame Group Co. Ltd.Zhejiang Hengyi Group Co. Zhejiang Hengyi Petrochemial
85500.00 2024-07-29 2025-07-29 No No
Ltd. Co. Ltd.Zhejiang Hengyi Group Co.Zhejiang Hengyi Petrochemial
Ltd.、Zhejiang Southeast 15000.00 2024-11-28 2025-06-09 No No
Co. Ltd.Space Frame Group Co. Ltd.Zhejiang Hengyi Group Co. Zhejiang Shuangtu New
22900.00 2024-04-28 2025-11-06 No No
Ltd. MAterials Co. Ltd.Zhejiang Hengyi Group Co. Zhejiang Shuangtu New
13120.00 2024-09-04 2025-09-04 No No
Ltd. MAterials Co. Ltd.Zhejiang Hengyi Group Co. Zhejiang Yisheng
$1718.13 2024-12-04 2025-05-30 No No
Ltd. Petrochemical Co. Ltd.Zhejiang Hengyi Group Co. Zhejiang Yisheng
282910.24 2022-08-17 2026-07-23 No No
Ltd. Petrochemical Co. Ltd.Zhejiang Hengyi Group Co. Zhejiang Yisheng
38866.08 2024-02-05 2025-11-24 No No
Ltd. Petrochemical Co. Ltd.Zhejiang Hengyi Group Co. Zhejiang Yisheng
80096.40 2024-07-29 2025-06-06 No No
Ltd. Petrochemical Co. Ltd.
(5)Related-party lending
Maturity
Related party Lending amount Start date Notes
date
Borrowing:
Temporary working capital replenished by
Zhejiang Hengyi Group Co.
5759650000 -- -- Heng Yi Group to the Company which has
Ltd.been returned in full
Lending:
Zhejiang Yisheng New 786000000.00 2024/1/1 2024/12/30 Entrusted loan lending rate: 4.785%
4682024 Annual Report of Hengyi Petrochemical Co. Ltd.
Maturity
Related party Lending amount Start date Notes
date
Materials Co. Ltd.
(6)Information about related-party assets transfer and debt restructuring
Contents of related- Amount incurred in Amount incurred
Related party
party transactions current period in previous period
Zhejiang Hengyi Group Co. Ltd. Asset transfer 0.00 880000000.00
Hong Kong Yitian Co. Ltd Asset transfer 12824043.92 0.00
Asset transfer 65515035.94 0.00
Shaoxing Keqiao Hengming Chemical Fiber Co. Ltd.Yisheng Dhua Petrochemical .Co. Ltd. Asset transfer 1140080.53 0.00
Zhejiang Yisheng New Materials Co. Ltd. Asset transfer 3646219.52 0.00
(7)Related party acquisition/purchase of assets and development expenditure
Contents of related- Amount incurred in Amount incurred
Related party
party transactions current period in previous period
Hangzhou Yijing Chemical Fiber Co. Ltd. Assignment of Assets 106627510.62 0.00
Zhejiang Hengyi Group Co. Ltd. Assignment of Assets 315000000.00 0.00
(8)Remunerations for key management personnel
Amount incurred in current Amount incurred in previous
Item
period period
Remunerations for key management personnel RMB 7.0343 million RMB 8.0537 million
(9)Other related-party transactions
By the end of December 31 2024 the Company’s and its subsidiaries’ balance of
deposits is RMB 400.2245 million in its related party namely China Zheshang Bank
Co. Ltd. The amount of commercial draft discounted but immature at the end of the
term is RMB 000.
