Zhejiang NHU Co., Ltd.2023Annual Report
April 2023
Section I Important Notes, Contents, and DefinitionsThe Board of Directors and its members, Board of Supervisors and its members,and senior executives of the Company hereby guarantee that the informationpresented in this annual report is authentic, accurate, complete and free of falserecords, misleading statements or material omissions, and they will bearindividual and joint liabilities for such information.Hu Baifan, the Company’s legal representative, Shi Guanqun, the officer incharge of accounting, and Zhang Lijin, the head of accounting department herebydeclare that they guarantee the financial statements in this annual report areauthentic, accurate and complete. All members of the Board of Directors haveattended the meeting of the Board of Directors for deliberation of this annualreport.The future plan and other forward-looking information disclosed in this annualreport shall not be regarded as a commitment to investors. We kindly remindinvestors of all possible risks in investments.We draw your attention to item “XI. Outlook for the future development of theCompany” under “Section III Management Discussion and Analysis”, whichexplicitly states the possible risks in business operation and countermeasuresthereon.Profit distribution proposal deliberated and approved by the meeting of the Boardof Directors is as follows: Based on the 3,073,421,680 shares (total share capital of3,090,907,356 excluding 17,485,676 repurchased shares[Note]), a cash dividend of
4.50 yuan (tax included) will be distributed to all shareholders for every 10 shares,and no bonus shares will be distributed, and the capital reserve will not beconverted into share capital.Note: According to the “Rules on Share Repurchase of Listed Companies”, shares in the special
account for repurchase of listed companies carry no right of profit distribution and conversionof capital reserve into share capital.If the Company’s total share capital changes due to the conversion of convertiblebonds, share repurchase, exercise of equity incentives, refinancing and listing ofnew shares, etc. before the implementation of the profit distribution proposal, thetotal distribution will be adjusted accordingly based on the same distribution ratio.
This Annual Report is an English translation of the Chinese Annual Report. In case the English version does notconform to the Chinese version, the Chinese version prevails.
Contents
Section I Important Notes, Contents, and Definitions ...... 1
Section II Company Profile and Key Financial Indicators ...... 6
Section III Management Discussion and Analysis ...... 11
Section IV Corporate Governance ...... 36
Section V Environmental and Social Responsibilities ...... 54
Section VI Significant Events ...... 61
Section VII Movements in Shares and Conditions of Shareholders ...... 70
Section VIII Preferred Shares ...... 77
Section IX Bonds ...... 78
Section X Financial Report ...... 79
Documents Available for Reference
I. Financial statements signed and sealed by the Company’s legal representative, officer in charge of accounting,and head of accounting department;II. The original auditor’s report with the seal of the accounting firm and the signature and seal of the certifiedpublic accountants;III. Originals of all the Company’s documents and announcements published on newspapers designated by theChina Securities Regulatory Commission during the reporting period;IV. Other documents for reference.
Definitions
| Abbreviations | Refers to | Contents of definitions |
| The Company, NHU | Refers to | ZHEJIANG NHU CO., LTD. |
| CSRC | Refers to | China Securities Regulatory Commission |
| CSRC, Zhejiang Office | Refers to | China Securities Regulatory Commission, Zhejiang Office |
| PPS | Refers to | Polyphenylene Sulfide |
| PPA | Refers to | Poly Phthalamide |
| PSU | Refers to | Polysulfone |
| PEEK | Refers to | Polyetheretherketone |
| PEI | Refers to | Polyetherimide |
| VOC | Refers to | Volatile Organic Compound |
| NH-acid | Refers to | Taurine |
| HSE | Refers to | Healthy And Safe Environment |
| F5 | Refers to | Vitamin B5 |
| CNAS | Refers to | China National Accreditation Service For Conformity Assessment |
| DSC | Refers to | Differential Scanning Calorimetry |
| ARC | Refers to | Accelerating Ratecalori Meter |
| RC1e | Refers to | Reaction Calorimeter |
| PF | Refers to | Lupin |
| CEP | Refers to | European Pharmacopoeia Applicability Certification |
| Pd catalyzer | Refers to | Palladium Catalyst |
| IPDA | Refers to | Isophorone Diamine |
| NBC | Refers to | Azabicycles |
| CLA | Refers to | Karon anhydride |
| AM ester | Refers to | Methyl Methacrylate |
| ADI | Refers to | Aliphatic Isocyanates |
| HDI | Refers to | Hexamethylene Diisocyanate| |
Section II Company Profile and Key Financial IndicatorsI. Company profile
| Stock abbreviation | NHU | Stock code | 002001 |
| Stock Exchange | Shenzhen Stock Exchange | ||
| Company Name in Chinese | 浙江新和成股份有限公司 | ||
| Company Abbreviation in Chinese | 新和成 | ||
| Company name in foreign language (if any) | ZHEJIANG NHU CO., LTD. | ||
| Company Abbreviation in foreign language (if any) | NHU | ||
| Legal representative | Hu Baifan | ||
| Registered address | No.418 Xinchang Dadao West Road, Qixing Sub-district, Xinchang County, Zhejiang Province, China | ||
| Postal code of registered address | 312500 | ||
| Historical changes of registered address | On May 28, 2020,the Company’s registered address was changed from No.4 Jiangbei Road, Yulin Sub-district, Xinchang County, Zhejiang Province, China to No.418 Xinchang Dadao West Road, Qixing Sub-district, Xinchang County, Zhejiang Province, China | ||
| Office address | No.418 Xinchang Dadao West Road, Qixing Sub-district, Xinchang County, Zhejiang Province, China | ||
| Postal code of office address | 312500 | ||
| Official website | http://www.cnhu.com | ||
| 002001@cnhu.com | |||
II. Contact information
| Items | Board secretary | Securities affairs representative |
| Name | Shi Guanqun | Zeng Shuying |
| Contact address | No.418 Xinchang Dadao West Road, Qixing Sub-district, Xinchang County, Zhejiang Province, China | No.418 Xinchang Dadao West Road, Qixing Sub-district, Xinchang County, Zhejiang Province, China |
| Tel. | +86 575 86017157 | +86 575 86017157 |
| Fax | +86 575 86125377 | +86 575 86125377 |
| E-mail address | sgq@cnhu.com | 002001@cnhu.com |
III. Information disclosure and location
| Stock exchange website where the Company discloses the annual report | Shenzhen Stock Exchange: http://www.szse.cn |
| Medias and websites with which the Company discloses the annual report | Securities Times, Shanghai Securities News, China Securities Journal Giant Tide Information Network: www.cninfo.com.cn |
| Site where the annual report was prepared and completed | Securities Department of the Company |
IV. Change of registration
| Unified social credit code | 91330000712560575G |
| Changes of main business scope since listing (if any) | None |
| Changes of holding shareholders (if any) | None |
V. Other relevant informationAccounting firm engaged by the Company
| Name | Pan-China Certified Public Accountants LLP |
| Office address | Resources Building, 1366 Qianjiang Road, Shangcheng District, Hangzhou 310020, China |
| Certified Public Accountants | Teng Peibin Jian Yanhui |
The sponsor institution engaged by the Company, which performed the duty of continuous guidance and supervision during thereporting period
□ Applicable √ Not Applicable
The financial advisor engaged by the Company, who performed the duty of continuous guidance and supervision during the reportingperiod
□ Applicable √ Not Applicable
VI. Key accounting data and financial indicators
Whether the Company needs to perform retroactive adjustment or restatement on financial data of prior years
√ Yes □ No
Reason for retroactive adjustment or restatementAccounting policy changes
| Items | Year 2023 | Year 2022 | YoY growth rate | Year 2021 | ||
| Before adjustment | After adjustment[Note ] | After adjustment | Before adjustment | After adjustment t[Note ] | ||
| Operating revenue (yuan) | 15,116,537,003.30 | 15,933,984,403.41 | 15,933,984,403.41 | -5.13% | 14,917,101,500.91 | 14,917,101,500.91 |
| Net profit attributable to shareholders of listed company (yuan) | 2,704,238,767.54 | 3,620,271,034.96 | 3,620,280,626.51 | -25.30% | 4,356,010,628.22 | 4,356,020,894.30 |
| Net profit attributable to shareholders of listed company after deducting non-recurring profit or loss (yuan) | 2,614,210,640.58 | 3,586,873,100.22 | 3,586,882,691.77 | -27.12% | 4,179,793,729.75 | 4,179,803,995.83 |
| Net cash flows from operating activities (yuan) | 5,119,370,863.32 | 4,361,481,083.61 | 4,361,481,083.61 | 17.38% | 5,837,878,051.57 | 5,837,878,051.57 |
| Basic EPS (yuan/share) | 0.87 | 1.17 | 1.17 | -25.64% | 1.41 | 1.41 |
| Diluted EPS (yuan/share) | 0.87 | 1.17 | 1.17 | -25.64% | 1.41 | 1.41 |
| Weighted average ROE | 11.24% | 16.08% | 16.08% | Decreased by 4.84 percentage points | 21.21% | 21.21% |
| Items | Dec. 31, 2023 | Dec. 31, 2022 | After adjustment | Dec. 31, 2021 | ||
| Before adjustment | After adjustment[Note ] | After adjustment | Before adjustment | After adjustment t[Note ] | ||
| Total assets (yuan) | 39,156,246,864.67 | 38,267,625,155.83 | 38,267,645,013.46 | 2.32% | 34,724,025,476.79 | 34,724,035,742.87 |
| Net assets attributable to shareholders of listed company (yuan) | 24,804,662,320.99 | 23,574,859,468.61 | 23,574,879,326.24 | 5.22% | 21,831,838,010.85 | 21,831,848,276.93 |
Reasons for changes in accounting policies and correction of accounting errors[Note ] Effective January 1, 2023, the Company implemented Accounting Standards Interpretation No. 16 issued by the Ministry ofFinance (MOF) . The "Accounting for deferred income taxes not subject to the initial recognition exemption for assets and liabilitiesarising from individual transactions" requires that adjustments be made for individual transactions to which the provision applies thatoccur between the beginning of the earliest period for which the financial statements are presented in the period in which the provisionis first implemented and the date of first implementation. If taxable temporary differences and deductible temporary differences arisefrom lease liabilities and right-of-use assets recognized as a result of a single transaction to which this provision applies at the beginningof the earliest period for which the financial statements are presented for the first time, and if projected liabilities related to abandonmentobligations and related assets are recognized, the taxable temporary differences and deductible temporary differences shall be adjustedin accordance with the provisions of this provision and Accounting Standard No. 18 - "Income Taxes". -Income Taxes, the cumulativeeffect is adjusted to opening retained earnings and other related financial statement items in the earliest period for which the financialstatements are presented.The company's net profit before and after deducting non-recurring gains and losses in the last three fiscal years, whichever is lower, isnegative, and the audit report of the latest year shows that the company's ability of continuing operation is uncertain.
□ Yes √ No
The lower of the net profit before and after deducting extraordinary gains and losses is a negative value.
□ Yes √ No
VII. Differences in accounting data under Chinese accounting standards and overseasaccounting standards
1、Difference in net profit and net assets in financial statements disclosed respectively under IFRSStandards and Chinese accounting standards
□ Applicable √ Not Applicable
The Company has no difference in net profit or net assets in financial statements disclosed respectively under IFRS Standards andChinese accounting standards.
2、Difference in net profit and net assets in financial statements disclosed respectively under overseasaccounting standards and Chinese accounting standards
□ Applicable √ Not Applicable
The Company has no difference in net profit or net assets in financial statements disclosed respectively under overseas accountingstandards and Chinese accounting standards.VIII. Key financial indicators by quarter
Unit: RMB Yuan
| Items | First quarter | Second quarter | Third quarter | Fourth quarter |
| Operating revenue | 3,612,227,625.99 | 3,806,286,950.10 | 3,593,667,828.40 | 4,104,354,598.81 |
| Net profit attributable to shareholders of listed company | 643,158,260.22 | 840,070,976.74 | 617,979,827.61 | 603,029,702.97 |
| Net profit attributable to shareholders of listed company after deducting non-recurring profit or loss | 586,422,083.91 | 788,796,801.91 | 575,353,203.63 | 663,638,551.13 |
| Net cash flows from operating activities | 390,927,539.55 | 844,635,082.38 | 1,389,793,155.77 | 2,494,015,085.62 |
Is there any significant difference between the above financial indicators or their totals and the correspondent financial indicatorsdisclosed in quarterly or semi-annual reports?
□ Yes √ No
IX. Non-recurring profit or loss
√ Applicable □ Not Applicable
Unit: RMB Yuan
| Items | Year 2023 | Year 2022 | Year 2021 | Remarks |
| Gains or losses on disposal of non-current assets, including write-off of provision for impairment | 5,426,533.21 | -74,232,517.88 | -61,427,624.58 | |
| Government grants included in profit or loss (excluding those closely related to operating activities of the Company, satisfying government policies and regulations, and continuously enjoyed with certain quantity or quota based on certain standards) | 63,050,565.94 | 175,761,119.94 | 151,398,630.02 | |
| Gains or losses on changes in fair value of held-for-trading financial assets and held-for-trading financial liabilities, and investment income from disposal of held-for-trading financial assets and held-for-trading financial liabilities, excluding those arising from hedging business related to operating activities | 34,458,488.77 | -86,980,602.84 | 48,751,702.84 | |
| Fees charged to non-financial enterprises for fund occupancy included in current profit or loss | 465,887.82 | 988,193.62 | ||
| Gains or losses on assets consigned to the third party for investment or management | 12,715,401.91 | 52,749,284.13 | 57,777,633.53 | |
| Debt restructuring gains and losses | -847,442.05 | |||
| Other non-operating revenue or expenditures | 4,406,027.43 | 2,411,616.08 | 8,727,858.40 | |
| Other profit and loss items that meet the definition of non-recurring profit or loss | 9,579,239.88 | |||
| Less: Enterprise income tax affected | 29,488,260.00 | 46,826,444.91 | 28,969,203.00 | |
| Non-controlling interest affected (after tax) | 159,076.07 | 51,953.28 | 42,098.74 | |
| Total | 90,028,126.96 | 33,397,934.74 | 176,216,898.47 | -- |
Remarks on other profit or loss satisfying the definition of non-recurring profit or loss:
□ Applicable √ Not Applicable
The Company has no other profit or loss satisfying the definition of non-recurring profit or loss.Remarks on defining non-recurring profit or loss listed in the “Interpretation Pronouncement on Information Disclosure Criteria forPublic Companies No. 1 – Non-Recurring Profit or Loss” as recurring profit or loss
√ Applicable □Not Applicable
| Items | Amount involved(yuan) | Reason |
| Net profit attributable to shareholders of listed company after deducting non-recurring profit or loss in fiscal 2022 | 33,397,934.74 | |
| Net profit attributable to shareholders of listed company after deducting non-recurring profit or loss calculated in accordance with the “Interpretation Pronouncement on Information Disclosure Criteria for Public Companies No. 1 – Non-Recurring Profit or Loss (Revised in 2023)” for fiscal year 2022. | -69,074,749.77 | |
| discrepancy | 102,472,684.51 |
Section III Management Discussion and AnalysisI. The industry in which the Company operates during the reporting periodBased on the fine chemical industry, the company takes "Chemical+" and "Bio+" as its core technology platform to produce variousfunctional chemicals around nutrition, flavors and fragrances, new materials and APIs.Nutrition:
The overall trend of global population growth remains unchanged, with the degree of aging continuously deepening. As people pursuea healthy life and quality living, the demand for products in the large health sector, such as health supplements, pharmaceuticals, andinfant health, will always be maintained and continue to grow. The United Nations, PRB, and others predict that by 2050, the globalpopulation will approach 10 billion
.Vitamins and methionine are the representatives of the nutritional products market. Vitamins are trace organic substances essential tohumans and animals. The market demand mainly comes from the downstream feed, food, medicine and other fields. The overall demandis growing steadily at a low speed. The supply concentration is high, and the market price has long-term cyclical fluctuations. As thelargest producer of vitamins, China produced about 0.43 million tons of vitamins in 2022, accounting for 84.40% of the globalproduction. In 2023, the production capacity of the vitamin industry is released by inertia, the oversupply situation is intensified, andthe industry competition is fierce
.Methionine is the only amino acid containing sulfur among essential amino acids, and is the first limiting amino acid in poultry, high-yield dairy cows and fish. The industrial production of methionine is mainly used as a feed additive, which has two advantages:
economy and availability. At present, the main production process of methionine is chemical synthesis, the production process andengineering technology are complex, the safety and environmental protection requirements are high, and there are high capital barriersand technical barriers.The methionine industry has a high concentration of production, with the majority of the capacity focused on 8 major manufacturers:
Evonik, Adisseo, NHU, Novus, Sumitomo Chemical, CHINA UNIS CHEMICAL, CJ, and Sichuan Hebang. The global market demandis growing steadily, and the effective supply and demand are relatively balanced in the short term. The global methionine increase in2023 mainly comes from China, and the methionine production adjustment and supply reduction of most international enterprises inthe second half of 2023. It is expected that China's methionine production in 2023 will be 0.58 billion tons, an increase of 31.20% year-on-year, accounting for 34.60% of global production, and an increase of 7.9% compared with 2022
.Flavor and fragrance:
Flavor and fragrance industry is a complementary industry of the national economy, and the independent high-level flavor and fragranceindustry is crucial to the independent high-level food industry, tobacco industry and daily chemical industry. Fragrances includefragrances (synthetic fragrances, natural fragrances) and fragrances (daily chemical fragrances, food fragrances, tobacco fragrances,etc.), which are used in personal care, home care, food, beverage and other daily life scenarios. In 2022, the global flavor and fragrancemarket will reach 196.4 billion yuan, and China's market will reach 56 billion yuan, accounting for 28.50% of the world's total
.New polymer materials:
As a strategic and fundamental industry, new polymer materials has become an important symbol for measuring the economic and
https://www.prb.org/articles/highlights-from-the-2023-world-population-data-sheet/
The “2023 Vitamin Market Annual Analysis Report” by BOYAR
The “2023 Amino Acid Market Annual Analysis Report” by BOYAR
Xinhua reported December 2023 "Fragrance industry fragrance"
technological strength of a country or region. The “Guidelines under 14th Five-Year Plan and Vision for 2035” pointed out that it isnecessary to vigorously develop strategic emerging industries, including new generation information technology, biotechnology, newenergy, high-end equipment and other fields. These fields have huge demand for new materials. New polymer materials include general-purpose plastics, engineering plastics and special engineering plastics, and downstream processing forms include modified compositematerials, films, fibers, foams, coatings, etc., which are widely used in traditional fields such as automobiles, electronic appliances, aswell as new energy, 5G communication, artificial intelligence and other emerging fields. With the upgrading of consumption and thehigh-quality development of the manufacturing industry, the future market growth space of the polymer material industry is huge.Specialty engineering plastics refer to a class of engineering plastics with superior comprehensive performance and a long-term servicetemperature above 150°C. They combine advantages such as high heat resistance, insulation, corrosion resistance, and high mechanicalstrength, and are widely used. In the aerospace field, materials like PPS, PEEK, and PEI are partially replacing metals and thermosettingplastics due to their heat resistance, flame retardancy, and processability. In the automotive sector, lightweight and electrification arethe main factors driving the growth of demand for specialty engineering plastics. In the electronic and electrical field, the increase inthe assembly temperature of electronic components and the increase in the communication transmission frequency are the main factorsdriving the growth of the demand for special engineering plastics.
API industry:
API is the pillar industry of the domestic pharmaceutical industry and one of the key industries supported by the state. China and Indiaare the main source countries of API production. The advantages of API production are concentrated in emerging countries such asChina, and China has become a large production and export country of bulk API, and the production technology has reached theinternational leading level. According to the production data of chemical raw materials and chemical preparations collected by theStatistical Information Professional Committee of China Chemical Pharmaceutical Industry Association in 2022, the production ofchemical raw materials basically remained stable, and among the major categories, the output of anti-infective drugs in 2022 increasedby 3% over the previous year; The output of antipyretic and analgesic drugs will increase by 16.1% in 2022; Vitamin productionincreased by 10.6% in 2022.
II. The main business of the Company during the reporting periodThe Company is a national high-tech company mainly engaged in the production and sales of nutrition, flavor and fragrance, newpolymer materials, and APIs. It focuses on fine chemicals, adheres to the concept of innovation-led development and competition-driven growth, and continuously develops various functional chemicals based on the two core platforms of chemical and biology,providing value-added services and solutions to customers in more than 100 countries and regions around the world. It continuouslyimproves the quality of human life with high-quality, healthy and green products, and creates sustainable value for stakeholders. Withleading technology, scientific management and sincere service, the Company has become one of the four major world vitaminmanufacturers, one of the top 100 national fine chemical companies, one of the top 10 companies in China’s light of industry fragranceand a well-known special engineering plastics manufacturer.
1. Main products and applications
Nutrition: The current products mainly cover vitamins, amino acids and pigments, etc. Specific products include vitamin E, vitamin A,vitamin C, methionine, vitamin D3, biotin, coenzyme Q10, carotenoids, vitamin B5, vitamin B6, vitamin B12, etc. They are mainlyused in feed additives and nutrition supplements of food, beverages, health food, etc. The Company actively implements the serializedand differentiated development of nutrition, and continuously improves the competitiveness of its products by optimizing theprocessing line and tackling key issues. In addition, through internal integration and external cooperation, it embraces the ideology of
China Huaxin "The demand for special engineering plastics continues to increase, and the application status and future trend ofvarious products are viewed by consumer areas"
China Chemical and Pharmaceutical Industry Association "China Chemical and Pharmaceutical Industry Economic OperationReport 2022"
open cooperation. It actively deploys cutting-edge biotechnology, and builds the Company’s “Bio+” platform.Flavor and fragrance: At present, our main fragrance products include linalool, citral, and cis-3-hexenol series, and methyldihydrojasmonate, raspberry ketone and ligustral, which are widely used in personal care, cosmetic and food fields. From theperspective of competitiveness and market share, NHU becomes an important supplier in the global flavor and fragrance industry. TheCompany continuously enriches the varieties of fragrance products to meet the changing market demands.Polymer materials: The company focuses on the development of high-performance polymers and key intermediates, moderatedevelopment of downstream applications of materials, the main products include polyphenyl sulfide (PPS), high temperature nylon(PPA), HDI, IPDA, downstream applications include automotive, electronic appliances, environmental protection, industrialapplications and other fields. At present, the company has created a whole industry chain of PPS from basic raw materials to highpolymer, then to modified processing, to special fibers, becoming the only domestic enterprise that can stably produce fiber grade,injection grade, extrusion grade, coating grade PPS, and is developing new material projects in the whole industry chain.APIs: The main products are concentrated in the series of vitamins and antibiotics. The main products include moxifloxacinhydrochloride, vitamin A, vitamin D3, etc., which are mainly used as active pharmaceutical ingredients for processing and producingpharmaceutical preparations.
2. Main business models
(1) Procurement model
The company has always adhered to the procurement principle of “fairness, transparency and optimal cost”, adopted the dual strategyof long-term strategic cooperation and open competitive procurement, deepened the market trend and market analysis, and ensured thesteady supply of strategic materials. Pay attention to source procurement, reduce intermediate links, reduce procurement costs. Promotesunshine procurement, establish an information system, and make the procurement process transparent, standardized and efficient.Select suppliers with good reputation and quality products, and sign quality assurance agreements to ensure stable and reliableperformance of purchased items. We will give priority to environmentally friendly, energy-saving and sustainable products and services,encourage suppliers to achieve green production and operation, and gradually promote carbon emission reduction and carbon neutralityplans. Select suppliers with a good sense of social responsibility, pay attention to their social responsibility performance, establish long-term cooperative relations, and achieve sustainable development of procurement activities.
(2) Production model
The Company has always been adhering to the production strategy based on the principle of “production and sales coordination,efficient operation, excellent quality, and cost leadership”. The Company maintained a balance between production and sales throughanalysis of changes in market demands, effective response to repeated epidemic waves and dual-control power cuts, and reasonableproduction plans. In addition, the Company keeps innovating the production model, digging out internal potentials, and optimizing theproduction process, in order to promote safe, green, standardized and efficient production, and continuously improve thecompetitiveness of its products.
(3) Sales model
The Company has always been adhering to the “customer-centric, market-oriented” sales strategy. It divides business lines by productapplication fields, and establishes a sales model that suits market needs according to market characteristics and industry practices. Mostof the Company’s sales are achieved through direct sales. By doing so, it establishes long-term and stable strategic cooperativerelationships with end customers to create greater value for them. Meanwhile, it also selects excellent agents or distributors fordistribution. By doing so, it services customers indirectly based on market and customer features. At the same time, through measuressuch as holding customer service months, strengthening customer strategic cooperation, establishing customer evaluation models, andoptimizing customer classification management, we will continue to expand market areas, increase new large-scale customers, andenhance brand influence.
3. Key performance drivers
The Company has built four modern industrial bases across the country. It adheres to the development strategy of integration,serialization and synergy, and insists on innovation-driven. Relying on the solid foundation of fine chemical industry, it focuses on“chemical+” and “biology+” to form NHU featured R&D models with industrial clusters, and technology and industry platformsinterdependent. Not only can its products connect basic chemical raw materials in the upstream, but also extend to special intermediates,nutrition, flavor and fragrance, new polymer materials, and APIs in the downstream. It has formed a product network structure to resistrisks and respond to market emergencies.During the reporting period, the company's original products were operated in fine detail and the development and construction of newprojects and new products were carried out in an orderly manner. Of the 250,000 tons/year methionine phase II project in the nutritionsector, 100,000 tons of equipment ran smoothly, 150,000 tons of equipment with its process route successfully established in one go,continues to enhance its comprehensive competitive advantage.; The 180,000 tons/year liquid methionine (conversion) project of thecompany and China Petroleum & Chemical Corporation was put into construction; 4,000 tons/year cystine project started construction;30,000 tons/year taurine project started normal production and sales; 2,500 tons/year vitamin B5 project started normal production andsales. In the Flavor and fragrance sector, 5,000 tons/year menthol project started normal production and sales. In the new polymermaterials sector, 7,000 tons/year PPS Phase III project started normal production and sales; The pilot test of the adiponitrile projectwas successful, and the project approval is progressing in an orderly manner. The HA project has commenced with material inputtesting, and the project is advancing smoothly. In the API sector, Pharmaceutical-grade Coenzyme Q10 was listed, and the productstructure was upgraded according to market demand, and gradually developed into a manufacturer of antipyretic and analgesic drugs,nutritional drugs and characteristic API intermediates.During the reporting period, the price of major vitamin products was under downward pressure, and the company actively tookcountermeasures, innovative marketing management, gave play to the advantages of sector linkage, and made efforts to overcomevarious unfavorable factors, and achieved steady growth in product sales year-on-year. During the reporting period, the companypromoted the normal sales of newly put into production projects, and achieved steady revenue growth in the flavors and fragrancessegment and the new materials segment. At the same time, through innovation to reduce costs, fully tap the potential, strengthen theanalysis and prediction of the procurement market, and reasonably reduce operating costs, maintaining the overall steady developmentof the company.During the reporting period, the Company’s main business and its business model remained unchanged.
III. Core competitiveness analysisSince its establishment, the Company has focused on fine chemicals, and adhered to innovation-driven development. Through decadesof development, it has gradually formed an industrial system with nutrition, flavor and fragrance, new polymer materials and APIs asits main business. The market share of its main products is among the top tier in the world market. The Company’s core competitivenesslies in its cooperate culture, R&D, management, talent and brand.
1. Corporate culture
Adhering to the enterprise objective of “creating wealth, employees’ success, and benefit the society”, core values of “new, harmony,union”, business philosophy of “create wealth, balanced and sustainable”, and enterprise spirit of “realism, innovation, high-qualityand efficiency”, the Company innovates its operation, and continuously improves management, to ensure the steady development.Under the guidance of the “teacher culture”, the Company pursues high-quality and sustainable development, creates spiritual wealthand material wealth, provides a platform and opportunity for employees to develop and realize life value, and contributes to socialinnovation development, green development, and shared development. During the reporting period, the Company deepened culturalpublicity and implementation, organized corporate culture lectures, strengthened the integration of corporate culture and management,carried out reflection activities on execution and talent training, as well as the "Woodpecker" management behavior correction actions,promoting the improvement of management capabilities.
2. R&D
The company adheres to the research and development concept of "demand-oriented, internal and external integration", and hasinvested more than 5% of its operating income in research and development for many consecutive years. Through the establishment ofan innovative organizational structure at three levels of science, technology and application, the company has formed a three-levelinnovative research and development system of scientific research, technology transformation and technology application, and formeda research and development model with the General research Institute as the core, research branches, four production bases,Xinhecheng-Zhejiang University joint research and development center, and external scientific research cooperation institutions. Thecompany cooperates closely with well-known research institutes and universities at home and abroad, such as Zhejiang University,Chinese Academy of Sciences, Jiangnan University, China Agricultural University, Zhejiang University of Technology, and CysBioBiotechnology Co., LTD., organizing and utilizing global basic science research resources to jointly carry out prospective and appliedresearch in chemistry. As the core of enterprise technology innovation, the research institute of the company has set up biomedicallaboratory, supercritical reaction laboratory, engineering equipment research center and other laboratories, equipped with 600M ultra-low temperature probe nuclear magnetic resonance instrument and other world advanced scientific research equipment, master thesupercritical reaction, high vacuum distillation, high pressure hydrogenation continuous, peroxide and continuous crystallization andother leading technologies at home and abroad. It has been rated as a national enterprise technology center, a national postdoctoralresearch workstation, and a national model academician expert workstation. During the reporting period, the company was awardedthe "Zhejiang Science and Technology Leading Enterprise", and the New Materials Research Institute was awarded the Key EnterpriseResearch Institute of high-performance engineering Materials in Zhejiang Province.
3. Production management
The Company has always been adhering to the production strategy based on the principle of “production and sales coordination,efficient operation, excellent quality, and cost leadership” and the HSE guideline of “safety first, green development, full participation,and continuous improvement”. The Company takes planning as the goal, cost management as the main line, and maximizing companybenefits as the principle for the allocation of resources. Through oriented management and the cyclic operation of planning,organization, implementation and control of the operation process, the Company continuously strengthens the level of cost control.Meanwhile, it also improves the level of digitalization and intelligence. Through process reform, efficient management, and intelligentoperation, it promotes the continuous improvement of management efficiency. In addition, the Company is committed to thedevelopment of green chemicals, vigorously promotes clean production, recyclable economy and 7S on-site management, and adoptsan environmental governance model that focuses on source control and final disposal. It is determined to take the road of sustainabledevelopment.
4. Process and equipment
The Company values highly the effective combination of process and equipment. It has a process and equipment research institute, andcooperates with famous engineering companies and scientific research institutes at home and abroad. Through the introduction,digestion, absorption and re-innovation of advanced technologies, the Company improves the overall level of its process and equipment.The Company is dedicated to the R&D of process and equipment towards larger scale, better airtightness, greater continuity, and higherlevel of automation, aiming to save energy and reduce emissions, to improve productivity and product quality, to increase the intrinsicsafety of production process, to lower production costs, and to improve the level of automation. Currently, the Company has developedvarious efficient reaction and separation platforms including continuous reaction, high vacuum distillation, continuous extraction,continuous crystallization, efficient filtration, simulated moving bed separation, microchannel and micro-interface reaction with respectto specific processes, and remarkable results have been achieved in continuous transformation of reaction, vapor-liquid-solidheterogeneous reaction, and separation of air sensitive and heat sensitive materials through continuous improvement of large-sizeequipment.
5. Talent
The company has always adhered to the management concept of "standardized and efficient" and the employment concept of "bothvirtue and talent, people and posts matching", and has shaped a pioneering and innovative, pragmatic, and efficient talent team and along-term stable and excellent management team with a high sense of responsibility, to promote the sustainable, healthy and rapiddevelopment of the company. The company continues to strengthen the construction of talent supply chain, constantly improve thetalent training system, strengthen the training of "management talents, skilled talents, international talents, core technical talents, andleadership talents", systematically train and reserve college students, introduce various professional talents, continue to promote thetraining of reserve cadres such as the sailing class and the departure class, and promote the cross-sequence rotation training of the fonttype. Promote the improvement of management and professional ability, and build a balanced talent structure. During the reportingperiod, the company has been honored with the "2022 High-Quality Development Demonstration Award for Valuing and CherishingTalents".
6. Brand
The company adheres to the "integrity-based", and has always adhered to serving customers and creating industry value with customersas the goal pursued by enterprises over the years. Through technological innovation, the company continues to provide customers withsafe and high-quality products and efficient and satisfactory services. After years of development and accumulation, the company haswon many honorary titles in the global fine chemical industry, such as one of China's top ten feed additive brands, one of the country'slarge vitamin feed additive enterprises, and won the list of China's top 500 petroleum and chemical enterprises (comprehensive) andChina's top 100 basic chemical raw material manufacturing enterprises. Good market reputation has laid a solid foundation for thehealthy and long-term development of the company. In addition, the company has repeatedly won the top 30 best internal control inZhejiang Province, the mainstream media listed companies "Best Investor relations Award", "Best Board of Directors award" and otherawards, widely favored by the market and investors. During the reporting period, the company was rated as "Top 100 Private Enterprisesin Shaoxing City in 2023", "Leading Scientific Enterprise in Zhejiang Province", "Top 10 Innovation and Development Enterprises inChina's Fine Chemical Industry in 2023", "Top 100 Enterprises in China's Fine Chemical Industry in 2023" and "Top 100 Enterprisesin China in 2023", and the company ranked No. 1 in the "Independent Innovation" group of China Brand Value Evaluation informationin 2023.
7. Globalization
Globally oriented, the company has set up overseas sales companies in Hong Kong, Singapore, Germany, Mexico, Brazil and otherregions or countries, and built overseas research institutes in Singapore to connect global innovation resources, providingcomprehensive solutions in the fields of nutrition and health, daily care, transportation, environmental protection, energy, and otherfields for customers in more than 100 countries and regions around the world. We will strive to optimize the allocation of resources athome and abroad, help expand overseas markets and provide localized services, and continue to move toward "Global NHU".
8. Intelligent Manufacturing
The company establishes the "one headquarters and multiple bases" management and control mode, builds a large-middle desktechnical route with new and successful characteristics, and strengthens the awareness of data management and the managementplatform support system by building the business center, data center and technology center, so as to realize the smooth managementprocess of the headquarters and production base, the same source of business data, and supports the efficient business decision-makingof enterprises. The company constantly promotes automation, informatization and digitalization, strives to create a new andcharacteristic intelligent manufacturing system, build smart factories, promote intelligent operation management, achieve efficient,flexible, punctual, lean production of high-quality products, better meet and serve customers, and shape new advantages of industrialcompetition.
IV. Main business analysis
1．Introduction
Please refer to item “II. The main business of the Company during the reporting period” under “Section III Management Discussionand Analysis” for details.2．Revenue and cost
(1) Operating revenue
Unit: RMB Yuan
| Items | Year 2023 | Year 2022 | YoY growth rate | ||
| Amount | % to total | Amount | % to total | ||
| Total | 15,116,537,003.30 | 100% | 15,933,984,403.41 | 100% | -5.13% |
| By industry | |||||
| Pharmaceutical chemicals | 13,797,766,058.00 | 91.28% | 14,672,567,397.29 | 92.08% | -5.96% |
| Others | 1,318,770,945.30 | 8.72% | 1,261,417,006.12 | 7.92% | 4.55% |
| By produc | |||||
| Nutrition | 9,866,822,612.52 | 65.27% | 10,951,828,026.72 | 68.73% | -9.91% |
| Flavor and fragrance | 3,273,948,378.45 | 21.66% | 2,967,080,657.65 | 18.62% | 10.34% |
| New polymer materials | 1,201,509,242.06 | 7.95% | 1,166,099,937.05 | 7.32% | 3.04% |
| Others | 774,256,770.27 | 5.12% | 848,975,781.99 | 5.33% | -8.80% |
| By region | |||||
| Domestic sales | 7,318,678,736.77 | 48.42% | 8,262,678,396.21 | 51.86% | -11.42% |
| Overseas sales | 7,797,858,266.53 | 51.58% | 7,671,306,007.20 | 48.14% | 1.65% |
| By sales model | |||||
| Direct sales | 10,976,755,778.18 | 72.61% | 11,874,529,226.77 | 74.52% | -7.56% |
| Agent sales | 4,139,781,225.12 | 27.39% | 4,059,455,176.64 | 25.48% | 1.98% |
(2) Industries, products and regions that account for more than 10% of the total operating revenue oroperating profi
√ Applicable □ Not Applicable
Unit: RMB Yuan
| Items | Operating revenue | Operating cost | Gross rate | Growth rate of operating revenue | Growth rate of operating cost | Growth rate of gross rate |
| By industry | ||||||
| Pharmaceutical chemicals | 13,797,766,058.00 | 9,143,852,194.64 | 33.73% | -5.96% | 1.07% | Decreased by 4.61 percentage points |
| By product | ||||||
| Nutrition | 9,866,822,612.52 | 6,915,666,865.62 | 29.91% | -9.91% | -0.42% | Decreased by 6.68 percentage points |
| Flavor and fragrance | 3,273,948,378.45 | 1,620,160,495.19 | 50.51% | 10.34% | 7.01% | Increased by 1.54 percentage points |
| By region | ||||||
| Domestic sales | 7,318,678,736.77 | 5,238,007,215.82 | 28.43% | -11.42% | -4.78% | Decreased by 5.00 percentage points |
| Overseas sales | 7,797,858,266.53 | 4,893,483,159.63 | 37.25% | 1.65% | 7.61% | Decreased by 3.47 percentage points |
In case the statistical caliber of the Company’s main business data was adjusted during the reporting period, the Company’s mainbusiness data of the preceding period adjusted according to the caliber at the end of the period shall be indicated
□ Applicable √ Not Applicable
(3) Whether the Company’s goods sales income is greater than service income
√ Yes □ No
| By industry | Items | Unit | Year 2023 | Year 2022 | YoY growth rate |
| Pharmaceutical chemicals | Sales | Ton | 789,182.83 | 655,683.43 | 20.36% |
| Production | Ton | 789,677.52 | 669,038.97 | 18.03% | |
| Stock | Ton | 68,991.71 | 68,497.02 | 0.72% | |
| Others | Sales | Ton | 26,584.02 | 24,551.07 | 8.28% |
| Production | Ton | 29,056.26 | 25,496.03 | 13.96% | |
| Stock | Ton | 6,265.53 | 3,793.29 | 65.17% |
Remarks on reason for relevant data with absolute growth rate over 30%
√ Applicable □ Not Applicable
The YoY growth rate of stock of others was up 30%, mainly due to the increase of PPS products due tothe completion of the thirdphase of PPS construction and the impact of capacity enhancement.
(4) The performance of major sales contracts and major purchase contracts signed by the Company during the reportingperiod
□ Applicable √ Not Applicable
(5) Composition of operating cost
Unit: RMB Yuan
| By industry | Items | Year 2023 | Year 2022 | YoY growth rate | ||
| Amount | % to total | Amount | % to total | |||
| Chemical industry | Cost of main operations | 9,113,248,621.48 | 89.95% | 9,001,010,480.60 | 89.58% | 1.25% |
| Others | Cost of main operations | 921,775,209.45 | 9.10% | 1,000,074,989.18 | 9.95% | -7.83% |
Unit: RMB Yuan
| By product | Items | Year 2023 | Year 2022 | YoY growth rate | ||
| Amount | % to total | Amount | % to total | |||
| Nutrition | Cost of main operations | 6,885,063,292.46 | 67.96% | 6,913,932,973.18 | 68.81% | -0.42% |
| Flavor and fragrance | Cost of main operations | 1,555,075,302.17 | 15.35% | 1,498,519,852.06 | 14.91% | 3.77% |
| New materials | Cost of main operations | 867,516,786.30 | 8.56% | 901,961,435.46 | 8.98% | -3.82% |
| Others | Cost of main operations | 727,368,450.00 | 7.18% | 686,671,209.08 | 6.83% | 5.93% |
(6) Whether the consolidation scope has changed during the reporting period
√ Yes □ No
| Entities | Equity acquisition method |
| Shandong New Shuang'an Biotechnology Co., Ltd | Acquisitions |
(7) Significant changes or adjustments to the Company’s business, products or services during the reportingperiod
□ Applicable √ Not Applicable
(8) Major customers and major suppliers
Major customers
| Total sales amount (yuan) of top 5 customers | 1,550,108,168.56 |
| Proportion to the total balance of annual sales amount (%) | 10.26% |
| Proportion of related party transaction to the total balance of annual sales amount (%) | 0.00% |
Top 5 customers
| No. | Customers | Sales amount (yuan) | Proportion to the total balance of sales amount (%) |
| 1 | Client A | 750,800,479.63 | 4.97% |
| 2 | Client B | 230,652,896.19 | 1.53% |
| 3 | Client C | 202,836,523.66 | 1.34% |
| 4 | Client D | 199,473,773.22 | 1.32% |
| 5 | Client E | 166,344,495.86 | 1.10% |
| Total | -- | 1,550,108,168.56 | 10.26% |
Remarks on other information of major customers
□ Applicable √ Not Applicable
Major suppliers
| Total purchase amount (yuan) of top 5 suppliers | 1,328,514,889.44 |
| Proportion to the total balance of annual purchase amount (%) | 13.86% |
| Proportion of related party transaction to the total balance of annual purchase amount (%) | 0% |
Top 5 suppliers
| No. | Suppliers | Purchase amount (yuan) | Proportion to the total balance of purchase amount (%) |
| 1 | Supplier A | 355,051,158.40 | 3.71% |
| 2 | Supplier B | 263,706,804.58 | 2.75% |
| 3 | Supplier C | 261,989,468.29 | 2.73% |
| 4 | Supplier D | 237,630,811.43 | 2.48% |
| 5 | Supplier E | 210,136,646.74 | 2.19% |
| Total | -- | 1,328,514,889.44 | 13.86% |
Remarks on other information of major suppliers
□ Applicable √ Not Applicable
3. Expenses
Unit: RMB Yuan
| Items | Year 2023 | Year 2022 | YoY growth rate | Remarks on significant changes |
| Selling expenses | 158,316,813.86 | 122,257,619.47 | 29.49% | This was mainly due to the increase in personnel remuneration, commission and office expenses during the reporting period. |
| Administrative expenses | 551,072,291.99 | 504,674,730.69 | 9.19% | |
| Financial expenses | 65,450,512.95 | 44,401,778.13 | 47.41% | This was mainly due to the decrease in interest income and foreign exchange gains.during the reporting period. |
| R&D expenses | 887,801,475.02 | 858,945,406.13 | 3.36% |
4. R&D input
√ Applicable □ Not Applicable
| Main R&D projects | Purposes | Progress | Targets to be fulfilled | Expected effect on the Company’s future development |
| Research on continuous process equipment technology development and application research | Research on some of the existing unit operations and equipment that are commonly used by the company and facilitate continuous operation, so that each production site can form a mature continuous reaction, continuous chromatography, continuous washing, continuous crystallization, continuous extraction and other continuous production lines | Kettle and pipeline continuous reaction model test platform, continuous extraction and continuous crystallization model platform have been built，and is undergoing application debugging | Formation of different scale multi-kettle tandem continuous reaction model test platform, pipeline reactor model test platform, falling film evaporator basic data verification device, continuous crystallization model test platform, continuous extraction model test platform, membrane separation model test platform, microchemical platform | Enhance our industry position in the API industry, Enhance the comprehensive competitiveness of products |
| Development of PF product technology | Develop new products in PF category and obtain official license and customer approval | R&D completed, some products are being promoted for projectization | Process research and quality research on several PF products, forming independent R&D technology and quality standards, and launched new categories of APIs. | Enrichment of API product lines |
| Research on new dosage formulations and process technology of nutrient products | Development of new dosage forms for vitamin products such as granules, tablets, drops, emulsions, and gels. | Completion of emulsification new process, vitamin A dry crosslinking process small pilot research and development | Formation of a set of commissioning equipment suitable for the development of powder, tablet, drop and capsule type formulation products with a batch output of about 50Kg | Develop new products of nutrient preparations to improve the product range of our nutritional products |
| Main R&D projects | Purposes | Progress | Targets to be fulfilled | Expected effect on the Company’s future development |
| Research on the development and application of high-safety nutrient products | To develop high- safety fat-soluble vitamin and carotenoid preparations and research on the effect and mechanism of their application in downstream premix, feeds and animals (in vitro and in vivo). | 3 products for large production applications; the platform has completed construction and started normal operation and application debugging | To research on the application effect of newly developed ethoxyquinoline-free vitamin and carotenoid preparation products in premix and feeds, and their bioutilization effect in different animal fields. Establish feed processing platform and breeding test base for pilot-scale experiments, so as to evaluate the application effect of high-safety vitamin and carotenoid. | It is expected to improve the Company’s independent research and development level in the developmentcontinue to provide effective and sustainable solutions for customers. |
| Development of Vitamin product technology | Research and development of synthetic process innovation for new and old products of vitamin series | VB6 available, others still in development | The company continues to innovate the existing vitamin product process; continues to research and develop the synthesis process for new vitamin products. | The company continues to improve the vitamin series products, to improve the company's overall competitiveness |
| Key Technology Development and Application Demonstration for Equivalent Reduction of Pd Catalyst for Vitamin and Antibiotic Synthesis | To study the design, synthesis and catalytic mechanism of metal catalysts as the primary task, and explore the industrial development and application of high performance metal catalysts | Pilot stage commissioning | The precise design, synthesis, development and application of our new and old products involving Pd catalysts, etc. | Improve the synthesis technology of related products, such as useful to Pd catalysts, to reduce costs and improve competitiveness |
| AM ester synthesis process development | Continuously promoting the chemical synthesis of new AM ester products, and scaling up design and industrialization | Mold testing and further scaling up of the design phase | Application of chemical synthesis of new AM ester products and promotion of scale-up design and industrialization | Breaking the monopoly of foreign technology and promoting industrial upgrading |
| Construction of biologically synthesized strains of typical B vitamins, development and industrialization of fermentation process | Enhanced production of engineered strains through multi-parameter optimization of the fermentation process to accelerate the substitution of chemical synthesis by biofermentation | Vitamin B5, B12 have been in the company's internal test run, running well, other B products fermentation process research | Green synthesis of existing vitamins by constructing high-level strains and amplifying fermentation | Realize the green vitamin bio-manufacturing, and then upgrade China's fermentation level to the world's leading level, and play a key role for the company to seize the high point of international technology and build a new pillar of green environmental protection industry system in China. |
| Adiponitrile synthesis process innovation and industrialization technology application research | Chemical synthesis and industrialization of adiponitrile | Pilot testing of new processes and design of further scale-ups | Research on technology development of adiponitrile products and localization of production technology of adiponitrile products | Break through the technical barriers of adiponitrile, break the monopoly of foreign companies, and promote the development of domestic related industries |
| Main R&D projects | Purposes | Progress | Targets to be fulfilled | Expected effect on the Company’s future development |
| High-specification API product development | Further promote the company's R & D of API products, especially vitamin API product research and development work, reduce production costs, improve API product specifications | Completed research on pharmaceutical grade products such as Coenzyme Q10 and Moxifloxacin Hydrochloride, of which Q10 has obtained the domestic registration number and Moxifloxacin Hydrochloride has obtained the CEP certificate; and is promoting the research on 6 pharmaceutical grade products such as Vitamin B6. | Completed the development and research of pharmaceutical-grade pilot processes for more than 5 products, such as vitamin VB6, and the process has the value and feasibility of scaling up, and guided and optimized the establishment of the scaling-up process. | Enhance our company's industry position in the API industry, especially in the competitiveness of the high-specification vitamin market |
| Research and Application of Fine Chemical Analysis and Testing Technology | Establishing relevant standards and testing methods for synthetic intermediates; carrying out research on the preparation, separation and purification of trace impurities, and determining the structure of impurities, etc. | Passed CNAS National Laboratory Accreditation Qualification Periodic Supervisory Review and Expansion Re-accreditation, and is able to carry out analytical technology research support both inside and outside the company. | Provide analytical technology services for enterprises, establish analytical technology development, and assist in the company's product development | Provide a full range of analysis and testing services for the company's product technology innovation, and assist in solving key technical problems in the production and R&D process. |
| Development and Application of Highly Efficient Separation Processes and Coupling Enhancement Technology | Systematically study the influencing factors of the company's products in the separation process, optimize the best parameters of the separation process, achieve controllable separation process and quality of the products, and solve the actual production problems through production debugging in the workshop. | Crystallization, extraction, simulated moving bed separation technology development is basically standardized and applied in a number of products; distillation and membrane separation technology development is in the process of further standardization | Systematic research on the separation process of the company's existing and developing products to support the solution of practical production problems. | Through the innovation and development of the separation process, the company realizes the improvement of the separation process and quality of the products, meets the needs of different customers, and enhances the competitiveness of the products in the market. |
| Research on the improvement of safety and environmental protection | The company has set up a safety and environmental protection assessment laboratory, equipped with calorimetric equipment | The safety and environmental protection assessment laboratory has been | The research and development to improve the company's safety and security technology in the chemical production and | This research and development improves the enterprise's essential safety level and effectively prevents accidents from |
| Main R&D projects | Purposes | Progress | Targets to be fulfilled | Expected effect on the Company’s future development |
| technology of fine chemical industry | such as DSC, ARC and RC1e and analysts, to carry out kinetic and thermodynamic analysis and research on related materials and chemical reaction processes, and to amplify the debugging of the corresponding processes when necessary. | completed and is capable of issuing process safety assessment reports that meet the requirements | storage process to carry out process optimization of the more dangerous process, from the essence of the reaction process to reduce the risk of danger. | occurring |
| Development and industrialization of new emulsified starch | Research on the development of modified starches with excellent emulsifying properties based on tapioca starch instead of waxy corn starch. | Pilot process development in progress | New emulsified starch replaces waxy corn starch to improve the stability of modified starch supply and corresponding product quality | New type of emulsified starch replaces waxy corn starch to ensure timely supply of raw materials, avoiding the risk of supply cut-off and meeting the company's production needs. |
| HA Project | R&D aimed at stabilizing the production of ketone, IPDA, ADI and polymers | Project under construction | This research can stabilize the production of ketone, IPDA, ADI and polymers, providing customers with high-quality products and enhancing the company's efficiency | HA-related products are nationally encouraged projects with good application growth in the fields of curing agents, polyurethane, plastic fibers, and water-based coatings. |
| research on Simulation of moving bed technology and application | The research can meet the company's product production and R & D needs, continuous research and development and improvement of chromatographic separation technology, enhance the production process level of the company's products, and enhance the company's market competitiveness | The company has provided technical support for the separation and production of five small pilot separations and three production projects, and is now continuing to carry out technical research and solve separation problems in the workshop and R&D process according to demand | According to the target products and impurities, select the appropriate filler, process conditions, parameters, etc., mother liquor recovery, product purification, so as to achieve the goal of improving the separation yield, improve product quality, and enhance the level of process automation. | This research can help companies build core innovative competencies and provide better products to their customers |
| Development and application of high efficiency multiphase carbonylation catalysts | Preparation and application technology development of catalysts involving carbonylation synthesis unit in the synthesis of new and old products of the company | Carbonylation catalysts have been applied in the synthesis process of 2 products, and the related catalyst preparation technology is in the process of further optimization | Optimize the carbonylation synthesis unit technology in the company's product process route, prepare the corresponding catalysts, and improve the activity, selectivity and stability of the carbonylation reaction. | Carbonylation technology is atomically economical and has wider applications in the synthesis of aldehydes, acids, and esters, and in the future it can be utilized to develop more and better products by combining carbonylation technology with market demand. |
Details of R&D personnel
| Items | Year 2023 | Year 2022 | Percentage of change |
| Number of R&D personnel (persons) | 2,803 | 2,629 | 6.62% |
| % to total employees | 23.85% | 22.81% | Increased by 1.04 percentage points |
| Educational background structure | |||
| Technical secondary school, high school and below | 135 | 139 | -2.88% |
| Junior college | 373 | 370 | 0.81% |
| Bachelor | 1,388 | 1,345 | 3.20% |
| Master | 828 | 700 | 18.29% |
| Doctor | 79 | 75 | 5.33% |
| Total | 2,803 | 2,629 | 6.62% |
| Age structure | |||
| Below 30 years old | 1,353 | 1,293 | 4.64% |
| 30-40 years old | 1,045 | 947 | 10.35% |
| Over 40 years old | 405 | 389 | 4.11% |
| Total | 2,803 | 2,629 | 6.62% |
Details of R&D input
| Items | Year 2023 | Year 2022 | Percentage of change |
| R&D input amount (yuan) | 887,801,475.02 | 858,945,406.13 | 3.36% |
| % to total operating revenue | 5.87% | 5.39% | Increased by 0.48 percentage points |
| Capitalized amount (yuan) | 0.00 | 0.00 | 0.00% |
| % to total R&D input | 0.00% | 0.00% | 0.00% |
Reason for significant changes in structure of the Company’s R&D personnel and the effect
□ Applicable √ Not Applicable
Reason for significant changes in the proportion of total R&D input to operating revenue compared to the preceding period
□ Applicable √ Not Applicable
Reason for significant changes in capitalization rate of R&D input and remarks on the reasonability
□ Applicable √ Not Applicable
5. Cash flows
Unit: RMB Yuan
| Items | Year 2023 | Year 2022 | YoY growth rate |
| Subtotal of cash inflows from operating activities | 16,264,139,030.71 | 16,712,001,413.64 | -2.68% |
| Subtotal of cash outflows from operating activities | 11,144,768,167.39 | 12,350,520,330.03 | -9.76% |
| Net cash flows from operating activities | 5,119,370,863.32 | 4,361,481,083.61 | 17.38% |
| Subtotal of cash inflows from investing activities | 950,343,311.05 | 1,919,918,190.77 | -50.50% |
| Subtotal of cash outflows from investing activities | 4,828,029,671.75 | 5,759,332,104.36 | -16.17% |
| Net cash flows from investing activities | -3,877,686,360.70 | -3,839,413,913.59 | -1.00% |
| Subtotal of cash inflows from financing activities | 5,996,318,716.61 | 6,855,158,371.64 | -12.53% |
| Subtotal of cash outflows from financing activities | 8,049,329,843.78 | 8,125,152,950.95 | -0.93% |
| Net cash flows from financing activities | -2,053,011,127.17 | -1,269,994,579.31 | -61.66% |
| Net increase of cash and cash equivalents | -705,271,516.56 | -562,695,606.37 | -25.34% |
Remarks on main factors leading to the significant changes in growth rates of relevant data
√ Applicable □ Not Applicable
The YoY growth rate of net cash flows from operating activities was 17.38%, which was mainly due to the decrease in procurementof raw materials during this reporting period.The YoY growth rate of Subtotal of cash inflows from investing activities was -50.50%, which was mainly due to the decrease inredemption of financial products during the reporting period.The YoY growth rate of Subtotal of cash outflows from investing activities was -16.17%，which was mainly due to the decrease inthe purchase of property management products and the decrease in investment of construction work in process during the reportingperiod.The YoY growth rate of Net cash flows from financing activities was -61.66%, which was mainly due to the decrease in newborrowings during the reporting period.The YoY growth rate of Net increase of cash and cash equivalents was -25.34%, which was mainly due to the decrease in newborrowings during the reporting period.Remarks on reason for significant difference between net cash flows from operating activities during the reporting period and net profitof the current period
√ Applicable □Not Applicable
The large difference between net cash flow from operating activities and net profit of the Company is mainly due to the turnaround ofconstruction in progress (Methionine project with annual output of 0.25 million tons, Shangyu Industrial Park PPS Project, NH acidprojec, etc.) during the period under review, which affects the increase in accumulated depreciation of fixed assets and leads to a largeimpact of non-payment cost in the net profit of the current year.
