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 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 and Its Summary; 2.Reviewed on Proposal on Adjustments to the 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