6.Related parties’ receivables and payable
(1)Receivables
4692024 Annual Report of Hengyi Petrochemical Co. Ltd.
Ending balance Ending balance of previous year
Project name Bad debt
Book balance Book balance Bad debt provision
provision
Notes receivable:
Zhejiang Baling Hengyi Caprolactam Co. Ltd. 0.00 0.00 966628.00 0.00
Accounts receivable:
Hainan Yisheng Petrochemical Co. Ltd. 1509972.70 0.00 213112065.66 0.00
Zhejiang Baling Hengyi Caprolactam Co. Ltd. 714046.20 0.00 400689.72 0.00
Zhejiang Yisheng New Materials Co. Ltd. 1124520.54 0.00 398771.41 0.00
Hangzhou Yijing Chemical Fibre Co. Ltd. 0.00 0.00 3877449.15 0.00
Ningbo Qingzhi Chemical Terminal Co. Ltd. 0.00 0.00 280105.95 0.00
3297277.390.000.000.00
Hong Kong Yisheng Dahua Co. Ltd.Yisheng New Materials Trading Co. Ltd. 62144926.08 0.00 0.00 0.00
Advance payment:
Zhejiang Baling Hengyi Caprolactam Co. Ltd. 9978.79 0.00 9978.79 0.00
Hangzhou Yijing Chemical Fibre Co. Ltd. 88960.38 0.00 0.00 0.00
Hong Kong Yitian Co. Ltd. 2616755.56 0.00 0.00 0.00
Other current assets:
Zhejiang Yisheng New Materials Co. Ltd. 0.00 0.00 787149197.50 0.00
Other Non Current assets:
Hangzhou Yijing Chemical Fibre Co. Ltd. 4880607.52 0.00 0.00 0.00
(1) Payable
Ending balance of previous
Project name Ending balance
year
Note payables:
Zhejiang Yisheng New Materials Co. Ltd. 786401800.00 281000000.00
Ningbo Rongxincheng Trading Co. Ltd. 290360000.00 0.00
Accounts payable:
4702024 Annual Report of Hengyi Petrochemical Co. Ltd.
Zhejiang Baling Hengyi Caprolactam
4964717.032716705.08
Co.Ltd
Hangzhou Yichen Chemical Fibre Co. Ltd. 0.00 2346.68
Shaoxing Keqiao Hengming Chemical
376449.80848660.98
Fibre Co. Ltd.Zhejiang Hengyi Polyamide Co. Ltd 1203.44 1487.41
Hangzhou Bayi Energy Co. Ltd. 13660186.86 2201434.04
Hangzhou Yijing Chemical Fiber Co. Ltd. 6917.23 391541.53
Hong Kong Yitian Co. Ltd. 0.00 48652663.66
Contractual liabilities and other current
liabilities:
Hangzhou Bayi Energy Co. Ltd. 23800768.00 0.00
Zhejiang Baling Hengyi Caprolactam
9804717.620.00
Co.Ltd
Lease Liabilities:
Shaoxing Keqiao Hengming Chemical
1119181.060.00
Fiber Co. Ltd.Non-current liabilities mature within one
year:
Shaoxing Keqiao Hengming Chemical
1066638.460.00
Fibre Co. Ltd.X.Commitments and Contingencies
1. Contingent liabilities arising from pending litigation and arbitration and their
financial impact
* Criminal case of Wang XX and related civil action cases in Zhejiang Shuangtu
Since October 21 2018 Zhejiang Shuangtu has received the notice from more than
ten clients (including Haiyan Yixiao Knitting New Materials Co. Ltd.). After the
payment the clients never received goods delivered by Zhejiang Shuangtu and could
not get contact with WangXX. For the reason of the failure of Zhejiang Shuangtu to