V. Non-main business analysis
√ Applicable □ Not Applicable
Unit: RMB Yuan
| Items | Amount | % to total profit before tax | Reason for balance | Whether has continuity |
| Investment income | 83,054,284.94 | 2.55% | It was mainly due to realized profits and dividend income from associates during the reporting period. | No |
| Gains on changes in fair value ("-" means loss) | 29,932,484.98 | 0.92% | It was mainly due to changes in the fair value of forward settlements during the reporting period. | No |
| Assets impairment loss ("-" means loss) | -227,048,860.06 | -6.98% | It was mainly due to losses arising from the decrease in prices of vitamin series products and the provision for inventory depreciation, | No |
| Other income | 202,088,522.53 | 6.21% | It was mainly due to government grants received during the reporting period. | No |
| Gains on asset disposal (or less: losses) | 16,404,163.69 | 0.50% | It was mainly due to the disposal of fixed assets. | No |
| Non-operating revenue | 7,931,135.56 | 0.24% | It was mainly due to income from claims. | No |
| Non-operating expenditures | 14,502,738.61 | 0.45% | It was mainly due to losses on assets scrapped during the reporting period. | No |
VI. Assets and liabilities analysis
1. Significant changes in asset composition
Unit: RMB Yuan
| Items | Dec. 31, 2022 | Jan. 1, 2022 | Percentage of change | Remarks on significant changes | ||
| Amount | % to total | Amount | % to total | |||
| Cash and bank balances | 4,543,361,146.98 | 11.60% | 5,343,851,967.72 | 13.96% | -2.36% | |
| Accounts receivable | 2,483,266,952.88 | 6.34% | 2,476,269,041.23 | 6.47% | -0.13% | |
| Inventories | 4,318,878,875.34 | 11.03% | 4,144,557,702.39 | 10.83% | 0.20% | |
| Long-term equity investments | 697,145,200.08 | 1.78% | 432,503,568.48 | 1.13% | 0.65% | |
| Fixed assets | 21,860,082,637.13 | 55.83% | 16,523,867,858.53 | 43.18% | 12.65% | It was mainly due to the conversion of Methionine project with annual output of 0.25 million tons during the reporting period. |
| Construction in progress | 1,621,882,507.56 | 4.14% | 5,089,233,908.22 | 13.30% | -9.16% | |
| Right-of-use assets | 6,603,631.56 | 0.02% | 2,830,136.37 | 0.01% | 0.01% | |
| Short-term borrowings | 1,235,688,062.90 | 3.16% | 1,846,373,441.01 | 4.82% | -1.66% | |
| Contract liabilities | 251,008,240.97 | 0.64% | 60,660,929.75 | 0.16% | 0.48% | |
| Long-term borrowings | 6,821,643,194.58 | 17.42% | 5,273,637,508.87 | 13.78% | 3.64% | |
| Lease liabilities | 5,240,136.43 | 0.01% | 2,822,404.07 | 0.01% | 0.00% | |
Proportion of foreign assets to total assets is comparatively high
□ Applicable √ Not Applicable
2. Assets and liabilities at fair value
√ Applicable □ Not Applicable
Unit: RMB Yuan
| Items | Opening balance | Gains on changes in fair value | Accumulated changes in fair value included in equity | Provision for impairment made in the current period | Amount purchased during the reporting period | Amount sold during the reporting period | Other changes | Closing balance |
| Financial assets | ||||||||
| 1. Held-for-trading financial assets (derivative financial assets excluded) | 720,000,000.00 | 145,000,000.00 | 720,000,000.00 | 145,000,000.00 | ||||
| 2. Derivative financial assets | 314,576.43 | 27,741,474.52 | 28,056,050.95 | |||||
| Subtotal of financial assets | 720,314,576.43 | 27,741,474.52 | 145,000,000.00 | 720,000,000.00 | 173,056,050.95 | |||
| Financial liabilities | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||
Remarks on other changes
NoWhether the Company has significant changes in measurement attributes of main assets during the reporting period
□ Yes √ No
3. Restrictions on assets as of the end of the reporting period
Unit: RMB Yuan
| Items | Book balance | Carrying amount | Type of restriction | Restrictions |
| Cash and bank balances | 77,905,369.24 | 77,905,369.24 | pledged | Banker's acceptance deposit |
| 12,048,779.84 | 12,048,779.84 | pledged | Letter of Credit Deposit | |
| 3,929,600.00 | 3,929,600.00 | pledged | customs Deposit | |
| 870,050.56 | 870,050.56 | pledged | Safety Construction deposit | |
| 853,216.21 | 853,216.21 | pledged | Project works labor wage deposit | |
| 661,215.83 | 661,215.83 | pledged | Water deposit | |
| 500,000.00 | 500,000.00 | pledged | Letter of Guarantee Deposit | |
| 22,500.00 | 22,500.00 | pledged | ETC Deposit | |
| Notes receivable | 94,097,743.14 | 94,097,743.14 | pledged | Opening a pledge of banker's acceptances |
| Receivables financing | 143,872,489.15 | 143,872,489.15 | pledged | Opening a pledge of banker's acceptances |
| Fixed assets | 97,257,595.52 | 81,371,634.23 | mortgaged | Mortgage to a bank for the purpose of obtaining a loan |
| Intangible assets | 10,301,747.64 | 10,301,747.64 | mortgaged | Mortgage to a bank for the purpose of obtaining a loan |
| Total | 442,320,307.13 | 426,434,345.84 |
VII. Investment status analysis
1. Overall information
√ Applicable □ Not Applicable
| Investments during the reporting period (yuan) | Investments of the preceding period (yuan) | Percentage of change |
| 3,377,423,672.72 | 5,034,909,624.27 | -32.92% |
2. Significant equity investments made during the reporting period
□ Applicable √ Not Applicable
3. Significant non-equity investments in progress during the reporting period
□ Applicable √ Not Applicable
4. Investments in financial assets
(1) investments in securities
□ Applicable √ Not Applicable
There is no investment in securities during the reporting period.
(2) Investments in derivatives
√ Applicable □ Not Applicable
1） Derivative investments for hedging purposes during the reporting period
√ Applicable □ Not Applicable
Unit: RMB 0,000 yuan
| Types of Derivatives Investments | Initial Investment Amount | Opening amount | Gains or losses on changes in fair value for the period | Accumulated fair value changes recorded in equity | Amount purchased during the reporting period | Amount sold during the reporting period | End of period amount | Investment amount at the end of the period as a percentage of the company's net assets at the end of the reporting period |
| Forward contracts | 35,506.29 | 35,506.29 | 2,993.25 | 0 | 454,255.58 | 294,114.67 | 195,647.20 | 7.85% |
| Total | 35,506.29 | 35,506.29 | 2,993.25 | 0 | 454,255.58 | 294,114.67 | 195,647.20 | 7.85% |
| description of the accounting policies and specific principles of accounting for hedging operations during the reporting period, and whether there have been any significant changes compared to the previous reporting period | The Company accounts for the hedging business conducted in accordance with the relevant provisions of the Ministry of Finance's AS 22 - Recognition and AS 23 - Transfer of Financial Assets and AS 37 - Presentation of Financial Instruments and its guidance. There were no significant changes in accounting policies and specific principles of accounting compared with the previous reporting period. | |||||||
| Description of actual profit or loss for the reporting period | In order to reduce the impact of exchange rate fluctuations on the Company's operating results, the Company carried out foreign exchange hedging business in accordance with a certain percentage of its export business, with business varieties mainly including forward exchange settlement and other foreign exchange derivative products, all of which were within the expected scale of sales business, and the actual gain or loss on derivatives at the end of the reporting period was 6.72 million yuan. | |||||||
| Description of the hedging effect | The Company carries out foreign exchange hedging business based on the principle of exchange rate risk neutrality. By carrying out foreign exchange hedging business, the Company reduces the impact of exchange rate fluctuation on the Company's operation and effectively controls the operation risk. | |||||||
| Derivatives Investment Funding | Self-funded. | |||||||
| Risk analysis and description of control measures for derivative positions during the reporting period (including but not limited to market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) | In order to prevent exchange rate risk, the Company and its subsidiaries have carried out derivative business and the Company and its subsidiaries have strictly implemented the "Foreign Exchange Hedging Business Management Regulations". | |||||||
| Changes in market prices or product fair values of invested derivatives during the reporting period, and the analysis of the fair value of derivatives should disclose the specific methods used and the setting of relevant assumptions and parameters | Tht floating loss on fair value of derivatives during the reporting period was 29.93 million Yuan. Changes in fair value are determined at the end of each month based on quoted market prices from external financial institutions. | |||||||
| Litigation involved (if applicable) | No | |||||||
| Date of disclosure of board announcement for approval of derivative investments (if any) | April 21, 2023 | |||||||
| Special opinion of independent directors on the company's derivatives investment and risk control | The Company has formulated the "Management Measures for Foreign Exchange Hedging Business", which sets out specific operating procedures for conducting foreign exchange hedging business by strengthening internal controls, implementing risk prevention measures and improving management. The Company has analyzed the feasibility of its foreign exchange hedging business and, in general, it is practical and feasible for it to carry out foreign exchange hedging, which can effectively reduce the risk of exchange rate fluctuations and is conducive to stabilizing the profit level. The content and consideration procedures of the matter are in compliance with the relevant laws, regulations, regulatory documents and the Articles of Association, and do not constitute any damage to the interests of the Company and other shareholders. We unanimously agree with the Company to carry out foreign exchange hedging business this time. | |||||||
2） Investments in derivatives for speculative purposes during the reporting period
□ Applicable √ Not Applicable
The Company had no derivative investments for speculative purposes during the reporting period.
5. Use of raised funds
√ Applicable □ Not Applicable
(1) Overall use of raised funds
√ Applicable □ Not Applicable
Unit: RMB 0,000 yuan
| Year of fund-raising | Way of fund-raising | Total amount raised | Net amount raised | Amount used in the current period | Accumulated amount of raised funds used | Total raised funds with changes in uses during the reporting period | Accumulated amount of raised funds with changes in uses during the reporting period | Proportion of raised funds with changes in uses to total raised funds | Total raised funds not yet used | Purposes of raised funds not yet used and the whereabouts | Raised funds being idle for over two years |
| Year 2017 | Private placement of shares | 486,707.55 | 486,707.55 | 134,059.96 | 511,879.75 | 0 | 0 | 0.00% | 49,826.89 | Deposited in special accounts for raised funds, used to purchase bank financial products, deposited as structured deposits | 0 |
| Total | -- | 486,707.55 | 486,707.55 | 134,059.96 | 511,879.75 | 0 | 0 | 0.00% | 49,826.89 | -- | 0 |
| Remarks on overall use of raised funds | |||||||||||
| The Company’s raised funds used in previous years amounted to3,778.20 million yuan, the net amount of interest on cash in bank received in previous years less handling charges amounted to 88.12 million yuan, gains on financial products and structured deposits received in previous years amounted to 630.82 million yuan, and the net expenditure on financial products and structured deposits purchased in previous years amounted to 720.00 million yuan; the raised funds actually used in 2023 amounted to 1,340.60 million yuan, the net amount of interest on cash in bank received in 2023 less handling charges amounted to 17.58 million yuan, gains on financial products and structured deposits received in 2023 amounted to 13.48 million yuan, and the net recovery from financial products and structured deposits purchased in 2023 amounted to 575.00 million yuan; the accumulated amount of the raised funds used amounted to 5,118.80 million yuan, the accumulated net amount of interest on cash in bank received less handling charges amounted to 105.69 million yuan, the accumulated amount of gains on financial products and structured deposits received amounted to 644.30 million yuan, and net expenditure on financial products and structured deposits purchased amounted to 145.00million yuan. As of December 31, 2023, the balance of raised funds was 498.27 million yuan, of which the balance in the special account was 353.27 million yuan (including the net amount of interest on cash in bank less handling charges, gains on financial products and structured deposits received on an accumulated basis). | |||||||||||
(2) Committed projects with raised funds
√ Applicable □ Not Applicable
Unit: RMB 0,000 yuan
| Committed investment projects and over-raised funds whereabouts | Whether changed (including partial changed) | Total committed investment in raised funds | Total amount after adjustment (1) | Input during the reporting period | Accumulated input as of the period end (2) | Investment progress as of the period end (3)=(2)/(1) | Date of reaching designed usable conditions | Benefit realized in the reporting period | Whether the expected benefit is reached | Whether there was significant changes in feasibility of the project |
| Committed investment projects | ||||||||||
| Methionine project with annual output of 0.25 million tons | No | 486,707.55 | 486,707.55 | 134,059.96 | 511,879.75 | 105.17% | December 31, 2023 | 71,084.98 | Yes | No |
| Subtotal | -- | 486,707.55 | 486,707.55 | 134,059.96 | 511,879.75 | -- | -- | 71,084.98 | -- | -- |
| Over-raised funds whereabouts | ||||||||||
| No | ||||||||||
| Total | -- | 486,707.55 | 486,707.55 | 134,059.96 | 511,879.75 | -- | -- | 71,084.98 | -- | -- |
| Conditions of and reasons for not meeting the planned schedule or estimated revenue (by specific project) | Pursuant to the results deliberated and approved by the eighth meeting of the eighth session of Board of Directors and the seventh meeting of the eighth session of the Board of Supervisors dated October 27, 2021, the Company intended to adjust the date when the methionine project with annual output of 0.25 million tons reaches the designed usable conditions from the originally planned December 2021 to June 2023, with other contents remaining unchanged. Main reasons: Due to the impact of the macro economy, the construction progress of the project’s infrastructure has been delayed, the procurement and delivery time of some equipment and materials has been extended, the installation and commissioning of equipment has been delayed, and the overall progress of the investment projects with raised funds has slowed down, which jointly resulted in the postponement of delivery of the projects. Currently, The project's 0.25million tons production line has now met the capitalization conditions and has been transferred to fixed assets. | |||||||||
| Remarks on significant changes in feasibility of projects | None. | |||||||||
| Amount, purposes and progress of use of over-raised funds | Not Applicable | |||||||||
| Changes in implementation locations of investment projects with raised funds | Not Applicable | |||||||||
| Adjustment on the implementation method of investment projects with raised funds | Not Applicable | |||||||||
| Preliminary investment and replacement of investment projects with raised funds | Applicable | |||||||||
| Preliminary investment amounted to 36.06 million yuan, and the replacement of raised funds is completed. | ||||||||||
| Temporary replenishment of working capital with idle raised funds | Not Applicable | |||||||||
| Amount of and reasons for the balance of raised funds in the implementation of projects | Not Applicable | |||||||||
| Uses and whereabouts of unused raised funds | Deposited in special accounts for raised funds, used to purchase bank financial products, deposited as structured deposits | |||||||||
| Problems or other situations in the use and disclosure of raised funds | None. | |||||||||
(3) Change of projects with raised funds
□ Applicable √ Not Applicable
There is no change of projects with raised funds during the reporting period.VIII. Sale of major assets and equities
1. Sale of major assets
□ Applicable √ Not Applicable
There is no sale of major assets during the reporting period.
2. Significant sale of equities
□ Applicable √ Not Applicable
IX. Major entities controlled or invested by the Company
√ Applicable □ Not Applicable
Major subsidiaries and investees with influence on net profit of the Company over 10% (inclusive)
Unit: RMB Yuan
| Entities | Categories | Major businesses | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| Shandong NHU Pharmaceutical Co., Ltd. | Subsidiary | Production and sales of fragrances | 590 million yuan | 396,158.64 | 321,785.69 | 358,508.59 | 135,460.24 | 116,438.69 |
| Shandong NHU Amino-acids Co., Ltd. | Subsidiary | Production and sales of methionine | 1,100 million yuan | 1,025,647.07 | 890,171.17 | 386,200.41 | 119,846.82 | 105,539.03 |
| Shandong NHU Vitamins Co., Ltd. | Subsidiary | Production and sales of feed additives | 500 million yuan | 371,167.68 | 319,164.68 | 220,763.57 | 94,135.47 | 81,652.19 |
| Heilongjiang NHU Biotechnology Co., Ltd. | Subsidiary | Production and sales of fragrances | 700 million yuan | 668,766.81 | 5,118.34 | 184,534.83 | -58,822.29 | -59,118.17 |
Remarks on major holding investeesDetails of acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ Not Applicable
| Subsidiaries | Method for acquisition and disposal of subsidiaries during the reporting period | Effect on the overall production, operation and performance |
| Shandong New Shuang'an Biotechnology Co., Ltd | Acquisition | No significant effect at the beginning of the period. |
X. Structured entities controlled by the Company
□ Applicable √ Not Applicable
XI. Outlook for the future development of the Company
1. The Company’s development strategy
The company will consistently adhere to the development strategy of integration, serialization and synergy, adhere to the strategic mainchannel of "chemical +" and "biological +", improve the ability of applied research and application services, focus on the business ofnutrition products, flavors and spices, polymer new materials and apis, adhere to innovation-driven development of various functionalchemicals, and strengthen the construction of technology and industrial platforms. Strengthen the introduction and cooperation ofadvanced equipment, relying on the four modern production bases of Xinchang, Zhejiang, Shangyu, Shandong Weifang, HeilongjiangSuihua, etc., to realize the extension of the industrial chain, deepen the global marketing network, and promote the sustainable andhigh-quality development of the company. At the same time, the company actively pays attention to and cultivates functional chemicalopportunities related to strategic emerging industries such as plant protection industry, new energy industry, energy conservation andenvironmental protection industry and information industry.
(1) It will continue to expand and strengthen the nutrition business. On the basis of integration and market coordination, lean operation,and continuously improve the comprehensive competitiveness of existing products; At the same time, the rapid development of strategicproducts, ensure the implementation of key projects, constantly enrich product categories, and improve the comprehensivecompetitiveness of products; Continue to deepen the global marketing network layout, improve product application service capabilities.
(2) It will develop wider and deeper in flavor and fragrance business. From the current product structure mainly based on citral series,linalool series and leaf alcohol series, we will gradually diversify, promote the landing of new projects, constantly introduce integrated,serialized and coordinated new flavor varieties, realize the functionalization and differentiation of products, and continue to improvethe core competitiveness of products through internal and external integration, technological innovation and research and development,and lean management.
(3) It will continue its development in new material business. The company based on "chemical +, biological +", the new materialindustry into an important pillar industry of the company, become a new material industry. Guided by cost leadership, we adhere tointegration and serialization development ideas, integrate resources, open cooperation, focus on polymer and key intermediates, make
large products, and coordinate the development of downstream applications; Accurately grasp marketing strategies, improveapplication service capabilities, deploy future product market development in advance, and improve the profitability of existingproducts.
(4) It will focus on making more special and refined APIs. With "leading technology, quality first, proficient in regulations, andindustrial collaboration." In order to guide the idea, we will make use of the company's existing industrial supporting advantages,integrate the company's resources, plan and build a professional base, increase the research and application of new products, newtechnologies and new equipment in the field of apis, achieve differentiated development, and actively promote the core competitivenessof existing products and the expansion of emerging markets.
2. Business plan of the Company
In 2024, the company will focus on the business guiding ideology of "expanding the market, seeking development, strong management,and preventing risks", strengthen confidence, adhere to the strategic main channel of "chemical +" and "biological +", seizeopportunities, practice internal skills, and achieve high-quality development. It mainly focuses on the following aspects:
(1) Go all out, collaborating production and sales to expand the market. First, we will take multiple measures to expand market share.Flexible use of sales strategies, through product differentiation development to accelerate market development, optimize customerservice to strengthen cooperation, through effective channels to do value marketing to enhance brand influence. Second, we willstrengthen sales support through multi-party linkage. Strengthen production and marketing coordination, do a good job in efficient andlow-cost production scheduling, ensure supply chain security around key raw materials, do a good job in customer-centric qualitysupport, and continue to optimize production costs to enhance product competitiveness. Third, more efforts will be made to promotesales layout. Promote marketing digitalization and information upgrading, optimize the "sales + service" model to do a good job ofdifferentiated marketing, strengthen the introduction and training of marketing talents, strengthen the construction of global salesnetwork to improve global sales coordination.
(2) Innovation-driven, concentrating efforts for development. First, we will focus on key products and improve innovation efficiency.To improve research and development efficiency through management process optimization, information technology and other methods,focus on key product research and development, focus on old product technology improvement, and effectively undertake marketdemand to complete product downstream application research. Second, we will deepen cooperation with other countries and speed upthe process of internationalization. It is necessary to improve the international development plan, expand the coverage of innovationcooperation, integrate high-quality global resources, and deepen strategic cooperation with upstream and downstream industrial chainenterprises. Third, accelerate the platform construction, strengthen innovation support, and efficiently promote the construction ofmodular technology platforms with the help of internal and external resources; Focus on the needs of the industry, and give play to thevalue of innovative technology in industrial practice. Fourth, we will promote key projects and ensure the implementation of the strategy.Focus on strategic objectives, allocate resources, and promote the construction progress and test acceptance of projects underconstruction; Complete the production test of the put into production; Evaluate the maturity of uninitiated projects and accelerate theimplementation; Strengthen the demonstration and control of technical transformation and overhaul projects to ensure the effectivenessof projects.
(3) Excellence chasing, enhancing professionalism and strengthen management. First, digital transformation has made a new leap.Enhance the application value of business and data, deepen the construction of smart factories, optimize chemical models with matureexperience, and improve the intelligent manufacturing system. Second, we need to improve the production and operation system.Strengthen the daily supervision and risk control of the quality management system, optimize the customer support process; Strengthenthe target management of the energy management system and measures for energy conservation and carbon reduction, and explore thetransformation of the energy structure. Third, new actions should be taken in ESG management. To undertake customer carbonreduction requirements, plan carbon emission reduction routes, accelerate the construction of comprehensive management and socialresponsibility management mechanisms, and continue to promote cleaner production. Fourth, the integrity of assets should be improved.Comprehensively promote asset integrity system to improve equipment management level; Promote the information construction of
equipment and improve the level of automation. New breakthroughs have been made in building a high talent base. Optimizeorganizational structure and job responsibilities, strengthen employer brand building, and improve recruitment quality; Improve theconstruction of talent echelon and training course system, and promote management improvement. Sixth, we must make newachievements in the construction of corporate culture. Give play to the leading role of culture and create a "culture +" communicationmodel. Strengthen the role of "cultural service management", build cultural brand activities, and enhance the corporate image.
(4) Consistent, keeping stable operation to preventing risks. First, we need to strengthen management and control of business risks.Strengthen industry and policy research and judgment, strive for policy resources, and do a good job in project compliance approval;Refine the overall budget management, optimize cost control, improve the credit rating system, and prevent bad debt risks; Control thescale and pace of investment, do a good job in exchange rate analysis, and ensure operating cash flow; Assess tax risks, establish earlywarning mechanisms, and consolidate corporate governance and internal control. Second, we need to strengthen operational riskmanagement. Adhere to the red line of production safety, upgrade the HSE management system, and strengthen the construction ofprofessional safety teams; Establish a risk assessment mechanism, sort out compliance risks, and strengthen regulation learning;Establish a foreign-related compliance committee to guide the code of conduct for employees. Third, we will strengthen protection ofintellectual property rights. Optimize secret-related management requirements, realize the protection of trade secrets in the wholeprocess, comprehensively carry out patent risk assessment, layout key technologies in advance, and safeguard the rights and interestsof the company.
3. Possible risks
(1) Macroeconomic risks
The global economy is facing numerous uncertainties due to international trade frictions and possible intensification of geopoliticalconflicts. The company will accelerate the pace of globalization, speed up the global strategic layout, continuously improve theconstruction of global innovation, sales, and information centers, establish a diversified innovation chain, supply chain, and customerbase, to promote the company's steady development.
(2) Industry and market competition risks
The Company is facing peer competition in both domestic and international markets. The development of new technologies by itscompetitors will not only impact the market, but also challenge the Company’s market position in the industry. In the future, theCompany will continuously enhance its R&D and innovation capabilities, improve its technology, strengthen cost control, and improvethe competitiveness in the industry.
(3) Risks of raw material price fluctuation
As cost of raw materials accounts for a relatively high proportion of the total cost, the price fluctuations caused by the supply-demandimbalance of raw material will have an impact on the Company’s profit. In the future, the Company will reduce the adverse impact ofraw material price fluctuations through market research and judgment, establishing strategic partnership with suppliers, and improvingthe utilization rate of raw materials.
(4) Exchange rate and trade risks
The company provides products and services to customers in more than 100 countries and regions around the world. Political risks,trade obstacles and exchange rate fluctuations caused by Sino-US trade frictions, international political and economic instability willhave a certain impact on the company's sales revenue and profitability. In the future, the company will take targeted measures to activelyrespond to changes in the international market, strive to stabilize its international market position and actively explore new economicgrowth points to maintain the steady growth of the company's performance.
(5) Risks of changes in environmental protection policies
With the increased social awareness of environmental protection, the promotion of the ecological civilization construction of the CPC
Central Committee, and the strategic goal of “carbon emission peak and carbon neutrality”, the requirements for energy conservation,emission reduction, safety, and environmental protection in the chemical and pharmaceutical manufacturing industry in which theCompany operates are stricter than before. The Company will operate with higher standards and explore more environmentally friendlyways of production to achieve sustainable development.XII. Researches, communications, and interviews received by the Company during thereporting period
√ Applicable □ Not Applicable
| Date of reception | Reception site | Way of reception | Type of visitor | Visitors | Major contents of conversation and information provided | Index for basic information of the investigation |
| April 26, 2023 | "Investor Relations Interactive Platform" of Shenzhen Panorama Network | Network platform online communication | Others | Investors who attended the Company’s online annual performance presentation of 2022 | Introduce the operating conditions of the Company and answer questions from investors | Please refer to the Investor Relations Activities Record Sheet of April 26, 2023, which published at the website http://irm.cninfo.com.cn/ssessgs/S002001 for details. |
| October 19, 2023 | Shanghai office of SZSE and online communication platform of SZSE | Field research | Others | Investors who attended the "Industry Benchmark Laying the Foundation-Collective Exchange Activity" organized by SZSE. | Introduce the operating conditions of the Company and answer questions from investors | Please refer to the Investor Relations Activities Record Sheet of October 19, 2023, which published at the website http://irm.cninfo.com.cn/ssessgs/S002001 for details. |
| December 26, 2023 | Grand Kempinski Hotel Shanghai | Field research | Institution | 1. Zheshang Securities 2. Guotai Asset Management 3. Merchants Securities 4. China Universal Asset Management 5. Aegon-industrial Fund Management 6. CIB fund Management 7. Greenwoods Asset 8. Rongsheng Fund 9. Lord Abbett China Asset Management 10. Fulin Assets 11. United Advance Capital 12. Shanghai Shifeng Assets 13. CITIC-Prudential Fund Management 14. Zhonghai Fund Management 15. Vanfon funds 16. BOC Investment Management 17. Shanghai Wudi Funds 18. Bank Of Communications Schroder Fund Management 19. Bosera Asset Management 20. Shanghai Cubetrade Investment Management 21. Yinhua Fund Management 22. Ashmore-CCSC Fund Management 23. Taiping Asset Management 24. JPMorgan Funds 25. Western Leadbank Fund Management 26. Shanghai Elegant Investment | Introduce the operating conditions of the Company and answer questions from investors | Please refer to the Investor Relations Activities Record Sheet of December 26, 2023, which published at the website http://irm.cninfo.com.cn/ssessgs/S002001 for details. |
XIII. Implementation of the "Quality-Return dual improvement" action plan
Whether the company disclosed the "quality-return dual improvement" action plan.
√Yes □ no
In order to implement the guiding ideology of "to activate the capital market and boost investor confidence" proposed by the PoliticalBureau meeting of the CPC Central Committee and "to vigorously improve the quality and investment value of listed companies, totake more effective and effective measures to stabilize the market and stabilize confidence", safeguard the rights and interests of allshareholders, enhance investor confidence, and promote the long-term sustainable development of the company. The Companypublished the "Announcement on the Action Plan of" Double Improvement of Quality and Return "(2024-002) on designatedinformation disclosure media and http://www.cninfo.com.cn on March 9, 2024, The main content of the action plan includes fouraspects: "Innovation-driven development, excellence and specialization", "Contributor-based sharing of the company's developmentresults", "deepening corporate governance and improving the standard operation level", and "compliance information disclosure andsincere two-way communication".During the reporting period, the company continued to actively return shareholders with relatively stable profit distribution policies
and cash dividend programs, allowing investors to share the results of the company's business development. In addition, in order toboost market confidence, promote employees to create, share, share and co-enrich with enterprises, improve employees' enthusiasm,creativity and responsibility, and enhance the company's cohesion and competitiveness. The company launched the fourth phase of theemployee stock ownership plan and completed the stock purchase in September 2023, with the purchase amount of 480 million yuan.The controlling shareholder NHU Holding Group Co., Ltd. proposed the plan to increase its holdings in 2023, with the amount forincreasing the shares not less than 200 million yuan and not more than 300 million yuan, and the implementation was completed inMarch 2024, with the purchase amount of 300 million yuan. When the secondary market was in turmoil in 2023, the Company disclosedthe "Announcement on the Commitment of the Controlling Shareholders, the actual controller and the Board Supervisor not to reducethe shares of the Company", and NHU Holding Group Co., Ltd. and Mr. Hu Baifan, the actual controller, together with other directorsand senior management personnel who hold the company’s shares, promised not to reduce their shares in the next six months.The company will continue to develop functional chemicals through technology development and product innovation, enrich theproduct line of the fine "chemical +" and "biological +" platform, do the best and specialize in the main fine chemical industry,constantly improve the core competitiveness, and achieve steady and sustainable development of enterprises. In the future, under thepremise of ensuring normal operation, the company insists on providing investors with continuous and stable cash dividends, andcombines the company's operating status and business development goals to bring long-term investment returns to shareholders. At thesame time, the company continues to deepen corporate governance, improve the standard operation level, take the initiative to conveyvalue concepts to investors, understand investors' views and suggestions on the company's operation and development, guide investorsto take the initiative to pay attention to the company's announcement, news and other official channel information, and constantlyimprove the two-way communication mechanism between the company and investors.
Section IV Corporate GovernanceI. Basic informationDuring the reporting period, the Company further improved its corporate governance structure and internal control system, strengthenedits information disclosure management, actively carried out investor relations management and constantly promoted its corporategovernance in strict accordance with the “Company Law of the People’s Republic of China”, the “Securities Law of the People’sRepublic of China” and relevant laws, regulations and regulatory documents of CSRC and the Shenzhen Stock Exchange.
1. About shareholders and general meetings: The Company convenes and holds general meetings in accordance with the requirementsof the “Rules for General Meetings of Listed Companies” and its “Rules of Procedure of General Meetings”, treats all shareholdersequally, ensures that all shareholders, especially small and medium-sized shareholders, have equal status and fully exercise their rights,and ensures that all shareholders have the legal rights to information, participation and voting on significant events.
2. About relationship between the controlling shareholder and the Company: The Company has independent business and self-management ability. The Company’s controlling shareholder strictly regulates its own behavior, exercises the rights of investor throughgeneral meetings, and does not directly or indirectly interfere with the decision-making and operation activities of the Company beyondthe general meetings. The related party transactions between the Company and the controlling shareholder are on an arm’s length basis,while these two are independent of each other in personnel, property, finance, organization and business, and the Company’s Board ofDirectors, Board of Supervisors and internal organizations can operate independently.
3. About directors and the Board of Directors: The Company elects directors and engages independent directors in strict accordancewith the selection and appointment procedures as stipulated in the “Company Law” and the “Articles of Association”. The board sizeand composition meet the requirements of laws and regulations. In accordance with the “Rules of Procedure of the Board of Directors”and other rules, all directors can seriously attend board meetings, faithfully perform their duties for the interests of the Company andall shareholders, actively participate in relevant training, learn relevant laws and regulations, and promote the standardized operationand scientific decision-making of the Board of Directors. The meeting procedures of the Board of Directors comply with legalrequirements, the minutes are complete and true, and the disclosure of information related to the meetings is timely, accurate andsufficient.
4. About supervisors and the Board of Supervisors: The Company’s Board of Supervisors strictly implements relevant provisions ofthe “Company Law” and the “Articles of Association”, and its size and composition meet the requirements of laws and regulations.Under the principle of being responsible to all shareholders, especially small and medium-sized shareholders, the Board of Supervisorsperform their duties conscientiously, conducts supervision on the Company’s financial position, significant events, related partytransactions as well as the legality and compliance of directors and other senior executives in the performance of their duties, andexpresses opinions independently in accordance with the “Rules of Procedure of the Board of Supervisors” and other rules.
5. About performance evaluation and incentive and restraint mechanism: The Company’s performance evaluation and incentivemechanism is fair and transparent, and the emoluments of directors, supervisors and senior executives are based on the Company’sperformance and individual performance; the appointment of senior executives strictly follows the “Articles of Association” andrelevant laws and regulations.
6. About information disclosure and transparency: The Company designates the secretary of the Board of Directors to be responsiblefor information disclosure and receiving visits and inquiries from shareholders, and designates Securities Times, Shanghai SecuritiesNews, China Securities Journal, and Cninfo (http://www.cninfo .com.cn) as the designated newspapers and websites for the Company’sinformation disclosure; Complying with relevant laws and regulations and the requirements of the Company’s “Information DisclosureManagement System”, the Company discloses relevant information in a true, accurate, complete and timely manner to ensure that allshareholders have equal access to information.
7. About stakeholders: the Company can fully respect and safeguard the legitimate rights and interests of stakeholders, realize thecoordination and balance of interests among shareholders, employees, society and other parties, and jointly promote the sustainableand healthy development of the Company.Whether there is a significant difference between the actual situation of corporate governance and laws, administrative regulations andrules on the governance of listed companies issued by the CSRC
□ Yes √ No
There is no significant difference between the actual situation of corporate governance and laws, administrative regulations and ruleson the governance of listed companies issued by the CSRC.II. The Company’s efforts in ensuring the independence of its assets, personnel, finance,organization, business, etc. from the controlling shareholder and actual controllerDuring the reporting period, the Company and the controlling shareholder were completely separated in terms of business, personnel,assets, finance, organization, etc. With stable production and operation, complete internal organization, the Company was able tooperate independently and in a standardized manner.
1. Independence of business
The Company operates independently under a complete business structure, and has no business in horizontal competition with that ofthe controlling shareholder. The controlling shareholder does not directly or indirectly interfere with the Company’s business operations.
2. Independence of personnel
The Company’s labor, personnel and remuneration management are completely independent. The Company has entered into laborcontracts with employees, and formulated a strict labor system such as employment, assessment, promotion, training, etc. Allemployees are paid by the Company. All senior executives work full-time and receive emoluments from the Company, and do not holdany administrative positions concurrently in the controlling shareholder and its subordinate entities.
3. Independence of assets
The Company has an independent and complete production, supply, sales system and supporting facilities, and has independentindustrial property rights, trademarks, non-patented technologies and other intangible assets.
4. Independence of finance
The Company has an independent financial and accounting department, and has established an independent accounting system andfinancial management system to makes financial decisions independently. The Company opens bank accounts and pays taxesindependently.
5. Independence of organization
The Company’s organization is independent from the controlling shareholder. The Company has established a relatively soundorganizational structure, and has established decision-making and supervision institutions such as the general meeting of shareholders,the Board of Directors, the Board of Supervisors, etc. The Company set up the Board Office, Audit Department, Financial Department,Securities Department, President’s Office, Human Resources Department, Production and Operation Department, HSE ManagementDepartment, Engineering Equipment Management Department, Logistics Department, Marketing Service Department, Science andTechnology Cooperation Department, Intellectual Property Department, Research Institute and other functional departments. Theaforementioned institutions and functional departments operate independently, and there is no situation where the controllingshareholder’s institutions act on behalf of the Company.III. Horizontal competition
□ Applicable √ Not applicable
IV. Annual general meeting and extraordinary general meetings held during the reportingperiod
1. General meeting of shareholders
| Session | Type of meetings | Proportion of participating investors | Meeting date | Disclosure date | Resolutions |
| General meeting of shareholders of 2022 | Annual general meeting of shareholders | 52.95% | May 19, 2023 | May 20, 2023 | 9 proposals including the Annual Work Report of the Board of Directors of 2022 were deliberated and approved. Please refer to Announcement No. 2023-025 disclosed on http://www.cninfo.com.cn for details. |
| The first extraordinary general meeting of shareholders in 2023 | Extraordinary general meeting of shareholders | 55.24% | June 26, 2023 | June 27, 2023 | 2 proposals including the Forth Phase of Employee Stock Ownership Plan (Draft) of Zhejiang NHU Co., Ltd. and Summary were deliberated and approved. Please refer to Announcement No. 2023-032 disclosed on http://www.cninfo.com.cn for details. |
| The second extraordinary general meeting of shareholders in 2023 | Extraordinary general meeting of shareholders | 54.36% | September 19, 2023 | September 20, 2023 | 4 proposals including the proposal regarding the election of non-independent directors during the board of directors' reshuffle were deliberated and approved. Please refer to Announcement No. 2023-056 disclosed on http://www.cninfo.com.cn for details. |
2. Preference shareholders with restored voting rights request to convene an extraordinary general meeting
□ Applicable √ Not applicable
V. Directors, supervisors and senior executives
1. Basic information
| Name | Gender | Age | Position | Status | Commencement date of service | Termination date of service | Number of shares held at the beginning of the period (shares) | number of shares increased in the current period (shares) | number of shares decreased in the current period (shares) | Other increase/ decrease (shares) | Number of shares held at the end of the period (shares) | Reasons for increase or decrease |
| Hu Baifan | Male | 62 | Chairman | Incumbent | 2/26/1999 | 9/19/2026 | 13,922,998 | 13,922,998 | ||||
| Hu Baishan | Male | 57 | Vice Chairman, President | Incumbent | 2/26/1999 | 9/19/2026 | 14,595,929 | 14,595,929 | ||||
| Shi Guanqun | Male | 53 | Director, Vice President, Secretary of the Board, CFO | Incumbent | 2/26/1999 | 9/19/2026 | 10,477,838 | 10,477,838 | ||||
| Wang Xuewen | Male | 55 | Director, Vice President | Incumbent | 2/26/1999 | 9/19/2026 | 8,877,931 | 8,877,931 | ||||
| Wang Zhengjiang | Male | 55 | Director | Incumbent | 4/12/2008 | 9/19/2026 | 459,000 | 459,000 | ||||
| Zhou Guiyang | Male | 49 | Director | Incumbent | 4/20/2011 | 9/19/2026 | 165,242 | 165,242 | ||||
| Yu Hongwei | Male | 53 | Director | Incumbent | 9/19/2023 | 9/19/2026 | ||||||
| Yu Baijin | Male | 57 | Director | Leave office | 9/15/2020 | 9/19/2023 | ||||||
| Ji Jianyang | Male | 45 | Independent Director | Incumbent | 9/15/2020 | 9/19/2026 |
| Name | Gender | Age | Position | Status | Commencement date of service | Termination date of service | Number of shares held at the beginning of the period (shares) | number of shares increased in the current period (shares) | number of shares decreased in the current period (shares) | Other increase/ decrease (shares) | Number of shares held at the end of the period (shares) | Reasons for increase or decrease |
| Shen Yuping | Male | 67 | Independent Director | Incumbent | 9/19/2023 | 9/19/2026 | ||||||
| Wang Feng | Male | 48 | Independent Director | Incumbent | 9/19/2023 | 9/19/2026 | ||||||
| Wang Yang | Male | 45 | Independent Director | Incumbent | 9/19/2023 | 9/19/2026 | ||||||
| Huang Can | Male | 45 | Independent Director | Leave office | 7/12/2017 | 9/19/2023 | ||||||
| Jin Zanfang | Female | 48 | Independent Director | Leave office | 7/12/2017 | 9/19/2023 | ||||||
| Zhu Jianmin | Female | 60 | Independent Director | Leave office | 7/12/2017 | 9/19/2023 | ||||||
| Lyu Guofeng | Male | 52 | Chairman of the Board of Supervisors | Incumbent | 9/15/2020 | 9/19/2026 | ||||||
| Zhao Jia | Female | 43 | Supervisor | Incumbent | 9/19/2023 | 9/19/2026 | ||||||
| Wang Xiaobi | Female | 42 | Supervisor | Incumbent | 9/19/2023 | 9/19/2026 | ||||||
| Yan Hongyue | Male | 54 | Supervisor | Incumbent | 9/15/2020 | 9/19/2026 | ||||||
| Li Huafeng | Male | 41 | Supervisor | Incumbent | 9/19/2023 | 9/19/2026 | ||||||
| Shi Fangbin | Female | 48 | Chairman of the Board of Supervisors | Leave office | 9/15/2020 | 9/19/2023 | ||||||
| Yu Hongwei | Male | 53 | Supervisor | Leave office | 9/15/2020 | 9/19/2023 | ||||||
| Chen Zhaofeng | Male | 47 | Supervisor | Leave office | 9/15/2020 | 9/19/2023 | ||||||
| Zhang Liying | Female | 47 | Vice President | Incumbent | 9/19/2023 | 9/19/2026 | 47,400 | 47,400 | ||||
| Total | -- | -- | -- | -- | -- | 48,546,338 | 48,546,338 | -- |
Whether there was any resignation of directors and supervisors and dismissal of senior executives during the reporting period
√ Yes □ No
1. The Company held the second extraordinary general meeting of shareholders of 2023 on September 19, to complete the re-electionelection, and elected non-independent directors Hu Baifan, Hu Baishan, Shi Guanqun, Wang Xuewen, Wang Zhengjiang, Zhou Guiyangand Yu Hongwei, and elected independent directors Ji Jianyang, Shen Yuping, Wan Feng and Wang Yang to form the ninth Board ofDirectors of the Company. Elected non-employee representative supervisors Lvu Guofeng, Zhao Jia, Wang Xiaobi, and employeerepresentative supervisors Yan Hongyue and Li Huafeng elected by the company's employee congress to form the ninth Board ofSupervisors of the company. The eighth director Yu Baijin, the eighth independent director Huang Can, Jin Zanfang and Zhu Jianmin,and the eighth supervisor Shi Fangbin, Yu Hongwei and Chen Zhaofeng left office after their terms of office expired.