deliver after their payment Haiyan Yixiao Knitting New Materials Co. Ltd. Tonglu
4712024 Annual Report of Hengyi Petrochemical Co. Ltd.
Yueheng Knitting Clothing Co. Ltd. and Yiwu Zijing Clothing Co. Ltd. submitted a
case to the court.According to its self-inspection Zhejiang Shuangtu has already received the payment
of above clients for goods and finished related activities (including delivery and
issuance of sales invoice) as per the sales order. All clients failing to receive the goods
were handled by Wang XX a salesman in Zhejiang Shuangtu. Then the clients could
not get contact with Wang XX. On November 11 2018 Zhejiang Shuangtu reported
the case to the criminal investigation brigade subordinate to Dajiangdong Industry
Cluster District Suboffice of Hangzhou Public Security Bureau. The case has been
accepted already. On April 13 2019 Zhejiang Shuangtu received a notice from the
public security organ: Wang XX was arrested.Both the three civil cases related to Wang XX and the contract dispute case with
Haiyan Yixiao Knitting New Materials Co. Ltd. were opened to a court session on
December 3 2018. The court has not made a judgment yet. As Wang XX’s criminal
case is involved Tonglu Yueheng Knitting Clothing Co. Ltd. positively withdrew the
contract dispute case and would decide how to solve after the criminal case was
handled. For the contract dispute case with Yiwu Zijing Clothing Co. Ltd. Zhejiang
Shuangtu has submitted corresponding answer brief and evidence materials to the
court. The court will open a court session later. For the contract dispute case with
Haiyan Yixiao Knitting New Materials Co. Ltd. the court froze RMB 300000
deposits of Zhejiang Shuangtu.In 2018 based on the information in the client’s letter of notice (including quantity of
goods not received) Zhejiang Shuangtu deducted an amount of RMB 26201814.47
from its revenues recorded corresponding freight cost (i.e. RMB 24105503.18) into
“other receivables – Wang XX” and withdrew bad debt losses in full amount. Based
on the receiving time and amount Zhejiang Shuangtu also withdrew an amount of
RMB 433932.50 accrued liabilities by bank lending rates in corresponding period.
4722024 Annual Report of Hengyi Petrochemical Co. Ltd.
On May 17 2019 Wang XX was arrested by law. On January 22 2020 the People's
Procuratorate of Hangzhou Xiaoshan District initiated a public prosecution to the
People's Court of Hangzhou Xiaoshan District on the charge of post occupation and
contract swindling. The case was accepted. Due to epidemic and other reasons the
court has not determined the date yet. According to the amount involving duty-related
crime as found in the indictment by the People's Procuratorate of Hangzhou Xiaoshan
District Zhejiang Shuangtu deducted an amount of RMB 2414257.32 from its
revenues and recorded corresponding freight cost (i.e. RMB 2138041.91) into
“other receivables – Wang XX” and confirmed anticipated losses in full amount.Based on the receiving time and amount Zhejiang Shuangtu also withdrew an amount
of RMB 1573136.66 accrued liabilities by bank lending rates in corresponding
period. According to the Agreement on Stock Issuance for Assets Purchase and
subsequent agreements signed by and between the Company and the former
shareholders of Zhejiang Shuangtu (namely Fulida Group and Xinghui Chemical
Fibre Group Co. Ltd.) Fulida Group and Xinghui Chemical Fibre Group Co. Ltd.promise and agree to assume joint and several liabilities to the Company and Zhejiang
Shuangtu with respect to all losses on Zhejiang Shuangtu and the Company caused by
the disputed case prior to December 7 2018 (included). Therefore above event will
have no significant influence on the Company and Zhejiang Shuangtu.On July 20 2020 the People’s Court of Hangzhou Xiaoshan District issued a paper of
sentence to judge: (1) The Defendant Wang XX is sentenced to jail for 13 years for
duty encroachment and for eleven years and six months for contract swindling and
also fined for RMB 150000. Upon a combined punishment Wang XX is sentenced to
18-year imprisonment and fined RMB 150000. (2) The Defendant Wang XX is
ordered to return and compensate for economic losses to related units and the victim.After the criminal case of Wang XX was judged the cases deemed as duty
4732024 Annual Report of Hengyi Petrochemical Co. Ltd.
encroachment of related victims were also heard judged and/or compromised. By the
end of the issue date of this report 11 out of 13 victims from duty encroachment
affirmed by the court have been judged compromised and settled. A total amount of
RMB 936800 is involved in other two unsettled cases.On 3 April 2023 Hangzhou Qiantang District People's Procuratorate filed an
indictment with Hangzhou Qiantang District People's Court charging defendant Wang
XX with committing the crime of occupational encroachment: from August to
October 2018 defendant Wang XX took advantage of the convenience of his position
and encroached on Shuangtu Company's property by taking partial shipments and
other means after presenting the goods on behalf of the company's customers such as
Zhejiang Huagang Clothing Accessories Company Limited and other 3 units. The
total amount involved was RMB 2100307.86.On 30 June 2023 Hangzhou Qiantang District People's Court issued a criminal
judgement sentencing Wang to four years' fixed-term imprisonment for the crime of
occupying positions and imposing a fine of RMB 50000; together with the sentence
of eighteen years' fixed-term imprisonment for the previous crime and a fine of RMB
150000 it decided to carry out the fixed-term imprisonment of eighteen years and
nine months and impose a fine of RMB 200000; and ordered Defendant Wang Yishi
to pay compensation for economic losses of the aggrieved unit Zhejiang Shuangtu
New Material Ltd. for economic losses of RMB 2100307.86.In 2023 Double Rabbit Company offset its income by RMB 1813774.41 recorded
the corresponding cost of goods of RMB 1719275.62 as "other receivables - Mr.Wang" and fully recognized the estimated loss; at the same time it accrued estimated
liabilities based on the timing and amount of customer payments received using the
same period bank loan interest rate and interbank lending rate.On October 13 2023 the company received RMB 6570 from the Hangzhou
Qiantang District People's Court transferred on behalf of the defendant Mr. Wang.
4742024 Annual Report of Hengyi Petrochemical Co. Ltd.
Due to settlements with some of the victims the actual refund of payments to the
victims by Double Rabbit Company was less than the amount determined by the court
for the case. Therefore the company reduced the amount of receivable compensation
from the original shareholders of Double Rabbit Company Fulida Group Holding Co.Ltd. and Xinghui Chemical Fibre Group Co. Ltd. based on the actual expenditures
of settled cases reducing the amounts for the years 2021 2022 and 2024 by RMB
8.5558 million yuan RMB 54100 and RMB 957800respectively. In 2023 due to the
newly confirmed embezzlement offense committed by Mr. Wang resulting in losses to
Double Rabbit Company and the parent company the receivable compensation from
the original shareholders of Double Rabbit Company Fulida Group Holding Co. Ltd.and Xinghui Chemical Fibre Group Co. Ltd. increased by RMB 2246502.35
(excluding RMB 6570 for court-executed funds for the year).As of December 31 2024 the company recognized "other receivables - Mr. Wang" at
RMB 27956250.71 fully recognizing credit impairment losses; at the same time it
recognized receivable compensation from the original shareholders of Double Rabbit
Company Fulida Group Holding Co. Ltd. and Xinghui Chemical Fibre Group Co.Ltd. at RBM 24875430.34.* Arbitration Case for EPC Contract Dispute with COOEC International Co. Ltd.Hengyi Industries Sdn. Bhd. (hereinafter referred to as Hengyi Brunei or Respondent)
a subsidiary of the Company has received China International Economic and Trade
Arbitration Commission's Notice on Defense of EPC Contract Dispute Case No.P20220470. COOEC International Co. Limited (hereinafter referred to as CNOOC
International or Applicant) has submitted an arbitration application to China
International Economic and Trade Arbitration Commission for disputes arising from
the settlement of Hengyi (Brunei) PMB Petrochemical Project Single Point Mooring
and Submarine Pipeline EPC signed with Hengyi Brunei. The main arbitration
requests of CNOOC International Company involved the total amount of RMB
4752024 Annual Report of Hengyi Petrochemical Co. Ltd.
116758196.47 from twelve claims including payment or refund of project progress
payment quality assurance deposit costs incurred due to contract changes as well as
the losses and corresponding interest and other expenses caused by the respondent
during the construction. The Company categorized and summarized the above
arbitration requests and provided defense opinions. In addition the Company
proposes arbitration counterclaims such as bearing corresponding compensation for
delayed construction period losses due to the serious delay in the manufacturing
delivery and installation progress of key equipment by CNOOC resulting in the
completion of the project far behind the original contract date. The case was heard at
Zhejiang Branch of China International Economic and Trade Arbitration Commission
on July 18 2022 and March 23 2023 respectively. As of the disclosure date of this
report the arbitration case has not yet been adjudicated.In July 2024 Hengyi Brunei Company fulfilled the arbitration award issued by the
China International Economic and Trade Arbitration Commission on April 30 2024.