2. The company held the first meeting of the ninth board of directors on September 19, 2023, elected Hu Baifan as the chairman, HuBai-Shan as the vice chairman, hired Hu Bai-Shan as the president of the company, Shi Guanqun as the secretary of the board, hiredShi Guanqun, Wang Xuewen, Zhang Liying as the vice president of the company, and Shi Guanqun as the financial director of thecompany. On the same day, the company held the first meeting of the ninth Board of Supervisors and elected Lvu Guofeng as thechairman of the Board of Supervisors.For details, please refer to the Announcement on the Completion of the Election of the Board of Directors and the Board of Supervisorsand the Appointment of Senior Management Personnel, Securities Affairs Representative and Head of Internal Audit, (2023-059)published by the Company on designated information disclosure media and http://www.cninfo.com.cn.Changes of directors, supervisors and senior executives
√ Applicable □ Not applicable
| Name | Position | Type | Date | Reasons |
| Yu Baijin | Director | Expiration of employment | Sept. 19, 2023 | Expiration of employment |
| Huang Can | Independent Director | Expiration of employment | Sept. 19, 2023 | Expiration of employment |
| Name | Position | Type | Date | Reasons |
| Jin Zanfang | Independent Director | Expiration of employment | Sept. 19, 2023 | Expiration of employment |
| Zhu Jianmin | Independent Director | Expiration of employment | Sept. 19, 2023 | Expiration of employment |
| Shi Fangbin | Chairman of the Board of Supervisors | Expiration of employment | Sept. 19, 2023 | Expiration of employment |
| Chen Zhaofeng | Supervisor | Expiration of employment | Sept. 19, 2023 | Expiration of employment |
| Yu Hongwei | Director | Appointed | Sept. 19, 2023 | Expiration of employment as a supervisor, Elected as a director on the second extraordinary general meeting of shareholders in 2023 |
| Shen Yuping | Independent Director | Elected | Sept. 19, 2023 | Elected on the second extraordinary general meeting of shareholders in 2023 |
| Wang Feng | Independent Director | Elected | Sept. 19, 2023 | Elected on the second extraordinary general meeting of shareholders in 2023 |
| Wang Yang | Independent Director | Elected | Sept. 19, 2023 | Elected on the second extraordinary general meeting of shareholders in 2023 |
| Lyu Guofeng | Chairman of the Board of Supervisors | Elected | Sept. 19, 2023 | Elected on the first meeting of the Ninth Supervisory Board |
| Zhao Jia | Supervisor | Elected | Sept. 19, 2023 | Elected on the second extraordinary general meeting of shareholders in 2023 |
| Wang Xiaobi | Supervisor | Elected | Sept. 19, 2023 | Elected on the second extraordinary general meeting of shareholders in 2023 |
| Li Huafeng | Supervisor | Elected | Sept. 19, 2023 | Elected on the Employee Representative Congress |
| Zhang Liying | Vice President | Appointed | Sept. 19, 2023 | Appointed on the first meeting of the Ninth Board of Directors |
Remarks on other information
□ Applicable √ Not Applicable
2. Profiles of directors, supervisors and senior executives
Professional background, main work experience and main responsibilities of current directors, supervisors and senior managers of thecompanyHu Baifan (Graduate, Senior Economist) currently serves as the Chairman of the Company. He used to work in Xinchang DashijuVocational Middle School.Hu Baishan (EMBA of Zhejiang University, Senior Engineer) currently serves as the Vice Chairman and President of the Company.He used to be the Deputy General Manager of the Company.Shi Guanqun (Accountant) currently serves as the Director, Vice President, Secretary of the Board of Directors and CFO of theCompany. He used to be the manager of the Financial Department of the Company.Wang Xuewen (majoring in business management at Donghua University) currently serves as the Director and Vice President of theCompany, and the General Manager of the Nutrition Business Department. He used to be the manager of the Company’s supply andmarketing company.Wang Zhengjiang (Master’s degree, Senior Engineer) currently serves as the Director of the Company, General Manager of MethionineBusiness Department, and the General Manager of Shandong NHU Amino-acids Co., Ltd. He used to be the manager of Shangyu NHUBio-Chem Co., Ltd.Zhou Guiyang (Bachelor’s degree) currently serves as the Director of the Company and General Manager of Zhejiang NHU SpecialMaterials Co., Ltd. and General Manager of Zhejiang Xinhecheng Nylon Material Co., Ltd. and General Manager of Shangyu Base.Heused to be the Deputy General Manager of Shangyu NHU Bio-Chem Co., Ltd.Yu Hongwei (Bachelor’s degree) currently serves as the Supervisor of the Company, General Manager of Shandong Industrial Parkand General Manager of Shandong NHU Vitamins Co., Ltd. and Shandong NHU Fine Chemical Science and Technology Co., Ltd. Heused to be the Deputy Chief Engineer of Zhejiang Juhua Group Co., Ltd.
Ji Jianyang, (Master’s degree), independent director, has been a partner of Beijing Guantao Zhongmao (Hangzhou) Law Firm since2014, and a practice tutor of Zhejiang University Law School, and served as independent director of Jingu Stock (002488) and FengliIntelligence (301368).Shen Yuping (PhD in Economics), independent director, has served as professor and dean of Zhejiang University of Finance andEconomics, and is currently a professor of Zhejiang University of Finance and Economics, a master's supervisor, a famous teacher inZhejiang Province, a registered tax agent, a talent of "151 Talent Project", and vice president of Zhejiang Tax Society. He is also theindependent director of Hongxun Technology (603015) and Jiaao Environmental Protection (603822).Wan Feng, Ph.D., independent Director, has served as senior software Engineer of Oracle Software Company (China), AssistantProfessor of Business and Management School of Beijing Normal University, and Associate Professor of University of East Anglia.Since 2021, he has been an associate professor of International Business School of Zhejiang University.Wang Yang (Doctor of Accounting), independent director, has successively served as senior manager of Ping An Securities Co., LTD.,Post-doctoral workstation of Shenzhen Stock Exchange, senior manager of Beijing Working Group, senior manager of National Smalland Medium Enterprises Share Transfer System Co., LTD., senior manager of Zhongguancun Innovative and EntrepreneurialEnterprises Listing Training Base of Shenzhen Stock Exchange. Since 2018, he has been the director of risk control and the person incharge of compliance risk control of Beijing Zhiming Haojin Investment Management Co., LTD. He is also the independent directorof Intech Medical (300677).Lv Guofeng, (Master’s degree) Chairman of the Board of Supervisors of the Company, is currently the general manager of HeilongjiangXinhecheng Biotechnology Co., LTD., and used to be the general manager of Fragrance Division, general manager of ShandongXinhecheng Pharmaceutical Co., LTD., and general manager of Shangyu Production Area of Nutrition Division.Zhao Jia, (Master’s degree) Supervisor of the company, currently serves as the director of Risk Control Department of XinhechengHolding Group Co., LTD. He is also the chairman of the Board of Supervisors of Beijing Fuyuan Pharmaceutical Co., LTD., and thesupervisor of Shaoxing Yuexiu Education Development Co., LTD., Zhejiang Jingshi Real Estate Co., LTD., Shaoxing Heyue PropertyServices Co., LTD. He served as the legal secretary of Xinhecheng Holding Group Co., LTD., the secretary of the board of FuyuanPharmaceutical Co., LTD., and the director of the Supervision Department of Xinhecheng Holding Group Co., LTD.Wang Xiaobi, (Bachelor’s degree) senior accountant, Supervisor of the Company, currently Assistant Vice President of the companyand head of the Securities Department, and also serves as the supervisor of Shandong Xinhecheng Holding Co., LTD., HeilongjiangXinhecheng Biological Chemical Co., LTD., Zhejiang Saiya Chemical Co., LTD. He was the head of the fund Department and theMinister of Finance of the company.Yan Hongyue (Bachelor’s degree) currently serves as the Supervisor of the Company and General Manager of Xinchang Base. Heused to be the General Manager of Shandong NHU Vitamins Co., Ltd., Assistant to General Manager and Deputy General Manager ofShandong NHU Pharmaceutical Co., Ltd.Li Huafeng, (Master’s degree) currently serves as the Supervisor of the Company the assistant vice president and deputy Generalmanager of Animal Nutrition Division of the company. He used to be the head of the Spice Sales Department, assistant general managerand sales manager, deputy general manager of the Spice Department, Sales manager, Deputy general manager and marketing managerof the Nutrition Department.Zhang Liying, (Bachelor’s degree) senior economist, current Vice president of the company, has served as Deputy Chief of the QualityControl Section, director of the company Certification Office, Assistant Minister of Enterprise Management, Assistant director of thePresident's Office, Deputy Minister of Enterprise Management (presiding), Deputy Minister of Human Resources (presiding), Ministerof Human Resources, and assistant to Vice President.Directors, supervisors and senior executives that serve in shareholders
√ Applicable □ Not applicable
| Name of persons | Name of shareholders | Position in shareholders | Commencement date of service | Termination date of service | Whether receive emoluments and allowances from shareholders |
| Hu Baifan | NHU Holding Group Co., Ltd. | Chairman, CEO | 11/11/2011 | 12/27/2026 | No |
| Hu Baishan | NHU Holding Group Co., Ltd. | Director | 11/11/2011 | 12/27/2026 | No |
| Shi Guanqun | NHU Holding Group Co., Ltd. | Director | 11/11/2011 | 12/27/2026 | No |
| Wang Xuewen | NHU Holding Group Co., Ltd. | Director | 11/11/2011 | 12/27/2026 | No |
| Wang Zhengjiang | NHU Holding Group Co., Ltd. | Director | 12/28/2023 | 12/27/2026 | No |
| Zhou Guiyang | NHU Holding Group Co., Ltd. | Chairman of the Board of Supervisors | 12/28/2023 | 12/27/2026 | No |
| Zhao Jia | NHU Holding Group Co., Ltd. | Head of Risk Control Department | 4/1/2019 | To date | Yes |
| Explanation of employment at shareholder units | None | ||||
Directors, supervisors and senior executives that serve in other entities
√ Applicable □ Not applicable
| Name of persons | Name of other entities | Position in other entities | Commencement date of service | Termination date of service | Whether receive emoluments and allowances from other entities |
| Hu Baifan | Zhejiang Gengdu Investment Co., Ltd. | Executive Director and CEO | 9/4/2012 | To date | No |
| Hu Baifan | Xinchang Heli Investment Co., Ltd. | Director | 1/3/2017 | To date | No |
| Hu Baifan | Safe & Rich Venture Capital Co., Ltd. | Director | 12/5/2008 | To date | No |
| Hu Baifan | THE Investment Management Co., Ltd. | Director | 9/21/2015 | To date | No |
| Hu Baifan | Xinchang Qinjin Investment Co., Ltd. | Chairman | 6/10/2015 | To date | No |
| Hu Baifan | Xinchang Qinjin Investment Co., Ltd. | CEO | 5/30/2019 | To date | No |
| Hu Baifan | Xinchang Rural Commercial Bank Co., Ltd. | Director | 1/26/2005 | To date | No |
| Hu Baifan | Hangzhou Foremost Material Technology Co., Ltd. | Director | 8/2/2010 | 8/31/2023 | No |
| Hu Baifan | Beijing Foyou Pharma CO.,LTD. | Director | 5/16/2019 | 5/27/2025 | No |
| Hu Baifan | Shaoxing Yuexiu Education Development Co., Ltd. | Chairman and CEO | 12/5/2016 | 7/25/2026 | No |
| Hu Baifan | Zhejiang Huixian Venture Capital Co., Ltd. | Executive Director and CEO | 3/16/2017 | To date | No |
| Hu Baifan | Zhejiang Hefeng Investment Co., Ltd. | Executive Director | 4/20/2018 | To date | No |
| Hu Baifan | Zhejiang Hefeng Investment Co., Ltd. | CEO | 7/21/2022 | To date | No |
| Hu Baifan | NHU Real Estate Holding Co., Ltd. | Director | 12/2/2010 | To date | No |
| Hu Baifan | Xinchang County NHU Real Estate Co., Ltd. | Director | 3/20/2017 | To date | No |
| Hu Baishan | Zhejiang Second Pharma Co., Ltd. | Director | 9/15/2017 | 12/20/2024 | No |
| Hu Baishan | Shaoxing Yuexiu Education Development Co., Ltd. | Director | 12/5/2016 | 7/25/2026 | No |
| Shi Guanqun | Xinchang Heli Investment Co., Ltd. | Chairman | 11/30/2012 | To date | No |
| Shi Guanqun | Xinchang Qinjin Investment Co., Ltd. | Director | 6/10/2015 | To date | No |
| Shi Guanqun | Shaoxing Yuexiu Education Development Co., Ltd. | Director | 12/5/2016 | 7/25/2026 | No |
| Shi Guanqun | NHU Real Estate Holding Co., Ltd. | Director | 12/2/2010 | To date | No |
| Shi Guanqun | Zhejiang Jingshi Real Estate Co., Ltd. | Director | 9/22/2020 | To date | No |
| Shi Guanqun | Zhejiang Deli Equipment Co., Ltd. | Director | 10/24/2016 | 10/27/2024 | No |
| Shi Guanqun | Beijing Foyou Pharma CO.,LTD. | Director | 5/16/2019 | 5/27/2025 | No |
| Shi Guanqun | Xinchang County NHU Real Estate Co., Ltd. | Director | 3/20/2017 | To date | No |
| Zhou Guiyang | Envalior NHU Engineering Materials (Zhejiang) Co.,Ltd. | Vice Chairman | 1/7/2016 | To date | No |
| Name of persons | Name of other entities | Position in other entities | Commencement date of service | Termination date of service | Whether receive emoluments and allowances from other entities |
| Zhou Guiyang | Zhejiang Saiya Chemical Materials Co., Ltd. | Director | 1/3/2017 | 3/28/2026 | No |
| Ji Jianyang | Beijing Guantao Zhongmao (Hangzhou) Law Firm | Partner | 1/9/2014 | To date | Yes |
| Ji Jianyang | Zhejiang Jingu Co., Ltd. | Independent Director | 11/7/2023 | 11/6/2026 | Yes |
| Ji Jianyang | Zhejiang Fore Intelligent Technology Co., Ltd. | Independent Director | 12/12/2023 | 12/11/2026 | Yes |
| Ji Jianyang | Hangzhou Quantum Fanyu Film and Television Culture Media Co., Ltd | Director | 5/28/2021 | 5/27/2024 | Yes |
| Ji Jianyang | Zhejiang International Trade Group | Outside director | 12/18/2021 | 12/17/2024 | Yes |
| Shen Yuping | Zhejiang University of Finance & Economics | Professor | 8/6/1980 | To date | Yes |
| Shen Yuping | Ningbo Techmation Co., Ltd. | Independent Director | 1/15/2021 | 1/15/2027 | Yes |
| Shen Yuping | Zhejiang Jiaao Enprotech Stock Co., Ltd. | Independent Director | 9/5/2022 | 3/14/2024 | Yes |
| Shen Yuping | Xianheng International Science&Technology Co., Ltd. | Independent Director | 8/18/2017 | 9/5/2023 | Yes |
| Shen Yuping | Tax Institute of Zhejiang Provincial | Vice Chairman | 4/26/2014 | 4/27/2024 | No |
| Shen Yuping | Liangzhi Zhongcheng Certified Public Accountants | Consultant | 5/16/2022 | 4/16/2024 | Yes |
| Wang Feng | Zhejiang University International Business School | Associate Professor | 12/1/2021 | 12/31/2027 | Yes |
| Wang Yang | Beijing Zhiming Haojin Investment Management Co., Ltd. | Risk Control Director, Compliance Risk Control Responsible Person | 1/1/2018 | To date | Yes |
| Wang Yang | Pacific Securities Co., Ltd | Investment Advisor | 12/1/2018 | To date | Yes |
| Wang Yang | Henan Pingmei Shenma Private Equity Fund Management Co., Ltd | Director | 3/1/2021 | To date | No |
| Wang Yang | Guangdong Yikang Health Industry Group Co., Ltd. | Independent Director | 1/1/2021 | To date | Yes |
| Wang Yang | Intco Medical Technology Co., Ltd. | Independent Director | 3/14/2022 | To date | Yes |
| Zhao Jia | Beijing Foyou Pharma CO.,LTD. | Chairman of the Board of Supervisors | 5/28/2022 | 5/27/2025 | No |
| Zhao Jia | Shaoxing Yuexiu Education Development Co., Ltd. | Supervisor | 12/5/2016 | 7/25/2023 | No |
| Zhao Jia | Zhejiang Jingshi Real Estate Co., Ltd. | Supervisor | 9/22/2020 | To date | No |
| Zhao Jia | Shaoxing Heyue Property Service Co., Ltd. | Supervisor | 8/10/2020 | To date | No |
| Wang Xiaobi | Zhejiang Saiya Chemical Co., Ltd. | Chairman of the Board of Supervisors | 7/23/2023 | 3/28/2026 | No |
| Wang Xiaobi | Xinchang Heli Investment Co., Ltd. | Director | 12/29/2016 | To date | No |
Penalties imposed by securities regulators on current and outgoing directors, supervisors and senior executives of the Company in thepast three years
√ Applicable □ Not applicable
On October 18, 2021, Zhejiang Securities Regulatory Bureau issued the "Administrative Penalty Decision" ([2021] No. 19), believingthat Li Li, then the manager of the data enhancement Department of the Internet service business group of Daily Interactive Co., LTD.,fabricated multiple sales contracts and related settlement documents between the company and customers by forging seals and othermeans. Daily Interactive did not find the above contract and business falsehood in time, confirmed the relevant sales revenue andprepared financial statements accordingly, resulting in false records in the three quarterly reports of 2019, annual reports of 2019,quarterly reports of 2020, semi-annual reports of 2020, and three quarterly reports of 2020 disclosed by Daily Interactive. The aboveconduct of Daily Interactive violates Article 63 of the Securities Act of 2005 and Article 78, paragraph 2, of the Securities Act of 2019,and constitutes an information disclosure violation described in Article 197, paragraph 2, of the Securities Act of 2019.
Zhu Jianmin (who left office during the reporting period), was the independent director of the Company, and the deputy general managerand Chief financial officer of DailyInteractive at that time and was in charge of financial work. He failed to ensure the truth, accuracyand completeness of the information disclosure of DailyInteractive Co., LTD., and was directly responsible for the illegal informationdisclosure. According to the provisions of the second paragraph of Article 197 of the Securities Law of 2019, the Zhejiang SecuritiesRegulatory Bureau decided to give Zhu Jianmin a warning and impose a fine of 800,000 yuan. On February 24, 2022, the ShenzhenStock Exchange issued the Decision on giving Notice and Criticism to DailyInteractive Co., Ltd. and relevant parties, giving noticeand criticism to Zhu Jianmin on the above matters.3. Emoluments of directors, supervisors and senior executives.
3. Remuneration of directors, supervisors and senior managers
Decision-making procedure, basis for determination and actual payment of emoluments of directors, supervisors and senior executivesDecision-making procedure: According to the standards stipulated by the Company’s unified remuneration management system, theemoluments of the Company’s directors, supervisors and senior executives are determined based on the result of the regular assessmentunder the Company’s performance appraisal mechanism. The allowance standard for independent directors shall be deliberated anddecided by the general meeting of shareholders.Basis for determination: Emoluments of directors, supervisors and senior executives are determined based on the Company’s resultsof operations and performance appraisal indicators.Emoluments of directors, supervisors and senior executives during the reporting period
Unit: RMB 0,000 yuan
| Name | Gender | Age | Position | Status | 2023 emoluments | Whether receive emoluments from related parties of the Company |
| Hu Baifan | Male | 62 | Chairman | Incumbent | 450.47 | No |
| Hu Baishan | Male | 57 | Vice Chairman, President | Incumbent | 299.37 | No |
| Shi Guanqun | Male | 53 | Director, Vice President, Secretary of the Board, CFO | Incumbent | 170.04 | No |
| Wang Xuewen | Male | 55 | Director, Vice President | Incumbent | 125.46 | No |
| Wang Zhengjiang | Male | 55 | Director | Incumbent | 262.26 | No |
| Zhou Guiyang | Male | 49 | Director | Incumbent | 75.16 | No |
| Yu Hongwei | Male | 53 | Director | Incumbent | 140.16 | No |
| Yu Baijin | Male | 57 | Director | Leaving office | 10.45 | No |
| Ji Jianyang | Male | 45 | Independent Director | Incumbent | 10.60 | No |
| Shen Yuping | Male | 67 | Independent Director | Incumbent | 3.00 | No |
| Wang Feng | Male | 48 | Independent Director | Incumbent | 3.00 | No |
| Wang Yang | Male | 45 | Independent Director | Incumbent | 3.00 | No |
| Huang Can | Male | 45 | Independent Director | Leaving office | 7.60 | No |
| Jin Zanfang | Female | 48 | Independent Director | Leaving office | 7.60 | No |
| Zhu Jianmin | Female | 60 | Independent Director | Leaving office | 7.60 | No |
| Lyu Guofeng | Male | 52 | Chairman of the Board of Supervisor | Incumbent | 152.36 | No |
| Zhao Jia | Female | 43 | Supervisor | Incumbent | 0.00 | Yes |
| Wang Xiaobi | Female | 42 | Supervisor | Incumbent | 26.17 | No |
| Yan Hongyue | Male | 54 | Supervisor | Incumbent | 91.23 | No |
| Li Huafeng | Male | 41 | Supervisor | Incumbent | 34.02 | No |
| Shi Fangbin | Female | 48 | Chairman of the Board of Supervisor | Leaving office | 0.00 | Yes |
| Chen Zhaofeng | Male | 47 | Supervisor | Leaving office | 17.51 | No |
| Zhang Liying | Female | 47 | Vice President | Incumbent | 49.71 | No |
| Total | -- | -- | -- | -- | 1,946.77 | -- |
Other information note
√Applicable □ Not applicable
During the reporting period, the compensation for the company's key management personnel was 26.52 million yuan, including 19.47million yuan for the salaries of directors, supervisors, and senior management personnel in 2023, 4.35 million yuan for the settlementin 2021, and 2.70 million yuan for the settlement in 2022.VI. Directors’ performance of duties during the reporting period
1. Meetings of the Board of Directors during the reporting period
| Session | Meeting date | Disclosure date | Resolutions |
| The fifteenth meeting of the eighth session of Board of Directors | 4/19/2023 | 4/21/2023 | 18 proposals including the “Annual Work Report of the Board of Directors of 2022” were deliberated and approved. Please refer to Announcement No. 2023-005 disclosed on http://www.cninfo.com.cn for details. |
| The sixteenth meeting of the eighth session of Board of Directors | 6/7/2023 | 6/8/2023 | 3 proposals including the “the Forth Phase of Employee Stock Ownership Plan (Draft) of Zhejiang NHU Co., Ltd. and Summary” were deliberated and approved. Please refer to Announcement No. 2023-027 disclosed on http://www.cninfo.com.cn for details. |
| The seventeenth meeting of the eighth session of Board of Directors | 8/28/2023 | 8/30/2023 | 7 proposals including the “Semi-annual Report of Board of Directors of 2023 and Summary” were deliberated and approved. Please refer to Announcement No. 2023-039 disclosed on http://www.cninfo.com.cn for details. |
| The first meeting of the ninth session of Board of Directors | 9/19/2023 | 9/20/2023 | 6 proposals including the “Proposal regarding the election of the Chairman and Vice Chairman of the ninth board of directors of the company.” were deliberated and approved. Please refer to Announcement No. 2023-058 disclosed on http://www.cninfo.com.cn for details. |
| The second meeting of the ninth session of Board of Directors | 10/25/2023 | 10/27/2023 | 2 proposals including the “Third Quarterly Report of 2023” were deliberated and approved. Please refer to Announcement No. 2023-061 disclosed on http://www.cninfo.com.cn for details. |
2. Directors’ attendance at meetings of the Board of Directors and general meetings of shareholders
| Directors’ attendance at meetings of the Board of Directors and general meetings of shareholders | |||||||
| Name of directors | Number of board meetings to be present during the reporting period | Number of board meetings attended on site | Number of board meetings attended through audio visual means | Number of board meetings attended by proxy | Number of absences from board meetings | Whether directors failed to attend two consecutive board meetings in person | Number of general meetings attended |
| Hu Baifan | 5 | 5 | 0 | 0 | 0 | No | 3 |
| Hu Baishan | 5 | 5 | 0 | 0 | 0 | No | 3 |
| Shi Guanqun | 5 | 5 | 0 | 0 | 0 | No | 3 |
| Wang Xuewen | 5 | 5 | 0 | 0 | 0 | No | 3 |
| Wang Zhengjiang | 5 | 2 | 3 | 0 | 0 | No | 2 |
| Zhou Guiyang | 5 | 2 | 3 | 0 | 0 | No | 2 |
| Yu Hongwei | 2 | 1 | 1 | 0 | 0 | No | 0 |
| Yu Baijin | 3 | 0 | 2 | 1 | 0 | No | 1 |
| Ji Jianyang | 5 | 2 | 3 | 0 | 0 | No | 3 |
| Shen Yuping | 2 | 1 | 1 | 0 | 0 | No | 0 |
| Wang Feng | 2 | 1 | 1 | 0 | 0 | No | 0 |
| Wang Yang | 2 | 1 | 1 | 0 | 0 | No | 0 |
| Huang Can | 3 | 1 | 2 | 0 | 0 | No | 1 |
| Jin Zanfang | 3 | 1 | 2 | 0 | 0 | No | 2 |
| Zhu Jianmin | 3 | 1 | 2 | 0 | 0 | No | 1 |
Remarks on failure to attend two consecutive board meetings in person：N/A
3. Directors’ objections to relevant matters of the Company
Whether directors have raised objections to relevant matters of the Company
□ Yes √ No
Directors have not raised any objections to relevant matters of the Company during the reporting period.
4. Other remarks on directors’ performance of duties
Whether the directors’ recommendation on the Company were adopted
√ Yes □ No
Remarks on directors’ recommendation on the Company adopted or not adoptedDuring the reporting period, the directors, in strict accordance with the “Articles of Association”, “Rules of Procedures of the Boardof Directors” and relevant laws and regulations, actively attended board meetings and general meetings, performed their duties withdiligence, put forward relevant opinions on significant governance and operation decisions in accordance with the actual situation ofthe Company, formed unanimous opinions after full communication and discussion, and resolutely supervised and promoted theimplementation of the resolutions made by the Board of Directors to ensure scientific, timely and efficient decision-making andsafeguard the legitimate rights and interests of the Company and all shareholders.VII. Special committees under the Board of Directors during the reporting period
| Name of committees | Members | Number of meetings held | Meeting date | Content of meeting | Important comments and suggestions made | Other performance of duties | Details of dispute (if any) |
| The eighth session of Remuneration and Assessment Committee | Zhu Jianmin, Jin Zanfang, Shi Guanqun | 2 | 4/19/2023 | 5 proposals including “Summary of Internal Audit for the Year 2022 and 2023 Work Plan”, were deliberated and approved. | |||
| 8/18/2023 | 3 proposals including “Summary of Internal Audit for the Half Year of 2023 and Work Plan for the Third Quarter of 2023” were deliberated and approved. | ||||||
| The ninth session of Remuneration and Assessment Committee | Shen Yuping, Ji Jiangyang, Wang Yang | 2 | 9/19/2023 | 2 proposals including “The nomination of the company's CFO” were deliberated and approved. | |||
| 10/20/2023 | 3 proposals including “Summary of Internal Audit for the Third Quarter of 2022 and Work Plan for the Fourth Quarter of 2022” were deliberated and approved. | ||||||
| The eighth session of Remuneration and Assessment Committee | Ji Jianyang, Hu Baishan, Huang Can, Zhu Jianmin, Shi Guanqun | 2 | 6/2/2023 | "The fourth phase of the employee stock ownership plan (draft) and its summary" was deliberated and approved. | |||
| 8/18/2023 | "The proposal regarding the standard of work allowances for independent directors" was deliberated and approved. | ||||||
| The eighth session of Nomination Committee | Hu Baifan, Huang Can, Ji Jiangyang | 1 | 8/18/2023 | 2 proposals including “The election of non-independent directors for the board of directors' reshuffle” were deliberated and approved. | |||
| The eighth session of Nomination Committee | Hu Baifan, Ji Jiangyang, Wang Yang | 1 | 9/19/2023 | "The proposal on the nomination of the company's CEO and Secretary of the Board" was deliberated and approved. |
VIII. Work of the Board of Supervisors
Whether the Board of Supervisors found any risks in the Company during its supervisory activities in the reporting period
□ Yes √ No
The Board of Supervisors has no objection to the supervised matters during the reporting period.
IX. Employees
1. Number of employees, professional workforce and education level
| Number of active employees of the parent company at the end of the reporting period | 579 |
| Number of active employees of major subsidiaries at the end of the reporting period | 11,178 |
| Total number of active employees at the end of the reporting period | 11,757 |
| Total number of employees receiving remuneration in the current period | 11,757 |
| Number of retired cadres and employees whose expenses borne by the parent company and major subsidiaries | 7 |
| Professional workforce | |
| Categories | Number |
| Production staff | 7,619 |
| Sales staff | 186 |
| Technical staff | 2,803 |
| Finance staff | 104 |
| Administrative staff | 1,045 |
| Total | 11,757 |
| Education level | |
| Categories | Number |
| Doctoral degree | 81 |
| Master’s degree | 1,169 |
| Bachelor’s degree | 3,751 |
| Associate degree | 4,248 |
| High school education, secondary vocational school education or below | 2,508 |
| Total | 11,757 |
2. Remuneration policy
The Company formulates the “Remuneration Management System” in accordance with the “Labor Law of the People’s Republic ofChina” and relevant laws and regulations to provide competitive remunerations. A remuneration package is mainly composed of basesalary, performance-based pay and benefits. The Company also offers employee incentives including incremental rewards, specialcontribution rewards, incentives during the tenure, and additional rewards for high performance beyond expectations. The Companypays five insurances and a housing fund, and continuously improves employee satisfaction and loyalty.
3. Training program
With the strategic goal of “building a highland of talents”, the Company takes supporting business development as the starting pointand job-based talent standards as the direction to promote various types of talent training in an orderly manner. It launches leadershiptraining courses for middle level, high level and grassroots management cadres to effectively improve the management ability andquality of management cadres. It also launches professional ability development classes related to equipment, HSE and R&D tostrengthen technical staff skills. For new staff, the Company offers induction training to enhance their cultural identities andprofessional abilities. It organizes on-the-job training, skill level training, certification training for special equipment and special typeof work to ensure that employees meet all regulations and skill requirements. The Company makes efforts to cultivate 5 types of talents:
international talents, leadership talents, management talents, core technical talents and core skill talents. On the one hand, it furtherimproves the development and utilization of internal lecturer resources and absorbs internal excellent experiences and practices for a
better enterprise succession; On the other hand, it combines “inviting in” and “going out” to establish a cooperation mechanism fortraining talents at different levels and expand their thinking and vision through external training, exchange with advanced enterprises,study tours, etc. The Company aims to make each employee get the opportunity to learn and the platform to grow, so that they canfulfill themselves and achieve personal growth along with the Company. Talents are the most valuable, sustainable and competitivestrategic resources of the Company.
4. Labor outsourcing
□ Applicable √ Not applicable
X. Profit distribution and conversion of capital reserve into share capital
Profit distribution policy during the reporting period, especially the establishment, implementation or adjustment of cash dividendpolicy
√ Applicable □ Not applicable
The 2022 Annual General meeting of shareholders held on May 19, 2023 reviewed and approved the 2022 Annual Profit DistributionPlan, which was implemented and completed on June 14, 2023. The Annual Equity Distribution Plan for 2022: Based on 3,073,421,680shares (3,090,907,356 shares, the total share capital of the company at that time, excluded 17,485,676 repurchased shares), the cashdividend of RMB5 (including tax) was distributed to all shareholders for every 10 shares, and the total cash distribution wasRMB1,536,710,840.00 (including tax).
| Special remarks on cash dividend policy | |
| Whether it complies with the Articles of Association or the resolution of the general meeting: | Yes |
| Whether the criteria and proportion of dividends are clear and unambiguous: | Yes |
| Whether relevant decision-making procedures and mechanisms are complete: | Yes |
| Whether the independent directors have performed their duties and responsibilities and played their due roles: | Yes |
| Specific reasons and the next steps it intends to take to enhance the investor return level if the Company did not pay cash dividend: | N/A |
| Whether small and medium-sized shareholders have adequate opportunities to express their opinions and demands, and whether their legitimate rights and interests are adequately protected: | Yes |
| In case of changes or adjustments of the cash dividend policy, whether the conditions and procedures are compliant and transparent: | N/A |
The Company is profitable during the reporting period and the parent company’s profit available for distribution is positive but nocash dividend distribution plan has been proposed
□ Applicable √ Not applicable
Profit distribution and conversion of capital reserve into share capital during the reporting period
√ Applicable □ Not applicable
| Number of bonus shares for every 10 shares (shares) | 0 |
| Dividends for every 10 shares (yuan) (tax included) | 4.50 |
| Number of shares increased for every 10 shares (shares) | 0 |
| Equity base for distribution proposal (shares) | 3,073,421,680 |
| Amount of cash dividends (yuan) (tax included) | 1,383,039,756 |
| Amount of cash dividends by other methods (such as share repurchase) (yuan) | 0 |
| Total cash dividends (including those by other methods) (yuan) | 1,383,039,756 |
| Profit available for distribution (yuan) | 5,137,599,917.63 |
| Proportion of total cash dividends (including those by other methods) to total profit distribution | 100% |
| Details on cash dividend |
| If the Company is in growth stage and there are major capital expenditure arrangements, the proportion of cash dividends in this profit distribution shall be at least 20%. |
| Details on proposals on profit distribution or conversion of capital reserve into share capital |
| Profit distribution proposal deliberated and approved by the meeting of the Board of Directors is as follows: Based on the 3,073,421,680 shares (total share capital of 3,090,907,356 excluding 17,485,676 repurchased shares[Note]), a cash dividend of 4.50 yuan (tax included) will be distributed to all shareholders for every 10 shares, and no bonus shares will be distributed, and the capital reserve will not be converted into share capital. Note: According to the “Rules on Share Repurchase of Listed Companies”, shares in the special account for repurchase of listed companies carry no right of profit distribution and conversion of capital reserve into share capital If the Company’s total share capital was changed due to the conversion of convertible bonds into shares, share repurchase, equity incentive exercise, refinancing and issuing new shares to the public before the implementation of the distribution plan, the total distribution amount shall be adjusted with distribution proportion unchanged. |
XI. Implementation of equity incentive plans, employee stock ownership plans or otheremployee incentive programs
√ Applicable □ Not applicable
1. Equity incentive
Not applicable.Equity incentives received by directors and senior executives of the Company
□ Applicable √ Not applicable
Assessment mechanism and incentives for senior executivesNot applicable.
2. Implementation of employee stock ownership plans
√ Applicable □ Not applicable
All active employee stock ownership plans during the reporting period
| Scope of employees | Number of employees | Total shares held | Changes | Proportion to total share capital of the Company | Sources of fund to implement the plan |
| The third phase of employee stock ownership plan: directors, supervisors, senior executives of the Company, and regular employees of the Company and its holding subsidiaries or wholly-owned subsidiaries who meet the criteria | 681 | 12,157,826 | N/A | 0.39% | Legal remuneration of the employees, self-raised funds and other methods permitted by laws and administrative regulations |
| The fourth phase of employee stock ownership plan: directors, supervisors, senior executives of the Company, and regular employees of the Company and its holding subsidiaries or wholly-owned subsidiaries who meet the criteria | 627 | 29,528,181 | N/A | 0.96% | Legal remuneration of the employees, self-raised funds and other methods permitted by laws and administrative regulations |
Shareholdings of directors, supervisors and senior executives in the employee stock ownership plan during the reporting period
| Name | Position | Number of shares held at the beginning of the reporting period | Number of shares held at the end of the reporting period | Proportion to total share capital of the Company |
| The third phase of employee stock ownership plan: Hu Baishan, Shi Guanqun, Wang Xuewen, Wang Zhengjiang, Zhou Guiyang, Yu Baijin, Shi Fangbin, Lyu Guofeng, Yu Hongwei, Yan Hongyue, Chen Zhaofeng, Zheng Gentu | Directors, supervisors and senior executives | 1,601,317 | 0 | 0.00% |
| The fourth phase of employee stock ownership plan:Hu Baifan, Hu Baishan, Shi Guanqun, Wang Xuewen, Wang Zhengjiang, Zhou Guiyang, Shi Fangbin, Lyu Guofeng, Yu Hongwei, Yan Hongyue, Chen Zhaofeng, Wang Xiaobi, Li Huafeng, Zhang Liying | Directors, supervisors and senior executives | 0 | 8,664,835 | 0.28% |
Changes in asset management agency during the reporting period
□ Applicable √ Not applicable
Changes in equity during the reporting period due to disposal of shares by holders, etc.
□ Applicable √ Not applicable
Exercise of shareholders’ rights during the reporting periodPursuant to the “Third Phase of Employee Stock Ownership Plan (Draft) and the Fourth Phase of Employee Stock Ownership Plan(Draft)”, the plans voluntarily waives the voting rights of holding shares in the general meeting of the Company, while shares acquiredthrough the employee stock ownership plan carry no voting rights in the general meeting. During the reporting period, the employeestock ownership plan did not exercise the voting rights of holding shares in the general meeting, but still enjoyed the right to profitdistribution.Other relevant situations and remarks of the employee stock ownership plan during the reporting period
□ Applicable √ Not applicable
Change in membership of the management committee of employee stock ownership plan
√ Applicable □ Not applicable
1. The management committee of the the third phase of employee stock ownership plan remains unchanged.
2. The management committee of the the forth phase of employee stock ownership plan: pursuant to the first meeting of holders of theforth phase of employee stock ownership plan in manner of voting by correspondence dated June 20, 2023, the proposal on Electionof Members of the Management Committee for the Forth Phase of Employee Stock Ownership Plan was deliberated and approved. Ms.Xi Chun, Mr. Yu Weiguo, Mr. Chen Mengqiao, Mr. Li Huafeng and Ms. Wang Xiaobi were elected as the member of the managementcommittee. The term is the duration of the Company's fourth employee stock ownership plan.Financial impact of employee stock ownership plan on the Company in the reporting period and related accounting treatments
□ Applicable √ Not applicable
Termination of employee stock ownership plan during the reporting period
√ Applicable□ Not applicable
As of November 11, 2023, all shares of the Company held under the third phase of the Employee Stock Ownership Plan have beensold. According to the relevant regulations, the implementation of the third phase of the employee stock ownership Plan has beencompleted and terminated. For details, please refer to the "Announcement on Completion and Termination of the Sale of the ThirdPhase of the Employee Stock Ownership Plan" (Announcement No. 2023-065) published by the Company on designated informationdisclosure media and http://www.cninfo.com.cn on November 11, 2023.
Other remarks
1. The Company held the 16th meeting of the eighth Board of Directors and the 13th meeting of the eighth Board of Supervisors onJune 7, 2023, and the first extraordinary general meeting of shareholders in 2023 on June 26, 2023, to review and pass the employeestock ownership Plan related proposals such as the fourth Employee Stock Ownership Plan (Draft) and its summary of Zhejiang NHUCo., LTD. The fourth phase of the employee stock ownership plan was agreed to be implemented. As of September 25, 2023, a total of29,528,181 shares of the Company have been purchased under the fourth phase of the employee stock ownership Plan through thesecondary market bidding transaction, accounting for 0.9553% of the Company's existing total share capital, with a total transactionamount of 479,442,157.08 yuan (excluding transaction costs). The average transaction price was about 16.2368 yuan per share, andthe company completed the target stock purchase of the fourth phase of the employee stock ownership plan. The lock-up period of theunderlying shares acquired under the fourth Employee Stock Ownership Plan is 12 months, calculated from the date of the Company'sannouncement of the transfer of the last underlying shares to the plan.The number of shares held by directors, supervisors and senior managers in the employee stock ownership plan is calculatedaccording to the proportion of the holder's share in the total share of the employee stock ownership plan.
3. Other employee incentive programs
□ Applicable √ Not applicable
XII. Construction and implementation of internal control system during the reporting period
1. Construction and implementation of internal control system
The Company has established a sound internal control system under continuous improvement and enhancement in accordance with the“Basic Standard for Enterprise Internal Control” and its accompanying guidelines to adapt to the dynamic external environment andinternal management requirements. The Company’s internal controls can cover the major aspects of operation and management, andthe design of these controls is sound and reasonable. The internal controls are effectively executed and there is no material omission.During the reporting period, the company revised and improved its internal management system based on the actual work situation andchanges in the internal and external environment, including 18 new systems and 35 revised rules and regulations. Including "CarbonEmission Management Measures", "Channel Business Management Measures", "Product Pricing Management Measures," BiddingManagement Measures, "Asset Management Basic System, Project Management System and Customer Management System, so as toimprove the company's management and business processes, and further optimize the company's internal control management.
2. Details on material deficiencies in internal control identified during the reporting period
□ Yes √ No
XIII. Management control in subsidiaries during the reporting period
| Name of subsidiaries | Integration plan | Progress of integration | Problems encountered in integration | Solutions adopted | Progress of solutions | Follow-up solutions |
| Shandong New Shuang'an Biotechnology Co., Ltd | N/A | N/A | N/A | N/A | N/A | N/A |
IV. Internal control self-assessment report or auditor’s report on internal control
1. Internal control self-assessment report
| Date of report | April 23, 2024 | |
| Full text of report | Please refer to the “Internal Control Self-Assessment Report of 2023 of Zhejiang NHU Co., Ltd.” disclosed on http://www.cninfo.com.cn on April 23, 2024 for details. | |
| Proportion of the total assets of entities included in the assessment scope to the total assets in the Company’s consolidated financial statements | 100.00% | |
| Proportion of the operating revenue of entities included in the assessment scope to the operating revenue in the Company’s consolidated financial statements | 100.00% | |
| Criteria for identifying deficiencies | ||
| Categories | Categories | Categories |
| Qualitative criteria | Indicators of material deficiencies in financial reporting include: 1) fraud by directors, supervisors and senior executives; 2) correction of published financial reports by the Company; 3) discovery by the auditor of a material misstatement in the current financial report that was not detected by internal control in the course of operation; and 4) ineffective monitoring of internal control by the Company. Indicators of significant deficiencies in financial reporting include: 1) failure to select and apply accounting policies in accordance with CASBEs; 2) failure to establish anti-fraud procedures and controls; and 3) individual or multiple deficiencies in the financial reporting process that, although not meeting the criteria for determining a significant deficiency, affect the objective of integrity and accuracy. General deficiencies in financial reporting are control deficiencies other than the above-mentioned material and significant deficiencies. | The following circumstances are identified as indicators of material deficiencies, while others are respectively identified as indicators of significant deficiencies or general deficiencies according to the degree of impact: 1) lack of democratic or scientific decision-making procedures, leading to decision-making errors; 2) violation of laws and regulations, such as environmental pollution, failure to report or disclose information in accordance with regulations; 3) loss of executives or technical personnel in key positions; 4) internal control evaluation stating that material or significant deficiencies have not been rectified; 5) lack of system control or systemic failure in important businesses. |
| Quantitative criteria | The Company uses 5% of profit before tax as the overall materiality of the financial statements. A material deficiency is identified when the potential misstatement is greater than or equal to the overall materiality. A significant deficiency is identified when the potential misstatement is less than the overall materiality but greater than or equal to 20% of the overall materiality. A general deficiency is identified When the potential misstatement is less than 20% of the overall materiality. | The Company uses 5% of profit before tax as the overall materiality of the financial statements. A material deficiency is identified when the potential misstatement is greater than or equal to the overall materiality. A significant deficiency is identified when the potential misstatement is less than the overall materiality but greater than or equal to 20% of the overall materiality. A general deficiency is identified when the potential misstatement is less than 20% of the overall materiality. |
| Number of material deficiencies in internal control over financial reporting | 0 | |
| Number of material deficiencies in internal control over non-financial reporting | 0 |
| Number of significant deficiencies in internal control over financial reporting | 0 |
| Number of significant deficiencies in internal control over non-financial reporting | 0 |
2. Auditor’s report on internal control
√ Applicable □ Not applicable
| Audit opinion paragraph in the internal control audit report | |
| In our opinion, Zhejiang NHU Co., Ltd maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, in accordance with the Basic Standard for Enterprise Internal Control and related regulations. | |
| Disclosure of internal control audit report | Disclosure |
| Disclosure date of full text of internal control audit report | 4/23/2024 |
| Index of Full Text Disclosure of Internal Control Audit Report | For details, please refer to Juchao Information Website http://www.cninfo.com.cn "Internal Control Audit Report of Zhejiang NHU Co., Ltd. |
| Opinion Type of Internal Control Audit Report | Standard Unqualified Opinion |
| Whether there are major defects in the non-financial report | No |
Whether the accounting firm has issued an internal control audit report with non-standard opinions
□ Yes √ No
Whether the internal control audit report issued by the accounting firm is consistent with the opinion of the self-evaluation report ofthe board of directors? Yes □ No
XV. Self-examination and rectification concerning the special action of corporate governance
Not applicable
Section V Environmental and Social Responsibilities
I. Major environmental issuesWhether the Company and its subsidiaries belong to the key pollutant discharging units announced bydepartments of environmental protection administration
√ Yes □ No
Environmental protection-related policies and industry standards
Measures for the Management of the List of Priority Units for Environmental Supervision（Decree No. 27 of the Ministry of Ecologyand Environment）Ecological and environmental administrative penalties（Decree of the Ministry of Ecology and Environment No. 30）Measures for the Management of Voluntary Greenhouse Gas Emission Reduction Trading (Trial)（Decree of the Ministry of Ecologyand Environment No. 31）Graphic Signs for Environmental Protection -- Solid Waste Storage (Disposal) Sites (GB 15562.2-1995)（Environmental StandardsBulletin [2023] No. 5）Pollution Control Standards for the Storage of Hazardous Wastes（Environmental Standards Bulletin [2023] No. 6）Technical Specification for the Marking of Pollutant Discharge Outlets of Sewage Discharging Units with Two-dimensional Codes（Environmental Standards Bulletin [2023] No. 16）Notice on Doing the Work Related to the Allocation of National Carbon Emission Trading Allowances for the Years 2021 and 2022（ National Environmental Regulation Climate [2023] No. 1）Methane Emission Control Action Program (National Environmental Regulation Climate [2023] No. 67)Circular on the Administration of Industrial Noise Emission Permits (UNEO EIA [2023] No. 14)Circular on Further Strengthening Work Related to the Regulated Environmental Management of Hazardous Wastes (EnvironmentalOffice Solid [2023] No.17)Administrative permits for environmental protectionOn April 18, 2023, Shangyu NHU Bio-Chem Co., Ltd. reacquired a discharge permit valid until April 17, 2028.On March 15, 2023，Shandong NHU Pharmaceutical Co., Ltd. reacquired a discharge permit valid until March 14, 2028.On July 25, 2023，Shandong NHU Amino-acids Co., Ltd. reacquired a discharge permit valid until July 24 2028.On July 21, 2023，Shandong NHU Vitamins Co., Ltd. reacquired a discharge permit valid until July 20 2028.On August 4, 2023，Shandong NHU Fine ChemicalScience and Technology Co. reacquired a discharge permit valid until August 3,2028.On December 6, 2023，Heilongjiang NHU Biotechnology Co., Ltd. reacquired a discharge permit valid until May 17, 2028.