(2)By the end of December 31 2024 the Company’s debt guarantee is shown as
follows:
Guaranty Amount Maturity date
Guarantor Warrantee
Style Guaranteed of guarantee
Hengyi Petrochemical Co. Hainan Yisheng Petrochemical Credit
70000.002025-11-17
Ltd. Co. Ltd. guarantee
XI.Events after the balance sheet date
1. Distribution of profits
On April 22 2025 during the twenty-second session of the twelfth Board of Directors
meeting the company approved the "Proposal on the Distribution of Profits for the
Year 2024." The company intends to distribute cash dividends of RMB 0.50 (tax
included) per 10 shares to all shareholders entitled to dividends using the total share
capital recorded on the registration date determined in the announcement of the equity
4762024 Annual Report of Hengyi Petrochemical Co. Ltd.
distribution as the base deducting the shares held by the company's repurchase
special securities account. There will be no bonus shares issued and no increase in
share capital through capital reserve conversion. This proposal is subject to approval
at the annual general meeting of shareholders for the year 2024.
2.As at the date of this financial report apart from the above matters there were
no other matters required to be disclosed after the balance sheet date during the
current year
XII.Other important events
1.Correction to prior period errors
There were no prior period error corrections that need to be disclosed by the Company
during this year.
2.Segment information
Segmental management is not implemented in the Company. Therefore there is no
reporting segment.
3.Other important events
There were no other important events that need to be disclosed by the Company
during this year.XIII.Notes to main items in the company’s financial statements
1. Other receivables
Ending balance of previous
Item Ending balance
year
Interests receivable 0.00 0.00
Dividends receivable 340000000.00 765000000.00
Other receivables 5864340335.74 5147890574.22
Total 6204340335.74 5912890574.22
4772024 Annual Report of Hengyi Petrochemical Co. Ltd.
(1)Dividends receivable
Project (or Invested Unit) Ending balance Ending balance of previous year
Zhejiang Shuangtu New Materials Co. Ltd. 290000000.00 0.00
Jiaxing Yipeng Chemical Fiber Co. Ltd. 50000000.00 0.00
Zhejiang Hengyi Petrochemical Co. Ltd. 0.00 425000000.00
Taicang Yifeng Chemical Fibre Co. Ltd. 0.00 230000000.00
Zhejiang Hengyi International Trading Co.
0.00110000000.00
Ltd.Subtotal 340000000.00 765000000.00
Minus: Bad debt provision 0.00 0.00
Total 340000000.00 765000000.00
(2)Other receivables
* Disclosure by aging
Aging Ending balance Ending balance of
previous year
5863960335.745147710574.22
Within 1 year
200000.00
1-2 years 0.00
2-3 years 0.00 200000.00
Over three years 202500.00 2500.00
Subtotal 5864362835.74 5147913074.22
Minus: Bad debt provision 22500.00 22500.00
Total 5864340335.74 5147890574.22
* Classification based on nature of fund
Ending balance of previous
Nature of account Ending balance
year
4782024 Annual Report of Hengyi Petrochemical Co. Ltd.
Related party funds within the scope of
5863960335.745147510574.22
consolidation
Portfolio of deposits and security 402500.00 402500.00
Subtotal 5864362835.74 5147913074.22
Minus: Bad debt provision 22500.00 22500.00
Total 5864340335.74 5147890574.22
* Accrual of bad debt reserves
Stage 1 Stage 2 Stage 3
Expected credit Expected credit loss Expected credit loss
Bad debt provision over the lifetime over the lifetime Total
loss of the future (no credit (credit impairment
twelve months impairment has occurred has
occurred) occurred)
Ending balance of previous
10000.000.002500.0012500.00
year
Book balance of other
receivables at the end of the
previous year:
- Transferred to Stage 2 0.00 -- -- 0.00
- Transferred to Stage 3 0.00 0.00 -- 0.00
- Transferred back to Stage
----0.000.00
2
- Transferred back to Stage
--0.000.000.00
1
Provision in current period 10000.00 0.00 0.00 10000.00
4792024 Annual Report of Hengyi Petrochemical Co. Ltd.
Withdrawal or Roll-back in
0.000.000.000.00
current period
Write-off or cancellation
after verification in current 0.00 0.00 0.00 0.00
period
Other changes 0.00 0.00 0.00 0.00
Ending balance 20000.00 0.00 2500.00 22500.00
* Situation of bad debt reserves
Amount of changes in current period
Ending
Ending
Category balance of Amount
Provision Resell or write off balance
previous year recovered or
written back
Related party funds within
0.000.000.000.000.00
the scope of consolidation
Receivables and payables
such as advance from
0.000.000.000.000.00
entities beyond the scope
of consolidation
Combination of tax
refunds receivable and
0.000.000.000.000.00
other government
subsidies
Portfolio of deposits and
22500.000.000.000.0022500.00
security
Employee loan and petty
0.000.000.000.000.00
cash
Other groups 0.00 0.00 0.00 0.00 0.00
4802024 Annual Report of Hengyi Petrochemical Co. Ltd.
Total 22500.00 0.00 0.00 0.00 22500.00
* Other receivables with top five ending balance collected by debtor
Proportions in
the total other
Bad debt
Nature of accounts provision
Name of organization Ending balance Aging
account receivable at Ending
the year ended balance
(%)
Related
Zhejiang Hengyi Within 1
receivables 5863960335.74 99.99 0.00
Petrochemical Co. Ltd. year
and payables
Convertible
bonds
China Securities Depository &
converted to
Clearing Corporation Shenzhen 2-3 year 400000.00 0.01 20000.00
pay zero over 3years
Branch
share
capital
More than 3
Beihai Haifu Building Deposit 2500.00 0.00 2500.00
years
Total -- 5864362835.74 -- 100.00 22500.00
2.Long-term equity investment
(1)Classification of long-term equity investment
Ending balance Ending balance of previous year
Imp I
Item airment mpair
Book balance Book value Book balance ment Book value
Res
R
erve
eserve
4812024 Annual Report of Hengyi Petrochemical Co. Ltd.
Investment in
16038768517.980.0016038768517.9815941768517.980.0015941768517.98
subsidiaries
Investments in
joint ventures and 13850798.62 0.00 13850798.62 14156002.82 0.00 14156002.82
associates
Total 16052619316.60 0.00 16052619316.60 15955924520.80 0.00 15955924520.80
(2)Investment in subsidiaries
Endi
Provision
ng
for
impairme
Ending balance of Increase in Decrease in Balance
Investee Ending balance
nt
previous year current period current period
of
reserves
in current
impairme
period
nt
reserves
Zhejiang Hengyi Petrochemical Co. Ltd. 9392870750.00 0.00 0.00 9392870750.00 0.00 0.00
Zhejiang Hengyi International Trade Co. 300000000.00 0.00 0.00 300000000.00 0.00 0.00
Ltd.Zhejiang Hengyi Engineering Management 200000000.00 0.00 0.00 200000000.00 0.00 0.00
Co. Ltd.Zhejiang Hengyi Petrochemical Research 160000000.00 90000000.00 0.00 250000000.00 0.00 0.00
Institute Co. Ltd.Zhejiang Shuangtu New Materials Co. 2104999978.20 0.00 0.00 2104999978.20 0.00 0.00
Ltd.Jiaxing Yipeng Chemical Fibre Co. Ltd. 2886198482.98 0.00 0.00 2886198482.98 0.00 0.00
Taicang Yifeng Chemical Fibre Co. Ltd. 897699306.80 0.00 0.00 897699306.80 0.00 0.00
Hangzhou Yixian Energy Technology 0.00 7000000.00 0.00 7000000.00 0.00 0.00
Co. Ltd.
15941768517.9897000000.000.0016038768517.980.000.00
Total
(3)Investment in associated and cooperative enterprises
4822024 Annual Report of Hengyi Petrochemical Co. Ltd.
Changes of increase or decrease in current period
Ending balance of
Investee Cash dividends or Provisions for Ending balance impairment
profits declared to impairment Others reserves
distribute reserves
Associated enterprises
Ningbo Jinhou Industry
0.000.000.0013850798.620.00
Investment Co. Ltd.