Industry emission standards and the specific circumstances of pollutant emissions involved in productionand operation activities
| Name | Types of major and characteristic pollutants | Name of main pollutants and pollutant characteristics | Discharge method | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration | Executive pollutant discharge standard | Total amount of discharge | Total verified amount of discharge | Excessive discharge or not |
| The Company | water pollution | COD | Sewer connection | 1 | Plant area | 126mg/L | 500mg/L | 20.70t | ≤189.5t/a | No |
| The Company | water pollution | NH3-N | Sewer connection | 1 | Plant area | 4.0mg/L | 35mg/L | 0.61t | ≤13.28t/a | No |
| The Company | Atmospheric pollutants | SO? | Filtered discharge | 1 | Plant area | 19mg/m? | 50mg/m? | 0.80t | ≤8.612 t/a | No |
| The Company | Atmospheric pollutants | NOx | Filtered discharge | 1 | Plant area | 33mg/ m? | 50mg/m? | 0.48t | ≤28t/a | No |
| Shangyu NHU Bio-Chem Co., Ltd. | water pollution | COD | Sewer connection | 1 | Plant area | 197.793mg/L | 500mg/L | 162.354t | ≤440.9 t/a | No |
| Shangyu NHU Bio-Chem Co., Ltd. | water pollution | NH3-N | Sewer connection | 1 | Plant area | 6.138mg/L | 35mg/L | 5.038t | ≤30.863 t/a | No |
| Shangyu NHU Bio-Chem Co., Ltd. | water pollution | TN | Sewer connection | 1 | Plant area | 23.31mg/L | 70mg/L | 19.133t | ≤61.726 t/a | No |
| Shangyu NHU Bio-Chem Co., Ltd. | Atmospheric pollutants | VOC | Filtered discharge | 1 | Plant area | 5.047mg/m? | 100mg/m? | 1.581t | ≤207.6 t/a | No |
| Shangyu NHU Bio-Chem Co., Ltd. | Atmospheric pollutants | NOx | Filtered discharge | 1 | Plant area | 3.361mg/m? | 200mg/m? | 0.975t | ≤12.96 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | Atmospheric pollutants | VOC | Filtered discharge | 1 | Plant area | 5.098mg/m? | 100mg/m? | 0.349t | ≤121.833 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | Atmospheric pollutants | VOC | Filtered discharge | 1 | Plant area | 0.927mg/m? | 100mg/m? | 0.21t | ≤1.069 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | Atmospheric pollutants | VOC | Filtered discharge | 1 | Plant area | 0.915mg/m? | 100mg/m? | 0.007t | ≤0.288 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | Atmospheric pollutants | VOC | Filtered discharge | 1 | Plant area | 9.575mg/m? | 100mg/m? | 0.003t | ≤0.01 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | Atmospheric pollutants | NOx | Filtered discharge | 1 | Plant area | 4.625mg/m? | 200mg/m? | 0.321t | ≤19.8 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | Atmospheric pollutants | NOx | Filtered discharge | 1 | Plant area | 142.998mg/m? | 300mg/m? | 27.811t | ≤28.08 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | Atmospheric pollutants | NOx | Filtered discharge | 1 | Plant area | 18.233mg/m? | 150mg/m? | 1.285t | ≤8.44 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | Atmospheric pollutants | SO? | Filtered discharge | 1 | Plant area | 3mg/m? | 100mg/m? | 0.204t | ≤9.295 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | Atmospheric pollutants | SO? | Filtered discharge | 1 | Plant area | 3.36mg/m? | 100mg/m? | 0.644t | ≤37.94 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | Atmospheric pollutants | SO? | Filtered discharge | 1 | Plant area | 3.36mg/m? | 50mg/m? | 0.178t | ≤10.905 t/a | No |
| Name | Types of major and characteristic pollutants | Name of main pollutants and pollutant characteristics | Discharge method | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration | Executive pollutant discharge standard | Total amount of discharge | Total verified amount of discharge | Excessive discharge or not |
| Zhejiang NHU Phar-maceutical Co., Ltd. | Atmospheric pollutants | PM | Filtered discharge | 1 | Plant area | 4.017mg/m? | 20mg/m? | 0.268t | ≤5.174 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | Atmospheric pollutants | PM | Filtered discharge | 1 | Plant area | 3.978mg/m? | 30mg/m? | 0.776t | ≤8.42 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | Atmospheric pollutants | PM | Filtered discharge | 1 | Plant area | 8.453mg/m? | 20mg/m? | 0.507t | ≤5.626 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | water pollution | COD | Sewer connection | 1 | Plant area | 197.793mg/L | 500mg/L | 140.534t | ≤382.37 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | water pollution | NH3-N | Sewer connection | 1 | Plant area | 6.138mg/L | 35mg/L | 4.361t | ≤26.766 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | water pollution | TN | Sewer connection | 1 | Plant area | 23.31mg/L | 70mg/L | 16.561t | ≤53.532t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | Atmospheric pollutants | PM | Filtered discharge | 1 | Plant area | 1.72mg/m? | 5 mg/m? | 0.1809t | ≤17.73 t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | Atmospheric pollutants | PM | Filtered discharge | 1 | Plant area | 2.13mg/m? | 20 mg/m? | 0.4468t | ≤17.73 t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | Atmospheric pollutants | PM | Filtered discharge | 1 | Plant area | 6.90mg/m? | 20 mg/m? | 0.1390t | ≤17.73 t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | Atmospheric pollutants | SO? | Filtered discharge | 1 | Plant area | 3.22mg/m? | 35mg/m? | 0.3147t | ≤67.92t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | Atmospheric pollutants | SO? | Filtered discharge | 1 | Plant area | 2.76mg/m? | 50mg/m? | 0.5842t | ≤67.92t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | Atmospheric pollutants | SO? | Filtered discharge | 1 | Plant area | 18.18mg/m? | 50mg/m? | 0.3550t | ≤67.92t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | Atmospheric pollutants | NOx | Filtered discharge | 1 | Plant area | 17.56mg/m? | 50 mg/m? | 2.0869t | ≤83.28 t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | Atmospheric pollutants | NOx | Filtered discharge | 1 | Plant area | 15.92mg/m? | 100mg/m? | 3.1469t | ≤83.28 t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | Atmospheric pollutants | NOx | Filtered discharge | 1 | Plant area | 45.45mg/m? | 150 mg/m? | 1.1409 t | ≤83.28 t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | Atmospheric pollutants | VOC | Filtered discharge | 2 | Plant area | 2.35mg/m? | 60 mg/m? | 0.9006t | ≤69.72 t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | water pollution | COD | Sewer connection | 1 | Plant area | 195.36mg/L | 500 mg/L | 67.5737t | ≤182.1 t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | water pollution | NH3-N | Sewer connection | 1 | Plant area | 6.72mg/L | 35 mg/L | 2.2140t | ≤12.747 t/a | No |
| Name | Types of major and characteristic pollutants | Name of main pollutants and pollutant characteristics | Discharge method | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration | Executive pollutant discharge standard | Total amount of discharge | Total verified amount of discharge | Excessive discharge or not |
| Zhejiang NHU Special Materials Co., Ltd. | water pollution | TN | Sewer connection | 1 | Plant area | 24.14mg/L | 70 mg/L | 7.7592t | ≤25.494 t/a | No |
| Shandong NHU Pharmaceutical Co., Ltd. | Atmospheric pollutants | PM | Filtered discharge | 5 | Plant area | 1.59mg/m? | 10 mg/m? | 0.35t | ≤10.766t/a | No |
| Shandong NHU Pharmaceutical Co., Ltd. | Atmospheric pollutants | SO? | Filtered discharge | 4 | Plant area | 3.63mg/m? | 50 mg/m? | 0.79t | ≤4.006t/a | No |
| Shandong NHU Pharmaceutical Co., Ltd. | Atmospheric pollutants | NOx | Filtered discharge | 5 | Plant area | 37.92mg/m? | 100 mg/m? | 12.36t | ≤66.49t/a | No |
| Shandong NHU Pharmaceutical Co., Ltd. | Atmospheric pollutants | VOC | Filtered discharge | 3 | Plant area | 8.98mg/m? | 60 mg/m? | 14.15t | ≤80.4t/a | No |
| Shandong NHU Pharmaceutical Co., Ltd. | Atmospheric pollutants | VOC | unorganized | / | Plant area | 1.9mg/m? | 2mg/m? | / | ≤73.9572t/a | No |
| Shandong NHU Pharmaceutical Co., Ltd. | water pollution | COD | Sewer connection | 1 | Plant area | 335mg/L | 1000mg/L | 71.29t | ≤720.98t/a | No |
| Shandong NHU Pharmaceutical Co., Ltd. | water pollution | NH3-N | Sewer connection | 1 | Plant area | 11.41mg/L | 100mg/L | 2.69t | ≤72.10 t/a | No |
| Shandong NHU Pharmaceutical Co., Ltd. | water pollution | TN | Sewer connection | 1 | Plant area | 26.94mg/L | 120mg/L | 5.91t | ≤86.86 t/a | No |
| Shandong NHU Amino-acids Co., Ltd. | Atmospheric pollutants | SO? | Filtered discharge | 4 | Plant area | 48.8mg/m? | 50mg/m? | 7.56t | ≤162.472 t/a | No |
| Shandong NHU Amino-acids Co., Ltd. | Atmospheric pollutants | NOx | Filtered discharge | 4 | Plant area | 95.1mg/m? | 100mg/m? | 73.1t | ≤415.75 t/a | No |
| Shandong NHU Amino-acids Co., Ltd. | Atmospheric pollutants | PM | Filtered discharge | 5 | Plant area | 9.84mg/m? | 10mg/m? | 2.189t | ≤29.314 t/a | No |
| Shandong NHU Amino-acids Co., Ltd. | Atmospheric pollutants | VOC | Filtered discharge | 3 | Plant area | 51.2mg/m? | 60mg/m3 | 11.33t | ≤379.63 t/a | No |
| Shandong NHU Amino-acids Co., Ltd. | water pollution | COD | Sewer connection | 1 | Plant area | 842mg/L | 1000mg/L | 264t | ≤839.2 t/a | No |
| Shandong NHU Amino-acids Co., Ltd. | water pollution | NH3-N | Sewer connection | 1 | Plant area | 79.9mg/L | 100mg/L | 4.71t | ≤83.92 t/a | No |
| Shandong NHU Amino-acids Co., Ltd. | water pollution | TN | Sewer connection | 1 | Plant area | 119mg/L | 120mg/L | 29.4t | ≤100.704 t/a | No |
| Shandong NHU Vitamins Co., Ltd. | Atmospheric pollutants | VOC | Filtered discharge | 4 | Plant area | 1.54mg/m? | 60 mg/m? | 7.01t | ≤85.67 t/a | No |
| Shandong NHU Vitamins Co., Ltd. | Atmospheric pollutants | SO? | Filtered discharge | 3 | Plant area | 4.8 mg/m? | 50 mg/m? | 1.65t | ≤21.14 t/a | No |
| Name | Types of major and characteristic pollutants | Name of main pollutants and pollutant characteristics | Discharge method | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration | Executive pollutant discharge standard | Total amount of discharge | Total verified amount of discharge | Excessive discharge or not |
| Shandong NHU Vitamins Co., Ltd. | Atmospheric pollutants | NOx | Filtered discharge | 4 | Plant area | 45mg/m? | 100 mg/m? | 33.575t | ≤65.27 t/a | No |
| Shandong NHU Vitamins Co., Ltd. | Atmospheric pollutants | PM | Filtered discharge | 5 | Plant area | 2.61 mg/m? | 10 mg/m? | 1.34t | ≤4.8 t/a | No |
| Shandong NHU Vitamins Co., Ltd. | water pollution | COD | Sewer connection | 1 | Plant area | 248 mg/L | 2000 mg/L | 42.4t | ≤1376.56t/a | No |
| Shandong NHU Vitamins Co., Ltd. | water pollution | NH3-N | Sewer connection | 1 | Plant area | 10.4 mg/L | 100 mg/L | 1.76t | ≤68.61 t/a | No |
| Shandong NHU Vitamins Co., Ltd. | water pollution | TN | Sewer connection | 1 | Plant area | 58.4mg/L | 120 mg/L | 10t | ≤93.21t/a | No |
| Shandong NHU Fine ChemicalScience and Technology Co. | Atmospheric pollutants | VOC | Filtered discharge | 2 | Plant area | 20.5mg/m? | 60 mg/m? | 1.82t | ≤18.031 t/a | No |
| Shandong NHU Fine ChemicalScience and Technology Co. | Atmospheric pollutants | NOx | Filtered discharge | 2 | Plant area | 30mg/m? | 100 mg/m? | 1.28t | ≤37.61 t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | Atmospheric pollutants | PM | Filtered discharge | 1 | Plant area | 16.73mg/m? | 30mg/m? | 7.45t | ≤19.224t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | Atmospheric pollutants | PM | Filtered discharge | 1 | Plant area | 10.52mg/m? | 30mg/m? | 0.000985t | ≤0.68 t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | Atmospheric pollutants | PM | Filtered discharge | 1 | Plant area | 6.85mg/m? | 30mg/m? | 0.001514t | ≤0.55t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | Atmospheric pollutants | NOx | Filtered discharge | 1 | Plant area | 32.64mg/m? | 200mg/m? | 13.63t | ≤128.16 t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | Atmospheric pollutants | SO? | Filtered discharge | 1 | Plant area | 96.78mg/m? | 200mg/m? | 43.07t | ≤128.16 t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | Atmospheric pollutants | VOC | Filtered discharge | 1 | Plant area | 1.29mg/m? | 150mg/m? | 0.58t | ≤96.12 t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | Atmospheric pollutants | VOC | Filtered discharge | 1 | Plant area | 15.73mg/m? | 150mg/m? | 0.001529t | ≤3.38 t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | Atmospheric pollutants | VOC | Filtered discharge | 1 | Plant area | 15.23mg/m? | 150mg/m? | 0.009881t | ≤2.77 t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | Atmospheric pollutants | VOC | Filtered discharge | 1 | Plant area | 5.7mg/m?3 | 150mg/m? | 0.00519t | ≤2.80 t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | water pollution | COD | Sewer connection | 1 | Plant area | 136.74mg/m? | 300mg/L | 699.25t | ≤1980t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | water pollution | NH3-N | Sewer connection | 1 | Plant area | 4.61mg/m? | 35mg/L | 20.34t | ≤231t/a | No |
Construction and operation of pollution prevention and control facilities
The Company has established the environmental protection concept of green development: 1. Introducing the concept of greenchemistry, developing and producing products that are more environment-friendly. 2. Transferring from support-orientation toresponsibility-orientation, to conduct source reduction, process control and end-of-pipe treatment properly. 3. Pursuing reduction,recycling and harmlessness to create ecological factories, and realize the harmonious development of man and nature.Wastewater treatment: The Company has a complete sewage treatment system, with a wastewater collection system for productionsewage, domestic sewage, initial rainwater and accident water to separate the clean water and rainwater from the sewage. The wastepool is sealed with a cover, and all the waste gases are effectively collected and eventually incinerated, which effectively reduces theemission of waste gas. In 2022, the capacity of the sewage station will be upgraded, and the treatment capacity of the sewage stationwill be increased by 10%.Waste gas treatment: The Company adopts the self-developed nitrogen sealing system to effectively reduce the waste gas emission; ituses different pretreatment technologies according to the composition and nature of different waste gases, and introduces advancedforeign waste gas treatment devices to strengthen its waste gas treatment capacity. The Company carries out regular waste gas leakdetection and repair (LDAR) every year to effectively supervise and reduce unorganized waste gases. In 2021,The Company activelyupgrades coal-fired thermal oil furnaces via the “coal to gas” conversion, introduces natural gas boilers, carries out low-NOxtransformation, and adds SNCR denitrification facilities to the terminal to actively carry out NOx treatment. In 2022, the companybegan to implement the construction of odor-free factories, comprehensively carry out waste gas treatment, and solve the problem ofodor at the factory boundary.Solid waste disposal: the company has built a standardized hazardous waste temporary storage warehouse and a hazardous wasteincineration device, and the company basically disposes of hazardous wastes by itself. Outsourced solid wastes shall be transferred instrict accordance with the requirements of the Management Measures for Five Forms of Hazardous Waste Transfer, and shall beentrusted to qualified units for disposal.Noise prevention and control: The Company chooses low-noise equipment, and adopts the noise reduction measures of foundationdamping for the equipment that does not need to be fixed. In addition to taking foundation damping for air compressors, blowers andvarious pumps, the Company also installs additional soundproof covers around the noise sources for sound insulation.Emergency management: The Company installs online waste gas monitors around the plant boundary to monitor the environment ofthe plant boundary in real time. It introduces VOC online monitors to monitor the gas emission data in real time and uploads thedetection data to the monitoring platform. It monitors the waste water emission index in real time by waste water online monitoringsystem of “one enterprise one pipe” and upload it to the Bureau of Ecology and Environment. It introduces domestic first-class elevatedflare technology to specifically deal with abnormal waste gas in the production process. It also introduces domestic first-class leakstoppage technology under pressure to reduce the abnormal leakage of pipelines, valves, flanges and tanks to the minimum, thusreducing the environmental impact caused by a large number of leaks.Environmental self-monitoring program
The company has good pollutant emission monitoring and management ability and can timely inform the environmental protectionadministrative department and the public of the monitoring information. The company has developed relevant self-test plans, whichcover the indicators of the company's organized waste gas, unorganized waste gas and groundwater. At the same time, a third-partytesting company is entrusted to carry out regular monitoring.The company implements environmental information disclosure in strict accordance with the national, provincial, municipal and countyrequirements on enterprise environmental information disclosure. Each subsidiary has made enterprise environmental protectioninformation public on platforms such as the environmental information management system of provincial and municipal key pollutantdischarge units.
Environmental emergency response planOn August 3, 2023, Shandong NHU Amino-acids Co., Ltd. re-filed the emergency response plan for environmental emergencies.On August 25, 2023, Shandong NHU Vitamins Co., Ltd. re-filed its emergency response plan for environmental emergencies.On August 30, 2023, Shandong NHU Fine ChemicalScience and Technology Co. re-filed the emergency response plan forenvironmental emergencies.Investment in environmental treatment and protection and payment of environmental protection taxDuring the reporting period, the company invested RMB 628.81 million in environmental protection treatment and paid environmentalprotection tax of RMB 1.81 million.Measures taken to reduce carbon dioxide emissions during the reporting period and their effects
√ Applicable □ Not applicable
In the research and development of new products, the carbon emission of 10,000 yuan output value is taken as an important indicatorfor the process route and environmental feasibility assessment of new products. The green development technology is applied in theresearch and development of new products to improve the atomic utilization rate and reduce the carbon emission generated by theconsumption of raw materials from the source. （The photovoltaic power generation project of Shandong NHU Vitamins Co., Ltd.）Administrative penalties for environmental problems during the reporting period
| Name | Reasons for punishment | Violations | Results of punishment | Impact on the production and operation of the Company | Rectification measures of the Company |
| N/A | N/A | N/A | N/A | N/A | N/A |
Other environmental information that should be disclosedNone.
Other information related to environmental protection
None.II. Social responsibilities
Please refer to the announcement disclosed on http://www.cninfo.com.cn on April 23, 2024 for the full text of the “SocialResponsibility Report of 2023”.III. Details on consolidating poverty alleviation achievements and promoting rural vitalizationNone.
Section VI Significant EventsI. Commitment performance
1. Commitment performance fulfilled during the reporting period and not fulfilled as of the end of the reporting period byparties related to commitments including the actual controller of the Company, shareholders, related parties, acquirers andthe Company
√ Applicable □ Not Applicable
| Commitments | Parties making commitments | Types of commitments | Content of commitments | Time of commitment | Term of commitment | Performance |
| Commitments to shares reform | None | None | None | None | None | None |
| Commitments made in reports on acquisition and changes in equity | None | None | None | None | None | None |
| Commitments made in asset restructuring | None | None | None | None | None | None |
| Commitments made in IPO or refinancing | NHU Holding Group Co., Ltd. and Zhang Pingyi, Shi Cheng, Yuan Yizhong, Hu Baishan, Shi Guanqun, Wang Xuewen, Cui Xinrong, Wang Xulin | Commitments on horizontal competition, related party transactions and occupation of funds | The signing of “Commitment on No Engagement in Horizontal Competition” and commitments on no engagement in business activities result in horizontal competition with operations of the Company after listing | June 25, 2004 | Long-term | Strictly performed |
| Hu Baifan; Hu Baishan; Guanqun; Wang Xuewen; Cui Xinrong; Wang Zhengjiang; Zhou Guiyang | The Company’s directors, senior executives committed to perform their duties faithfully and diligently to safeguard the legitimate rights and interests of the Company and shareholders, and make the following commitments in accordance with the relevant provisions of the CSRC for the full performance of measures on filling immediate returns: 1. not to transfer benefits to other entities or individuals without compensation or on unfair terms, and not to use other means to harm benefits of the Company; 2. to impose restrictions on duty consumption of member of the Board of Directors and senior executives; 3. not to use assets of the Company to engage in investment or consumption activities not related to duty performance; 4. to link remuneration system formulated by the Board of Directors or remuneration committee to the implementation of measures on filling immediate returns; 5. to link vesting conditions of equity incentive to be published in the future to the implementation of measures on filling immediate returns. | January 12, 2017 | Long-term | Strictly performed |
2. Realization of profit forecasts for the Company’s assets or projects and its reasons if there are profit forecasts for assets orprojects and the reporting period is still in the profit forecast period
□ Applicable √ Not Applicable
II. Non-operating occupation of funds over listed companies by controlling shareholders andother related parties
□ Applicable √ Not Applicable
There is no non-operating occupation of funds over listed companies by controlling shareholders and other related parties during thereporting period.III. Illegal external guarantees
□ Applicable √ Not Applicable
There is no illegal external guarantee during the reporting period.IV. Explanations by the Board of Directors on the latest “Modified Auditor’s Report”
□ Applicable √ Not Applicable
V. Statements by the Board of Directors, the Board of Supervisors and independent directors(if applicable) on the “Modified Auditor’s Report” issued by the accounting firm during thereporting period
□ Applicable √ Not Applicable
VI. Changes of accounting policies and estimates or significant accounting error correctioncompared to the financial reports in the previous year
□ Applicable √ Not Applicable
The company did not have any changes in accounting policies, accounting estimates, or corrections of significant accounting errors
| Hu Baifan; NHU Holding Group Co., Ltd. | Not to interfere in the Company’s business and management activities in excess of authority; not to encroach on benefits of the Company; to perform measures on filling immediate returns in a practical way. | January 12, 2017 | Long-term | Strictly performed | |||
| Commitments to equity incentive | None | None | None | None | None | None | |
| Other commitments to small and medium-sized shareholders of the Company | None | None | None | None | None | None | |
| Other commitments to minority shareholders of the Company | NHU Holding Group Co., Ltd. | Share increase commitment | During the period of increasing the shares of the company and within the legal period, NHU Holding Group Co., Ltd. will not reduce the shares of the company and will complete the increase plan within the above implementation period. | October 27, 2023 | 6 months | Strictly performed | |
| Whether commitments are performed on time | Yes | ||||||
| If commitment performance is not fulfilled on time, please explain detailed reasons for it and the next work plans. | Not applicable | ||||||
during the reporting period.VII. Changes in the scope of consolidated financial statements compared to the financialreports in the previous year
√ Applicable □ Not Applicable
| Name | Equity acquisition method | Time of equity acquisition |
| Shandong New Shuang'an Biotechnology Co., Ltd | Acquisition | September 20, 2023 |
VIII. Engagement and dismissal of accounting firmsDomestic accounting firms engaged currently
| Name | Pan-China Certified Public Accountants LLP |
| Remuneration (thousand yuan) | 2,100.00 (tax included) |
| Continuous years for audit services | 23 years |
| Certified Public Accountants | Teng Peibin, Jan Yanhui |
| Certified Public Accountants’ continuous years for audit services | 4 years for Teng Peibin and 2 year for Jan Yanhui |
Whether to engage another accounting firm instead in the current period
□ Yes √ No
Engagement of accounting firms, financial advisors or sponsors for audit of internal controls
□ Applicable √ Not Applicable
IX. Delisting after disclosure of the annual report
□ Applicable √ Not Applicable
X. Matters related to bankruptcy and restructuring
□ Applicable √ Not Applicable
There are no matters related to bankruptcy and restructuring during the reporting period.
XI. Significant lawsuits and arbitration
□ Applicable √ Not Applicable
There is no significant lawsuit and arbitration during the reporting period.XII. Penalties and rectification
□ Applicable √ Not Applicable
XIII. Integrity of the Company, its controlling shareholders and the actual controller
□ Applicable √ Not Applicable
XIV. Significant related party transactions
1. Related party transactions relevant to daily operations
□ Applicable √ Not Applicable
There is no related party transaction relevant to daily operations during the reporting period.
2. Related party transactions in purchase or sale of assets or equities
□ Applicable √ Not Applicable
There is no related party transaction in purchase or sale of assets or equities during the reporting period.
3. Related party transactions in joint external investments
□ Applicable √ Not Applicable
There is no related party transaction in joint external investments during the reporting period.
4. Related party creditor’s rights and debts
□ Applicable √ Not Applicable
There is no related creditor’s rights or debts during the reporting period.
5. Transactions with related financial companies
□ Applicable √ Not Applicable
There is no business of deposits, loans, credit granting or other financial businesses between the Company and its related financialcompanies.
6. Transactions between financial companies controlled by the Company and the Company’s relatedparties
□ Applicable √ Not Applicable
There is no business of deposits, loans, credit granting or other financial businesses between financial companies controlled by theCompany and the Company’s related parties.
7. Other significant related party transactions
□ Applicable √ Not Applicable
There is no other significant related party transaction during the reporting period.XV. Significant contracts and performance
1. Matters of trusteeship, contracting and leases
(1) Trusteeship
□ Applicable √ Not Applicable
There is no trusteeship during the reporting period.
(2) Contracting
□ Applicable √ Not Applicable
There is no contracting during the reporting period.
(3) Leases
□ Applicable √ Not Applicable
There is no lease during the reporting period.
2. Significant guarantees
√ Applicable □ Not Applicable
Unit: RMB 0,000 yuan
| External guarantees by the Company and its subsidiaries to third parties (guarantees to subsidiaries are excluded) | ||||||||||||||
| Guaranteed parties | Announcement date of disclosure of amount guaranteed | Amount guaranteed | Actual commencement date | Actual amount guaranteed | Types of guarantees | Collaterals (if any) | Counter guarantees (if any) | Period of guarantee | Whether the guarantee is mature | Whether guarantee for related parties | ||||
| No | ||||||||||||||
| Total amount of guarantees approved during the reporting period (A1) | 0 | Total amount actually guaranteed during the reporting period (A2) | 0 | |||||||||||
| Total amount of guarantees approved at the end of the reporting period (A3) | 0 | Total amount actually guaranteed at the end of the reporting period (A4) | 0 | |||||||||||
| The Company’s guarantees to subsidiaries | ||||||||||||||
| Guaranteed parties | Announcement date of disclosure of amount guaranteed | Amount guaranteed | Actual commencement date | Actual amount guaranteed | Types of guarantees | Collaterals (if any) | Counter guarantees (if any) | Period of guarantee | Whether the guarantee is mature | Whether guarantee for related parties | ||||
| Heilongjiang NHU Biotechnology Co., Ltd. | 12/28/2018 | 200,000 | 6/24/2019 | 200,000 | Joint and several liability guarantee | 6/24/2019-12/31/2023 | Yes | No | ||||||
| Shandong NHU Vitamins Co., Ltd. | 12/28/2018 | 90,000 | 11/29/2019 | 50,000 | Joint and several liability guarantee | 11/29/2019-4/26/2023 | Yes | No | ||||||
| NHU (Hong Kong) Trading Co., Ltd. | 5/22/2020 | 120,000 | 9/7/2020 | 56,661.6 | Joint and several liability guarantee | 9/7/2020-9/7/2023 | Yes | No | ||||||
| Shandong NHU Fine ChemicalScience and Technology Co. | 5/22/2020 | 50,000 | 3/24/2021 | 50,000 | Joint and several liability guarantee | 3/24/2021-12/25/2025 | No | No | ||||||
| NHU (Hong Kong) Trading Co., Ltd. | 5/11/2022 | 130,000 | 6/17/2022 | 7,859.18 | Joint and several liability guarantee | 6/17/2022-6/18/2023 | Yes | No | ||||||
| NHU (Hong Kong) Trading Co., Ltd. | 5/11/2022 | 130,000 | 7/14/2022 | 7,859.18 | Joint and several liability guarantee | 7/14/2022-5/15/2023 | Yes | No | ||||||
| Heilongjiang NHU Biotechnology Co., Ltd. | 4/22/2021 | 40,000 | 8/26/2021 | 37,000 | Joint and several liability guarantee | 8/26/2021-12/21/2025 | No | No | ||||||
| Zhejiang NHU Imports & Exports Co., Ltd. | 5/11/2022 | 15,000 | 5/31/2022 | 15,000 | Joint and several liability guarantee | 5/31/2022-10/23/2023 | Yes | No | ||||||
| Zhejiang NHU Imports & Exports Co., Ltd. | 5/20/2023 | 25,000 | 6/16/2023 | 10,000 | Joint and several liability guarantee | 6/16/2023-6/15/2024 | No | No | ||||||
| Xinchang NHU Vitamins Co. | 4/22/2021 | 40,000 | 12/16/2021 | 29,000 | Joint and several liability guarantee | 12/16/2021-12/25/2026 | No | No | ||||||
| NHU (Hong Kong) Trading Co., Ltd. | 5/11/2022 | 130,000 | 9/2/2022 | 103.86 | Joint and several liability guarantee | 9/2/2022-5/1/2023 | Yes | No | ||||||
| NHU (Hong Kong) Trading Co., Ltd. | 5/11/2022 | 130,000 | 11/3/2022 | 8.36 | Joint and several liability guarantee | 11/3/2022-6/1/2023 | Yes | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 5/11/2022 | 130,000 | 12/15/2022 | 24.56 | Joint and several liability guarantee | 12/15/2022-8/1/2023 | Yes | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 5/11/2022 | 130,000 | 3/15/2023 | 14.43 | Joint and several liability guarantee | 3/15/2023-11/1/2023 | Yes | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 5/11/2022 | 130,000 | 5/12/2023 | 45.83 | Joint and several liability guarantee | 5/12/2023-12/1/2023 | Yes | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 5/20/2023 | 100,000 | 6/12/2023 | 15.87 | Joint and several liability guarantee | 6/12/2023-3/1/2024 | No | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 5/20/2023 | 100,000 | 8/4/2023 | 97.31 | Joint and several liability guarantee | 8/4/2023-5/1/2024 | No | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 5/20/2023 | 100,000 | 9/26/2023 | 26.69 | Joint and several liability guarantee | 9/26/2023-6/1/2024 | No | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 5/20/2023 | 100,000 | 12/5/2023 | 4.01 | Joint and several liability guarantee | 12/5/2023-9/1/2024 | No | No | ||
| Zhejiang NHU Pharmaceutical Co., Ltd | 5/11/2022 | 60,000 | 6/24/2022 | 55,000 | Joint and several liability guarantee | 6/24/2022-6/23/2027 | No | No | ||
| Xinchang NHU Vitamins Co. | 5/11/2022 | 20,000 | 10/14/2022 | 18,000 | Joint and several liability guarantee | 10/14/2022-10/14/2027 | No | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 5/20/2023 | 100,000 | 6/12/2023 | 7,790.97 | Joint and several liability guarantee | 6/12/2023-6/12/2024 | No | No | ||
| Shandong NHU Fine ChemicalScience and Technology Co. | 5/20/2023 | 58,600 | 6/6/2023 | 58,600 | Joint and several liability guarantee | 6/6/2023-3/29/2028 | No | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 5/20/2023 | 100,000 | 11/20/2023 | 56,661.6 | Joint and several liability guarantee | 11/20/2023-11/8/2026 | No | No | ||
| Total amount of guarantees approved for subsidiaries during the reporting period (B1) | 215,000 | Total amount actually guaranteed for subsidiaries during the reporting period (B2) | 133,256.71 | |||||||
| Total amount of guarantees approved for subsidiaries at the end of the reporting period (B3) | 404,000 | Total amount actually guaranteed for subsidiaries at the end of the reporting period (B4) | 322,196.45 | |||||||
| Guarantees by subsidiaries to subsidiaries | ||||||||||
| Guaranteed parties | Announcement date of disclosure of amount guaranteed | Amount guaranteed | Actual commencement date | Amount actually guaranteed | Types of guarantees | Collaterals (if any) | Counter guarantee (if any) | Period of guarantee | Whether the guarantee is mature | Whether guarantee for related parties |
| No | ||||||||||
| Total amount of guarantees approved for subsidiaries during the reporting period (C1) | 0 | Total amount actually guaranteed for sub-sidiaries during the reporting period (C2) | 0 | |||||||
| Total amount of guarantees approved for subsidiaries at the end of the reporting period (C3) | 0 | Total amount actually guaranteed for subsidiaries at the end of the reporting period (C4) | 0 |
| Total amount guaranteed by the Company (namely sum of the above three items) | |||
| Total amount of guarantees approved during the reporting period (A1+B1+C1) | 215,000 | Total amount actually guaranteed during the reporting period (A2+B2+C2) | 133,256.71 |
| Total amount of guarantees approved at the end of the reporting period (A3+B3+C3) | 404,000 | Total amount actually guaranteed at the end of the reporting period (A4+B4+C4) | 322,196.45 |
| Proportion of the amount actually guaranteed (A4+B4+C4) to net assets of the Company | 12.99% | ||
| Including: | |||
| Balance of guarantees for shareholders, the actual controller and its related parties (D) | 0 | ||
| Balance of debt guarantee directly or indirectly for guaranteed parties with debt to asset ratio exceeding 70% (E) | 202,600.00 | ||
| The amount of the total amount guaranteed exceeding 50% of net assets (F) | 0 | ||
| Total amount guaranteed of three items above (D+E+F) | 202,600.00 | ||
| Remarks on unexpired guarantee contracts with guarantee liabilities incurred or evidence indicating the possibility of undertaking joint liquidation liabilities during the reporting period (if applicable) | No | ||
| Remarks on external guarantee in violation of provisions (if applicable) | No | ||
Specific description of the use of composite guarantees:
None
3. Entrusted cash assets management
(1) Entrusted financing
√ Applicable □ Not Applicable
Entrusted financing during the reporting period
Unit: RMB 0,000 yuan
| Types | Source of entrusted funds | Entrusted amount | Unexpired balance | Amount overdue and not recovered | Impairment amount accrued for financial products overdue and not recovered |
| Bank financial products | Raised funds | 80,000 | 14,500 | 0 | 0 |
| Total | 80,000 | 14,500 | 0 | 0 | |
High-risk entrusted financial products with individual significant amount or low security and poor liquidity
□ Applicable √ Not Applicable
When the principal of entrusted financial products is expected to be irrevocable or there are other conditions result in impairment ofentrusted financial products
□ Applicable √ Not Applicable
(2) Entrusted loans
□ Applicable √ Not Applicable
There is no entrusted loan during the reporting period.
4. Other significant contracts
□ Applicable √ Not Applicable
There is no other significant contract during the reporting period.XVI. Other significant events
√ Applicable □ Not Applicable
1. Progress of the third phase of employee stock ownership plan
The third employee stock ownership plan of the Company was deliberated and adopted by the second extraordinary shareholders’meeting of 2020 held on November 11, 2020, the current employee stock ownership plan is managed by the Company itself, and theCompany’s shares are acquired and held by stock purchase through secondary market, the duration shall not exceed 24 months. OnFebruary 26, 2021, the number of shares held by the third employee stock ownership plan of the Company was 12,157,826*, accountingfor RMB 303,710,918.74 Yuan and 0.39% of the company's total share capital. The company held the 14th meeting of the eighth boardof directors on October 31, 2022, reviewed and approved the "Proposal on the Extension of the Duration of the Third Employee StockOwnership Plan", and agreed that the duration of the company's employee stock ownership plan will be extended. The former durationNovember 11,2020 to November 10, 2022 will be adjusted to November 11, 2020 to November 10, 2023. Other contents will not bechanged. As of November 11, 2023, the third phase of the Employee Stock Ownership Plan was sold.For details, please refer to the "Announcement on Completion and Termination of the Sale of the Third Phase of the Employee StockOwnership Plan" (Announcement No. 2023-065) published by the Company on designated information disclosure media andhttp://www.cninfo.com.cn on November 11, 2023.* On May 25, 2022, after the implementation of the company's 2021 annual equity distribution, the number of shares held by thecompany's third-phase employee stock ownership plan increased to 12,157,826 shares, accounting for 0.39% of the company's existingtotal share capital.
2. Progress of the fourth employee stock ownership plan
The fourth phase of the Employee stock ownership Plan of the Company was reviewed and approved by the first extraordinary Generalmeeting of shareholders in 2023 held on June 26, 2023. The current employee stock ownership plan is managed by the Company itself,acquired and held by the Company through the secondary market purchase, with a duration of not more than 24 months. As ofSeptember 25, 2023, a total of 29,528,181 shares of the Company have been purchased under the fourth phase of the employee stockownership Plan through the secondary market bidding transaction, accounting for 0.9553% of the Company's existing total share capital,with a total transaction amount of 479,442,157.08 yuan (excluding transaction costs). The average transaction price was about 16.2368yuan per share, and the company completed the target stock purchase of the fourth phase of the employee stock ownership plan. Thelock-up period of the underlying shares acquired under the fourth Employee Stock Ownership Plan is 12 months, calculated from thedate of the Company's announcement of the transfer of the last underlying shares to the plan. For details, please refer to theAnnouncement on the Implementation Progress of the Fourth Employee Stock Ownership Plan and Completion of Stock Purchase(2023-060) published by the Company on designated information disclosure media and http://www.cninfo.com.cn.
3. Progress of the controlling shareholder in increasing the company's shares
Based on the confidence of the company's future sustainable and stable development and the recognition of the company's value, toenhance investor confidence, the company's controlling shareholder NHU Holding Group Co., Ltd. plans to increase its shares of theCompany in the next six months from October 26, 2023, through the means permitted by the trading system of Shenzhen StockExchange (including but not limited to centralized bidding, block trading, etc.). The amount of shares to be increased shall not be lessthan RMB 200 million and shall not exceed RMB 300 million. There is no price range for this plan, and the plan will be graduallyimplemented according to the volatility of the company's stock price and the overall trend of the capital market. As of the end of the
reporting period, NHU Holding Company has accumulated 15,046,826 shares of the Company, accounting for 0.4868% of the totalshare capital of the Company, and accumulated additional holdings of 250,325,523.96 yuan (excluding transaction fees).
4. Progress of investment projects with raised funds
With the approval of [2017] No. 1684 document of China Securities Regulatory Commission, the company's lead underwriter, CSCSecurities Co., Ltd., privately issued 175 million common shares (A shares) to specific objects at an issue price of RMB 28.00/share,raising a total of RMB 4,900 million. After deducting the underwriting and recommendation fees of RMB 30 million yuan (includingtax), the raised funds amounted to RMB 4,870 million, which was remitted to the raised funds supervision account of the company bythe lead underwriter, CSC Securities Co., Ltd. on December 7, 2017. In addition, after deducting lawyer fees, audit fees, capitalverification fees and other issuance expenses of RMB 4.62 million (excluding tax), and considering the deductible VAT input tax ofRMB 1.70 million of underwriting fees and recommendation fees deducted by the lead underwriter, the net amount of funds raised wasRMB 4,867.08 million. The availability of the above raised funds has been verified by Tianjian Certified Public Accountants (specialgeneral partnership), who issued the capital verification report ([2017] No. 503).From January to December 2023, the actual use of the raised funds was RMB 1,340.60 mn, and the accumulated investment of theraised funds project was RMB 5,118.80 mn. As of December 31, 2023, The balance of raised funds is RMB 498.27 mn (includingfinancial management and structured deposits, the net amount of accumulated bank deposit interest less bank fees, etc., and bankfinancial management income).5, the company's board of directors, the board of supervisors to complete the election and appointment ofsenior management, securities affairs representatives and internal audit headThe Company held the second extraordinary general meeting of 2023 on September 19, 2023, and elected non-independent directorsHu Baifan, Hu Ba-shan, Shi Guanqun, Wang Xuowen, Wang Zhengjiang, Zhou Guiyang and Yu Hongwei, and elected independentdirectors Ji Jianyang, Shen Yuping, Wan Feng and Wang Yang to form the ninth Board of Directors of the Company. Elected non-employee representative supervisors Lv Guofeng, Zhao Jia, Wang Xiaobi, and employee representative supervisors Yan Hongyue andLi Huafeng elected by the company's employee congress to form the ninth Board of Supervisors of the company. On the same day, thecompany held the first meeting of the ninth Board of Directors, elected Hu Baifan as chairman, Hu Bai-shan as vice chairman andelected members of the ninth Board of Directors of the special committee, appointed Hu Bai-Shan as president of the company, ShiGuanqun as secretary of the board, Zeng Shuying as representative of securities affairs, Shi Guanqun, Wang Xuowen and Zhang Liyingwere appointed as vice presidents of the company, Shi Guanqun as Chief financial officer of the company, and Chen Boxiang as headof internal audit of the company; On the same day, the company held the first meeting of the ninth Board of Supervisors and electedLv Guofeng as the chairman of the Board of Supervisors. For details, please refer to the Announcement on the Completion of theElection of the Board of Directors and the Board of Supervisors and the Appointment of Senior Management Personnel, SecuritiesAffairs Representative and Head of Internal Audit (2023-059) published by the Company on designated information disclosure mediaand http://www.cninfo.com.cn.XVII. Significant events of subsidiaries of the Company
□ Applicable √ Not Applicable
Section VII Movements in Shares and Conditions of ShareholdersI. Movements in shares
1. Details
Unit: Share
| Items | Before | Movements | After | ||||||
| Quantity | % to total | Issue of new shares | Bonus shares | Reserve transferred to shares | Others | Subtotal | Quantity | % to total | |
| I. Restricted shares | 36,374,202 | 1.18% | 35,550 | 35,550 | 36,409,752 | 1.18% | |||
| 1. Held by other domestic parties | 36,374,202 | 1.18% | 35,550 | 35,550 | 36,409,752 | 1.18% | |||
| Including: Held by domestic natural persons | 36,374,202 | 1.18% | 35,550 | 35,550 | 36,409,752 | 1.18% | |||
| II. Unrestricted shares | 3,054,533,154 | 98.82% | -35,550 | -35,550 | 3,054,497,604 | 98.82% | |||
| 1. RMB ordinary shares | 3,054,533,154 | 98.82% | -35,550 | -35,550 | 3,054,497,604 | 98.82% | |||
| III. Total | 3,090,907,356 | 100.00% | 0 | 0 | 3,090,907,356 | 100.00% | |||
Reason for movements
√ Applicable □ Not Applicable
On September 19, 2023, the Company held the second extraordinary General meeting of 2023, the first meeting of the ninth Board
of Supervisors, and the first meeting of the ninth Board of Directors in the company's conference room to review andapprove the relevant motions on the election of the Board of Directors and the Board of Supervisors and the appointment of seniormanagers, securities affairs representatives and internal audit leaders. Ms. Zhang Liying was elected as the vice President of thecompany, her original 47,400 shares were locked up at 75% ratio, and 35,550 new restricted shares were added.Approval on movements in shares
□ Applicable √ Not Applicable
Transfer of shares
□ Applicable √ Not Applicable
Effect of movements in shares on financial indicators of preceding year and preceding period such as basic EPS and diluted EPS, netassets per share attributable to shareholders of ordinary shares
□ Applicable √Not Applicable
Other contents the Company considered as necessary or securities regulatory institutions required disclosure
□ Applicable √ Not applicable
2. Movement in restricted shares
√ Applicable □ Not applicable
Unit: Share
| Shareholders | Number of restricted shares at the beginning of the period | Number of restricted shares increased during the current period | Number of restricted shares unlocked during the current period | Number of restricted shares at the end of the period | Reason for restriction | Date of unlocking |
| Zhang Liying | 0 | 35,550 | 35,550 | Locked up for the shares are held by the executive | 75% of total shares held by the executive are locked up on an annual basis. | |
| Total | 0 | 35,550 | 0 | 35,550 | -- | -- |
II. Issuance and listing of securities
1. Issuance of securities (preferred shares excluded) within the reporting period
□ Applicable √ Not Applicable
2. Movements in total shares of the Company and structure of shareholders, movements in structure of assetsand liabilities of the Company
□ Applicable √ Not Applicable
3. Existing shares held by internal employees
□ Applicable √ Not Applicable
III. Shareholders and actual controllers
1. Number of shareholders of the Company and their shareholding conditions
Unit: Share
| Total number of ordinary shareholders at the end of the reporting period | 107,247 | Total number of ordinary shareholders at the end of the previous month prior to the date of disclosure of the annual report | 98,469 | Total number of preferred shareholders whose voting rights were restored at the end of the reporting period | 0 | Total number of preferred shareholders whose voting rights were restored at the end of the previous month prior to the date of disclosure of the annual report | 0 | ||||
| Shareholders with holding proportion over 5% or the top 10 shareholders with largest holding proportions | |||||||||||
| Shareholders | Nature of shareholders | Holding proportion | Quantity of ordinary shares at the end of the reporting period | Movements during the reporting period | Quantity of restricted shares | Quantity of unrestricted shares | Shares pledged, marked or frozen | ||||
| Condition | Quantity | ||||||||||
| NHU Holding Group Co., Ltd. | Domestic non-state-owned legal person | 49.71% | 1,536,409,351 | 15,046,826 | 0 | 1,536,409,351 | N/A | ||||
| Hong Kong Securities Clearing Company Limited | Overseas legal person | 3.22% | 99,482,997 | 32,346,205 | 0 | 99,482,997 | N/A | ||||
| Shanghai Chongyang Strategic Investment Co., Ltd.－ Chongyang Strategic Huizhi Fund | Others | 1.75% | 54,072,200 | 0 | 0 | 54,072,200 | N/A | ||||
| National Social Security Fund No.503 Portfolio | Others | 1.33% | 41,000,100 | 2,000,040 | 0 | 41,000,100 | N/A | ||||
| The Company－Employee stock ownership plan phase IV | Others | 0.96% | 29,528,181 | 2,952,818 | 0 | 29,528,181 | N/A | ||||
| China Construction Bank Corporation - E Fund Shanghai and Shenzhen 300 Medical and Health Trading Open-end Index Fund | Others | 0.74% | 22,999,677 | 6,879,544 | 0 | 22,999,677 | N/A | ||||
| National Social Security Fund No.117 Portfolio | Others | 0.58% | 18,019,748 | 9,799,838 | 0 | 18,019,748 | N/A | ||
| China Life Insurance Company Limited-Traditional-General Insurance Products-005L-ShanghaiCT001 | Others | 0.53% | 16,516,386 | 3,251,002 | 0 | 16,516,386 | N/A | ||
| Shanghai Chongyang Strategic Investment Co., Ltd. － Chongyang Strategic Yingzhi Fund | Others | 0.53% | 16,248,559 | 0 | 0 | 16,248,559 | N/A | ||
| Hu Baishan | Domestic natural person | 0.47% | 14,595,929 | 0 | 10,946,947 | 14,595,929 | N/A | ||
| Strategic investors or ordinary legal persons that became one of the top 10 shareholders due to the allotment of new shares | Shanghai Chongyang Strategic Investment Co., Ltd. － Chongyang Strategic Huizhi Fund became one of the top 10 shareholders with largest holding proportions due to its participation in private placement of shares in 2017. | ||||||||
| Remarks on relationships or concerted action between the top 10 shareholders with largest holding proportions | Among the above shareholders, Hu Baishan is the director of NHU Holding Group Co., Ltd. Due to participating in Employee stock ownership plan phase IV, Hu Baishan formed an association relationship with The Company－Employee stock ownership plan phase IV. The Company does not know whether other shareholders have relationships and whether they are persons acting in concert as defined in Administration of the Takeover of Listed Companies Procedures. | ||||||||
| Remarks on proxy voting and waiver of voting right of the above shareholders | None | ||||||||
| Special remarks on top 10 shareholders with special repurchase accounts | The Company’s special securities account for repurchase is attributable to the top 10 shareholders, who however did not participate in the presentation of such balances. | ||||||||
| Top 10 shareholders with unrestricted shares | |||||||||
| Shareholders | Quantity of unrestricted shares at the end of the reporting period | Category of shares | |||||||
| Category | Quantity | ||||||||
| NHU Holding Group Co., Ltd. | 1,536,409,351 | RMB ordinary shares | 1,536,409,351 | ||||||
| Hong Kong Securities Clearing Company Limited | 99,482,997 | RMB ordinary shares | 99,482,997 | ||||||
| Shanghai Chongyang Strategic Investment Co., Ltd. － Chongyang Strategic Huizhi Fund | 54,072,200 | RMB ordinary shares | 54,072,200 | ||||||
| National Social Security Fund No.503 Portfolio | 41,000,100 | RMB ordinary shares | 41,000,100 | ||||||
| The Company－Employee stock ownership plan phase IV | 29,528,181 | RMB ordinary shares | 29,528,181 | ||||||
| China Construction Bank Corporation - E Fund Shanghai and Shenzhen 300 Medical and Health Trading Open-end Index Fund | 22,999,677 | RMB ordinary shares | 22,999,677 | ||||||
| National Social Security Fund No.117 Portfolio | 18,019,748 | RMB ordinary shares | 18,019,748 | ||||||
| China Life Insurance Company Limited-Traditional-General Insurance Products-005L-ShanghaiCT001 | 16,516,386 | RMB ordinary shares | 16,516,386 | ||||||
| Shanghai Chongyang Strategic Investment Co., Ltd. － Chongyang Strategic Yingzhi Fund | 16,248,559 | RMB ordinary shares | 16,248,559 | ||||||
| Chongyang Group Co., Ltd. | 13,962,191 | RMB ordinary shares | 13,962,191 | ||||||
| Remarks on relationships or concerted action between the top 10 shareholders with unrestricted shares, and between the top 10 shareholders with unrestricted shares and top 10 shareholders with largest holding proportions. | Among the above shareholders, Hu Baishan is the director of NHU Holding Group Co., Ltd. Due to participating in Employee stock ownership plan phase IV, Hu Baishan formed an association relationship with The Company－Employee stock ownership plan phase IV. The Company does not know whether other shareholders have relationships and whether they are persons acting in concert as defined in Administration of the Takeover of Listed Companies Procedures. | ||||||||
| Remarks on top 10 shareholders of ordinary shares participating in securities margin trading | Shanghai Chongyang Strategic Investment Co., Ltd. － Chongyang Strategic Huizhi Fund holds 54,072,127 shares through client account of collateral securities for margin trading of Guotai Junan Securities Co., Ltd.; Shanghai Chongyang Strategic Investment Co., Ltd. － Chongyang Strategic Yingzhi Fund holds 16,248,461 shares through client account of collateral securities for margin trading of CITIC Securities Co., Ltd.; Chongyang Group Co., Ltd. holds 13,961,946 shares through client account of collateral securities for margin trading of China Merchants Securities Co., Ltd. | ||||||||
The lending of shares by the top 10 shareholders in the refinancing business
√Applicable □ Not applicable
Unit: Share
| The status of the top ten shareholders' participation in securities lending and borrowing transactions | ||||||||
| Shareholder name (full name) | Holdings in ordinary account and credit account at the beginning of the period | Shares borrowed for securities lending at the beginning of the period and have not yet been returned | Holdings in ordinary account and credit account at the end of the period | Shares borrowed for securities lending at the end of the period and have not yet been returned | ||||
| Total quantity | Ratio to total share capital | Total quantity | Ratio to total share capital | Total quantity | Ratio to total share capital | Total quantity | Ratio to total share capital | |
| China Construction Bank Corporation - E Fund Shanghai and Shenzhen 300 Medical and Health Trading Open-end Index Fund | 16,120,133 | 0.52% | 206,500 | 0.01% | 22,999,677 | 0.74% | 252,800 | 0.01% |
Changes in the top 10 shareholders compared with the previous period
√Applicable □ Not applicable
Unit: Share
| Changes in the top 10 shareholders compared with the end of the previous period | |||||
| Shareholder name (full name) | Entrant /Exit during the reporting period | Number of shares lent through refinancing and not yet returned at the end of the period | Number of shares held in shareholders' general accounts and credit accounts, and shares lent through refinancing and not yet returned at the end of the period | ||
| Total quantity | Ratio to total share capital | Total quantity | Ratio to total share capital | ||
| The Company－Employee stock ownership plan phase IV | Entrant | 0 | 0.00% | 29,528,181 | 0.96% |
| National Social Security Fund No.117 Portfolio | Entrant | 0 | 0.00% | 18,019,748 | 0.58% |
| China Life Insurance Company Limited-Traditional-General Insurance Products-005L-ShanghaiCT001 | Entrant | 0 | 0.00% | 16,516,386 | 0.53% |
| Kuwait Investment Authority | Exit | 0 | 0.00% | 1,035,565 | 0.03% |
| National Social Security Fund No.112 Portfolio | Exit | 0 | 0.00% | 11,888,657 | 0.38% |
| Chongyang Group Co., Ltd. | Exit | 0 | 0.00% | 13,962,191 | 0.45% |
Whether the Company's top 10 ordinary shareholders and the top 10 ordinary shareholders without selling restrictions conductedagreed repurchase transactions during the reporting period
□Applicable √Not applicable
The the Company's top 10 ordinary shareholders and the top 10 ordinary shareholders without selling restrictions did not engage inany agreed repurchase transactions during the reporting period.