3.Operating income and operating cost
Amount incurred in current period Amount incurred in previous period
Item
Revenue Cost Revenue Cost
1069681728.421065678320.710.000.00
Main business
0.000.000.000.00
Other businesses
Total 1069681728.42 1065678320.71 0.00 0.00
4.Investment income
Amount incurred in current Amount incurred in previous
Item
period period
Income from long-term equity investment
340000000.00340000000.00
checked with cost method
Income from long-term equity investment
-305204.20-98622.42
checked with equity method
Total 339694795.80 339901377.58
XIV.Further information
1. List of non-recurring profits and losses in this year
Item Amount
1. Gains and losses on disposal of non-current assets including elimination
-69347520.98
of provision for impairment of assets
4832024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Amount
2. Government grants recognised in profit or loss for the current period
except for those government grants that are closely related to the Company's
normal business operations in line with national policies and in accordance
73683478.38
with defined criteria and that have a sustained impact on the Company's
profit or loss
3. Gains and losses arising from changes in the fair value of financial assets
and liabilities held by non-financial corporations and gains and losses
arising from the disposal of financial assets and liabilities except for
110896777.29
effective hedging operations related to the Company's normal business
operations
4. Occupancy fees charged to non-financial corporations included in profit
0.00
or loss for the period
5. Gains or losses on the investment or management of assets entrusted to
0.00
others;
6. Gains and losses on external entrusted loans 16324423.72
7. Losses of assets due to force majeure factors such as natural disasters; 0.00
8. Reversal of provision for impairment of receivables individually tested
587594.00
for impairment;
9. The cost of investments in subsidiaries associates and joint ventures
acquired by an enterprise is less than its share of the gain arising from the
0.00
fair value of the identifiable net assets of the investee at the time the
investment is acquired
10. Net profit or loss for the period from the beginning of the period to the
date of consolidation of subsidiaries resulting from business combinations 0.00
under the same control;
11. Gains and losses on exchange of non-monetary assets; 0.00
12. Debt restructuring gains and losses; 0.00
13. One-off costs incurred by an enterprise because the relevant business 0.00
4842024 Annual Report of Hengyi Petrochemical Co. Ltd.
Item Amount
activity is no longer sustainable such as expenses for relocating employees;
14. One-time effect on profit or loss for the period due to adjustments in
0.00
tax accounting and other laws and regulations;
15. One-time recognition of share-based payment fees due to cancellation
0.00
and modification of equity incentive plans;
16. For cash-settled share-based payments gains and losses arising from
changes in the fair value of employee compensation payable after the 0.00
feasible date;
17. Gains and losses arising from changes in the fair value of investment
0.00
properties that are subsequently measured using the fair value model;
18. Gains arising from transactions where the transaction price is
0.00
significantly unfair;
19. Gains and losses arising from contingencies that are not related to the
0.00
Company's normal business operations;
20. Custodial fee income earned on trusteeship; 1698113.16
21. Non-operating income and expenses other than those listed above. -34615951.04
22. Other items of profit or loss that meet the definition of non-recurring
23008095.06
profit or loss (Note)
Total non-recurring gains and losses before income tax 122235009.59
Less: Amount of income tax effect -8440156.97
Total non-recurring gains and losses net of income tax 130675166.56
Effect of minority interests in profit or loss (loss expressed as "-") -82987725.12
Amount of net profit attributable to owners of the parent company from
213662891.68
non-recurring gains and losses
Note: Other income and expenses items that meet the definition of non-recurring
gains and losses mainly include non-recurring gains and losses attributable to the
investee units in significant jointly controlled entities and associates accounted for
using the equity method with an amount of RMB 23008095.06.
4852024 Annual Report of Hengyi Petrochemical Co. Ltd.
The recognition of non-recurring gains and losses by the Company is implemented in
accordance with the provisions of the "Interpretation Announcement No. 1 on
Non-recurring Gains and Losses in the Information Disclosure of Companies Issuing
Publicly Traded Securities" (Revised in 2023) (CSRC Announcement [2023] No. 65).
2.Return on equity and earnings per share
Weighted average Earnings per Share
Profits in reporting period return on net assets
Basic earnings Diluted EPS
(%) per share
Net profits assigned to the Company’s common
0.930.070.07
shareholders
Net profits assigned to common shareholders after
0.080.010.01
deduction of non-recurring profits and losses
Hengyi Petrochemical Co. Ltd.President: Qiu Yibo
April 22 2025
486
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