2. Controlling shareholders
Nature of shareholders: Natural person holdingCategory of shareholders: Legal person
| Holding shareholders | Head of the entity | Date of establishment | Unified social credit code | Main business scope |
| NHU Holding Group Co., Ltd. | Hu Baifan | 2/14/1989 | 91330624146424869T | Industrial investments, goods import and export; production and sales of chemical products, pharmaceutical intermediates, chemical materials |
| Equity conditions of other domestic and overseas listed companies that the holding shareholders control or participate in during the reporting period | NHU Holding Group Co., Ltd. directly holds 36.73% of the shares of Beijing Fuyuan Pharmaceutical Co., Ltd. | |||
Changes of holding shareholders during the reporting period
□ Applicable √ Not applicable
The Company has no changes of holding shareholders during the reporting period.
3. Actual controllers and persons acting in concert
Nature of actual controller: Domestic natural personsCategory of actual controller: Natural persons
| Actual controller | Relationship with the actual controller | Nationality | Whether has permanent residence in other countries or regions |
| Hu Baifan | Self | China | No |
| Hu Baishan | Person acting in concert (including the following forms: agreement, relatives, common control) | China | No |
| Main occupation and position | Mr. Hu Baifan, Chairman of the Board, is a Chinese born in 1962, who has no permanent residence in foreign countries or regions. He has a master’s degree in Business Administration of Zhejiang University, and he is Senior Economist, Member of the Communist Party of China. He also serves as the Chairman of NHU Holding Group Co., Ltd. and its holding subsidiary Shaoxing Yuexiu Education Development Co., Ltd., and Director of NHU Real Estate Holding Co., Ltd. Mr. Hu Baishan, Vice Chairman and President, is a Chinese born in 1967, who has no permanent residence in foreign countries or regions. He has a master’s degree in EMBA program of Zhejiang University, and he is Senior Engineer, Member of the Communist Party of China. He also serves as the Director of NHU Holding Group Co., Ltd. and Shaoxing Yuexiu Education Development Co., Ltd. | ||
| Domestic and oversea listed companies once been under their control within a decade | Beijing Foyou Pharma Co., Ltd. actually controlled by Hu Baifan was listed on the main board of Shanghai Stock Exchange in 2022. | ||
Changes of actual controller within the reporting period
□ Applicable √ Not applicable
The Company has no changes in actual controller within the reporting period.Block diagram of title and control relationships between the Company and the actual controller
Whether the actual controller controls the Company through trust or other asset management methods
□ Applicable √ Not applicable
4. Whether the quantity of accumulated pledged shares of the Company held by the controlling shareholdersor the largest shareholder and his person acting in concert accounts for over 80% of total shares of theCompany held by them
□ Applicable √ Not applicable
5. Other legal person shareholders with holding proportion over 10%
□ Applicable √ Not applicable
6. Decrease in holding proportion of restricted shares of controlling shareholders, actual controllers,reorganizing parties and other undertaking entities
√ Applicable □Not applicable
On August 24, 2023, the Company published the "Announcement on the Commitment of the Controlling Shareholders, ActualControllers and Directors of the Company Not to Reduce Their Shares of the Company" (2023-037) on designated informationdisclosure media and http://www.cninfo.com.cn. NHU Holding Group Co., LTD., the controlling shareholder, Mr. Hu Baifan, the actual
controller, Mr. Hu Baishan, the acting party, and other directors and senior management personnel holding shares of the Company (Mr.Shi Guanqun, Mr. Wang Xuowen, Mr. Wang Zhengjiang, and Mr. Zhou Guiyang) declare not to reduce their holdings of the Company'sshares within six months from the date of signing the commitment letter. It includes the new shares arising from the conversion ofcapital reserves, distribution of stock dividends, rights issues, additional issues and other matters during the commitment period.The Company published the "Announcement on Controlling Shareholders' Plan to Increase the Company's Shares" (2023-064) ondesignated information disclosure media and http://www.cninfo.com.cn on October 27, 2023, the controlling shareholder NHU HoldingGroup Co., Ltd. plans to increase its shares of the company in the next 6 months through the means permitted by the trading system ofthe Shenzhen Stock Exchange (including but not limited to centralized bidding, block trading, etc.). The amount of shares to beincreased is not less than 200 million yuan and not more than 300 million yuan, and there is no price range for this increase plan. NewHarmony Holdings Group Limited undertakes not to reduce its shares during the period of increase and the statutory period.IV. Actual implementation of share repurchase during the reporting periodActual progress of share repurchase
□Applicable √ Not applicable
Implementation progress of shareholding reduction for shares repurchased through centralized bidding
□ Applicable √ Not applicable
Section VIII Preferred Shares
□ Applicable √ Not applicable
The Company has no preferred shares during the reporting period.
Section IX Bonds
□ Applicable √ Not applicable
Section X Financial Report
I. Auditor’s Report
| Audit Opinion | Standard unqualified opinion |
| Date of Auditor’s Report | April 19, 2024 |
| Accounting Firm | Pan-China Certified Public Accountants LLP |
| Number of Auditor’s Report | PCCPAAR [2024] No. 2809 |
| Signatory Certified Public Accountants | Teng Peibin, Jan Yanhui |
Auditor’s ReportTo the Shareholders of Zhejiang NHU Co., Ltd.:
I. Audit OpinionWe have audited the accompanying financial statements of Zhejiang NHU Co., Ltd. (the “Company”), which comprise the consolidatedand parent company balance sheets as at December 31, 2023, the consolidated and parent company income statements, the consolidatedand parent company cash flow statements, and the consolidated and parent company statements of changes in equity for the year thenended, as well as notes to financial statements.In our opinion, the attached financial statements present fairly, in all material respects, the financial position of the Company as atDecember 31, 2023, and of its financial performance and its cash flows for the year then ended in accordance with China AccountingStandards for Business Enterprises.II. Basis for Audit OpinionWe conducted our audit in accordance with China Standards on Auditing. Our responsibilities under those standards are furtherdescribed in the Certified Public Accountant’s Responsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the China Code of Ethics for Certified Public Accountants, and we have fulfilled otherethical responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion.III. Key Audit MattersKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statementsof the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in formingour opinion thereon, and we do not express a separate opinion on these matters.(I) Revenue recognition
1. Key audit matters
Please refer to item V 23、VII 40 and XVII.1of this section for details.The Company is mainly engaged in manufacturing and sales of nutrition, flavor and fragrance, new polymer materials, etc. In 2023,the operating revenue amounted to 15.12 billion yuan.
As operating revenue is one of the key performance indicators of the Company, there might be inherent risks that the Company’smanagement (the “Management”) adopts inappropriate revenue recognition to achieve specific goals or expectations, we haveidentified revenue recognition as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for revenue recognition are as follows:
(1) We obtained understandings of key internal controls related to revenue recognition, assessed the design of these controls, determinedwhether they had been executed, and tested the effectiveness of the operation;
(2) We checked sale contracts, obtained understandings of main contractual terms or conditions, and assessed whether the revenuerecognition method was appropriate;
(3) We performed analysis procedure on operating revenue and gross margin by month, product, client, etc., so as to identify whetherthere are significant or abnormal fluctuations and find out the reason of fluctuations;
(4) For revenue from domestic sales, we checked supporting documents related to revenue recognition by sampling method, includingsales contracts, sales invoices, delivery lists, shipping documents, client acceptance receipts, etc.; for revenue from overseas sales, weobtained information from Electron Port and checked it with accounting records, and checked supporting documents including salescontracts, bills of clearance, waybills, sales invoices, etc. by sampling method;
(5) We performed confirmation procedures on current sales amount by sampling method in combination with confirmation procedureof accounts receivable;
(6) We performed cut-off tests on the operating revenue recognized around the balance sheet date, and assessed whether the operatingrevenue was recognized in the appropriate period;
(7) We obtained the sales return records after the balance sheet date, and checked whether there was any situation that meet the revenuerecognition conditions on the balance sheet date
(8) We checked whether information related to operating revenue had been presented appropriately in the financial statements.(II) Existence and integrity of cash and bank balances
1. Key audit matters
Please refer to item V 1 of this section for details.At the balance sheet date, the Company’s cash and bank balances amounted to4,543.36 million yuan, which is one of the main assetsof the Company. As the amount of cash and bank balances is significant, the existence and integrity of cash and bank balances havesignificant influence on financial statements, we have identified existence and integrity of cash and bank balances as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for existence and integrity of cash and bank balances are as follows:
(1) We obtained understandings of key internal controls related to management of cash and bank balances, assessed the design of thesecontrols, determined whether they had been executed, and tested the effectiveness of the operation;
(2) We checked integrity of bank accounts in combination with detail tests based on “List of Opened Bank Settlement Accounts”obtained;
(3) We obtained and checked bank statements and bank reconciliation statements, and performed confirmation procedures on balanceof bank accounts;
(4) We checked bank statements and bank journals, performed bidirectional tests on bank statements of significant accounts, andchecked the transactions with large amounts;
(5) We checked the original documents of time deposit, and checked whether cash and bank balances have been pledged in combinationwith enterprise credit reports;
(6) We reviewed interest income, and checked whether interest income was consistent with the amount of cash and bank balances; and
(7) We checked whether information related to cash and bank balances had been presented appropriately in the financial statements.(III) Recognition and measurement of fixed assets and construction in progress
1. Key audit matters
Please refer to item V 15、16 and VII 12、 13 of this section for details.As of December 31, 2023, the Company’s carrying amount of fixed assets and construction in progress totals 23,481.97 million yuan,which is one of the major assets of the Company.Recognition and measurement of fixed assets and construction in progress involves significant judgement of the Management includingthe determination of capitalization criteria for expenditures, time point of construction in progress transferred to fixed assets and thebeginning of depreciation, estimation on economic useful lives and residual value of fixed assets, etcAs the amount of carrying amount of fixed assets and construction in progress is significant, and reasonableness of judgementmentioned above has significant influence on financial statements, we have identified recognition and measurement of fixed assets andconstruction in progress as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for recognition and measurement of fixed assets and construction in progress are as follows:
(1) We obtained understandings of key internal controls related to fixed assets and construction in progress, assessed the design ofthese controls, determined whether they had been executed, and tested the effectiveness of the operation;
(2) We checked the accuracy of capitalization amount in combination with the audit of bank borrowings;
(3) We checked acceptance reports related to construction projects or project progress reports, payment documents of constructionschedule payments, etc. by sampling method, and decided whether the time point of construction in progress transferred to fixed assetswas reasonable;
(4) We checked information such as acceptance reports or project progress reports related to important construction projects andpayment vouchers for construction progress to determine whether the point in time when construction in progress is transferred to fixedassets is reasonable;
(5) We checked purchase invoices, insurance policy of sales contracts, delivery lists etc. of fixed assets such as outsourcing machinery,and reviewed the accuracy of their costs;
(6) We obtained supporting documents related to construction in progress increased in the current period, including project application,construction loan contracts, construction contracts, invoices, purchase application for construction materials, payment bills,manufacturing agreements etc., and checked whether their costs and accounting treatment were correct;
(7) We assessed the reasonableness of economic useful lives and residual value of fixed assets estimated by the Management incombination with conditions of the industry;
(8) We checked whether information related to fixed assets and construction in progress had been presented appropriately in thefinancial statements.
IV. Other InformationThe Management is responsible for the other information. The other information comprises the information included in the Company’sannual report, but does not include the financial statements and our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusionthereon.In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, considerwhether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated.If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are requiredto report that fact. We have nothing to report in this regardV. Responsibilities of the Management and Those Charged with Governance for the Financial StatementsThe Management is responsible for preparing and presenting fairly the financial statements in accordance with China AccountingStandards for Business Enterprises, as well as designing, implementing and maintaining internal control relevant to the preparation offinancial statements that are free from material misstatement, whether due to fraud or error.In preparing the financial statements, the Management is responsible for assessing the Company’s ability to continue as a going concern,disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Managementeither intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’s financial reporting process.
VI. Certified Public Accountant’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,but is not a guarantee that an audit conducted in accordance with China Standards on Auditing will always detect a materialmisstatement when it exists. Misstatement can arise from fraud or error and are considered material if, individually or in the aggregate,they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.We exercise professional judgment and maintain professional skepticism throughout the audit performed in accordance with ChinaStandards on Auditing. We also:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and performaudit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involvecollusion, forgery, intentional omissions, misrepresentations, or the override of internal control.(II) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.(III) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosuresmade by the Management.(IV) Conclude on the appropriateness of the Management’s use of the going concern basis of accounting and, based on the auditevidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the
Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attentionin our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditionsmay cause the Company to cease to continue as a going concern.(V) Evaluate the overall presentation, structure and content of the financial statements, and whether the financial statements representthe underlying transactions and events in a manner that achieves fair presentation.(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities withinthe Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance ofthe group audit. We remain sole responsibility for our audit opinion.We communicate with those charged with governance regarding the planned audit scope, time schedule and significant audit findings,including any deficiencies in internal control of concern that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regardingindependence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on ourindependence, and where applicable, related safeguards.From the matters communicated with those charged with governance, we determine those matters that were of most significance in theaudit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’sreport unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determinethat a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expectedto outweigh the public interest benefits of such communication.II. Financial statementsThe monetary unit of the financial statements is Renminbi (RMB) Yuan.
1. Consolidated balance sheet
Prepared by Zhejiang NHU Co., Ltd.
December 31, 2023
Unit: RMB Yuan
| Items | December 31, 2023 | January 1, 2023 |
| Current assets: | ||
| Cash and bank balances | 4,543,361,146.98 | 5,343,851,967.72 |
| Settlement funds | ||
| Loans to other banks | ||
| Held-for-trading financial assets | 173,056,050.95 | 720,314,576.43 |
| Derivative financial assets | ||
| Notes receivable | 116,125,267.70 | 372,641,835.79 |
| Accounts receivable | 2,483,266,952.88 | 2,476,269,041.23 |
| Receivables financing | 331,634,090.61 | 379,217,582.25 |
| Advances paid | 209,274,602.05 | 222,336,776.26 |
| Premiums receivable | ||
| Reinsurance accounts receivable | ||
| Reinsurance reserve receivable | ||
| Other receivables | 142,060,705.67 | 269,567,592.73 |
| Items | December 31, 2023 | January 1, 2023 |
| Including: Interest receivable | ||
| Dividend receivable | 20,735,987.73 | |
| Financial assets under reverse repo | ||
| Inventories | 4,318,878,875.34 | 4,144,557,702.39 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 68,232,745.03 | 182,442,976.79 |
| Total current assets | 12,385,890,437.21 | 14,111,200,051.59 |
| Non-current assets: | ||
| Loans and advances | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | 697,145,200.08 | 432,503,568.48 |
| Other equity instrument investments | 22,998,147.55 | 22,998,147.55 |
| Other non-current financial assets | ||
| Investment property | ||
| Fixed assets | 21,860,082,637.13 | 16,523,867,858.53 |
| Construction in progress | 1,621,882,507.56 | 5,089,233,908.22 |
| Productive biological assets | ||
| Oil & gas assets | ||
| Right-of-use assets | 6,603,631.56 | 2,830,136.37 |
| Intangible assets | 2,407,560,753.82 | 1,738,506,246.32 |
| Development expenditures | ||
| Goodwill | 3,622,704.97 | 3,622,704.97 |
| Long-term prepayments | 11,697,961.72 | 13,179,878.45 |
| Deferred tax assets | 650,079.18 | 49,832,030.34 |
| Other non-current assets | 138,112,803.89 | 279,870,482.64 |
| Total non-current assets | 26,770,356,427.46 | 24,156,444,961.87 |
| Total assets | 39,156,246,864.67 | 38,267,645,013.46 |
| Current liabilities: | ||
| Short-term borrowings | 1,235,688,062.90 | 1,846,373,441.01 |
| Central bank loans | ||
| Loans from other banks | ||
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 349,347,472.36 | 627,438,689.79 |
| Accounts payable | 1,930,958,598.05 | 2,175,458,436.49 |
| Advances received | ||
| Contract liabilities | 251,008,240.97 | 60,660,929.75 |
| Financial liabilities under repo |
| Items | December 31, 2023 | January 1, 2023 |
| Absorbing deposit and interbank deposit | ||
| Deposit for agency security transaction | ||
| Deposit for agency security underwriting | ||
| Employee benefits payable | 418,273,203.88 | 386,391,911.86 |
| Taxes and rates payable | 301,794,080.40 | 208,198,951.94 |
| Other payables | 53,671,773.90 | 67,351,740.34 |
| Including: Interest payable | ||
| Dividend payable | ||
| Handling fee and commission payable | ||
| Reinsurance accounts payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 1,564,392,458.67 | 2,591,687,706.22 |
| Other current liabilities | 17,260,124.76 | 4,978,299.99 |
| Total current liabilities | 6,122,394,015.89 | 7,968,540,107.39 |
| Non-current liabilities: | ||
| Insurance policy reserve | ||
| Long-term borrowings | 6,821,643,194.58 | 5,273,637,508.87 |
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 5,240,136.43 | 2,822,404.07 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | 1,065,586,274.49 | 1,083,159,222.41 |
| Deferred tax liabilities | 221,675,090.41 | 277,316,677.63 |
| Other non-current liabilities | ||
| Total non-current liabilities | 8,114,144,695.91 | 6,636,935,812.98 |
| Total liabilities | 14,236,538,711.80 | 14,605,475,920.37 |
| Equity: | ||
| Share capital | 3,090,907,356.00 | 3,090,907,356.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 3,613,345,485.13 | 3,613,097,510.81 |
| Less: Treasury shares | 500,059,711.25 | 500,059,711.25 |
| Other comprehensive income | 103,920,732.85 | 76,577,564.17 |
| Special reserve | 60,860,818.76 | 26,196,894.55 |
| Surplus reserve | 1,545,453,678.00 | 1,444,414,900.05 |
| General risk reserve | ||
| Undistributed profit | 16,890,233,961.50 | 15,823,744,811.91 |
| Items | December 31, 2023 | January 1, 2023 |
| Total equity attributable to the parent company | 24,804,662,320.99 | 23,574,879,326.24 |
| Non-controlling interest | 115,045,831.88 | 87,289,766.85 |
| Total equity | 24,919,708,152.87 | 23,662,169,093.09 |
| Total liabilities & equity | 39,156,246,864.67 | 38,267,645,013.46 |
Legal representative: Hu Baifan Officer in charge of accounting: Shi Guanqun Head of accounting department: Zhang Lijin
2. Parent company balance sheet
Unit: RMB Yuan
| Items | December 31, 2023 | January 1, 2023 |
| Current assets: | ||
| Cash and bank balances | 2,944,073,209.24 | 4,202,458,431.01 |
| Held-for-trading financial assets | 200,000,000.00 | |
| Derivative financial assets | ||
| Notes receivable | 116,657,645.60 | 333,989,841.29 |
| Accounts receivable | 626,644,050.39 | 500,589,449.94 |
| Receivables financing | ||
| Advances paid | 4,143,777.83 | 3,906,244.57 |
| Other receivables | 2,908,050,463.81 | 2,496,112,121.85 |
| Including: Interest receivable | ||
| Dividend receivable | 20,735,987.73 | |
| Inventories | 295,102,427.23 | 383,861,555.41 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 1,925,459.39 | 3,980,654.70 |
| Total current assets | 6,896,597,033.49 | 8,124,898,298.77 |
| Non-current assets: | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | 10,678,236,147.42 | 9,386,046,175.45 |
| Other equity instrument investments | 72,998,147.55 | 72,998,147.55 |
| Other non-current financial assets | ||
| Investment property | ||
| Fixed assets | 612,700,666.98 | 625,625,323.34 |
| Construction in progress | 71,331,975.01 | 2,701,423.73 |
| Productive biological assets | ||
| Oil & gas assets | ||
| Right-of-use assets | 2,630,791.48 | 2,791,860.28 |
| Intangible assets | 145,613,180.34 | 144,448,440.79 |
| Development expenditures | ||
| Goodwill |
| Items | December 31, 2023 | January 1, 2023 |
| Long-term prepayments | 1,165,411.93 | 2,614,317.07 |
| Deferred tax assets | 10,794,527.34 | 26,157,812.32 |
| Other non-current assets | 29,165,952.28 | 21,018,962.32 |
| Total non-current assets | 11,624,636,800.33 | 10,284,402,462.85 |
| Total assets | 18,521,233,833.82 | 18,409,300,761.62 |
| Current liabilities: | ||
| Short-term borrowings | 496,760,409.72 | 501,525,361.11 |
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 109,519,196.45 | 226,011,556.24 |
| Accounts payable | 115,590,089.62 | 107,476,196.13 |
| Advances received | ||
| Contract liabilities | 3,836,737.57 | 4,296,388.78 |
| Employee benefits payable | 74,330,678.60 | 75,342,683.87 |
| Taxes and rates payable | 13,608,334.34 | 7,632,017.61 |
| Other payables | 16,876,789.87 | 28,936,115.08 |
| Including: Interest payable | ||
| Dividend payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 687,277,786.06 | 1,208,306,034.83 |
| Other current liabilities | 494,804.24 | 558,530.54 |
| Total current liabilities | 1,518,294,826.47 | 2,160,084,884.19 |
| Non-current liabilities: | ||
| Long-term borrowings | 4,350,488,292.95 | 3,336,304,155.58 |
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 2,715,619.54 | 2,822,404.07 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | 11,067,751.34 | 11,887,665.38 |
| Deferred tax liabilities | 19,080,454.36 | |
| Other non-current liabilities | ||
| Total non-current liabilities | 4,364,271,663.83 | 3,370,094,679.39 |
| Total liabilities | 5,882,566,490.30 | 5,530,179,563.58 |
| Equity: | ||
| Share capital | 3,090,907,356.00 | 3,090,907,356.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 3,353,675,803.74 | 3,353,427,829.42 |
| Less: Treasury shares | 500,059,711.25 | 500,059,711.25 |
| Items | December 31, 2023 | January 1, 2023 |
| Other comprehensive income | 506,954.43 | 506,954.43 |
| Special reserve | 10,583,344.97 | |
| Surplus reserve | 1,545,453,678.00 | 1,444,414,900.05 |
| Undistributed profit | 5,137,599,917.63 | 5,489,923,869.39 |
| Total equity | 12,638,667,343.52 | 12,879,121,198.04 |
| Total liabilities & equity | 18,521,233,833.82 | 18,409,300,761.62 |
Legal representative: Hu Baifan Officer in charge of accounting: Shi Guanqun Head of accounting department: Zhang Lijin
3. Consolidated income statement
Unit: RMB Yuan
| Items | Year 2023 | Year 2022 |
| I. Total operating revenue | 15,116,537,003.30 | 15,933,984,403.41 |
| Including: Operating revenue | 15,116,537,003.30 | 15,933,984,403.41 |
| Interest income | ||
| Premiums earned | ||
| Revenue from handling charges and commission | ||
| II. Total operating cost | 11,960,861,457.05 | 11,705,488,745.99 |
| Including: Operating cost | 10,131,490,375.45 | 10,048,300,866.94 |
| Interest expenses | ||
| Handling charges and commission expenditures | ||
| Surrender value | ||
| Net payment of insurance claims | ||
| Net provision of insurance policy reserve | ||
| Premium bonus expenditures | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 166,729,987.78 | 126,908,344.63 |
| Selling expenses | 158,316,813.86 | 122,257,619.47 |
| Administrative expenses | 551,072,291.99 | 504,674,730.69 |
| R&D expenses | 887,801,475.02 | 858,945,406.13 |
| Financial expenses | 65,450,512.95 | 44,401,778.13 |
| Including: Interest expenses | 319,906,196.30 | 329,243,757.49 |
| Interest income | 133,145,750.15 | 153,449,422.80 |
| Add: Other income | 202,088,522.53 | 176,863,614.19 |
| Investment income (or less: losses) | 83,054,284.94 | 128,695,043.73 |
| Including: Investment income from associates and joint ventures | 44,130,854.54 | 95,616,385.10 |
| Gains from derecognition of financial assets at amortized cost | ||
| Gains on foreign exchange (or less: losses) |
| Items | Year 2023 | Year 2022 |
| Gains on net exposure to hedging risk (or less: losses) | ||
| Gains on changes in fair value (or less: losses) | 29,932,484.98 | -66,321,783.72 |
| Credit impairment loss | 3,551,588.16 | 5,165,584.15 |
| Assets impairment loss | -230,600,448.22 | -162,974,265.12 |
| Gains on asset disposal (or less: losses) | 16,404,163.69 | 2,726,604.77 |
| III. Operating profit (or less: losses) | 3,260,106,142.33 | 4,312,650,455.42 |
| Add: Non-operating revenue | 7,931,135.56 | 4,985,224.34 |
| Less: Non-operating expenditures | 14,502,738.61 | 79,532,730.91 |
| IV. Profit before tax (or less: total loss) | 3,253,534,539.28 | 4,238,102,948.85 |
| Less: Income tax | 528,125,637.05 | 599,825,874.05 |
| V. Net profit (or less: net loss) | 2,725,408,902.23 | 3,638,277,074.80 |
| (I) Categorized by the continuity of operations | ||
| 1. Net profit from continuing operations (or less: net loss) | 2,725,408,902.23 | 3,638,277,074.80 |
| 2. Net profit from discontinued operations (or less: net loss) | ||
| (II) Categorized by the portion of equity ownership | ||
| 1. Net profit attributable to owners of parent company | 2,704,238,767.54 | 3,620,280,626.51 |
| 2. Net profit attributable to non-controlling shareholders | 21,170,134.69 | 17,996,448.29 |
| VI. Other comprehensive income after tax | 33,929,099.01 | 81,425,359.82 |
| Items attributable to the owners of the parent company | 27,343,168.68 | 78,191,736.48 |
| (I) Not to be reclassified subsequently to profit or loss | ||
| 1. Changes in remeasurement on the net defined benefit plan | ||
| 2. Items under equity method that will not be reclassified to profit or loss | ||
| 3. Changes in fair value of other equity instrument investments | ||
| 4. Changes in fair value of own credit risk | ||
| 5. Others | ||
| (II) To be reclassified subsequently to profit or loss | 27,343,168.68 | 78,191,736.48 |
| 1. Items under equity method that may be reclassified to profit or loss | ||
| 2. Changes in fair value of other debt investments | ||
| 3. Profit or loss from reclassification of financial assets into other comprehensive income | ||
| 4. Provision for credit impairment of other debt investments | ||
| 5. Cash flow hedging reserve | ||
| 6. Translation reserve | 27,343,168.68 | 78,191,736.48 |
| Items | Year 2023 | Year 2022 |
| 7. Others | ||
| Items attributable to non-controlling shareholders | 6,585,930.33 | 3,233,623.34 |
| VII. Total comprehensive income | 2,759,338,001.24 | 3,719,702,434.62 |
| Items attributable to the owners of the parent company | 2,731,581,936.22 | 3,698,472,362.99 |
| Items attributable to non-controlling shareholders | 27,756,065.02 | 21,230,071.63 |
| VIII. Earnings per share (EPS): | ||
| (I) Basic EPS (yuan per share) | 0.87 | 1.17 |
| (II) Diluted EPS (yuan per share) | 0.87 | 1.17 |
Net profit realized by the combined party in business combination under common control before the business combination in thecurrent period was 0.00 yuan, and net profit realized by the combined party in the previous period was 0.00 yuan.Legal representative: Hu Baifan Officer in charge of accounting: Shi Guanqun Head of accounting department: Zang Lijin
4. Parent company income statement
Unit: RMB Yuan
| Items | Year 2023 | Year 2022 |
| I. Operating revenue | 2,800,974,043.80 | 3,476,379,206.00 |
| Less: Operating cost | 2,516,550,050.27 | 2,829,191,552.87 |
| Taxes and surcharges | 17,900,647.81 | 19,574,413.26 |
| Selling expenses | 36,688,214.04 | 28,148,629.89 |
| Administrative expenses | 168,615,260.60 | 161,807,269.66 |
| R&D expenses | 249,169,737.63 | 237,369,336.57 |
| Financial expenses | 74,811,854.41 | 45,759,173.30 |
| Including: Interest expenses | 168,273,675.71 | 181,258,625.13 |
| Interest income | 95,067,720.22 | 135,572,386.45 |
| Add: Other income | 34,542,333.84 | 37,002,472.86 |
| Investment income (or less: losses) | 1,549,382,083.45 | 1,358,265,851.90 |
| Including: Investment income from associates and joint ventures | 24,434,009.92 | 47,283,121.54 |
| Gains from derecognition of financial assets at amortized cost | ||
| Gains on net exposure to hedging risk (or less: losses) | ||
| Gains on changes in fair value (or less: losses) | ||
| Credit impairment loss | -33,430,454.86 | 44,605,400.03 |
| Assets impairment loss | -22,771,080.59 | -17,315,989.84 |
| Gains on asset disposal (or less: losses) | 14,085,495.86 | -1,077,495.83 |
| II. Operating profit (or less: losses) | 1,279,046,656.74 | 1,576,009,069.57 |
| Add: Non-operating revenue | 2,729,472.22 | 88,499.41 |
| Less: Non-operating expenditures | 735,574.35 | 972,209.42 |
| III. Profit before tax (or less: total loss) | 1,281,040,554.61 | 1,575,125,359.56 |
| Less: Income tax | -4,385,111.58 | 22,950,159.11 |
| Items | Year 2023 | Year 2022 |
| IV. Net profit (or less: net loss) | 1,285,425,666.19 | 1,552,175,200.45 |
| (I) Net profit from continuing operations (or less: net loss) | 1,285,425,666.19 | 1,552,175,200.45 |
| (II) Net profit from discontinued operations (or less: net loss) | ||
| V. Other comprehensive income after tax | ||
| (I) Not to be reclassified subsequently to profit or loss | ||
| 1. Changes in remeasurement on the net defined benefit plan | ||
| 2. Items under equity method that will not be reclassified to profit or loss | ||
| 3. Changes in fair value of other equity instrument investments | ||
| 4. Changes in fair value of own credit risk | ||
| 5. Others | ||
| (II) To be reclassified subsequently to profit or loss | ||
| 1. Items under equity method that may be reclassified to profit or loss | ||
| 2. Changes in fair value of other debt investments | ||
| 3. Profit or loss from reclassification of financial assets into other comprehensive income | ||
| 4. Provision for credit impairment of other debt investments | ||
| 5. Cash flow hedging reserve | ||
| 6. Translation reserve | ||
| 7. Others | ||
| VI. Total comprehensive income | 1,285,425,666.19 | 1,552,175,200.45 |
| VII. Earnings per share (EPS): | ||
| (I) Basic EPS (yuan per share) | ||
| (II) Diluted EPS (yuan per share) |
5. Consolidated cash flow statement
Unit: RMB Yuan
| Items | Year 2023 | Year 2022 |
| I. Cash flows from operating activities: | ||
| Cash receipts from sale of goods or rendering of services | 15,114,302,982.05 | 15,306,568,290.22 |
| Net increase of client deposit and interbank deposit | ||
| Net increase of central bank loans | ||
| Net increase of loans from other financial institutions | ||
| Cash receipts from original insurance contract premium | ||
| Net cash receipts from reinsurance | ||
| Net increase of policy-holder deposit and investment | ||
| Cash receipts from interest, handling |
| charges and commission | ||
| Net increase of loans from others | ||
| Net increase of repurchase | ||
| Net cash receipts from agency security transaction | ||
| Receipts of tax refund | 809,452,548.86 | 1,027,184,301.30 |
| Other cash receipts related to operating activities | 340,383,499.80 | 378,248,822.12 |
| Subtotal of cash inflows from operating activities | 16,264,139,030.71 | 16,712,001,413.64 |
| Cash payments for goods purchased and services received | 8,199,010,919.39 | 9,323,961,398.08 |
| Net increase of loans and advances to clients | ||
| Net increase of central bank deposit and interbank deposit | ||
| Cash payments for insurance indemnities of original insurance contracts | ||
| Net increase of loans to others | ||
| Cash payments for interest, handling charges and commission | ||
| Cash payments for policy bonus | ||
| Cash paid to and on behalf of employees | 1,857,883,629.25 | 1,719,618,482.00 |
| Cash payments for taxes and rates | 772,137,083.65 | 1,017,074,124.15 |
| Other cash payments related to operating activities | 315,736,535.10 | 289,866,325.80 |
| Subtotal of cash outflows from operating activities | 11,144,768,167.39 | 12,350,520,330.03 |
| Net cash flows from operating activities | 5,119,370,863.32 | 4,361,481,083.61 |
| II. Cash flows from investing activities: | ||
| Cash receipts from withdrawal of investments | ||
| Cash receipts from investment income | 80,104,340.27 | 63,324,315.46 |
| Net cash receipts from the disposal of fixed assets, intangible assets and other long-term assets | 39,486,013.26 | 35,976,834.82 |
| Net cash receipts from the disposal of subsidiaries & other business units | ||
| Other cash receipts related to investing activities | 830,752,957.52 | 1,820,617,040.49 |
| Subtotal of cash inflows from investing activities | 950,343,311.05 | 1,919,918,190.77 |
| Cash payments for the acquisition of fixed assets, intangible assets and other long-term assets | 4,445,521,671.75 | 4,931,891,897.26 |
| Cash payments for investments | 237,508,000.00 | |
| Net increase of pledged borrowings | ||
| Net cash payments for the acquisition of subsidiaries & other business units | ||
| Other cash payments related to investing activities | 145,000,000.00 | 827,440,207.10 |
| Subtotal of cash outflows from investing activities | 4,828,029,671.75 | 5,759,332,104.36 |
| Net cash flows from investing activities | -3,877,686,360.70 | -3,839,413,913.59 |
| III. Cash flows from financing activities: | ||
| Cash receipts from absorbing investments |
Legal representative: Hu Baifan Officer in charge of accounting: Shi Guanqun Head of accounting department: Zang Lijin
6. Parent company cash flow statement
Unit: RMB Yuan
| Items | Year 2023 | Year 2022 |
| I. Cash flows from operating activities: | ||
| Cash receipts from sale of goods and rendering of services | 2,986,881,221.91 | 4,244,919,158.33 |
| Receipts of tax refund | 95,053,714.28 | 70,396,502.88 |
| Other cash receipts related to operating activities | 141,034,122.88 | 184,605,407.60 |
| Subtotal of cash inflows from operating activities | 3,222,969,059.07 | 4,499,921,068.81 |
| Cash payments for goods purchased and services received | 2,542,919,770.85 | 3,081,465,686.71 |
| Cash paid to and on behalf of employees | 346,310,819.49 | 339,198,320.10 |
| Cash payments for taxes and rates | 13,418,034.19 | 103,309,425.51 |
| Other cash payments related to operating activities | 149,457,603.83 | 136,806,092.80 |
| Subtotal of cash outflows from operating activities | 3,052,106,228.36 | 3,660,779,525.12 |
| Net cash flows from operating activities | 170,862,830.71 | 839,141,543.69 |
| II. Cash flows from investing activities: | ||
| Cash receipts from withdrawal of investments | ||
| Cash receipts from investment income | 1,438,109,000.00 | 1,226,726,388.76 |
| Net cash receipts from the disposal of fixed assets, intangible assets and other long-term assets | 30,696,077.98 | 6,140,487.71 |
Including: Cash received by subsidiariesfrom non-controlling shareholders asinvestments
| Including: Cash received by subsidiaries from non-controlling shareholders as investments | ||
| Cash receipts from borrowings | 5,996,318,716.61 | 6,843,969,570.73 |
| Other cash receipts related to financing activities | 11,188,800.91 | |
| Subtotal of cash inflows from financing activities | 5,996,318,716.61 | 6,855,158,371.64 |
| Cash payments for the repayment of borrowings | 6,198,516,255.00 | 5,807,173,190.91 |
| Cash payments for distribution of dividends or profits and for interest expenses | 1,833,426,559.71 | 2,132,962,559.97 |
| Including: Cash paid by subsidiaries to non-controlling shareholders as dividend or profit | ||
| Other cash payments related to financing activities | 17,387,029.07 | 185,017,200.07 |
| Subtotal of cash outflows from financing activities | 8,049,329,843.78 | 8,125,152,950.95 |
| Net cash flows from financing activities | -2,053,011,127.17 | -1,269,994,579.31 |
| IV. Effect of foreign exchange rate changes on cash & cash equivalents | 106,055,107.99 | 185,231,802.92 |
| V. Net increase in cash and cash equivalents | -705,271,516.56 | -562,695,606.37 |
| Add: Opening balance of cash and cash equivalents | 5,151,841,931.86 | 5,714,537,538.23 |
| VI. Closing balance of cash and cash equivalents | 4,446,570,415.30 | 5,151,841,931.86 |
| Items | Year 2023 | Year 2022 |
| Net cash receipts from the disposal of subsidiaries & other business units | ||
| Other cash receipts related to investing activities | 1,260,748,671.65 | 2,059,965,789.97 |
| Subtotal of cash inflows from investing activities | 2,729,553,749.63 | 3,292,832,666.44 |
| Cash payments for the acquisition of fixed assets, intangible assets and other long-term assets | 144,285,480.21 | 62,571,723.93 |
| Cash payments for investments | 1,267,508,000.00 | 1,350,000,000.00 |
| Net cash payments for the acquisition of subsidiaries & other business units | ||
| Other cash payments related to investing activities | 1,422,350,000.01 | 993,285,460.92 |
| Subtotal of cash outflows from investing activities | 2,834,143,480.22 | 2,405,857,184.85 |
| Net cash flows from investing activities | -104,589,730.59 | 886,975,481.59 |
| III. Cash flows from financing activities: | ||
| Cash receipts from absorbing investments | ||
| Cash receipts from borrowings | 2,995,000,000.00 | 4,250,000,000.00 |
| Other cash receipts related to financing activities | ||
| Subtotal of cash inflows from financing activities | 2,995,000,000.00 | 4,250,000,000.00 |
| Cash payments for the repayment of borrowings | 2,507,000,000.00 | 3,965,817,400.00 |
| Cash payments for distribution of dividends or profits and for interest expenses | 1,704,462,267.78 | 1,974,363,127.13 |
| Other cash payments related to financing activities | 1,690,292.10 | 181,401,563.42 |
| Subtotal of cash outflows from financing activities | 4,213,152,559.88 | 6,121,582,090.55 |
| Net cash flows from financing activities | -1,218,152,559.88 | -1,871,582,090.55 |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | 848,445.34 | 7,950,387.71 |
| V. Net increase in cash and cash equivalents | -1,151,031,014.42 | -137,514,677.56 |
| Add: Opening balance of cash and cash equivalents | 4,054,348,356.27 | 4,191,863,033.83 |
| VI. Closing balance of cash and cash equivalents | 2,903,317,341.85 | 4,054,348,356.27 |
7. Consolidated statement of changes in equity
Current period cumulative
Unit: RMB Yuan
| Items | Year 2023 | ||||||||||||||
| Equity attributable to parent company | |||||||||||||||
| Non-controlling interest | Total equity | ||||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Subtotal | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
| I. Balance at the end of prior year | 3,090,907,356.00 | 3,613,097,510.81 | 500,059,711.25 | 76,577,564.17 | 26,196,894.55 | 1,444,414,900.05 | 15,823,744,811.91 | 23,574,879,326.24 | 87,289,766.85 | 23,662,169,093.09 | |||||
Add: Cumulative changes of
accounting policies
| Add: Cumulative changes of accounting policies | |||||||||||||||
| Error correction of prior period |
Others
| Others | |||||||||||||||
| II. Balance at the beginning of current year | 3,090,907,356.00 | 3,613,097,510.81 | 500,059,711.25 | 76,577,564.17 | 26,196,894.55 | 1,444,414,900.05 | 15,823,744,811.91 | 23,574,879,326.24 | 87,289,766.85 | 23,662,169,093.09 | |||||
| III. Current period increase (or less: decrease) | 247,974.32 | 27,343,168.68 | 34,663,924.21 | 101,038,777.95 | 1,066,489,149.59 | 1,229,782,994.75 | 27,756,065.03 | 1,257,539,059.78 | |||||||
| (I) Total comprehensive income | 27,343,168.68 | 2,704,238,767.54 | 2,731,581,936.22 | 27,756,065.03 | 2,759,338,001.25 | ||||||||||
| (II) Capital contributed or withdrawn by owners | |||||||||||||||
| 1. Ordinary shares contributed by owners | |||||||||||||||
| 2. Capital contributed by holders of other equity instruments | |||||||||||||||
| 3. Amount of share-based payment included in equity |
4. Others
| 4. Others | |||||||||||||||
| (III) Profit distribution | 101,038,777.95 | -1,637,749,617.95 | -1,536,710,840.00 | -1,536,710,840.00 | |||||||||||
| 1. Appropriation of surplus reserve | 101,038,777.95 | -101,038,777.95 | |||||||||||||
| 2. Appropriation of general risk reserve |
3. Appropriation of profit to
owners
| 3. Appropriation of profit to owners | -1,536,710,840.00 | -1,536,710,840.00 | -1,536,710,840.00 |
4. Others
| 4. Others |
(IV) Internal carry-overwithin equity
| (IV) Internal carry-over within equity | |||||||||||||||
| 1. Transfer of capital reserve to capital | |||||||||||||||
| 2. Transfer of surplus reserve to capital |
| Items | Year 2023 | ||||||||||||||
| Equity attributable to parent company | Non-controlling interest | Total equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Subtotal | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
| 3. Surplus reserve to cover losses | |||||||||||||||
| 4. Changes in defined benefit plan carried over to retained earnings | |||||||||||||||
5. Other comprehensive
income carried over toretained earnings
| 5. Other comprehensive income carried over to retained earnings | |||||||||||||||
| 6. Others |
(V) Special reserve
| (V) Special reserve | 34,663,924.21 | 34,663,924.21 | 34,663,924.21 | ||||||||||||
| 1. Appropriation of current period | 85,571,248.53 | 85,571,248.53 | 85,571,248.53 |
2. Application of current
period
| 2. Application of current period | -50,907,324.32 | -50,907,324.32 | -50,907,324.32 | ||||||||||||
| (VI) Others | 247,974.32 | 247,974.32 | 247,974.32 | ||||||||||||
| IV. Balance at the end of current period | 3,090,907,356.00 | 3,613,345,485.13 | 500,059,711.25 | 103,920,732.85 | 60,860,818.76 | 1,545,453,678.00 | 16,890,233,961.50 | 24,804,662,320.99 | 115,045,831.88 | 24,919,708,152.87 |
Preceding period comparative
Unit: RMB Yuan
| Items | Year 2022 | ||||||||||||||
| Non-controlling interest | Total equity | ||||||||||||||
| Equity attributable to parent company | |||||||||||||||
| Share capital | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Subtotal | ||||||
| Other equity instruments | |||||||||||||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
| I. Balance at the end of prior year | 2,578,394,760.00 | 4,121,063,080.96 | 320,360,784.48 | -1,614,172.31 | 12,692,218.51 | 1,289,197,380.00 | 14,152,465,528.17 | 21,831,838,010.85 | 63,730,851.41 | 21,895,568,862.26 | |||||
| Add: Cumulative changes of accounting policies | 10,266.08 | 10,266.08 | 10,266.08 | ||||||||||||
| Error correction of prior period | |||||||||||||||
| Others | |||||||||||||||
II. Balance at the beginning of current year
| II. Balance at the beginning of current year | 2,578,394,760.00 | 4,121,063,080.96 | 320,360,784.48 | -1,614,172.31 | 12,692,218.51 | 1,289,197,380.00 | 14,152,475,794.25 | 21,831,848,276.93 | 63,730,851.41 | 21,895,579,128.34 | |||||
| III. Current period increase (or less: decrease) | 512,512,596.00 | -507,965,570.15 | 179,698,926.77 | 78,191,736.48 | 13,504,676.04 | 155,217,520.05 | 1,671,269,017.66 | 1,743,031,049.31 | 23,558,915.44 | 1,766,589,964.75 |
(I) Total comprehensive income
| (I) Total comprehensive income | 78,191,736.48 | 3,620,280,626.51 | 3,698,472,362.99 | 21,230,071.63 | 3,719,702,434.62 | ||||||||||
| (II) Capital contributed or withdrawn by owners | 179,698,926.77 | -179,698,926.77 | 2,328,843.81 | -177,370,082.96 | |||||||||||
| 1. Ordinary shares contributed by owners | |||||||||||||||
| 2. Capital contributed by holders of other equity instruments |
| Items | Year 2022 | ||||||||||||||
| Equity attributable to parent company | Non-controlling interest | Total equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Subtotal | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
| 3. Amount of share-based payment included in equity | |||||||||||||||
| 4. Others | 179,698,926.77 | -179,698,926.77 | 2,328,843.81 | -177,370,082.96 | |||||||||||
| (III) Profit distribution | 155,217,520.05 | -1,949,011,608.85 | -1,793,794,088.80 | -1,793,794,088.80 | |||||||||||
| 1. Appropriation of surplus reserve | 155,217,520.05 | -155,217,520.05 | |||||||||||||
2. Appropriation of general risk reserve
| 2. Appropriation of general risk reserve | |||||||||||||||
| 3. Appropriation of profit to owners | -1,793,794,088.80 | -1,793,794,088.80 | -1,793,794,088.80 | ||||||||||||
| 4. Others |
(IV) Internal carry-over within equity
| (IV) Internal carry-over within equity | 512,512,596.00 | -512,512,596.00 | |||||||||||||
| 1. Transfer of capital reserve to capital | 512,512,596.00 | -512,512,596.00 | |||||||||||||
| 2. Transfer of surplus reserve to capital |
3. Surplus reserve to cover losses
| 3. Surplus reserve to cover losses |
4. Changes in defined benefit plan carried
over to retained earnings
| 4. Changes in defined benefit plan carried over to retained earnings | |||||||||||||||
| 5. Other comprehensive income carried over to retained earnings | |||||||||||||||
| 6. Others |
(V) Special reserve
| (V) Special reserve | 13,504,676.04 | 13,504,676.04 | 13,504,676.04 | ||||||||||||
| 1. Appropriation of current period | 31,988,381.60 | 31,988,381.60 | 31,988,381.60 | ||||||||||||
| 2. Application of current period | -18,483,705.56 | -18,483,705.56 | -18,483,705.56 | ||||||||||||
| (VI) Others | 4,547,025.85 | 4,547,025.85 | 4,547,025.85 | ||||||||||||
| IV. Balance at the end of current period | 3,090,907,356.00 | 3,613,097,510.81 | 500,059,711.25 | 76,577,564.17 | 26,196,894.55 | 1,444,414,900.05 | 15,823,744,811.91 | 23,574,879,326.24 | 87,289,766.85 | 23,662,169,093.09 |
8. Parent company statements of changes in equity
Current period cumulative
Unit: RMB Yuan
| Items | Year 2023 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Others | Total equity | |||
| Preferred shares | Perpetual bonds | Others | ||||||||||
| I. Balance at the end of prior year | 3,090,907,356.00 | 3,353,427,829.42 | 500,059,711.25 | 506,954.43 | 1,444,414,900.05 | 5,489,923,869.39 | 12,879,121,198.04 | |||||
| Add: Cumulative changes of accounting policies | ||||||||||||
| Error correction of prior period | ||||||||||||
Others
| Others | ||||||||||||
| II. Balance at the beginning of current year | 3,090,907,356.00 | 3,353,427,829.42 | 500,059,711.25 | 506,954.43 | 1,444,414,900.05 | 5,489,923,869.39 | 12,879,121,198.04 | |||||
| III. Current period increase (or less: decrease) | 247,974.32 | 10,583,344.97 | 101,038,777.95 | -352,323,951.76 | -240,453,854.52 |
(I) Total comprehensive income
| (I) Total comprehensive income | 1,285,425,666.19 | 1,285,425,666.19 | ||||||||||
| (II) Capital contributed or withdrawn by owners |
1. Ordinary shares contributed by owners
| 1. Ordinary shares contributed by owners | ||||||||||||
| 2. Capital contributed by holders of other equity instruments | ||||||||||||
| 3. Amount of share-based payment included in equity | ||||||||||||
| 4. Others |
(III) Profit distribution
| (III) Profit distribution | 101,038,777.95 | -1,637,749,617.95 | -1,536,710,840.00 | |||||||||
| 1. Appropriation of surplus reserve | 101,038,777.95 | -101,038,777.95 | ||||||||||
| 2. Appropriation of profit to owners | -1,536,710,840.00 | -1,536,710,840.00 |
3. Others
| 3. Others | ||||||||||||
| (IV) Internal carry-over within equity | ||||||||||||
| 1. Transfer of capital reserve to capital | ||||||||||||
| 2. Transfer of surplus reserve to capital | ||||||||||||
| 3. Surplus reserve to cover losses |
4. Changes in defined benefit plan carried over to
retained earnings
| 4. Changes in defined benefit plan carried over to retained earnings | ||||||||||||
| 5. Other comprehensive income carried over to retained earnings | ||||||||||||
| 6. Others |
(V) Special reserve
| (V) Special reserve | 10,583,344.97 | 10,583,344.97 | ||||||||||
| 1. Appropriation of current period | 12,377,758.42 | 12,377,758.42 | ||||||||||
| 2. Application of current period | -1,794,413.45 | -1,794,413.45 | ||||||||||
| (VI) Others | 247,974.32 | 247,974.32 |
IV. Balance at the end of current period
| IV. Balance at the end of current period | 3,090,907,356.00 | 3,353,675,803.74 | 500,059,711.25 | 506,954.43 | 10,583,344.97 | 1,545,453,678.00 | 5,137,599,917.63 | 12,638,667,343.52 |
Preceding period comparative
Unit: RMB Yuan
| Items | Year 2022 | |||||||||||
| Share capital | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Others | Total equity | ||||
| Other equity instruments | ||||||||||||
| Preferred shares | Perpetual bonds | Others | ||||||||||
| I. Balance at the end of prior year | 2,578,394,760.00 | 3,861,393,399.57 | 320,360,784.48 | 506,954.43 | 1,289,197,380.00 | 5,886,750,011.71 | 13,295,881,721.23 | |||||
| Add: Cumulative changes of accounting policies | 10,266.08 | 10,266.08 | ||||||||||
Error correction of prior period
| Error correction of prior period | ||||||||||||
| Others |
II. Balance at the beginning of current year
| II. Balance at the beginning of current year | 2,578,394,760.00 | 3,861,393,399.57 | 320,360,784.48 | 506,954.43 | 1,289,197,380.00 | 5,886,760,277.79 | 13,295,891,987.31 | |||||
| III. Current period increase (or less: decrease) | 512,512,596.00 | -507,965,570.15 | 179,698,926.77 | 155,217,520.05 | -396,836,408.40 | -416,770,789.27 | ||||||
| (I) Total comprehensive income | 1,552,175,200.45 | 1,552,175,200.45 |
(II) Capital contributed or withdrawn by owners
| (II) Capital contributed or withdrawn by owners | 179,698,926.77 | -179,698,926.77 | ||||||||||
| 1. Ordinary shares contributed by owners | ||||||||||||
| 2. Capital contributed by holders of other equity instruments | ||||||||||||
| 3. Amount of share-based payment included in equity | ||||||||||||
| 4. Others | 179,698,926.77 | -179,698,926.77 |
(III) Profit distribution
| (III) Profit distribution | 155,217,520.05 | -1,949,011,608.85 | -1,793,794,088.80 | |||||||||
| 1. Appropriation of surplus reserve | 155,217,520.05 | -155,217,520.05 |
2. Appropriation of profit to owners
| 2. Appropriation of profit to owners | -1,793,794,088.80 | -1,793,794,088.80 | ||||||||||
| 3. Others |
(IV) Internal carry-over within equity
| (IV) Internal carry-over within equity | 512,512,596.00 | -512,512,596.00 | ||||||||||
| 1. Transfer of capital reserve to capital | ||||||||||||
| 2. Transfer of surplus reserve to capital | 512,512,596.00 | -512,512,596.00 | ||||||||||
| 3. Surplus reserve to cover losses |
4. Changes in defined benefit plan carried over to retained
earnings
| 4. Changes in defined benefit plan carried over to retained earnings |
5. Other comprehensive income carried over to retained
earnings
| 5. Other comprehensive income carried over to retained earnings | ||||||||||||
| 6. Others |
(V) Special reserve
| (V) Special reserve | ||||||||||||
| 1. Appropriation of current period | ||||||||||||
| 2. Application of current period | ||||||||||||
| (VI) Others | 4,547,025.85 | 4,547,025.85 | ||||||||||
| IV. Balance at the end of current period | 3,090,907,356.00 | 3,353,427,829.42 | 500,059,711.25 | 506,954.43 | 1,444,414,900.05 | 5,489,923,869.39 | 12,879,121,198.04 |
III. Company profileZhejiang NHU Co., Ltd. (the “Company”) was jointly established by Xinchang County Synthetic Chemical Plant, renamed as NHUHolding Group Co., Ltd. on November 17, 2009) and 9 natural persons including Zhang Pingyi, Yuan Yizhong, Shi Cheng, Hu Baishan,Shi Guanqun, Wang Xuewen, Shi Sanfu, Cui Xinrong, and Wang Xulin under the document of approval numbered Zhe Zheng Wei[1999] 9 issued by the former Securities Commission of the People’s Government of Zhejiang Province. Headquartered in ShaoxingCity, Zhejiang Province, the Company was registered at Zhejiang Administration for Industry and Commerce on April 5, 1999.Currently, the Company holds a business license with unified social credit code of 91330000712560575G, with registered capital of3,090,907,356.00 yuan, total share of 3,090,907,356 shares (each with par value of one yuan), of which, 36,374,202 shares are restrictedoutstanding shares, and 3,054,533,154 shares are unrestricted outstanding shares. The Company’s shares were listed on Shenzhen StockExchange on June 25, 2004.The Company belongs to pharmaceutical manufacturing industry and is mainly engaged in manufacturing and sales of nutrition, flavorand fragrance, and new polymer materials. The Company’s main products are nutrition, flavor and fragrance, and new polymermaterials.The financial statements were approved and authorized for issue by the Third meeting of the Ninth session of the Board of Directorsdated April 19 2024.IV. Preparation basis of the financial statements
1. Preparation basis
The financial statements have been prepared on the basis of going concern.
2. The ability to continue as a going concern
The Company has no events or conditions that may cast significant doubts upon the Company’s ability to continue as a going concernwithin the 12 months after the balance sheet date.V. Significant accounting policies and estimatesNote to specific accounting policies and estimates: The Company has set up accounting policies and estimates on transactions or eventssuch as impairment of financial instruments, depreciation of fixed assets, depreciation of right-of-use assets, amortization of intangibleassets, and revenue recognition, etc. based on the Company’s actual production and operation features.
1. Statement of compliance
The financial statements have been prepared in accordance with the requirements of China Accounting Standards for BusinessEnterprises (CASBEs), and present truly and completely the financial position, results of operations and cash flows of the Company.
2. Accounting period
The accounting year of the Company runs from January 1 to December 31 under the Gregorian calendar.
3. Operating cycle
Except for the real estate industry, the Company has a relatively short operating cycle for its business, an asset or a liability is classified
as current if it is expected to be realized or due within 12 months. The operating cycle for real estate industry starts from thedevelopment of property and ends at sales, which normally extends over 12 months and is subject to specific projects, therefore, anasset or a liability is classified as current if it is expected to be realized or due within such operating cycle.
4. Functional currency
The functional currency of the Company and its domestic subsidiaries is Renminbi (RMB) Yuan, while the functional currency ofsubsidiaries engaged in overseas operations including NHU (Hong Kong) Trading Co., Ltd., NHU Europe GmbH and NHU SingaporePTE. LTD. , NHU/CHR. OLESEN LATIN AMERICA A/S is the currency of the primary economic environment in which they operate.
5. Methodology for determining materiality criteria and basis for selection
?applicable □Not applicable
| Items | Importance Criteria |
| Significant write-offs of receivables | 0.5% of total assets |
| Significant prepayments aged over 1 year | 0.5% of total assets |
| Significant construction projects in progress | 0.5% of total assets |
| Significant accounts payable aged over 1 year | 0.5% of total assets |
| Significant other accounts payable aged over 1 year | 0.5% of total assets |
| Significant contractual liabilities older than 1 year | 0.5% of total assets |
| Significant cash flows from investing activities | 10.00% of total assets |
| Significant offshore operating entities | The Company identifies overseas operating entities whose total assets/total revenues/total profits exceed 15% of the Group's total assets/total revenues/total profits as significant overseas operating entities |
| Significant capitalized R&D projects, outsourced R&D projects | 0.5% of total assets |
| Significant subsidiaries, non-wholly owned subsidiaries | The Company identifies subsidiaries with total assets/total revenues/total profits exceeding 15% of the Group's total assets/total revenues/total profits as important subsidiaries, important non-wholly owned subsidiaries |
| Significant Joint Ventures, Associates, Co-Operations | The company identifies joint ventures, associates, and joint operations whose total assets/total revenues/total profits exceed 15% of the group's total assets/total revenues/total profits as significant joint ventures, associates, and joint operations |
6、Accounting treatments of business combination under and not under common control
1. Accounting treatment of business combination under common control
Assets and liabilities arising from business combination are measured at carrying amount of the combined party included in theconsolidated financial statements of the ultimate controlling party at the combination date. Difference between carrying amount of theequity of the combined party included in the consolidated financial statements of the ultimate controlling party and that of thecombination consideration or total par value of shares issued is adjusted to capital reserve, if the balance of capital reserve is insufficientto offset, any excess is adjusted to retained earnings.
2. Accounting treatment of business combination not under common control
When combination cost is in excess of the fair value of identifiable net assets obtained from the acquiree at the acquisition date, theexcess is recognized as goodwill; otherwise, the fair value of identifiable assets, liabilities and contingent liabilities, and themeasurement of the combination cost are reviewed, then the difference is recognized in profit or loss.
7. Criteria for judging control and preparation of consolidated financial statements
1. Controlled judgment
A parent company is recognized as controlling if it has power over the investee, enjoys variable returns through participation in theinvestee's relevant activities, and has the ability to use its power over the investee to affect the amount of its variable returns.
2. Compilation method of consolidated financial statements
The parent company brings all its controlled subsidiaries into the consolidation scope. The consolidated financial statements arecompiled by the parent company according to “CASBE 33 – Consolidated Financial Statements”, based on relevant information andthe financial statements of the parent company and its subsidiaries.
8. Classification of joint venture arrangements and accounting treatment of joint operations
1. Joint arrangements are categorized as joint operations and joint ventures.
2. When the company is a joint venture partner in a joint operation, the following items related to the share of interest in the jointoperation are recognized:
(1) Recognize assets held separately and assets held jointly in proportion to the share held;
(2) Recognize liabilities assumed individually, and liabilities assumed jointly in proportion to the share held;
(3) Recognize revenues from the sale of the company's share of joint operating outputs;
(4) Recognize income from joint operations arising from the sale of assets based on the company's share of ownership;
(5) Recognition of expenses incurred individually, as well as expenses incurred by the joint operation based on the company's share ofownership.
9. Recognition criteria of cash and cash equivalents
Cash as presented in cash flow statement refers to cash on hand and deposit on demand for payment. Cash equivalents refer to short-term, highly liquid investments that can be readily converted to cash and that are subject to an insignificant risk of changes in value.
10. Foreign currency translation
1. Translation of transactions denominated in foreign currency
Transactions denominated in foreign currency are translated into RMB yuan at the approximate exchange rate similar to the spotexchange rate at the transaction date at initial recognition. At the balance sheet date, monetary items denominated in foreign currencyare translated at the spot exchange rate at the balance sheet date with difference, except for those arising from the principal and interestof exclusive borrowings eligible for capitalization, included in profit or loss; non-cash items carried at historical costs are translated atthe approximate exchange rate similar to the spot exchange rate at the transaction date, with the RMB amounts unchanged; non-cashitems carried at fair value in foreign currency are translated at the spot exchange rate at the date when the fair value was determined,with difference included in profit or loss or other comprehensive income.
2. Translation of financial statements measured in foreign currency
The assets and liabilities in the balance sheet are translated into RMB at the spot rate at the balance sheet date; the equity items, otherthan undistributed profit, are translated at the spot rate at the transaction date; the revenues and expenses in the income statement are
translated into RMB at the approximate exchange rate similar to the spot exchange rate at the transaction date. The difference arisingfrom the aforementioned foreign currency translation is included in other comprehensive income.
11. Financial instruments
1. Classification of financial assets and financial liabilities
Financial assets are classified into the following three categories when initially recognized: (1) financial assets at amortized cost; (2)financial assets at fair value through other comprehensive income; (3) financial assets at fair value through profit or loss.Financial liabilities are classified into the following four categories when initially recognized: (1) financial liabilities at fair valuethrough profit or loss; (2) financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or whenthe continuing involvement approach applies; (3) financial guarantee contracts not fall within the above categories (1) and (2), andcommitments to provide a loan at a below-market interest rate, which do not fall within the above category (1); (4) financial liabilitiesat amortized cost.
2. Recognition criteria, measurement method and derecognition condition of financial assets and financial liabilities
(1) Recognition criteria and measurement method of financial assets and financial liabilities
When the Company becomes a party to a financial instrument, it is recognized as a financial asset or financial liability. The financialassets and financial liabilities initially recognized by the Company are measured at fair value; for the financial assets and liabilities atfair value through profit or loss, the transaction expenses thereof are directly included in profit or loss; for other categories of financialassets and financial liabilities, the transaction expenses thereof are included into the initially recognized amount. However, at initialrecognition, for accounts receivable that do not contain a significant financing component or in circumstances where the Companydoes not consider the financing components in contracts within one year, the Company measures the transaction price in accordancewith “CASBE 14 – Revenues”.
(2) Subsequent measurement of financial assets
1) Financial assets measured at amortized cost
The Company measures its financial assets at the amortized costs using effective interest method. Gains or losses on financial assetsthat are measured at amortized cost and are not part of hedging relationships shall be included into profit or loss when the financialassets are derecognized, reclassified, amortized using effective interest method or recognized with impairment loss.
2) Debt instrument investments at fair value through other comprehensive income
The Company measures its debt instrument investments at fair value. Interests, impairment gains or losses, and gains and losses onforeign exchange that calculated using effective interest method shall be included into profit or loss, while other gains or losses areincluded into other comprehensive income. Accumulated gains or losses that initially recognized as other comprehensive income shouldbe transferred out into profit or loss when the financial assets are derecognized.
3) Equity instrument investments at fair value through other comprehensive income
The Company measures its equity instrument investments at fair value. Dividends obtained (other than those as part of investment costrecovery) shall be included into profit or loss, while other gains or losses are included into other comprehensive income. Accumulated
gains or losses that initially recognized as other comprehensive income should be transferred out into retained earnings when thefinancial assets are derecognized.
4) Financial assets at fair value through profit or loss
The Company measures its financial assets at fair value. Gains or losses arising from changes in fair value (including interests anddividends) shall be included into profit or loss, except for financial assets that are part of hedging relationships.
(3) Subsequent measurement of financial liabilities
1) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities (including derivatives that areliabilities) and financial liabilities designated as at fair value through profit or loss. The Company measures such kind of liabilities atfair value. The amount of changes in the fair value of the financial liabilities that are attributable to changes in the Company’s owncredit risk shall be included into other comprehensive income, unless such treatment would create or enlarge accounting mismatchesin profit or loss. Other gains or losses on those financial liabilities (including interests, changes in fair value that are attributable toreasons other than changes in the Company’s own credit risk) shall be included into profit or loss, except for financial liabilities thatare part of hedging relationships. Accumulated gains or losses that originally recognized as other comprehensive income should betransferred out into retained earnings when the financial liabilities are derecognized.
2) Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuinginvolvement approach appliesThe Company measures its financial liabilities in accordance with “CASBE 23 – Transfer of Financial Assets”.
3) Financial guarantee contracts not fall within the above categories 1) and 2), and commitments to provide a loan at a below-marketinterest rate, which do not fall within the above category 1)The Company measures its financial liabilities at the higher of: a. the amount of loss allowances in accordance with impairmentrequirements of financial instruments; b. the amount initially recognized less the amount of accumulated amortization recognized inaccordance with “CASBE 14 – Revenues”.
4) Financial liabilities at amortized cost
The Company measures its financial liabilities at amortized cost using effective interest method. Gains or losses on financial liabilitiesthat are measured at amortized cost and are not part of hedging relationships shall be included into profit or loss when the financialliabilities are derecognized and amortized using effective interest method.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets are derecognized when:
a. the contractual rights to the cash flows from the financial assets expire; orb. the financial assets have been transferred and the transfer qualifies for derecognition in accordance with “CASBE 23 – Transfer ofFinancial Assets”.
2) Only when the underlying present obligations of a financial liability are relieved totally or partly may the financial liability bederecognized accordingly.
3. Recognition criteria and measurement method of financial assets transfer
Where the Company has transferred substantially all of the risks and rewards related to the ownership of the financial asset, itderecognizes the financial asset, and any right or liability arising from such transfer is recognized independently as an asset or a liability.If it retained substantially all of the risks and rewards related to the ownership of the financial asset, it continues recognizing thefinancial asset. Where the Company does not transfer or retain substantially all of the risks and rewards related to the ownership of afinancial asset, it is dealt with according to the circumstances as follows respectively: (1) if the Company does not retain its controlover the financial asset, it derecognizes the financial asset, and any right or liability arising from such transfer is recognizedindependently as an asset or a liability; (2) if the Company retains its control over the financial asset, according to the extent of itscontinuing involvement in the transferred financial asset, it recognizes the related financial asset and recognizes the relevant liabilityaccordingly.If the transfer of an entire financial asset satisfies the conditions for derecognition, the difference between the amounts of the followingtwo items is included in profit or loss: (1) the carrying amount of the transferred financial asset as of the date of derecognition; (2) thesum of consideration received from the transfer of the financial asset, and the accumulative amount of the changes of the fair valueoriginally included in other comprehensive income proportionate to the transferred financial asset (financial assets transferred refer todebt instrument investments at fair value through other comprehensive income). If the transfer of financial asset partially satisfies theconditions to derecognition, the entire carrying amount of the transferred financial asset is, between the portion which is derecognizedand the portion which is not, apportioned according to their respective relative fair value, and the difference between the amounts ofthe following two items is included into profit or loss: (1) the carrying amount of the portion which is derecognized; (2) the sum ofconsideration of the portion which is derecognized, and the portion of the accumulative amount of the changes in the fair valueoriginally included in other comprehensive income which is corresponding to the portion which is derecognized (financial assetstransferred refer to debt instrument investments at fair value through other comprehensive income).
4. Fair value determination method of financial assets and liabilities
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data and information areavailable to measure fair value. The inputs to valuation techniques used to measure fair value are arranged in the following hierarchyand used accordingly:
(1) Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company can access at themeasurement date.
(2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directlyor indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similarassets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability, for example,interest rates and yield curves observable at commonly quoted intervals; market-corroborated inputs;
(3) Level 3 inputs are unobservable inputs for the asset or liability. Level 3 inputs include interest rate that is not observable and cannotbe corroborated by observable market data at commonly quoted intervals, historical volatility, future cash flows to be paid to fulfill thedisposal obligation assumed in business combination, financial forecast developed using the Company’s own data, etc.
5. Impairment of financial instruments
(1) Measurement and accounting treatment
The Company, on the basis of expected credit loss, recognizes loss allowances of financial assets at amortized cost, debt instrumentinvestments at fair value through other comprehensive income, contract assets, leases receivable, loan commitments other than financialliabilities at fair value through profit or loss, financial guarantee contracts not belong to financial liabilities at fair value through profitor loss or financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuinginvolvement approach applies.Expected credit losses refer to the weighted average of credit losses with the respective risks of a default occurring as the weights.Credit loss refers to the difference between all contractual cash flows that are due to the Company in accordance with the contract andall the cash flows that the Company expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate. Amongwhich, purchased or originated credit-impaired financial assets are discounted at the credit-adjusted effective interest rate.At the balance sheet date, the Company shall only recognize the cumulative changes in the lifetime expected credit losses since initialrecognition as a loss allowance for purchased or originated credit-impaired financial assets.For leases receivable, and accounts receivable and contract assets resulting from transactions regulated in “CASBE 14 – Revenues”,the Company chooses simplified approach to measure the loss allowance at an amount equal to lifetime expected credit losses.For financial assets other than the above, on each balance sheet date, the Company shall assess whether the credit risk on the financialinstrument has increased significantly since initial recognition. The Company shall measure the loss allowance for the financialinstrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increasedsignificantly since initial recognition; otherwise, the Company shall measure the loss allowance for that financial instrument at anamount equal to 12-month expected credit loss.Considering reasonable and supportable forward-looking information, the Company compares the risk of a default occurring on thefinancial instrument as at the balance sheet date with the risk of a default occurring on the financial instrument as at the date of initialrecognition, so as to assess whether the credit risk on the financial instrument has increased significantly since initial recognition.The Company may assume that the credit risk on a financial instrument has not increased significantly since initial recognition if thefinancial instrument is determined to have relatively low credit risk at the balance sheet date.The Company shall estimate expected credit risk and measure expected credit losses on an individual or a collective basis. When theCompany adopts the collective basis, financial instruments are grouped with similar credit risk features.The Company shall remeasure expected credit loss on each balance sheet date, and increased or reversed amounts of loss allowancearising therefrom shall be included into profit or loss as impairment losses or gains. For a financial asset measured at amortized cost,the loss allowance reduces the carrying amount of such financial asset presented in the balance sheet; for a debt investment measured
at fair value through other comprehensive income, the loss allowance shall be recognized in other comprehensive income and shall notreduce the carrying amount of such financial asset.
6. Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are presented separately in the balance sheet and are not offset against each other. However,the company presents them in the balance sheet at the net amount after offsetting each other if the following conditions aresimultaneously met: (1) the company has a legal right to offset the recognized amount and such legal right is currently enforceable; (2)the company plans to settle the net amount, or to realize the financial asset and settle the financial liability at the same time.For transfers of financial assets that do not meet the conditions for derecognition, the company does not offset the transferred financialassets and related liabilities.12．Criteria for recognizing and providing for expected credit losses on receivables
1. Receivables with expected credit losses based on a combination of credit risk characteristics
| Portfolio Type | Basis for determining the portfolio | Methodology for measuring expected credit losses |
| Bankers' acceptances receivable | Type of notes | Expected credit losses are calculated by reference to historical credit loss experience, taking into account current conditions and projections of future economic conditions, through default exposures and expected credit loss rates over the entire duration |
| Commercial acceptances receivable | ||
| Accounts receivable – Portfolio grouped with ages | Age of accounts | Prepare a table of accounts receivable aging versus expected credit loss rates to calculate expected credit losses, taking into account historical credit loss experience, current conditions and projections of future economic conditions |
| Other receivables - export tax refund receivable portfolio | Nature of receivables | Expected credit losses are calculated by reference to historical credit loss experience, taking into account current conditions as well as projections of future economic conditions, through default exposures and expected credit loss rates within the next 12 months or over the entire life span |
| Other receivables - VAT refund receivable portfolio | ||
| Other receivables - land bond receivable portfolio | ||
| Other receivables - portfolio of security deposits receivable from customs and tax authorities | ||
| Other receivables - ageing portfolio | Age of accounts | Calculate expected credit losses by reference to historical credit loss experience and by preparing a table of the ageing of other receivables against the expected credit loss rate, taking into account current conditions and projections of future economic conditions |
2. Accounts receivable – comparison table of ages and lifetime expected credit loss rate of portfolio grouped with ages
| Ages | Accounts Receivable Expected credit loss ratio (%) | Other receivables Expected credit loss ratio (%) |
| Within 1 year (inclusive, the same hereinafter) | 5.00 | 5.00 |
| 1-2 years | 20.00 | 20.00 |
| 2-3 years | 80.00 | 80.00 |
| Over 3 years | 100.00 | 100.00 |
The ageing of accounts receivable/other receivables is calculated from the month in which the amounts are actually incurred.
3. Criteria for identifying receivables for which expected credit losses are provided on an individual basisFor receivables and contract assets with credit risk significantly different from that of the portfolio, the Company accrues expectedcredit losses on an individual basis.13．Inventories
1. Classification of inventories
Inventories include finished goods or goods held for sale in the ordinary course of business, work in process in the process of production,materials or supplies, etc. to be consumed in the production process or in the rendering of services.
2. Accounting method for dispatching inventories:
(1) Inventories other than development products are issued using the month-end lump-sum weighted-average method.
(2) When a project is developed, the land used for development is included in the development cost of the project by calculating theapportionment based on the floor area of the development products.
(3) Issuance of similar development products is accounted for by the average floor area method.
(4) If the public ancillary facilities are completed earlier than the relevant development products, after the public ancillary facilities arecompleted and finalized, they are allocated to the development costs of the relevant development projects according to the budgetedcosts of the relevant development projects; if the public ancillary facilities are completed later than the relevant development products,the public ancillary facilities fees are first withheld from the relevant development products, and then adjusted according to thedifference between the actual number of fees incurred and the number of fees withdrawn after the completion and finalization of thepublic ancillary facilities. If the public facilities are later than the completion of the relevant development products, the public facilitiesfees will be withheld by the relevant development products first, and the difference between the actual amount incurred and the amountwithheld will be adjusted according to the final account after the completion of the public facilities.
3. Inventory system
Perpetual inventory method is adopted.
4. Amortization method of low-value consumables and packages
(1) Low-value consumables
Low-value consumables are amortized with one-off method.
(2) Packages
Packages are amortized with one-off method.
5. Criteria for recognizing and providing for provision for decline in value of inventories
At the balance sheet date, inventories are measured at the lower of cost or net realizable value, and provision for decline in value ofinventories is made for the difference between cost and net realizable value. The net realizable value of inventories used directly forsale is determined in the normal course of production and operation by the estimated selling price of the inventories less estimatedselling expenses and related taxes; the net realizable value of inventories requiring processing is determined in the normal course ofproduction and operation by the estimated selling price of the finished goods produced less estimated costs to be incurred up to thetime of completion, estimated selling expenses and related taxes; At the balance sheet date, if there is a contract price agreed for one
part of the same inventory and no contract price exists for the other part, the net realizable value is determined separately and comparedwith its corresponding cost, and the amount of provision or reversal of allowance for decline in value of inventories is determinedseparately.14 .Long-term equity investments
1. Judgment of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevantactivities require the unanimous consent of the parties sharing control. Significant influence is the power to participate in the financialand operating policy decisions of the investee but is not control or joint control of these policies.
2. Determination of investment cost
(1) For business combination under common control, if the consideration of the combining party is that it makes payment in cash,transfers non-cash assets, assumes its liabilities or issues equity securities, on the date of combination, it regards the share of thecarrying amount of the equity of the combined party included in the consolidated financial statements of the ultimate controlling partyas the initial cost of the investment. The difference between the initial cost of the long-term equity investments and the carrying amountof the combination consideration paid or the par value of shares issued offsets capital reserve; if the balance of capital reserve isinsufficient to offset, any excess is adjusted to retained earnings.When long-term equity investments are obtained through business combination under common control achieved in stages, the Companydetermines whether it is a “bundled transaction”. If it is a “bundled transaction”, stages as a whole are considered as one transaction inaccounting treatment. If it is not a “bundled transaction”, on the date of combination, investment cost is initially recognized at the shareof the carrying amount of net assets of the combined party included the consolidated financial statements of the ultimate controllingparty. The difference between the initial investment cost of long-term equity investments at the acquisition date and the carrying amountof the previously held long-term equity investments plus the carrying amount of the consideration paid for the newly acquired equityis adjusted to capital reserve; if the balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings.
(2) For business combination not under common control, investment cost is initially recognized at the acquisition-date fair value ofconsiderations paid.When long-term equity investments are obtained through business combination not under common control achieved in stages, theCompany determined whether they are stand-alone financial statements or consolidated financial statements in accounting treatment:
1) In the case of stand-alone financial statements, investment cost is initially recognized at the carrying amount of the previously heldlong-term equity investments plus the carrying amount of the consideration paid for the newly acquired equity.
2) In the case of consolidated financial statements, the Company determines whether it is a “bundled transaction”. If it is a “bundledtransaction”, stages as a whole are considered as one transaction in accounting treatment. If it is not a “bundled transaction”, thecarrying amount of the acquirer’s previously held equity interest in the acquiree is remeasured at the acquisition-date fair value, andthe difference between the fair value and the carrying amount is recognized in investment income; when the acquirer’s previously heldequity interest in the acquiree involves other comprehensive income under equity method, the related other comprehensive income isreclassified as income for the acquisition period, excluding other comprehensive income arising from changes in net liabilities or assetsfrom remeasurement of defined benefit plan of the acquiree.
(3) Long-term equity investments obtained through ways other than business combination: the initial cost of a long-term equityinvestment obtained by making payment in cash is the purchase cost which is actually paid; that obtained on the basis of issuing equitysecurities is the fair value of the equity securities issued; that obtained through debt restructuring is determined according to “CASBE12 – Debt Restructuring”; and that obtained through non-cash assets exchange is determined according to “CASBE 7 – Non-cashAssets Exchange”
3. Subsequent measurement and recognition method of profit or loss
For long-term equity investments with control relationship, it is accounted for with cost method; for long-term equity investmentswith joint control or significant influence relationship, it is accounted for with equity method.
4. Disposal of a subsidiary in stages resulting in the Company’s loss of control
(1) Principles for determining whether or not a transaction is a "package deal"
In the case of a step-by-step disposal of equity investments in subsidiaries through multiple transactions until loss of control, theCompany determines whether a step-by-step transaction is a "package deal" by taking into account the terms and conditions of thetransaction agreement for each step of the step-by-step transaction, the respective disposal consideration, the target of the disposal, themethod of disposal, and the point of time of the disposal, among other information. If the terms, conditions and economic impacts ofeach transaction meet one or more of the following conditions, it is generally recognized that multiple transactions are "package deals":
1) The transactions are entered into at the same time or in consideration of the effects of each other;
2) The transactions as a whole achieve a complete business result;
3) the occurrence of one transaction is dependent on the occurrence of at least one other transaction;
4) a transaction is uneconomic when viewed in isolation, but is economic when considered in conjunction with other transactions.
(2) Accounting treatment for transactions that are not "package deals"
1) Individual financial statements
For equity interests disposed of, the difference between the book value and the actual acquisition price is recognized in profit or lossfor the current period. For the remaining equity interest, if it still has significant influence over the investee unit or exercises jointcontrol with other parties, it is transferred to the equity method of accounting; if it can no longer exercise control, joint control orsignificant influence over the investee unit, it is accounted for in accordance with the relevant provisions of "Accounting Standard forBusiness Enterprises (ASBE) No. 22 - Recognition and Measurement of Financial Instruments".
2) Consolidated financial statements
Prior to the loss of control, the difference between the disposal price and the disposal long-term equity investment's correspondingshare of the subsidiary's net assets calculated on a continuous basis from the date of purchase or the date of consolidation is adjustedto capital surplus (capital premium), and if capital premium is not sufficient to be eliminated, it is eliminated to retained earnings.Upon loss of control over Atomics, the remaining equity interest is remeasured at its fair value at the date of loss of control. Thedifference between the sum of the consideration obtained from the disposal of the equity interest and the fair value of the remainingequity interest, less the share of the original subsidiary's net assets continuously measured from the date of purchase or the date ofconsolidation based on the original shareholding ratio, is recognized as investment income in the period in which control is lost, andgoodwill is also eliminated. Other comprehensive income, such as other comprehensive income related to equity investments in theoriginal subsidiaries, should be transferred to investment income in the current period when control is lost.。
(3) Accounting treatment of "package transactions
1) Individual financial statements
Each transaction is accounted for as a disposal of a subsidiary and loss of control. However, the difference between the disposal priceand the carrying value of the long-term equity investment corresponding to the disposal of the investment in each case before the lossof control is recognized as other comprehensive income in the individual financial statements and transferred to profit or loss in theperiod of the loss of control when the loss of control occurs.
2) Consolidated financial statements
Each transaction is accounted for as a disposal of a subsidiary and loss of control. However, the difference between the disposal priceand the share of the net assets of the subsidiary corresponding to the disposal of the investment in each case before the loss of controlis recognized as other comprehensive income in the consolidated financial statements and transferred to profit or loss in the period ofloss of control when the control is lost.
15. Fixed assets
(1) Recognition principles
Fixed assets are tangible assets held for use in the production of goods or rendering of services, for rental to others, or for administrativepurposes, and expected to be used during more than one accounting year. Fixed assets are recognized if, and only if, it is probable thatfuture economic benefits associated with the assets will flow to the Company and the cost of the assets can be measured reliably.
(2) Depreciation method
| Categories | Depreciation method | Useful life (years) | Residual value proportion (%) | Annual depreciation rate (%) |
| Buildings and structures | Straight-line method | 7-70 | 5 | 13.57-1.36 |
| General equipment | Straight-line method | 5-10 | 5 | 19.00-9.50 |
| Special equipment | Straight-line method | 5-15 | 5 | 19.00-6.33 |
| Transport facilities | Straight-line method | 5-7 | 5 | 19.00-13.57 |
16. Construction in progress
1. Construction in progress is recognized if, and only if, it is probable that future economic benefits associated with the item will flowto the Company, and the cost of the item can be measured reliably. Construction in progress is measured at the actual cost incurred toreach its designed usable conditions.
2. Construction in progress is transferred into fixed assets at its actual cost when it reaches the designed usable conditions. When theauditing of the construction in progress was not finished while reaching the designed usable conditions, it is transferred to fixed assetsusing estimated value first, and then adjusted accordingly when the actual cost is settled, but the accumulated depreciation is not to beadjusted retrospectively.
| Categories | Standards and timing for transferring construction in progress to fixed assets |
| Buildings and structures | Construction works reach the state of intended use from the date of reaching the state of intended use |
| General equipment | After installation and commissioning to meet the design requirements or contractual standards |
| Special equipment | After installation and commissioning to meet the design requirements or contractual standards |
17、Borrowing costs
1. Recognition principle of borrowing costs capitalization
Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and construction or production ofassets eligible for capitalization, it is capitalized and included in the costs of relevant assets; other borrowing costs are recognized asexpenses on the basis of the actual amount incurred, and are included in profit or loss.
2. Borrowing costs capitalization period
(1) The borrowing costs are not capitalized unless the following requirements are all met: 1) the asset disbursements have alreadyincurred; 2) the borrowing costs have already incurred; and 3) the acquisition and construction or production activities which arenecessary to prepare the asset for its intended use or sale have already started.
(2) Suspension of capitalization: where the acquisition and construction or production of a qualified asset is interrupted abnormallyand the interruption period lasts for more than 3 months, the capitalization of the borrowing costs is suspended; the borrowing costsincurred during such period are recognized as expenses, and are included in profit or loss, till the acquisition and construction orproduction of the asset restarts.
(3) Ceasing of capitalization: when the qualified asset under acquisition and construction or production is ready for the intended use orsale, the capitalization of the borrowing costs is ceased.
3. Capitalization rate and capitalized amount of borrowing costs
For borrowings exclusively for the acquisition and construction or production of assets eligible for capitalization, the to-be-capitalizedamount of interests is determined in light of the actual interest expenses incurred (including amortization of premium or discount basedon effective interest method) of the special borrowings in the current period less the interest income on the unused borrowings as adeposit in the bank or as a temporary investment; where a general borrowing is used for the acquisition and construction or productionof assets eligible for capitalization, the Company calculates and determines the to-be-capitalized amount of interests on the generalborrowing by multiplying the weighted average asset disbursement of the part of the accumulative asset disbursements less the generalborrowing by the capitalization rate of the general borrowing used.
18. Intangible assets
(1) Measurement method, useful lives and impairment test
1. Intangible assets include land use right, patent right, non-patented technology, etc. The initial measurement of intangible assets isbased on its cost.
2. For intangible assets with finite useful lives, their amortization amounts are amortized within their useful lives systematically andreasonably, if it is unable to determine the expected realization pattern reliably, intangible assets are amortized by the straight-linemethod with details as follows:
| Items | Useful life and the basis for its determination | Amortization method |
| Land use right | 50,70,(Based on the number of years contained in the warrants) | linear method |
| Software | 10,(Based on projected years of benefit) | linear method |
| Patent right | 10, (Based on projected years of benefit) | linear method |
| Non-patented technology | 15, (Based on projected years of benefit) | linear method |
(2) Accounting policies on internal R&D expenditures
(1) Personnel labor costs
Personnel labor costs include salaries and wages, basic pension insurance premiums, basic medical insurance premiums, unemploymentinsurance premiums, work-related injury insurance premiums, maternity insurance premiums and housing fund of the Company'sresearch and development personnel, as well as labor costs of external research and development personnel.
Where research and development personnel serve on multiple research and development projects at the same time, the recognition oflabor costs is based on the records of hours worked by the research and development personnel of each research and developmentproject provided by the management of the Company, which are allocated proportionately among the different research anddevelopment projects.Where personnel directly engaged in research and development activities and external research and development personnel aresimultaneously engaged in non-research and development activities, the Company allocates the personnel labor costs actually incurredby the research and development personnel between research and development expenses and production and operating expenses basedon the records of their working hours in different positions, in accordance with the proportion of their actual working hours and otherreasonable methods.
(2) Direct input costs
Direct input costs refer to the relevant expenditures actually incurred by the Company for the implementation of research anddevelopment activities. It includes: 1) directly consumed materials, fuel and power costs; 2) the development and manufacturing costsof molds and process equipment used for intermediate tests and product trial production, the purchase costs of samples, prototypes andgeneral testing means that do not constitute fixed assets, and the inspection costs of trial products; and 3) the costs of operating andmaintaining, adjusting, inspecting, testing and repairing instruments and equipment used for research and development activities.
(3) Depreciation expense and long-term amortization expense
Depreciation expense refers to the depreciation of instruments, equipment and buildings in use used in research and developmentactivities.If instruments, equipment and buildings in use are used for research and development activities and are also used for non-research anddevelopment activities, necessary records are kept of the use of such instruments, equipment and buildings in use, and the depreciationexpense actually incurred is allocated between research and development expenses and production and operating expenses using areasonable method based on factors such as actual man-hours worked and square footage of space utilized.Long-term amortized expenses are long-term amortized expenses incurred in the course of alteration, modification, renovation andrepair of research and development facilities, which are summarized on the basis of actual expenditures and amortized equally over aspecified period of time.
(4) Amortization expense of intangible assets
Amortization expense of intangible assets is the amortization expense of software, intellectual property, and non-patented technologies(know-how, licenses, designs and calculation methods, etc.) used in research and development activities.
(5) Design costs
Design expenses are expenses incurred for the conception, development and manufacture of new products and processes, design ofprocesses, technical specifications, formulation of protocols, operational characteristics, etc., including expenses related to creativedesign activities for obtaining innovative, creative and breakthrough products.
(6) Equipment debugging costs and test costs
Equipment debugging costs are costs incurred for research and development activities in the process of preparing workpieces, includingcosts incurred for activities such as the development of special, specialized production machines, changes in production and qualitycontrol procedures, or the development of new methods and standards.Costs incurred for routine tooling preparation and industrial engineering for mass production and commercialization are not includedin the scope of collection.
(7) Commissioned external research and development costs
Entrusted external research and development expenses are expenses incurred by the Company for research and development activitiesentrusted to other organizations or individuals inside or outside the country (the results of the research and development activities areowned by the Company and are closely related to the Company's main business operations).
(8) Other expenses
Other expenses refer to expenses other than those mentioned above that are directly related to research and development activities,including technical library and data fees, data translation fees, expert consultation fees, insurance fees for high-tech research anddevelopment, search, demonstration, evaluation, appraisal and acceptance fees for research and development results, application fees,registration fees and agency fees for intellectual property rights, meeting fees, travel fees and communication fees.
4. Expenditures on the research phase of an internal project are recognized as profit or loss when they are incurred. An intangible assetarising from the development phase of an internal project is recognized if the Company can demonstrate all of the followings: (1) thetechnical feasibility of completing the intangible asset so that it will be available for use or sale; (2) its intention to complete theintangible asset and use or sell it; (3) how the intangible asset will generate probable future economic benefits, among other things, theCompany can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to beused internally, the usefulness of the intangible asset; (4) the availability of adequate technical, financial and other resources to completethe development and to use or sell the intangible asset; and (5) its ability to measure reliably the expenditure attributable to the intangibleasset during its development.
19. Impairment of part of long-term assets
For long-term assets such as long-term equity investments, fixed assets, construction in progress, right-of-use assets, intangible assetswith finite useful lives, etc., if at the balance sheet date there is indication of impairment, the recoverable amount is to be estimated.For goodwill recognized in business combination and intangible assets with indefinite useful lives, no matter whether there is indicationof impairment, impairment test is performed annually. Impairment test on goodwill is performed on related asset group or asset groupportfolio.When the recoverable amount of such long-term assets is lower than their carrying amount, the difference is recognized as provisionfor assets impairment through profit or loss.
20. Long-term prepayments
Long-term prepayments are expenses that have been recognized but with amortization period over one year (excluding one year). Theyare recorded with actual cost, and evenly amortized within the beneficiary period or stipulated period. If items of long-term prepaymentsfail to be beneficial to the following accounting periods, residual values of such items are included in profit or loss.
21. Employee benefits
(1) Short-term employee benefits
The Company recognizes, in the accounting period in which an employee provides service, short-term employee benefits actuallyincurred as liabilities, with a corresponding charge to profit or loss or the cost of a relevant asset.
(2) Post-employment benefits
The Company classifies post-employment benefit plans as either defined contribution plans or defined benefit plans.
(1) The Company recognizes in the accounting period in which an employee provides service the contribution payable to a definedcontribution plan as a liability, with a corresponding charge to profit or loss or the cost of a relevant asset.
(2) Accounting treatment by the Company for defined benefit plan usually involves the following steps:
1) In accordance with the projected unit credit method, using unbiased and mutually compatible actuarial assumptions to estimaterelated demographic variables and financial variables, measure the obligations under the defined benefit plan, and determine the periodsto which the obligations are attributed. Meanwhile, the Company discounts obligations under the defined benefit plan to determine thepresent value of the defined benefit plan obligations and the current service cost;
2) When a defined benefit plan has assets, the Company recognizes the deficit or surplus by deducting the fair value of defined benefitplan assets from the present value of the defined benefit plan obligation as a net defined benefit plan liability or net defined benefitplan asset. When a defined benefit plan has a surplus, the Company measures the net defined benefit plan asset at the lower of thesurplus in the defined benefit plan and the asset ceiling;
3) At the end of the period, the Company recognizes the following components of employee benefits cost arising from defined benefitplan: a. service cost; b. net interest on the net defined benefit plan liability (asset); and c. changes as a result of remeasurement of thenet defined benefit liability (asset). Item a and item b are recognized in profit or loss or the cost of a relevant asset. Item c is recognizedin other comprehensive income and is not to be reclassified subsequently to profit or loss. However, the Company may transfer thoseamounts recognized in other comprehensive income within equity.
(3) Termination benefits
Termination benefits provided to employees are recognized as an employee benefit liability for termination benefits, with acorresponding charge to profit or loss at the earlier of the following dates: a. when the Company cannot unilaterally withdraw the offerof termination benefits because of an employment termination plan or a curtailment proposal; or b. when the Company recognizes costor expenses related to a restructuring that involves the payment of termination benefits.
(4) Other long-term employee benefits
When other long-term employee benefits provided to the employees satisfied the conditions for classifying as a defined contributionplan, those benefits are accounted for in accordance with the requirements relating to defined contribution plan, while other benefitsare accounted for in accordance with the requirements relating to defined benefit plan. The Company recognizes the cost of employeebenefits arising from other long-term employee benefits as the followings: a. service cost; b. net interest on the net liability or net assetsof other long-term employee benefits; and c. changes as a result of remeasurement of the net liability or net assets of other long-term
employee benefits. As a practical expedient, the net total of the aforesaid amounts is recognized in profit or loss or included in the costof a relevant asset.
22. projected liability
1. When an obligation arising from contingencies such as guarantees given to others, litigation matters, product quality assurance, losscontracts, etc. becomes a present obligation of the company, and it is probable that the performance of the obligation will result in anoutflow of economic benefits to the company and the amount of the obligation can be measured reliably, the company recognizes theobligation as a projected liability.
2. The company initially measures a projected liability on the basis of the best estimate of the expenditure required to settle the relevantpresent obligation and reviews the carrying amount of the projected liability at the balance sheet date.
23. Revenue
Accounting policies on revenue recognition and measurement
1. Revenue recognition principles
At contract inception, the Company shall assess the contracts and shall identify each performance obligation in the contracts, anddetermine whether the performance obligation should be satisfied over time or at a point in time.The Company satisfies a performance obligation over time if one of the following criteria is met, otherwise, the performance obligationis satisfied at a point in time: (1) the customer simultaneously receives and consumes the economic benefits provided by the Company’sperformance as the Company performs; (2) the customer can control goods as they are created by the Company’s performance; (3)goods created during the Company’s performance have irreplaceable uses and the Company has an enforceable right to the paymentsfor performance completed to date during the whole contract period.For each performance obligation satisfied over time, the Company shall recognize revenue over time by measuring the progress towardscomplete satisfaction of that performance obligation. In the circumstance that the progress cannot be measured reasonably, but thecosts incurred in satisfying the performance obligation are expected to be recovered, the Company shall recognize revenue only to theextent of the costs incurred until it can reasonably measure the progress. For each performance obligation satisfied at a point in time,the Company shall recognize revenue at the time point that the customer obtains control of relevant goods or services. To determinewhether the customer has obtained control of goods, the Company shall consider the following indications: (1) the Company has apresent right to payment for the goods, i.e., the customer is presently obliged to pay for the goods; (2) the Company has transferred thelegal title of the goods to the customer, i.e., the customer has legal title to the goods; (3) the Company has transferred physicalpossession of the goods to the customer, i.e., the customer has physically possessed the goods; (4) the Company has transferredsignificant risks and rewards of ownership of the goods to the customer, i.e., the customer has obtained significant risks and rewardsof ownership of the goods; (5) the customer has accepted the goods; (6) other evidence indicating the customer has obtained controlover the goods.
2. Revenue measurement principle
(1) Revenue is measured at the amount of the transaction price that is allocated to each performance obligation. The transaction priceis the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer,excluding amounts collected on behalf of third parties and those expected to be refunded to the customer.
(2) If the consideration promised in a contract includes a variable amount, the Company shall confirm the best estimate of variableconsideration at expected value or the most likely amount. However, the transaction price that includes the amount of variableconsideration only to the extent that it is high probable that a significant reversal in the amount of cumulative revenue recognized will
not occur when the uncertainty associated with the variable consideration is subsequently resolved.
(3) In the circumstance that the contract contains a significant financing component, the Company shall determine the transaction pricebased on the price that a customer would have paid for if the customer had paid cash for obtaining control over those goods or services.The difference between the transaction price and the amount of promised consideration is amortized under effective interest methodover contractual period. The effects of a significant financing component shall not be considered if the Company expects, at the contractinception, that the period between when the customer obtains control over goods or services and when the customer pays considerationwill be one year or less.
(4) For contracts containing two or more performance obligations, the Company shall determine the stand-alone selling price at contractinception of the distinct good underlying each performance obligation and allocate the transaction price to each performance obligationon a relative stand-alone selling price basis.
3. Revenue recognition method
(1) Revenue from sales of products
The Company’s main products are nutrition, flavor and fragrance, new polymer materials, etc. Sales of products are performanceobligations satisfied at a point in time. Revenue from domestic sales is recognized when the Company has delivered goods to thecustomer as agreed by contract and has obtained delivery note signed by the customer, and the Company has collected the paymentsor has obtained the right to the payments, and related economic benefits are highly probable to flow to the Company. Revenue fromoverseas sales is recognized when the Company has declared goods to the customs based on contractual agreements and has obtaineda bill of lading, and the Company has collected the payments or has obtained the right to the payments, and related economic benefitsare highly probable to flow to the Company.
(2) Revenue from real estate sales
Real estate sales are performance obligations satisfied at a point in time. Revenue from real estate sales is recognized when theCompany has delivered properties to the customer as agreed by contract and has obtained the client acceptance receipts signed by thecustomer, and the Company has collected the payments or has obtained the right to the payments, and related economic benefits arehighly probable to flow to the Company.
24. Contract assets, contract liabilities
The Company presents contract assets or contract liabilities in the balance sheet based on the relationship between its performanceobligations and customers’ payments. Contract assets and contract liabilities under the same contract shall offset each other and bepresented on a net basis.The Company presents an unconditional right to consideration (i.e., only the passage of time is required before the consideration is due)as a receivable, and presents a right to consideration in exchange for goods that it has transferred to a customer (which is conditionalon something other than the passage of time) as a contract asset.The Company presents an obligation to transfer goods to a customer for which the Company has received consideration (or the amountis due) from the customer as a contract liability.25．Government grants
1. Government grants shall be recognized if, and only if, the following conditions are all met: (1) the Company will comply with theconditions attaching to the grants; (2) the grants will be received. Monetary government grants are measured at the amount received orreceivable. Non-monetary government grants are measured at fair value, and can be measured at nominal amount in the circumstancethat fair value cannot be assessed.
2. Government grants related to assets
Government grants related to assets are government grants with which the Company constructs or otherwise acquires long-term assetsunder requirements of government. In the circumstances that there is no specific government requirement, the Company shall determinebased on the primary condition to acquire the grants, and government grants related to assets are government grants whose primarycondition is to construct or otherwise acquire long-term assets. They offset carrying amount of relevant assets, or they are recognizedas deferred income. If recognized as deferred income, they are included in profit or loss on a systematic basis over the useful lives ofthe relevant assets. Those measured at notional amount are directly included into profit or loss. For assets sold, transferred, disposedor damaged within the useful lives, balance of unamortized deferred income is transferred into profit or loss of the period in which thedisposal occurred.
3. Government grants related to income
Government grants related to income are government grants other than those related to assets. For government grants that contain bothparts related to assets and parts related to income, in which those two parts are blurred, they are thus collectively classified asgovernment grants related to income. For government grants related to income used for compensating the related future cost, expensesor losses, they are recognized as deferred income and included in profit or loss or used to offset relevant cost during the period in whichthe relevant cost, expenses or losses are recognized; for government grants related to income used for compensating the related cost,expenses or losses incurred to the Company, they are directly included in profit or loss or used to offset relevant cost.
4. Government grants related to the ordinary course of business shall be included into other income or used to offset relevant cost basedon business nature, while those not related to the ordinary course of business shall be included into non-operating revenue orexpenditures.
5. Policy interest subvention
(1) In the circumstance that government appropriates interest subvention to lending bank, who provides loans for the Company with apolicy subsidised interest rate, borrowings are carried at the amount received, with relevant borrowings cost computed based on theprincipal and the policy subsidised interest rate.
(2) In the circumstance that government directly appropriates interest subvention to the Company, the subsidised interest shall offsetrelevant borrowing cost.
26. Deferred tax assets/Deferred tax liabilities
1. Deferred tax assets or deferred tax liabilities are calculated and recognized based on the difference between the carrying amount andtax base of assets and liabilities (and the difference of the carrying amount and tax base of items not recognized as assets and liabilitiesbut with their tax base being able to be determined according to tax laws) and in accordance with the tax rate applicable to the periodduring which the assets are expected to be recovered or the liabilities are expected to be settled.
2. A deferred tax asset is recognized to the extent of the amount of the taxable income, which is most likely to obtain and which canbe deducted from the deductible temporary difference. At the balance sheet date, if there is any exact evidence that it is probable thatfuture taxable income will be available against which deductible temporary differences can be utilized, the deferred tax assetsunrecognized in prior periods are recognized.
3. At the balance sheet date, the carrying amount of deferred tax assets is reviewed. The carrying amount of a deferred tax asset isreduced to the extent that it is no longer probable that sufficient taxable income will be available to allow the benefit of the deferredtax asset to be utilized. Such reduction is subsequently reversed to the extent that it becomes probable that sufficient taxable incomewill be available.
4. The income tax and deferred tax for the period are treated as income tax expenses or income through profit or loss, excluding thosearising from the following circumstances: (1) business combination; and (2) the transactions or items directly recognized in equity.
5. Deferred income tax assets and deferred income tax liabilities are stated at net amounts after offsetting when the following conditionsare simultaneously met: (1) there is a legal right to settle current income tax assets and current income tax liabilities on a net basis; (2)the deferred income tax assets and deferred income tax liabilities relate to income taxes levied by the same tax authority on the sametaxpaying entity, or relate to different taxpaying entities but are not realized or settled during each significant future period in whichthe deferred income tax assets and deferred income tax liabilities are reversed. each future period in which the deferred income taxassets and deferred income tax liabilities are reversed to the extent that the taxable entity involved intends to either settle the currentincome tax assets and current income tax liabilities on a net basis or to acquire the assets and settle the liabilities at the same time.
27. Leases
（1）Operating lease
1. Accounting treatment of leases as les see
At the commencement date, the Company recognizes a lease that has a lease term of 12 months or less as a short-term lease, whichshall not contain a purchase option; the Company recognizes a lease as a lease of a low-value asset if the underlying asset is of lowvalue when it is new. If the Company subleases an asset, or expects to sublease an asset, the head lease does not qualify as a lease of alow-value asset.For all short-term leases and leases of low-value assets, lease payments are recognized as cost or profit or loss with straight-linemethod/unit-of-production method over the lease term.Apart from the above-mentioned short-term leases and leases of low-value assets with simplified approach, the Company recognizesright-of-use assets and lease liabilities at the commencement date.
1) Right-of-use assets
The right-of-use asset is measured at cost and the cost shall comprise: 1) the amount of the initial measurement of the lease liability; 2)any lease payments made at or before the commencement date, less any lease incentives received; 3) any initial direct costs incurredby the lessee; and 4) an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring thesite on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.The Company depreciates the right-of-use asset using the straight-line method/unit-of-production method. If it is reasonable to becertain that the ownership of the underlying asset can be acquired by the end of the lease term, the Company depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Company depreciates theright-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the leaseterm.
2) Lease liability
At the commencement date, the Company measures the lease liability at the present value of the lease payments that are not paid atthat date, discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the Company’s incrementalborrowing rate shall be used. Unrecognized financing expenses, calculated at the difference between the lease payment and its presentvalue, are recognized as interest expenses over the lease term using the discount rate which has been used to determine the presentvalue of lease payment and included in profit or loss. Variable lease payments not included in the measurement of lease liabilities areincluded in profit or loss in the periods in which they are incurred.After the commencement date, if there is a change in the following items: a. actual fixed payments; b. amounts expected to be payable
under residual value guarantees; c. an index or a rate used to determine lease payments; d. assessment result or exercise of purchaseoption, extension option or termination option., the Company remeasures the lease liability based on the present value of lease paymentsafter changes, and adjusts the carrying amount of the right-of-use asset accordingly. If the carrying amount of the right-of-use asset isreduced to zero but there shall be a further reduction in the lease liability, the remaining amount shall be recognized into profit or loss.
（2） Accounting for leases as lessor
At the inception date of a lease, the Company classifies leases that transfer substantially all the risks and rewards associated withownership of the leased asset as finance leases, and all other leases as operating leases.
1) Operating leases
The Company recognizes lease receipts as rental income on a straight-line basis in each period of the lease term. Initial direct costsincurred are capitalized and amortized on the same basis as rental income and recognized in profit or loss in the current period. Variablelease payments related to operating leases that are not recognized as lease receipts are recognized in profit or loss when they are actuallyincurred.
2) Finance leases
At the commencement date of the lease term, the Company recognizes a finance lease receivable based on the net investment in thelease (the sum of the unguaranteed residual value and the present value of the lease receipts not yet received at the commencementdate of the lease term discounted at the interest rate embedded in the lease) and derecognizes the asset under a finance lease. Duringeach period of the lease term, the Company calculates and recognizes interest income based on the interest rate embedded in the lease.Variable lease payments acquired by the Company that are not included in the measurement of the net investment in the lease arerecognized in profit or loss when they are actually incurred.
（3） Sale and leaseback
1) Company as lessee
The Company evaluates to determine whether the transfer of assets in a sale and leaseback transaction is a sale in accordance with theprovisions of ASBE No. 14, "Revenue".If the transfer of an asset in a sale and leaseback transaction is a sale, the Company measures the right-of-use asset resulting from thesale and leaseback at the portion of the original asset's carrying value that relates to the right-of-use acquired by leasing it back andrecognizes the related gain or loss only on the transfer of the right to the lessor.If the transfer of an asset in a sale-leaseback transaction is not a sale, the Company continues to recognize the transferred asset, and atthe same time recognizes a financial liability equal to the amount of the transfer proceeds and accounts for the financial liability inaccordance with Accounting Standard for Business Enterprises (ASBE) No. 22, "Recognition and Measurement of FinancialInstruments".
2) The Company as Lessor
The Company evaluates to determine whether the transfer of assets in a sale-and-leaseback transaction is a sale in accordance withASBE No. 14, "Revenue".
If the transfer of assets in a sale-leaseback transaction is a sale, the Company accounts for the purchase of assets in accordance withother applicable corporate accounting standards and for the lease of assets in accordance with ASBE No. 21 - Leasing.If the transfer of assets in a sale-leaseback transaction is not a sale, the company does not recognize the transferred assets, but recognizesa financial asset equal to the transfer proceeds and accounts for the financial asset in accordance with ASBE No. 22, "Recognition andMeasurement of Financial Instruments".
28. Work safety fund
Safety production fees extracted by the Company in accordance with the Administrative Measures for the Extraction and Use ofEnterprise Production Safety Expenses (Cai Zi [2022] No. 136) issued by the Ministry of Finance and the Ministry of EmergencyResponse are included in the cost of the relevant products or in current profit or loss, and are also recorded in the account of "specialreserve". When the safety production fee is used, if it is an expense, it is directly deducted from the special reserve. If a fixed asset isformed, the expenditure incurred is summarized under the "construction in progress" account and recognized as a fixed asset when thesafety project is completed and reaches the intended state of use; at the same time, the special reserve is deducted in accordance withthe cost of forming the fixed asset and accumulated depreciation of the same amount is recognized, and no depreciation will be providedfor the fixed asset in the subsequent period.
29. Segment reporting
Operating segments are determined based on the structure of the Company’s internal organization, management requirements andinternal reporting system. An operating segment is a component of the Company:
1. that engages in business activities from which it may earn revenues and incur expenses;
2. whose financial performance is regularly reviewed by the Management to make decisions about resource to be allocated to thesegment and to assess its performance; and
3. for which accounting information regarding financial position, financial performance and cash flows is available through analysis.
30.Accounting treatment related to share repurchase
When the Company repurchases its shares for the purpose of reducing its registered capital or rewarding its employees, if the purchasedshares are to be kept as treasury shares, the treasury shares are recorded at the cash distributed to existing shareholders for repurchase;if the purchased shares are to be retired, the difference between the total par value of shares retired and the cash distributed to existingshareholders for repurchase is to reduce capital reserve, or retained earnings when the capital reserve is not enough to reduce. If theCompany repurchases vested equity instruments in equity-settled share-based payment transactions with employees, cost of treasuryshares granted to employees and capital reserve (other capital reserve) accumulated within the vesting period are to be written off onthe payment made to employees, with a corresponding adjustment in capital reserve (share premium).
31.Significant changes in accounting policies and estimates
(1) Significant changes in accounting policies
√ Applicable □ Not Applicable
Unit: RMB Yuan
| Contents and reasons | Statement Items Significantly Affected | Amount of impact |
| Effective January 1, 2023, the Company implemented Accounting Standards Interpretation No. 16 issued by the Ministry of Finance (MOF) . The "Accounting for deferred income taxes not subject to the initial recognition exemption for assets and liabilities arising from individual transactions" requires that adjustments be made for individual transactions to which the provision applies that occur between the beginning of the earliest period for which the financial statements are presented in the period in which the provision is first implemented and the date of first implementation. If taxable temporary differences and deductible temporary differences arise from lease liabilities and right-of-use assets recognized as a result of a single transaction to which this provision applies at the beginning of the earliest period for which the financial statements are presented for the first time, and if projected liabilities related to abandonment obligations and related assets are recognized, the taxable temporary differences and deductible temporary differences shall be adjusted in accordance with the provisions of this provision and Accounting Standard No. 18 - "Income Taxes". -Income Taxes, the cumulative effect is adjusted to opening retained earnings and other related financial statement items in the earliest period for which the financial statements are presented. | Balance sheet items at December 31, 2022 | |
| Deferred tax assets | 19,857.63 | |
| Surplus reserve | 959.16 | |
| Undistributed profit | 18,898.47 | |
| Income statement items for fiscal year 2022 | ||
| Income tax | -9,591.55 | |
(2) Significant changes in accounting estimates
□ Applicable √ Not Applicable
（3）Adjustments to items related to financial statements at the beginning of the year of first-timeimplementation of new accounting standards from 2023 onwards
□ Applicable √ Not Applicable
VI. Taxes
1. Main taxes and tax rates
| Taxes | Tax bases | Tax rates |
| Value-added tax (VAT) | The output tax calculated based on the revenue from sales of goods or rendering of services in accordance with the tax law, net of the input tax that is allowed to be deducted in the current period | 13%, 9%, 8%, 6%, 5% and 19%; export goods enjoy the “exemption, credit and refund” policy and the refund rate ranges from 0% to 13%; the subsidiary Zhejiang NHU Import & Export Co., Ltd. enjoys the “refund upon collection” policy and the refund rate ranges from 0% to 13%. |
| Urban maintenance and construction tax | Turnover tax actually paid | 5%, 7% |
| Enterprise income tax | Taxable income | 15%、16.5%、17%、20%、22%、25%、25.5%、34% |
| Land appreciation tax | The incremental amount arising from the transfer of state-owned land use right and the buildings and structures that are constructed on the land | A four-grade progressive tax system is adopted. The rates are: 30% for appreciated value not over 50% of total deductible amount; 40% for appreciated value over 50% but not over 100% of total deductible amount; 50% for appreciated value over 100% but not over 200% of total deductible amount; and 60% |
| Taxes | Tax bases | Tax rates |
| for appreciated value over 200% of total deductible amount. | ||
| Housing property tax | For housing property levied on the basis of price, housing property tax is levied at the rate of 1.2% of the balance after deducting 30% of the cost; for housing property levied on the basis of rent, housing property tax is levied at the rate of 12% of rent revenue. | 1.2%, 12% |
| Education surcharge | Turnover tax actually paid | 3% |
| Local education surcharge | Turnover tax actually paid | 2% |
| Solidarity surcharge [Note] | Income tax payable | 5.50% |
| Trade tax [Note] | Taxable income | 13.30% |
Note: The subsidiaries NHU EUROPE GmbH, NHU PERFORMANCE MATERIALS GMBH and Bardoterminal GmbH are subjectto these rates.Different enterprise income tax rates applicable to different taxpayers:
| Taxpayers | Income tax rate |
| The Company | 15% |
| Shangyu NHU Bio-Chem Co., Ltd. | 15% |
| Shandong NHU Pharmaceutical Co., Ltd. | 15% |
| Shandong NHU Vitamins Co., Ltd. | 15% |
| Shandong NHU Amino-acids Co., Ltd. | 15% |
| Zhejiang NHU Special Materials Co., Ltd. | 15% |
| Heilongjiang NHU Biotechnology Co., Ltd. | 15% |
| Zhejiang NHU Pharmaceutical Co., Ltd | 15% |
| Shandong NHU Fine ChemicalScience and Technology Co. | 15% |
| NHU (Hong Kong) Trading Co., Ltd. | Adoption of the territorial source principle of taxation, with profits tax rate of 8.25% for the first HK$2 million of Hong Kong-sourced profits and 16.5% for the subsequent Hong Kong-sourced profits, while profits sourced elsewhere are not subject to Hong Kong profits tax |
| NHU EUROPE GmbH | 15% |
| NHU PERFORMANCE MATERIALS GMBH | 15% |
| Bardoterminal GmbH | 15% |
| NHU Singapore PTE. LTD. | 17% |
| Shandong New Shuang'an Biotechnology Co., Ltd | 20% |
| NHU/CHR.OLESEN LATIN AMERICA A/S | 22% |
| NHU CHR.OLESEN MEXICO S.A.P.I. DE C.V. | 25.5% |
| NHU/CHR.OLESEN BRASIL LTDA | 34% |
| Other tax paying entities other than the above | 25% |
2. Tax preferential policies
1. Enterprise income tax
(1) Tax incentives for high-tech enterprises
1) According to the Hi-Tech Enterprise Certificate (GR202333009429) issued by Zhejiang Provincial Department of Science andTechnology, Zhejiang Provincial Department of Finance and Zhejiang Provincial Tax Service, State Taxation Administration (STA),the Company is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from 2023 to 2025. It is subject to therate of 15% for enterprise income tax in 2023.
2) According to the Hi-Tech Enterprise Certificate (GR202233002530) issued by Zhejiang Provincial Department of Science andTechnology, Zhejiang Provincial Department of Finance and Zhejiang Provincial Tax Service, STA, the subsidiary Shangyu NHU Bio-Chem Co., Ltd. is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from 2022 to 2024. It is subject tothe rate of 15% for enterprise income tax in 2023.
3) According to the Hi-Tech Enterprise Certificate (GR202337003609) issued by Department of Science and Technology ofShandong Province, Shandong Provincial Department of Finance and Shandong Provincial Tax Service, STA, the subsidiary ShandongNHU Pharmaceutical Co., Ltd. is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from 2023 to 2025.It is subject to the rate of 15% for enterprise income tax in 2023.
4) According to the Hi-Tech Enterprise Certificate (GR202337002254) issued by Department of Science and Technology ofShandong Province, Shandong Provincial Department of Finance and Shandong Provincial Tax Service, STA, the grandson ShandongNHU Vitamins Co., Ltd. is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from 2023 to 2025. It issubject to the rate of 15% for enterprise income tax in 2023.
5) According to the Hi-Tech Enterprise Certificate (GR202137000086) issued by Department of Science and Technology ofShandong Province, Shandong Provincial Department of Finance and Shandong Provincial Tax Service, STA, the subsidiary ShandongNHU Amino Acid Co., Ltd. is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from 2021 to 2023. Itis subject to the rate of 15% for enterprise income tax in 2023.
6) According to the Hi-Tech Enterprise Certificate (GR202133008939) issued by Zhejiang Provincial Department of Science andTechnology, Zhejiang Provincial Department of Finance and Zhejiang Provincial Tax Service, STA, the subsidiary Zhejiang NHUSpecial Materials Co., Ltd. is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from 2021 to 2023. It issubject to the rate of 15% for enterprise income tax in 2023.
7) According to the Hi-Tech Enterprise Certificate (GR202123000560) issued by Heilongjiang Provincial Department of Scienceand Technology, Heilongjiang Provincial Department of Finance and Heilongjiang Provincial Tax Service, STA, the subsidiaryHeilongjiang NHU Biotechnology Co., Ltd. is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from2021 to 2023. It is subject to the rate of 15% for enterprise income tax in 2023.
8) According to the Hi-Tech Enterprise Certificate (GR202233004365) issued by Zhejiang Provincial Department of Scienceand Technology, Zhejiang Provincial Department of Finance and Zhejiang Provincial Tax Service, STA, the subsidiary Zhejiang NHUPharmaceutical Co., Ltd. is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from 2022 to 2024. It issubject to the rate of 15% for enterprise income tax in 2023.
9) According to the Hi-Tech Enterprise Certificate (GR202237005690) issued by Department of Science and Technology ofShandong Province, Shandong Provincial Department of Finance and Shandong Provincial Tax Service, STA, the subsidiary ShandongNHU Fine ChemicalScience and Technology Co. is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policyfrom 2022 to 2024. It is subject to the rate of 15% for enterprise income tax in 2023.
(2) Tax incentives for micro and small enterprises
According to the Announcement of the Ministry of Finance and the State Administration of Taxation on Preferential Policies onIncome Tax for Small and Micro Enterprises and Individual Entrepreneurs (Announcement of the Ministry of Finance and the StateAdministration of Taxation No. 6 of 2023) and the Announcement on Further Implementation of Preferential Policies on the IncomeTax for Small and Micro Enterprises (Announcement of the Ministry of Finance and the State Administration of Taxation No. 13 of2022), from 1 January 2023 to 31 December 2024, small and micro enterprises are entitled to a reduction of 25% of their annual taxableincome and a tax rate of 20%. taxable income of small micro-profit enterprises not exceeding 1 million yuan shall be reduced by 25%
of the taxable income and subject to enterprise income tax at a rate of 20%. From January 1, 2022 to December 31, 2024, the portionof the annual taxable income of small micro-profit enterprises exceeding 1 million yuan but not exceeding 3 million yuan shall bereduced by 25% of the taxable income and subject to enterprise income tax at a rate of 20%. The grandson company, Shandong NewShuang'an Biotechnology Co., Ltd is subject to enterprise income tax at the corresponding preferential tax rate.
(3) Tax Benefits for Foreign Enterprises
According to Section 14 of the Inland Revenue Ordinance, Chapter 112 of the Laws of Hong Kong, Hong Kong adopts the territorialsource principle of taxation, i.e. only profits derived from Hong Kong are subject to Hong Kong tax, whereas profits derived fromelsewhere are not subject to Hong Kong profits tax. The subsidiary, Sun Woo Shing (Hong Kong) Trading Company Limited, is subjectto enterprise income tax at the corresponding preferential tax rate.
2. VAT
(1) According to the Announcement of the Ministry of Finance and the State Administration of Taxation on the Policy of Value-addedTax Credits for Enterprises in the Advanced Manufacturing Industry (Announcement of the Ministry of Finance and the StateAdministration of Taxation No. 43 of 2023), from 1 January 2023 to 31 December 2027, enterprises in the advanced manufacturingindustry are allowed to offset the payable value-added tax by adding 5% to the current period's creditable input tax amount. SubsidiariesShangyu NHU Bio-Chem Co., Ltd., Shandong NHU Pharmaceutical Co., Ltd., Shandong NHU Amino-acids Co., Ltd.and ZhejiangNHU Special Materials Co., Ltd., and grandson Shandong NHU Vitamins Co., Ltd., enjoy the preferential policy of adding 5% to theinput tax credits.
(2) According to the Announcement of the Ministry of Finance and the State Administration of Taxation and the GeneralAdministration of Customs on Policies Related to Deepening Value-added Tax Reform (Announcement of the Ministry of Finance andthe State Administration of Taxation and the General Administration of Customs No. 39 of 2019), taxpayers in the production andliving service industries are permitted to offset their tax payable in accordance with the current period's creditable input tax by addingup to 10 percent from April 1, 2019, to December 31, 2021; and according to the State Administration of Taxation's Announcement onMatters Relating to the Levy and Administration of VAT Reduction and Exemption Policies for Small-scale Taxpayers and OtherPolicies" (Announcement No. 1 of the State Administration of Taxation of the People's Republic of China for the Year 2023), theimplementation period of the aforesaid policy of VAT deduction and credit was extended to December 31, 2023. Weifang Jinghe RealEstate Co., Ltd, Ltd., the Grandson Company, is in compliance with the above provisions and enjoys the corresponding tax benefits.VII. Notes to items of consolidated financial statements
1. Cash and bank balances
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Cash on hand | 21,747.98 | 16,584.59 |
| Cash in bank | 4,445,046,788.85 | 5,151,816,943.29 |
| Other cash and bank balances | 97,192,582.33 | 192,018,439.84 |
| Digital Currency - RMB | 1,100,027.82 | |
| Total | 4,543,361,146.98 | 5,343,851,967.72 |
| Including: Deposited overseas | 89,207,212.60 | 62,426,363.92 |
Other remarks
Other cash and bank balances
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Deposit for bank acceptance | 77,905,369.24 | 147,608,293.24 |
| Deposit for letters of credit | 12,048,779.84 | 42,310,180.59 |
| Customs Margin | 3,929,600.00 | |
| Deposit for construction safety | 870,050.56 | 863,937.05 |
| Deposit for engineering labor costs | 853,216.21 | 851,288.54 |
| Deposit for water fees | 661,215.83 | 359,836.44 |
| Letter of Guarantee Deposit | 500,000.00 | |
| Deposited investment fund | 393,449.58 | 2.91 |
| Deposit for ETC | 22,500.00 | 16,500.00 |
| Alipay balance | 8,401.07 | 8,401.07 |
| Total | 97,192,582.33 | 192,018,439.84 |
2. Held-for-trading financial assets
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Financial assets at fair value through profit or loss | 173,056,050.95 | 720,314,576.43 |
| Including: Financial products with guaranteed principal and floating income | 145,000,000.00 | 720,000,000.00 |
| Derivative financial assets | 28,056,050.95 | 314,576.43 |
| Total | 173,056,050.95 | 720,314,576.43 |
3. Notes receivable
(1) Details on categories
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Bank acceptance | 116,125,267.70 | 321,261,741.29 |
| Commercial Acceptance | 51,380,094.50 | |
| Total | 116,125,267.70 | 372,641,835.79 |
（2） Classified disclosure by bad debt provision method
Unit: RMB Yuan
| Categories | Closing balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion | ||
| Notes receivable with provision for bad debts made on a collective basis | 116,125,267.70 | 100.00% | 116,125,267.70 | ||
| Bank acceptance | 116,125,267.70 | 100.00% | 116,125,267.70 | ||
| Commercial Acceptance | |||||
| Total | 116,125,267.70 | 100.00% | 116,125,267.70 | ||
(Continued)
| Categories | Opening balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion | ||
| Notes receivable with provision for bad debts made on a collective basis | 375,346,051.29 | 100.00% | 2,704,215.50 | 0.72% | 372,641,835.79 |
| Bank acceptance | 321,261,741.29 | 85.59% | 321,261,741.29 | ||
| Commercial acceptance | 54,084,310.00 | 14.41% | 2,704,215.50 | 5.00% | 51,380,094.50 |
| Total | 375,346,051.29 | 100.00% | 2,704,215.50 | 0.72% | 372,641,835.79 |
Unit: RMB Yuan
| Categories | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion | |
| Bankers' acceptances portfolio | 116,125,267.70 | ||
| Total | 116,125,267.70 | ||
If the allowance for bad debts on notes receivable is based on a general model of expected credit losses:
□ Applicable √ Not Applicable
（3）Provision for bad debts made, recovered or reversed during the period
Provision for bad debts in the current period:
Unit: RMB Yuan
| Categories | Opening balance | Increase/Decrease | Closing balance | |||
| Accrual | Recovery/ Reversal | Write-off | Others | |||
| Provision made on a collective basis | 2,704,215.50 | -2,704,215.50 | ||||
| Total | 2,704,215.50 | -2,704,215.50 | ||||
of which the amount of bad debt provision recovered or reversed during the period is significant:
□ Applicable √ Not Applicable
（4） Pledged notes at the balance sheet date
Unit: RMB Yuan
| Items | Closing balance of pledged notes |
| Bank acceptance | 94,097,743.14 |
| Total | 94,097,743.14 |
（5）Endorsed or discounted but undue notes at the balance sheet date
Unit: RMB Yuan
| Items | Closing balance derecognized | Closing balance not yet derecognized |
| Bank acceptance | 35,000,866.20 | |
| Total | 35,000,866.20 |
The acceptors of these bankers' acceptances are commercial banks with high creditworthiness, and the probability of non-payment ofbankers' acceptances accepted by them at maturity is relatively low, therefore, the Company will derecognize these bankers' acceptancesthat have been endorsed or discounted. However, if the notes are not paid when due, the Company will still be jointly and severallyliable to the bearer in accordance with the provisions of the Bills of Exchange Act.
4. Accounts receivable
（1） Age analysis
Unit: RMB Yuan
| Ages | Closing balance | Opening balance |
| Within 1 year (inclusive) | 2,540,372,908.81 | 2,573,685,603.72 |
| 1-2 years | 87,390,861.85 | 39,010,397.08 |
| 2-3 years | 297,000.00 | |
| Over 3 years | 2,106,280.80 | 2,049,280.80 |
| 3-4 years | 57,000.00 | 203,200.00 |
| 4-5 years | 203,200.00 | 286,550.00 |
| Over 5 years | 1,846,080.80 | 1,559,530.80 |
| Total | 2,629,870,051.46 | 2,615,042,281.60 |
（2） Details on categories
Unit: RMB Yuan
| Categories | Closing balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion | ||
| Including: | |||||
| Accounts receivable with provision for bad debts made on a collective basis | 2,629,870,051.46 | 100.00% | 146,603,098.58 | 5.57% | 2,483,266,952.88 |
| Total | 2,629,870,051.46 | 100.00% | 146,603,098.58 | 5.57% | 2,483,266,952.88 |
(Continued)
| Categories | Opening balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion | ||
| Including: | |||||
| Accounts receivable with provision for bad debts made on a collective basis | 2,615,042,281.60 | 100.00% | 138,773,240.37 | 5.31% | 2,476,269,041.23 |
| Total | 2,615,042,281.60 | 100.00% | 138,773,240.37 | 5.31% | 2,476,269,041.23 |
Accounts receivable with provision for bad debts made on a collective basis：146,603,098.58
Unit: RMB Yuan
| Ages | Closing balance | ||
| Closing balance | Closing balance of provision for bad debts | Proportion to the total balance of receivables (%) | |
| Within 1 year (inclusive) | 2,540,372,908.81 | 127,018,645.41 | 5.00% |
| 1-2 years | 87,390,861.85 | 17,478,172.37 | 20.00% |
| 2-3 years | 2,106,280.80 | 2,106,280.80 | 100.00% |
| Total | 2,629,870,051.46 | 146,603,098.58 | |
A description of the basis for determining the portfolio:
Provision for bad debts using an ageing portfolioIf the allowance for bad debts for accounts receivable is based on the general model of expected credit losses:
□ Applicable √ Not Applicable
（3） Provisions made, collected or reversed in the current period
Provisions made in the current period:
Unit: RMB Yuan
| Categories | Opening balance | Increase/Decrease | Closing balance | |||
| Accrual | Recovery/ Reversal | Write-off | Others | |||
| Provision made on a collective basis | 138,773,240.37 | 8,404,850.21 | 574,992.00 | 146,603,098.58 | ||
| Total | 138,773,240.37 | 8,404,850.21 | 574,992.00 | 146,603,098.58 | ||
（4） Accounts receivable actually written off in the current period
Unit: RMB Yuan
| Items | Write-off amount |
| Payment for goods | 574,992.00 |
（5）Details of the top 5 debtors with largest balances
Unit: RMB Yuan
| Debtors | Closing balance | Proportion to the total balance of receivables (%) | Closing balance of provision for bad debts |
| Client A | 258,627,362.37 | 9.83% | 12,931,368.12 |
| Client B | 153,899,998.71 | 5.85% | 7,694,999.94 |
| Debtors | Closing balance | Proportion to the total balance of receivables (%) | Closing balance of provision for bad debts |
| Client C | 85,556,985.11 | 3.25% | 17,111,397.02 |
| Client D | 57,015,735.00 | 2.17% | 2,850,786.75 |
| Client E | 48,661,266.69 | 1.85% | 2,433,063.33 |
| Total | 603,761,347.88 | 22.95% | 43,021,615.16 |
5、Receivables financing
（1） Presentation of receivable financing classifications
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Bank acceptance | 331,634,090.61 | 379,217,582.25 |
| Total | 331,634,090.61 | 379,217,582.25 |
（2） Pledged notes at the balance sheet date
Unit: RMB Yuan
| Items | Closing balance of pledged notes |
| Bank acceptance | 143,872,489.15 |
| Subtotal | 143,872,489.15 |
（3） Endorsed or discounted but undue notes at the balance sheet date
Unit: RMB Yuan
| Items | Closing balance derecognized | Closing balance not yet derecognized |
| Bank acceptance | 813,990,160.58 | |
| Total | 813,990,160.58 |
（4） Other remarks:
Due to the fact that the acceptor of bank acceptance is commercial bank, which is of high credit level, there is very little possibility offailure in recoverability when it is due. Based on this fact, the Company derecognized the endorsed or discounted bank acceptance.However, if any bank acceptance is not recoverable when it is due, the Company still holds joint liability on such acceptance, accordingto the China Commercial Instrument Law.
6、Advances paid
(1) Age analysis
Unit: RMB Yuan
| Ages | Closing balance | Opening balance | ||
| Amount | % to total | Amount | % to total | |
| Within 1 year | 206,538,373.94 | 98.69% | 215,300,317.59 | 96.84% |
| 1-2 years | 2,623,068.38 | 1.25% | 7,013,257.67 | 3.14% |
| 2-3 years | 97,159.73 | 0.05% | 16,001.00 | 0.01% |
| Ages | Closing balance | Opening balance | ||
| Amount | % to total | Amount | % to total | |
| Over 3 years | 16,000.00 | 0.01% | 7,200.00 | 0.01% |
| Total | 209,274,602.05 | 222,336,776.26 | ||
(2) Details of the top 5 debtors with largest balances
Unit: RMB Yuan
| Debtors | Book balance | Proportion to the total balance of advances paid (%) |
| Supplier A | 45,926,357.35 | 21.95% |
Supplier B
| Supplier B | 26,130,000.00 | 12.49% |
| Supplier C | 18,544,352.45 | 8.86% |
| Supplier D | 16,932,930.71 | 8.09% |
Supplier E
| Supplier E | 9,045,984.53 | 4.32% |
| Subtotal | 116,579,625.04 | 55.71% |
7．Other receivables
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Dividend receivable | 20,735,987.73 | |
| Other receivables | 142,060,705.67 | 248,831,605.00 |
| Total | 142,060,705.67 | 269,567,592.73 |
（1） Dividend receivable
1） Classification of dividends receivable
Unit: RMB Yuan
| Items/Investees | Closing balance | Opening balance |
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | 20,735,987.73 | |
| Total | 20,735,987.73 |
（2） Other receivables
1） Categorized by nature
Unit: RMB Yuan
| Nature of receivables | Closing book balance | Opening book balance |
| Export tax refund | 59,999,917.27 | 62,763,834.97 |
| Security deposits | 26,223,295.23 | 120,123,425.59 |
| Refundable VAT | 49,708,056.90 | 41,890,037.74 |
| Employee petty cash | 5,892,932.02 | 8,050,322.00 |
| Temporary advance payment receivable | 5,105,463.95 | 3,839,206.82 |
| Others | 2,290,423.97 | 3,035,775.60 |
| Nature of receivables | Closing book balance | Opening book balance |
| Unborrowed funds | 21,098,506.24 | |
| Receivables of returned equipment | 1,041,600.00 | |
| Total | 149,220,089.34 | 261,842,708.96 |
2） Ages analysis
Unit: RMB Yuan
| Ages | Closing book balance | Opening book balance |
| Within 1 year (inclusive) | 121,257,098.80 | 129,009,444.59 |
| 1-2 years | 4,774,411.02 | 21,076,224.01 |
| 2-3 years | 5,220,071.25 | 1,271,099.17 |
| Over 3 years | 17,968,508.27 | 110,485,941.19 |
| 3-4 years | 1,111,491.23 | 8,243,583.58 |
| 4-5 years | 3,390,964.34 | 3,449,067.41 |
| Over 5 years | 13,466,052.70 | 98,793,290.20 |
| Total | 149,220,089.34 | 261,842,708.96 |
3） Classified disclosure by bad debt provision method
□ Applicable √ Not Applicable
Unit: RMB Yuan
| Categories | Closing balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion | ||
| Including: | |||||
| Provision for bad debts by portfolio | 149,220,089.34 | 100.00% | 7,159,383.67 | 4.80% | 142,060,705.67 |
| Total | 149,220,089.34 | 100.00% | 7,159,383.67 | 4.80% | 142,060,705.67 |
(Continued)
| Categories | Opening balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion | ||
| Including: | |||||
| Provision for bad debts by portfolio | 261,842,708.96 | 100.00% | 13,011,103.96 | 4.97% | 248,831,605.00 |
| Total | 261,842,708.96 | 100.00% | 13,011,103.96 | 4.97% | 248,831,605.00 |
Number of bad debt provision categories by portfolio:1Provision for bad debts is made on a portfolio basis:7,159,383.67
Unit: RMB Yuan
| Ages | Closing balance | ||
| Amount | Carrying amount | % to total | |
| Export tax refund receivable portfolio | 59,999,917.27 | 0.00 | 0.00% |
| VAT refund receivable portfolio | 49,708,056.90 | 0.00 | 0.00% |
| Land bond receivable portfolio | 17,354,493.50 | 0.00 | 0.00% |
| Portfolio of deposits receivable from customs and tax authorities | 266,701.95 | 0.00 | 0.00% |
| Ages | 21,890,919.72 | 7,159,383.67 | 32.70% |
| Within 1 year (inclusive) | 12,061,340.14 | 603,066.99 | 5.00% |
| 1-2 years | 3,995,493.56 | 799,098.71 | 20.00% |
| 2-3 years | 384,340.25 | 307,472.20 | 80.00% |
| Over 3 years | 5,449,745.77 | 5,449,745.77 | 100.00% |
| Total | 149,220,089.34 | 7,159,383.67 | |
Provision for bad debts is made on the basis of a general model of expected credit losses:
Unit: RMB Yuan
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| 12?month expected credit losses | Lifetime expected credit losses (credit not impaired) | Lifetime expected credit losses (credit impaired) | ||
| Opening balance | 1,760,180.53 | 1,062,902.90 | 10,188,020.53 | 13,011,103.96 |
| Opening balance in the current period | ||||
| --Transferred to phase II | -199,774.68 | 199,774.68 | ||
| --Transferred to phase III | -76,868.05 | 76,868.05 | ||
| Provision made in the current period | -957,338.86 | -386,710.82 | -4,507,670.61 | -5,851,720.29 |
| Closing balance | 603,066.99 | 799,098.71 | 5,757,217.97 | 7,159,383.67 |
Classification of stages and bad debt provisioning ratioThe basis of classification by stages: Accounts aged less than one year are classified as stage I, accounts aged 1 to 2 years areclassified as stage II, and accounts aged more than 2 years are classified as stage III.Changes in carrying amounts for which the amount of change in the provision for losses during the period is material.
□Applicable ? Not applicable
4） Provisions made, collected or reversed in the current periodProvisions made in the current period:
Unit: RMB Yuan
| Categories | Opening balance | Increase/Decrease | Closing balance | |||
| Accrual | Recovery/ Reversal | Write-off | Others | |||
| Provision made on a collective basis | 13,011,103.96 | -5,851,720.29 | 7,159,383.67 | |||
| Total | 13,011,103.96 | -5,851,720.29 | 7,159,383.67 | |||
5） Details of the top 5 debtors with largest balances
Unit: RMB Yuan
| Debtors | Nature of receivables | Book balance | Ages | Proportion to the total balance of other receivables (%) | Provision for bad debts |
| National Revenue Service (export tax refunds receivable) | Export tax refund | 59,999,917.27 | Within 1 year (inclusive) | 40.21% | |
| Servicio de Administración Tributaria | Refundable VAT | 22,199,235.58 | Within 1 year (inclusive) | 14.88% | |
| Weifang Municipal Bureau of Land and Resource, Binhai District Branch | Security deposits | 4,835,731.00 | 2-3 years | 3.24% | |
| Security deposits | 12,518,762.50 | Over 3 years | 8.39% | ||
| Bundeskasse | Refundable VAT | 12,505,403.98 | Within 1 year (inclusive) | 8.38% | |
| Secretaria da Fazenda do Estado | Refundable VAT | 10,613,802.56 | Within 1 year (inclusive) | 7.11% | |
| Total | 122,672,852.89 | 82.21% |
8.Inventories
Is the company subject to disclosure requirements for the real estate industryNo
(1) Inventory classification
Unit: RMB Yuan
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for inventory write-down/ Provision for impairment of cost to fulfill a contract | Carrying amount | Book balance | Provision for inventory write-down/ Provision for impairment of cost to fulfill a contract | Carrying amount | |
| Raw materials | 527,624,081.09 | 6,293,242.29 | 521,330,838.80 | 512,088,438.92 | 1,371,035.91 | 510,717,403.01 |
| Work in process | 1,178,294,229.77 | 6,519,042.73 | 1,171,775,187.04 | 1,259,897,028.55 | 1,259,897,028.55 | |
| Goods on hand | 2,417,138,791.32 | 216,472,992.13 | 2,200,665,799.19 | 2,122,998,309.26 | 151,579,577.92 | 1,971,418,731.34 |
| Goods dispatched | 108,180,564.86 | 108,180,564.86 | 96,141,207.37 | 96,141,207.37 | ||
| Development cost | 98,068,949.58 | 98,068,949.58 | 97,530,835.60 | 97,530,835.60 | ||
| Developed products | 122,563,022.12 | 122,563,022.12 | 121,902,734.56 | 121,902,734.56 | ||
| Materials on consignment for further processing | 5,430,259.53 | 5,430,259.53 | 8,335,609.99 | 8,335,609.99 | ||
| Packages | 17,397,177.94 | 17,397,177.94 | 16,061,832.47 | 16,061,832.47 | ||
| Low-value consumables | 73,467,076.28 | 73,467,076.28 | 62,552,319.50 | 62,552,319.50 | ||
| Total | 4,548,164,152.49 | 229,285,277.15 | 4,318,878,875.34 | 4,297,508,316.22 | 152,950,613.83 | 4,144,557,702.39 |
(2) Inventories – Development cost
Unit: RMB Yuan
| Items | Estimated total investment | Opening balance | Closing balance |
| Boao NHU Resort | 550 million | 42,570,355.38 | 43,108,469.36 |
| Weifang NHU Town Phase II | 398.53 million | 54,960,480.22 | 54,960,480.22 |
| Subtotal | 97,530,835.60 | 98,068,949.58 |
(3) Inventories – Developed products
Unit: RMB Yuan
| Items | Date of completion | Opening balance | Increase | Decrease | Closing balance |
| Boao NHU Resort Center | December 2014 | 121,902,734.56 | 660,287.56 | 122,563,022.12 | |
| Subtotal | 121,902,734.56 | 660,287.56 | 122,563,022.12 |
（4）Provision for inventory write-down and provision for impairment of cost to fulfill a contract
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance | ||
| Accrual | Others | Recovery/ Reversal | Others | |||
| Raw materials | 1,371,035.91 | 4,922,206.38 | 6,293,242.29 | |||
| Work in process | 6,519,042.73 | 6,519,042.73 | ||||
| Goods on hand | 151,579,577.92 | 219,159,199.11 | 154,265,784.90 | 216,472,992.13 | ||
| Total | 152,950,613.83 | 230,600,448.22 | 154,265,784.90 | 229,285,277.15 | ||
| Items | Determination basis of net realizable value | Reasons for write-off of provision for inventory write-down | Reasons for reversal of provision for decline in value of inventories |
| Raw materials | Net realizable value is determined as the estimated selling price of the relevant finished goods, less costs estimated to be incurred to completion, estimated selling expenses and related taxes. | Increase in net realizable value of inventories for which provision for decline in value of inventories was made in prior periods | Consumption of inventories for which provision for decline in value of inventories has been made during the period |
| Work in process | Net realizable value is determined as the estimated selling price of the relevant finished goods, less costs estimated to be incurred to completion, estimated selling expenses and related taxes. | Increase in net realizable value of inventories for which provision for decline in value of inventories was made in prior periods | Inventories for which provision for inventory write-downs was made at the beginning of the period were depleted during the period. |
| Goods on hand | Net realizable value is determined as the estimated selling price of the relevant finished goods, less estimated selling expenses and related taxes. | Increase in net realizable value of inventories for which provision for decline in value of inventories was made in prior periods | Inventories for which provision for decline in value of inventories was made at the beginning of the period were sold during the period |
9. Other current assets
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Prepaid VAT or input VAT to be credited | 47,538,826.76 | 123,811,281.53 |
| Prepaid enterprise income tax | 5,070,275.22 | 54,251,454.46 |
| Prepaid insurance premiums | 4,738,519.69 | 4,330,488.27 |
| Prepaid housing rents | 23,362.83 | |
| Prepaid urban maintenance and | 13,194.85 | 13,194.85 |
| Items | Closing balance | Opening balance |
| construction tax | ||
| Prepaid education surcharge | 7,916.74 | 7,916.74 |
| Prepaid local education surcharge | 5,278.11 | 5,278.11 |
| Amortized catalyst costs | 10,858,733.66 | |
| Total | 68,232,745.03 | 182,442,976.79 |
10. Long-term equity investments
Unit: RMB Yuan
| Investees | Opening carrying amount | Closing carrying amount | Increase/Decrease | Closing carrying amount | Closing balance of provision for impairment | |||||||
| Investments increased | Investments decreased | Investment income/losses recognized under equity method | Adjustment in other comprehensive income | Changes in other equity | Cash dividend/ Profit declared for distribution | Provision for impairment | Others | |||||
| I. Joint ventures | ||||||||||||
| Ningbo ZRCC NHU Biotechnology Co., Ltd. | 233,508,000.00 | -17,341,021.51 | 216,166,978.49 | |||||||||
| Subtotal | 233,508,000.00 | -17,341,021.51 | 216,166,978.49 | |||||||||
| II. Associates | ||||||||||||
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | 239,967,333.33 | 41,180,429.16 | 50,707.22 | 12.27 | 197,267.10 | 281,395,724.54 | ||||||
| Zhejiang sanbo polymer Co., Ltd | ||||||||||||
| Envalior NHU Engineering Materials (Zhejiang) Co.,Ltd. | 24,457,448.36 | 5,388,244.54 | -2,547,352.90 | 27,298,340.00 | ||||||||
| Zhejiang Saiya Chemical Materials Co., Ltd. | 125,450,987.77 | 21,443,548.34 | 14,700,000.00 | -591,335.07 | 131,603,201.04 | |||||||
| CysBio ApS | 36,784,947.60 | -6,349,672.37 | 593,502.98 | 31,028,778.21 | ||||||||
| Shandong Bin’an Vocational Training School Co., Ltd. [Note1]] | 5,842,851.42 | -785,275.89 | 5,057,575.53 | |||||||||
| Anhui Innovation Technology Co., Ltd | 4,000,000.00 | 594,602.27 | 4,594,602.27 | |||||||||
| Subtotal | 432,503,568.48 | 4,000,000.00 | 61,471,876.05 | 50,707.22 | 14,700,012.27[Note2] | -2,347,917.89 | 480,978,221.59 | |||||
| Total | 432,503,568.48 | 237,508,000.00 | 44,130,854.54 | 50,707.22 | 14,700,012.27 | -2,347,917.89 | 697,145,200.08 | |||||
[Note1] Envalior NHU Engineering Materials (Zhejiang) Co.,Ltd. was renamed as DSM NHU Engineering Materials (Zhejiang)Co., Ltd. in August 2023[Note2] The Company received cash dividends of RMB 20,736,000.00 yuan in the current period, and the difference of RMB 12.27yuan from the dividend receivable accrued in the previous period was recognized in the current period.Recoverable amount determined as fair value less costs of disposal, net
□Applicable ? Not applicable
Recoverable amount is determined as the present value of the expected future cash flows
□Applicable ? Not applicable
11、Other equity instrument investments
Unit: RMB Yuan
| Items | Closing balance | Opening balance | Profit recognized in other comprehensive income for the period | Loss for the period charged to other comprehensive income | Profit accumulated in other comprehensive income at the end of the period | Losses accumulated in other comprehensive income at the end of the period | Dividend income recognized during the period | Reasons for designation as at fair value through other comprehensive income |
| Zhejiang Second Pharma Co., Ltd. | 7,790,147.55 | 7,790,147.55 | 17,973,000.00 |
| Items | Closing balance | Opening balance | Profit recognized in other comprehensive income for the period | Loss for the period charged to other comprehensive income | Profit accumulated in other comprehensive income at the end of the period | Losses accumulated in other comprehensive income at the end of the period | Dividend income recognized during the period | Reasons for designation as at fair value through other comprehensive income |
| Shanghai NewMargin Yongjin Eqiuty Enterprise (LP) | 15,208,000.00 | 15,208,000.00 | 6,500,000.00 | |||||
| Total | 22,998,147.55 | 22,998,147.55 | 24,473,000.00 |
12. Fixed assets
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Fixed assets | 21,860,082,637.13 | 16,523,867,858.53 |
| Total | 21,860,082,637.13 | 16,523,867,858.53 |
(1) Details
Unit: RMB Yuan
| Items | Buildings and structures | Generali equipment | Special equipment | Transport facilities | Total |
| I. Cost: | |||||
| 1. Opening balance | 7,126,286,829.35 | 217,277,952.88 | 15,524,771,612.37 | 27,261,458.12 | 22,895,597,852.72 |
| 2. Increase | 1,095,803,550.76 | 33,374,868.35 | 5,861,089,885.32 | 8,705,604.68 | 6,998,973,909.11 |
| (1) Acquisition | 114,457,965.89 | 13,959,051.51 | 259,474,019.74 | 8,705,604.68 | 396,596,641.82 |
| (2) Transferred in from construction in progress | 981,345,584.87 | 19,415,816.84 | 5,601,615,865.58 | 6,602,377,267.29 | |
| 3. Decrease | 1,936,936.77 | 4,144,731.15 | 31,331,376.27 | 4,003,894.72 | 41,416,938.91 |
| (1) Disposal/ Scrapping | 1,936,936.77 | 4,144,731.15 | 31,331,376.27 | 4,003,894.72 | 41,416,938.91 |
| 4. Closing balance | 8,220,153,443.34 | 246,508,090.08 | 21,354,530,121.42 | 31,963,168.08 | 29,853,154,822.92 |
| II. Accumulated depreciation | |||||
| 1. Opening balance | 861,276,258.73 | 123,348,225.80 | 5,340,663,239.78 | 17,564,262.94 | 6,342,851,987.25 |
| 2. Increase | 210,696,050.95 | 36,824,921.08 | 1,394,773,951.15 | 2,542,784.62 | 1,644,837,707.80 |
| (1) Accrual | 210,696,050.95 | 36,824,921.08 | 1,394,773,951.15 | 2,542,784.62 | 1,644,837,707.80 |
| 3. Decrease | 737,981.59 | 3,757,688.86 | 15,685,273.01 | 3,194,319.82 | 23,375,263.28 |
| (1) Disposal/ Scrapping | 737,981.59 | 3,757,688.86 | 15,685,273.01 | 3,194,319.82 | 23,375,263.28 |
| 4. Closing balance | 1,071,234,328.09 | 156,415,458.02 | 6,719,751,917.92 | 16,912,727.74 | 7,964,314,431.77 |
| III. Provision for impairment | |||||
| 1. Opening balance | 20,980,481.81 | 7,425.45 | 7,873,804.67 | 16,295.01 | 28,878,006.94 |
| 2. Increase | |||||
| (1) Accrual | |||||
| 3. Decrease | 312.71 | 103,645.20 | 16,295.01 | 120,252.92 |
| Items | Buildings and structures | Generali equipment | Special equipment | Transport facilities | Total |
| (1) Disposal/ Scrapping | 312.71 | 103,645.20 | 16,295.01 | 120,252.92 | |
| 4. Closing balance | 20,980,481.81 | 7,112.74 | 7,770,159.47 | 28,757,754.02 | |
| IV. Carrying amount | |||||
| 1. Closing balance | 7,127,938,633.44 | 90,085,519.32 | 14,627,008,044.03 | 15,050,440.34 | 21,860,082,637.13 |
| 2. Opening balance | 6,244,030,088.81 | 93,922,301.63 | 10,176,234,567.92 | 9,680,900.17 | 16,523,867,858.53 |
(2) Fixed assets temporarily idle
Unit: RMB Yuan
| Items | Cost | Accumulated depreciation | Provision for impairment | Carrying amount | Remarks |
| Buildings and structures | 189,734,007.10 | 49,821,436.38 | 20,975,435.81 | 118,937,134.91 | |
| General equipment | 141,344.56 | 120,253.14 | 2,420.51 | 18,670.91 | |
| Special equipment | 444,193,028.21 | 367,833,612.52 | 6,562,447.84 | 69,796,967.85 | |
| Subtotal | 634,068,379.87 | 417,775,302.04 | 27,540,304.16 | 188,752,773.67 |
(3) Fixed assets leased out under operating leases
Unit: RMB Yuan
| Items | Closing carrying amount |
| Buildings and structures | 31,057,650.27 |
| Subtotal | 31,057,650.27 |
(4) Fixed assets with certificate of titles being unsettled
Unit: RMB Yuan
| Items | Carrying amount | Reasons for unsettlement |
| Buildings and structures | 804,229,721.63 | Relevant procedures have not yet been completed. |
| Subtotal | 804,229,721.63 |
（5）Impairment testing of fixed assets
□Applicable √Not applicable
13. Construction in progress
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Construction in progress | 1,621,882,507.56 | 5,089,233,908.22 |
| Total | 1,621,882,507.56 | 5,089,233,908.22 |
(1) Details
Unit: RMB Yuan
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Methionine project with annual output of 0.25 million tons | 2,389,822,701.74 | 2,389,822,701.74 | ||||
| Shangyu Industrial Park PPS Project | 559,554,821.51 | 559,554,821.51 | ||||
| NH acid project | 514,155,642.52 | 514,155,642.52 | ||||
| 616 Joint Production Project | 426,984,891.23 | 426,984,891.23 | ||||
| NBC and CLA projects of Zhejiang Pharmaceutical | 120,581,503.32 | 120,581,503.32 | ||||
| Cogeneration Expansion Project | 113,869,534.14 | 113,869,534.14 | ||||
| Shandong Industrial Park HA Project | 601,552,381.89 | 601,552,381.89 | 94,672,989.28 | 94,672,989.28 | ||
| F5 project | 91,979,706.11 | 91,979,706.11 | ||||
| Shandong Industrial Park 603 Project | 67,408,245.22 | 67,408,245.22 | ||||
| Daming Life and Health Industry Project | 180,316,245.04 | 180,316,245.04 | 26,065,403.64 | 26,065,403.64 | ||
| Workshop 617 West Project | 40,846,076.50 | 40,846,076.50 | ||||
| Series Aldehyde Switching Production Project of 1500 tons in Workshop 615 | 41,051,446.96 | 41,051,446.96 | ||||
| Project A4 | 232,798,676.59 | 232,798,676.59 | ||||
| Annual production capacity of 300 tons of ketone technology reform and production expansion project | 30,141,232.47 | 30,141,232.47 | ||||
| Process and legitimacy project with annual production capacity of 0.02 million of glufosinate ammonium chloride | 29,410,485.13 | 29,410,485.13 | ||||
| 311 Workshop Phase II VA Expansion Project | 21,645,004.53 | 21,645,004.53 | ||||
| Public Multifunctional Productive Services Integrated Platform Construction Project | 37,345,453.89 | 37,345,453.89 | ||||
| Project with an annual production capacity of 30 tons of Apolyester | 43,287,282.66 | 43,287,282.66 | ||||
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Multi-functional production workshop construction project | 65,875,103.23 | 65,875,103.23 | ||||
| Other piecemeal projects | 297,613,118.67 | 297,613,118.67 | 684,138,469.51 | 684,138,469.51 | ||
| Total | 1,621,882,507.56 | 1,621,882,507.56 | 5,089,233,908.22 | 5,089,233,908.22 | ||
(2) Changes in significant projects
Unit: RMB Yuan
| Projects | Budgets RMB 0000 Yuan | Opening balance | Increase | Transferred to fixed assets | Other decrease | Closing balance | Accumulated input to budget（%） | Completion percentage（%） | Accumulated amount of borrowing cost capitalization | Including: Amount of borrowing cost capitalization in current period | Annual capitalization rate | Fund source |
| Methionine project with annual output of 0.25 million ton | 536,984.22 | 2,389,822,701.74 | 1,226,623,212.33 | 3,616,445,914.07 | 104.54 | 100 | Raised funds | |||||
| Shangyu Industrial Park PPS Project | 70,900.00 | 559,554,821.51 | 57,817,679.52 | 617,372,501.03 | 87.07 | 100 | Others | |||||
| NH acid project | 73,899.28 | 514,155,642.52 | 162,724,345.82 | 676,879,988.34 | 91.60 | 100 | Others | |||||
| 616 Joint Production Project [Note 1] | 77,213.69 | 426,984,891.23 | 426,098,091.74 | 886,799.49 | 97.93 | 100 | Others | |||||
| Shandong Industrial Park 603 Project [Note 2] | 8,983.60 | 67,408,245.22 | 65,792,108.48 | 1,616,136.74 | 75.03 | 80 | Others | |||||
| NBC and CLA projects of Zhejiang Pharmaceutical [Note 3] | 15,871.76 | 120,581,503.32 | 38,136,093.18 | 158,717,596.50 | 100.00 | 100 | Others | |||||
| Cogeneration Expansion Project | 33,890.43 | 113,869,534.14 | 91,967,857.14 | 205,837,391.28 | 60.74 | 100 | Others | |||||
| Shandong Industrial Park HA Project | 97,991.14 | 94,672,989.28 | 507,768,635.07 | 889,242.46 | 601,552,381.89 | 61.80 | 60 | Others | ||||
| F5 project | 13,563.50 | 91,979,706.11 | 42,125,728.27 | 134,105,434.38 | 115.98 | 100 | Others | |||||
| Daming Life and Health Industry Project [Note 4] | 76,203.56 | 26,065,403.64 | 154,250,841.40 | 180,316,245.04 | 79.17 | 79 | 4,394,033.27 | 90,277.72 | 2.50% | Others | ||
| Project A4 | 40,067.95 | 232,798,676.59 | 232,798,676.59 | 58.10 | 58 | Others | ||||||
| Total | 1,045,569.13 | 4,405,095,438.71 | 2,514,213,069.32 | 5,902,138,268.28 | 2,502,936.23 | 1,014,667,303.52 | -- | -- | 4,394,033.27 | 90,277.72 | -- |
Note 1 :616 Joint Production Project was terminated due to a change in sub-project planning, and n the current period, metalhardware (nuts and bolts) for use amounting to 886,799.49 yuan.Note 2: Shandong Industrial Park 603 Project was terminated due to a change in sub-project planning, and n the current period,metal hardware (nuts and bolts) for use amounting to 1,616,136.74 yuan.Note 3: NBC and CLA projects of Zhejiang Pharmaceutical due to the change of the project content in the current period, and thebudget has changed from RMB 135.55 million to RMB 158.72 million.Note 3: Daming Life and Health Industry Project due to the change in the investment budget for the second phase of the currentperiod, and the budget has changed from RMB 693.15 million to RMB 762.04million.
（3） Impairment testing of construction in progress
□Applicable ?Not applicable
14. Right-of-use assets
(1) Details
Unit: RMB Yuan
| Items | Buildings and structures | Total |
| I. Cost | ||
| 1.Opening balance | 3,573,327.02 | 3,573,327.02 |
| 2. Increase | 5,007,666.62 | 5,007,666.62 |
| (1) Leased in | 5,007,666.62 | 5,007,666.62 |
| 3. Decrease | 150,148.85 | 150,148.85 |
| (1) Disposal | 150,148.85 | 150,148.85 |
| 4.Closing balance | 8,430,844.79 | 8,430,844.79 |
| II. Accumulated depreciation | ||
| 1. Opening balance | 743,190.65 | 743,190.65 |
| 2. Increase | 1,234,171.43 | 1,234,171.43 |
| (1) Accrual | 1,234,171.43 | 1,234,171.43 |
| 3. Decrease | 150,148.85 | 150,148.85 |
| (1) Disposal | 150,148.85 | 150,148.85 |
| 4.Closing balance | 1,827,213.23 | 1,827,213.23 |
| III. Carrying amount | ||
| 1. Closing balance | 6,603,631.56 | 6,603,631.56 |
| 2. Opening balance | 2,830,136.37 | 2,830,136.37 |
(2) Impairment testing of right-of-use assets
□Applicable ?Not applicable
15. Intangible assets
(1) Details
Unit: RMB Yuan
| Items | Land use right | Patent right | Non-patented technology | Software | Total |
| I. Cost | |||||
| 1. Opening balance | 1,854,376,892.96 | 31,662,062.75 | 38,788,324.30 | 62,516,135.99 | 1,987,343,416.00 |
| 2. Increase | 692,186,861.45 | 5,648,472.50 | 26,580,133.95 | 7,298,816.60 | 731,714,284.50 |
| (1) Acquisition | 692,186,861.45 | 5,648,472.50 | 26,580,133.95 | 2,409,010.51 | 726,824,478.41 |
| (2) Internal R&D | 4,889,806.09 | 4,889,806.09 | |||
| 3. Closing balance | 7,351,154.19 | 7,351,154.19 | |||
| (1) Disposal | 7,351,154.19 | 7,351,154.19 | |||
| 4.Closing balance | 2,539,212,600.22 | 37,310,535.25 | 65,368,458.25 | 69,814,952.59 | 2,711,706,546.31 |
| II. Accumulated |
| Items | Land use right | Patent right | Non-patented technology | Software | Total |
| amortization | |||||
| 1. Opening balance | 223,213,559.07 | 5,344,520.66 | 1,628,315.26 | 18,650,774.69 | 248,837,169.68 |
| 2. Increase | 44,667,680.56 | 2,812,295.98 | 4,670,723.90 | 5,752,754.40 | 57,903,454.84 |
| (1) Accrual | 44,667,680.56 | 2,812,295.98 | 4,670,723.90 | 5,752,754.40 | 57,903,454.84 |
| II. Accumulated amortization | 2,594,832.03 | 2,594,832.03 | |||
| 4.Closing balance | 2,594,832.03 | 2,594,832.03 | |||
| 4.Closing balance | 265,286,407.60 | 8,156,816.64 | 6,299,039.16 | 24,403,529.09 | 304,145,792.49 |
| III. Carrying amount | |||||
| 1. Closing balance | 2,273,926,192.62 | 29,153,718.61 | 59,069,419.09 | 45,411,423.50 | 2,407,560,753.82 |
| 2. Opening balance | 1,631,163,333.89 | 26,317,542.09 | 37,160,009.04 | 43,865,361.30 | 1,738,506,246.32 |
At the balance sheet date, intangible assets formed through internal research and development account for 0.00% of total intangibleassets.
16. Goodwill
(1) Cost
Unit: RMB Yuan
| Investees or events resulting in goodwill | Opening balance | Increase | Decrease | Closing balance | ||
| Business combination | Translation reserve | Disposal | Translation reserve | |||
| Bardoterminal GmbH | 2,134,185.59 | 125,442.24 | 2,259,627.83 | |||
| NHU/CHR.OLESEN LATIN AMERICA A/S | 3,622,704.97 | 3,622,704.97 | ||||
| Total | 5,756,890.56 | 125,442.24 | 5,882,332.80 | |||
(2) Provision for impairment
Unit: RMB Yuan
| Investees or events resulting in goodwill | Opening balance | Increase | Decrease | Closing balance | ||
| Accrual | Translation reserve | Disposal | Translation reserve | |||
| Bardoterminal GmbH | 2,134,185.59 | 125,442.24 | 2,259,627.83 | |||
| Total | 2,134,185.59 | 125,442.24 | 2,259,627.83 | |||
17. Long-term prepayments
Unit: RMB Yuan
| Items | Opening balance | Increase | Amortization | Other decrease | Closing balance |
| Decoration fees | 8,149,891.98 | 1,519,112.24 | 3,325,788.71 | 6,343,215.51 | |
| Site leveling fees | 16,221.60 | 16,221.60 | |||
| Catalysts | 5,013,764.87 | 4,856,634.96 | 4,515,653.62 | 5,354,746.21 | |
| Total | 13,179,878.45 | 6,375,747.20 | 7,857,663.93 | 11,697,961.72 |
18. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets before offset
Unit: RMB Yuan
| Items | Closing balance | Opening balance | ||
| Deductible temporary difference | Deferred tax assets | Deductible temporary difference | Deferred tax assets | |
| Provision for impairment of assets | 71,881,471.48 | 11,135,696.68 | 67,822,769.65 | 11,068,181.53 |
| Unrealized profit from internal transactions | 71,231,525.39 | 10,684,728.85 | 50,194,235.37 | 7,529,135.31 |
| Deferred income | 193,224,271.51 | 28,983,640.72 | 185,235,337.49 | 27,785,300.63 |
| Difference in depreciation of fixed assets | 287,023.76 | 43,053.56 | 22,863,701.57 | 3,429,555.24 |
| Lease liabilities | 2,822,404.05 | 423,360.61 | 2,924,244.46 | 438,636.67 |
| Total | 339,446,696.19 | 51,270,480.42 | 329,040,288.54 | 50,250,809.38 |
(2) Deferred tax liabilities before offset
Unit: RMB Yuan
| Items | Closing balance | Opening balance | ||
| Taxable temporary difference | Deferred tax liabilities | Taxable temporary difference | Deferred tax liabilities | |
| Difference due to one-off pre-tax deduction of fixed assets | 1,575,781,538.31 | 247,043,712.25 | 1,468,559,836.57 | 232,654,485.84 |
| Profit before tax of NHU (Hong Kong) Trading Co., Ltd. | 164,156,999.23 | 24,623,549.88 | 297,747,945.27 | 44,662,191.79 |
| usufructuary assets | 2,630,791.48 | 394,618.72 | 2,791,860.28 | 418,779.04 |
| Changes in fair value of trading financial instruments, derivative financial instruments | 934,443.21 | 233,610.80 | ||
| Total | 1,743,503,772.23 | 272,295,491.65 | 1,769,099,642.12 | 277,735,456.67 |
(3) Deferred tax assets or liabilities after offset
Unit: RMB Yuan
| Items | Closing balance of deferred tax assets offset by deferred tax liabilities | Closing balance of deferred tax assets/ liabilities after offset | Opening balance of deferred tax assets offset by deferred tax liabilities | Opening balance of deferred tax assets/ liabilities after offset |
| Deferred tax assets | 50,620,401.24 | 650,079.18 | 418,779.04 | 49,832,030.34 |
| Deferred tax liabilities | 50,620,401.24 | 221,675,090.41 | 418,779.04 | 277,316,677.63 |
(4) Details of unrecognized deferred tax assets
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Deductible temporary difference | 436,744,796.84 | 511,910,785.90 |
| Deductible losses | 3,044,096,175.08 | 2,002,071,871.11 |
| Total | 3,480,840,971.92 | 2,513,982,657.01 |
(5) Maturity years of deductible losses of unrecognized deferred tax assets
Unit: RMB Yuan
| Maturity years | Closing balance | Opening balance | Remarks |
| Year 2027 | 4,380,243.82 | 8,512,140.12 | |
| Year 2028 | 34,126,279.57 | 35,469,296.06 | |
| Year 2029 | 68,271,533.21 | 79,322,307.29 | |
| Year 2030 | 232,539,024.92 | 255,397,416.94 | |
| Year 2031 | 284,461,823.88 | 287,143,749.91 | |
| Year 2032 | 1,081,974,270.06 | 1,336,226,960.79 | |
| Year 2033 | 1,338,342,999.62 | ||
| Total | 3,044,096,175.08 | 2,002,071,871.11 |
19. Other non-current assets
Unit: RMB Yuan
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Pollution emission trading fees | 15,360,572.70 | 15,360,572.70 | 16,250,239.11 | 16,250,239.11 | ||
| Payments for coal quota | 78,962,800.00 | 78,962,800.00 | 63,496,000.00 | 63,496,000.00 | ||
| Prepayments for long-term assets | 43,789,431.19 | 43,789,431.19 | 200,124,243.53 | 200,124,243.53 | ||
| Total | 138,112,803.89 | 138,112,803.89 | 279,870,482.64 | 279,870,482.64 | ||
20. Restrictions on assets as of the end of the reporting period
Unit: RMB Yuan
| Items | Closing balance | Opening balance | ||||||
| Book balance | Carrying amount | Type of restriction | Restrictions | Book balance | Carrying amount | Type of restriction | Restrictions | |
| Cash and bank balances | 96,790,731.68 | 96,790,731.68 | pledges | Banker's acceptance deposit | 192,010,035.86 | 192,010,035.86 | pledges | Banker's acceptance deposit |
| Notes receivable | 94,097,743.14 | 94,097,743.14 | pledges | Opening a pledge of banker's acceptances | 233,192,351.27 | 233,192,351.27 | pledges | Opening a pledge of banker's acceptances |
| Fixed assets | 97,257,595.52 | 81,371,634.23 | collateral | Mortgage to a bank for the purpose of obtaining a loan | 91,819,126.30 | 79,692,425.35 | collateral | Mortgage to a bank for the purpose of obtaining a loan |
| Intangible assets | 10,301,747.64 | 10,301,747.64 | collateral | Mortgage to a bank for the purpose of obtaining a loan | 9,734,671.13 | 9,734,671.13 | collateral | Mortgage to a bank for the purpose of obtaining a loan |
| Receivables financing | 143,872,489.15 | 143,872,489.15 | pledges | Opening a pledge of banker's acceptances | 136,554,892.05 | 136,554,892.05 | pledges | Opening a pledge of banker's acceptances |
| Total | 442,320,307.13 | 426,434,345.84 | 663,311,076.61 | 651,184,375.66 | ||||
21. Short-term borrowings
(1) Details on categories
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Guaranteed borrowings | 12,686,706.84 | 22,643,974.95 |
| Credit borrowings | 1,223,001,356.06 | 1,673,729,466.06 |
| Credit and guaranteed borrowings | 150,000,000.00 | |
| Total | 1,235,688,062.90 | 1,846,373,441.01 |
22. Notes payable
Unit: RMB Yuan
| Categories | Closing balance | Opening balance |
| Bank acceptance | 349,347,472.36 | 627,438,689.79 |
| Total | 349,347,472.36 | 627,438,689.79 |
23. Accounts payable
(1) Details
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Materials and labor costs | 692,476,954.09 | 735,579,156.33 |
| Payments for engineering and equipment | 1,238,481,643.96 | 1,439,879,280.16 |
| Total | 1,930,958,598.05 | 2,175,458,436.49 |
24. Contract liabilities
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Payments for goods received in advance | 251,008,240.97 | 60,660,929.75 |
| Total | 251,008,240.97 | 60,660,929.75 |
25. Employee benefits payable
(1) Details
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance |
| I. Short-term employee benefits | 386,391,911.86 | 1,875,062,996.26 | 1,843,181,704.24 | 418,273,203.88 |
| II. Post-employment benefits – defined contribution plan | 116,365,404.68 | 116,365,404.68 | ||
| Total | 386,391,911.86 | 1,991,428,400.94 | 1,959,547,108.92 | 418,273,203.88 |
(2) Details of short-term employee benefits
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance |
| 1. Wage, bonus, allowance and subsidy | 352,176,336.45 | 1,649,716,561.81 | 1,608,632,988.86 | 393,259,909.40 |
| 2. Employee welfare fund | 91,748,297.85 | 91,748,297.85 | ||
| 3. Social insurance premium | 58,451,937.48 | 58,451,937.48 | ||
| Including: Medicare premium | 52,084,723.85 | 52,084,723.85 | ||
| Occupational injuries premium | 5,540,945.24 | 5,540,945.24 | ||
| Maternity premium | 826,268.39 | 826,268.39 | ||
| 4. Housing provident fund | 58,157,341.48 | 58,157,341.48 | ||
| 5. Trade union fund and employee education fund | 34,215,575.41 | 16,988,857.64 | 26,191,138.57 | 25,013,294.48 |
| Total | 386,391,911.86 | 1,875,062,996.26 | 1,843,181,704.24 | 418,273,203.88 |
(3) Details of defined contribution plan
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance |
| 1. Basic endowment insurance premium | 112,372,063.48 | 112,372,063.48 | ||
| 2. Unemployment insurance premium | 3,993,341.20 | 3,993,341.20 | ||
| Total | 116,365,404.68 | 116,365,404.68 |
26. Taxes and rates payable
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| VAT | 25,412,719.25 | 14,398,822.86 |
| Enterprise income tax | 205,149,607.58 | 141,076,919.30 |
| Individual income tax withheld for tax authorities | 12,600,229.27 | 6,871,930.23 |
| Urban maintenance and construction tax | 2,768,413.70 | 3,127,594.55 |
| Land appreciation tax | 19,557,360.54 | 7,963,404.79 |
| Housing property tax | 18,825,864.81 | 16,764,793.31 |
| Land use tax | 15,427,321.94 | 15,427,321.94 |
| Education surcharge (local education surcharge) | 2,052,563.31 | 2,568,164.96 |
| Total | 301,794,080.40 | 208,198,951.94 |
27. Other payables
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Other payables | 53,671,773.90 | 67,351,740.34 |
| Total | 53,671,773.90 | 67,351,740.34 |
1) Categorized by nature
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Security deposits | 22,235,033.12 | 26,917,823.16 |
| Unpaid expenses payable | 12,568,235.33 | 8,378,360.48 |
| Temporary receipts payable | 13,765,955.47 | 15,463,590.29 |
| Earnest money for housing purchase (Boao NHU Resort Center) | 600,000.00 | 100,000.00 |
| Call loans | 13,760,448.64 | |
| Others | 4,502,549.98 | 2,731,517.77 |
| Total | 53,671,773.90 | 67,351,740.34 |
28. Non-current liabilities due within one year
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Long-term borrowings due within one year | 1,562,730,340.48 | 2,591,558,912.13 |
| Lease liabilities due within one year | 1,662,118.19 | 128,794.09 |
| Total | 1,564,392,458.67 | 2,591,687,706.22 |
29. Other current liabilities
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Output VAT to be recognized | 17,260,124.76 | 4,978,299.99 |
| Total | 17,260,124.76 | 4,978,299.99 |
30. Long-term borrowings
(1) Categories
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Mortgaged borrowings | 26,217,293.08 | 31,590,890.00 |
| Guaranteed borrowings | 748,822,433.32 | 934,059,850.02 |
| Credit borrowings | 6,046,603,468.18 | 4,307,986,768.85 |
| Total | 6,821,643,194.58 | 5,273,637,508.87 |
31. Lease liabilities
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Unpaid lease payments | 6,464,449.62 | 4,080,857.16 |
| Add: Unrealized financing expenses | -1,224,313.19 | -1,258,453.09 |
| Total | 5,240,136.43 | 2,822,404.07 |
32. Deferred income
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance | Reasons for balance |
| Government grants | 1,083,159,222.41 | 106,142,187.78 | 123,715,135.70 | 1,065,586,274.49 | The Company received government grants related to assets, which were amortized based on the depreciation progress of corresponding assets. |
| Total | 1,083,159,222.41 | 106,142,187.78 | 123,715,135.70 | 1,065,586,274.49 | -- |
33. Share capital
Unit: RMB Yuan
| Items | Opening balance | Movements | Closing balance | ||||
| Issue of new shares | Bonus shares | Reserve transferred to shares | Others | Subtotal | |||
| Total shares | 3,090,907,356.00 | 3,090,907,356.00 | |||||
34. Capital reserve
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance |
| Share/capital premium | 3,334,992,617.92 | 3,334,992,617.92 | ||
| Other capital reserve | 278,104,892.89 | 247,974.32 | 278,352,867.21 | |
| Total | 3,613,097,510.81 | 247,974.32 | 3,613,345,485.13 |
Other remarks, including remarks on current movements and reasons for movements:
The increase in other capital surplus during the period was due to the change in the Company's share of net assets as a result ofthe increase in share-based payment and special reserve recognized by the Company's associate, Zhejiang Chunhui EnvironmentalProtection Energy Co.
35. Treasury shares
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance |
| Treasury shares | 500,059,711.25 | 500,059,711.25 | ||
| Total | 500,059,711.25 | 500,059,711.25 |
35 Other comprehensive income (OCI)
Unit: RMB Yuan
| Items | Opening balance | Current period cumulative | Closing balance | |||||
| Current period cumulative before income tax | Less: OCI previously recognized but transferred to profit or loss in current period | Less: OCI previously recognized but transferred to retained earnings in current period | Less: Income tax | Attributable to parent company | Attributable to non-controlling shareholders | |||
| Items not to be reclassified subsequently to profit or loss | 76,577,564.17 | 33,929,099.01 | 27,343,168.68 | 6,585,930.33 | 103,920,732.85 | |||
| Including: Other comprehensive income to be transferred to profit or loss under equity method | 506,954.43 | 506,954.43 | ||||||
| Items | Opening balance | Current period cumulative | Closing balance | |||||
| Current period cumulative before income tax | Less: OCI previously recognized but transferred to profit or loss in current period | Less: OCI previously recognized but transferred to retained earnings in current period | Less: Income tax | Attributable to parent company | Attributable to non-controlling shareholders | |||
| Translation reserves | 76,070,609.74 | 33,929,099.01 | 27,343,168.68 | 6,585,930.33 | 103,413,778.42 | |||
| Total | 76,577,564.17 | 33,929,099.01 | 27,343,168.68 | 6,585,930.33 | 103,920,732.85 | |||
37. Special reserve
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance |
| Work safety fund | 26,196,894.55 | 85,571,248.53 | 50,907,324.32 | 60,860,818.76 |
| Total | 26,196,894.55 | 85,571,248.53 | 50,907,324.32 | 60,860,818.76 |
Other remarks, including remarks on current movements and reasons for movements:
According to the "enterprise safety production costs and the use of management practices," the production and storage of dangerousgoods enterprises based on the actual business income of the previous year, the adoption of the regressive approach to the averagemonthly withdrawal in accordance with the following standards: 1) operating income of up to 10 million yuan, in accordance with
4.5%; 2) operating income of more than 10 million yuan to 100 million yuan, in accordance with 2.25% extraction; 3) operatingincome of more 100 million to 1 billion yuan, in accordance with 0.55% extraction; 4) 0.2% for the part of business income exceedingRMB 1 billion.According to the " Electricity production and supply enterprises," the production and storage of dangerous goods enterprises based onthe actual business income of the previous year, the adoption of the regressive approach to the average monthly withdrawal inaccordance with the following standards: 1) operating income of up to 10 million yuan, in accordance with 3%; 2) operating incomeof more than 10 million yuan to 100 million yuan, in accordance with 1.5% extraction; 3) 0.8% for the part of business incomeexceeding 100 million to 1 billion; 4) 0.6% for the part of business income exceeding RMB 1 billion.
38. Surplus reserve
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance |
| Statutory surplus reserve | 1,444,414,900.05 | 101,038,777.95 | 1,545,453,678.00 | |
| Total | 1,444,414,900.05 | 101,038,777.95 | 1,545,453,678.00 |
Other remarks, including remarks on current movements and reasons for movements:
In accordance with the Company Law of the People's Republic of China and the Company's Articles of Incorporation, theCompany is required to set aside 10% of the net profit of the parent company as legal reserve, which may be discontinued when theaccumulated legal reserve reaches 50% of the registered capital.
39. Undistributed profit
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Unallocated earnings at the end of the previous period before adjustment | 15,823,725,913.44 | 14,152,465,528.17 |
| Adjustments to total unappropriated earnings at the beginning of the period (increase +, decrease -) | 18,898.47 | 10,266.08 |
| Adjustment to unappropriated earnings at the beginning of the period | 15,823,744,811.91 | 14,152,475,794.25 |
| Items | Current period cumulative | Preceding period comparative |
| Add: Net profit attributable to owners of the parent company | 2,704,238,767.54 | 3,620,280,626.51 |
| Less: Appropriation of statutory surplus reserve | 101,038,777.95 | 155,217,520.05 |
| Dividend payable on ordinary shares | 1,536,710,840.00 | 1,793,794,088.80 |
| Closing balance | 16,890,233,961.50 | 15,823,744,811.91 |
Details of undistributed profits at the beginning of adjustment period:
(1) Undistributed earnings at the beginning of the period increased by 18,898.47 yuan due to a change in accounting policy.
40. Operating revenue/Operating cost
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative | ||
| Revenue | Cost | Revenue | Cost | |
| Main operations | 14,959,309,948.92 | 10,035,023,830.93 | 15,845,200,012.28 | 10,001,085,469.78 |
| Other operations | 157,227,054.38 | 96,466,544.52 | 88,784,391.13 | 47,215,397.16 |
| Total | 15,116,537,003.30 | 10,131,490,375.45 | 15,933,984,403.41 | 10,048,300,866.94 |
| Including: Revenue from contracts with customers | 15,113,068,097.55 | 10,130,630,010.13 | 15,930,926,276.49 | 10,047,351,912.18 |
Whether the lower of audited net profit before deducting non-recurring profit or loss and that after deducting non-recurring profit orloss is negative?
□ Yes √ No
Details of revenue:
Unit: RMB Yuan
| Categories of contracts | Revenue | Cost |
| By product | ||
| Including: | ||
| Nutrition | 9,866,822,612.52 | 6,915,666,865.62 |
| Flavor and fragrance | 3,273,948,378.45 | 1,620,160,495.19 |
| New materials | 1,201,509,242.06 | 868,294,564.64 |
| Others | 770,787,864.52 | 726,508,084.68 |
| Subtotal | 15,113,068,097.55 | 10,130,630,010.13 |
| By operating region | ||
| Including: | ||
| Domestic | 7,315,209,831.02 | 5,237,146,850.50 |
| Overseas | 7,797,858,266.53 | 4,893,483,159.63 |
| Subtotal | 15,113,068,097.55 | 10,130,630,010.13 |
| By revenue recognition time | ||
| Including: | ||
| Goods (transferred at a point in time) | 15,113,068,097.55 | 10,130,630,010.13 |
| By sales channel | ||
| Including: | ||
| Direct sales | 4,139,781,225.12 | 2,816,367,295.07 |
| Agent sales | 10,973,286,872.43 | 7,314,262,715.06 |
| Subtotal | 15,113,068,097.55 | 10,130,630,010.13 |
Information related to performance obligations:
None.Information related to transaction price allocated to the remaining performance obligations:
As of December 31, 2023 revenue corresponding to performance obligations for which the Company has entered into contracts butnot yet performed or fulfilled amounted to 3,302.66 million yuan, of which, 3,302.66 million yuan is expected to be recognized asrevenue in 2024.
41. Taxes and surcharges
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Urban maintenance and construction tax | 36,193,464.64 | 28,607,303.93 |
| Education surcharge (local education surcharge) | 28,181,033.35 | 23,414,216.46 |
| Housing property tax | 46,262,946.80 | 42,350,007.42 |
| Land use tax | 42,541,470.88 | 23,119,509.04 |
| Vehicle and vessel use tax | 59,709.62 | 42,132.94 |
| Stamp duty | 11,682,808.90 | 7,321,346.91 |
| Environmental protection tax | 1,808,553.59 | 1,543,201.53 |
| Land appreciation tax | 510,626.40 | |
| Total | 166,729,987.78 | 126,908,344.63 |
42. Selling expenses
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Employee benefits | 78,293,653.26 | 62,762,141.59 |
| Office expenses, business traveling expenses | 32,438,096.50 | 19,775,799.86 |
| Sales commission and customs declaration charges | 26,768,204.05 | 20,869,486.43 |
| Advertising and promotion expenses, business entertainment expenses | 10,599,777.15 | 9,402,072.09 |
| Others | 10,217,082.90 | 9,448,119.50 |
| Total | 158,316,813.86 | 122,257,619.47 |
43. Administrative expenses
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Employee benefits | 289,396,666.51 | 261,083,846.67 |
| Depreciation, amortization of intangible assets | 112,070,187.88 | 100,843,402.02 |
| Office expenses, business traveling expenses | 59,651,384.82 | 64,191,712.29 |
| Business entertainment expenses | 21,812,291.14 | 25,250,585.72 |
| Consulting fees | 16,308,436.60 | 17,492,615.79 |
| Insurance premiums | 15,294,561.41 | 14,142,873.77 |
| Items | Current period cumulative | Preceding period comparative |
| Disability Employment Guarantee Fund | 15,189,147.67 | 10,343,725.70 |
| Others | 21,349,615.96 | 11,325,968.73 |
| Total | 551,072,291.99 | 504,674,730.69 |
44. R&D expenses
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Employee benefits | 400,415,932.53 | 416,805,732.59 |
| Direct input | 321,079,990.14 | 289,342,939.10 |
| Depreciation, amortization of intangible assets | 80,744,547.58 | 68,939,590.01 |
| Outsourcing expenses | 55,869,894.26 | 42,655,069.34 |
| Office expenses, business traveling expenses | 14,660,221.42 | 24,753,637.81 |
| Others | 15,030,889.09 | 16,448,437.28 |
| Total | 887,801,475.02 | 858,945,406.13 |
44. Financial expenses
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Interest expenses | 319,906,196.30 | 329,243,757.49 |
| Less: Interest income | 133,145,750.15 | 153,449,422.80 |
| Losses on foreign exchange (or less: gains) | -128,139,758.40 | -140,824,825.49 |
| Others | 6,829,825.20 | 9,432,268.93 |
| Total | 65,450,512.95 | 44,401,778.13 |
46. Other income
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Government grants related to assets | 123,715,135.70 | 100,000,509.62 |
| Government grants related to income | 64,789,047.78 | 75,760,610.32 |
| Value-added tax credits | 12,067,795.91 | |
| Refund of handling fees for withholding individual income tax | 1,516,543.14 | 1,102,494.25 |
| Total | 202,088,522.53 | 176,863,614.19 |
47. Investment income
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Investment income from long-term equity investments under equity method | 44,130,854.54 | 95,616,385.10 |
| Investment income from disposal of financial instruments | 4,526,003.79 | -20,658,819.12 |
| Dividend income earned on investments in other equity instruments during the holding period | 24,473,000.00 |
| Items | Current period cumulative | Preceding period comparative |
| Gain on debt restructuring | -847,442.05 | |
| Interest on discounted bills | -2,409,421.07 | |
| Investment income from bank financial products and structured deposits | 12,715,401.91 | 52,749,284.13 |
| Interest income from split loans | 465,887.82 | 988,193.62 |
| Total | 83,054,284.94 | 128,695,043.73 |
48. Gains on changes in fair value
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Held-for-trading financial assets | 44,460,570.82 | 27,222,640.33 |
| Including: Gains on changes in fair value arising from financial assets classified as at fair value through profit or loss | 44,460,570.82 | 27,222,640.33 |
| Held-for-trading financial liabilities | -14,528,085.84 | -93,544,424.05 |
| Including: Gains on changes in fair value arising from financial liabilities classified as at fair value through profit or loss | -14,528,085.84 | -93,544,424.05 |
| Total | 29,932,484.98 | -66,321,783.72 |
49. Credit impairment loss
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Bad debts | 3,551,588.16 | 5,165,584.15 |
| Total | 3,551,588.16 | 5,165,584.15 |
50. Assets impairment loss
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Inventory write-down loss | -230,600,448.22 | -162,974,265.12 |
| Total | -230,600,448.22 | -162,974,265.12 |
51. Gains on asset disposal
Unit: RMB Yuan
| Sources | Current period cumulative | Preceding period comparative |
| Gains on disposal of non-current assets | 16,404,163.69 | 2,726,604.77 |
| Total | 16,404,163.69 | 2,726,604.77 |
52. Non-operating revenue
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative | Amount included in non-recurring profit or loss |
| Indemnity income | 6,995,674.96 | 4,412,772.54 | 6,995,674.96 |
| Gains on damage or retirement of non-current assets | 433,987.27 | 433,987.27 |
| Items | Current period cumulative | Preceding period comparative | Amount included in non-recurring profit or loss |
| Others | 501,473.33 | 572,451.80 | 501,473.33 |
| Total | 7,931,135.56 | 4,985,224.34 | 7,931,135.56 |
53. Non-operating expenditures
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative | Amount included in non-recurring profit or loss |
| Losses on damage or retirement of non-current assets | 10,977,630.48 | 76,959,122.65 | 10,977,630.48 |
| Donation expenditures | 1,709,683.40 | 1,598,510.79 | 1,709,683.40 |
| Others | 1,815,424.73 | 975,097.47 | 1,815,424.73 |
| Total | 14,502,738.61 | 79,532,730.91 | 14,502,738.61 |
54. Income tax expenses
(1) Details
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Current period income tax expenses | 534,585,273.11 | 452,277,073.04 |
| Deferred income tax expenses | -6,459,636.06 | 147,548,801.01 |
| Total | 528,125,637.05 | 599,825,874.05 |
(2) Reconciliation of accounting profit to income tax expenses
Unit: RMB Yuan
| Items | Current period cumulative |
| Profit before tax | 3,253,534,539.28 |
| Income tax expenses based on statutory/applicable tax rate | 488,030,180.89 |
| Effect of different tax rate applicable to subsidiaries | 76,435,219.99 |
| Effect of prior income tax reconciliation | -3,844,619.95 |
| Effect of non-taxable income | -11,419,236.74 |
| Effect of non-deductible costs, expenses and losses | 1,970,798.64 |
| Effect of utilization of deductible losses not previously recognized as deferred tax assets | -3,245,917.71 |
| Effect of deducible temporary differences or deductible losses not recognized as deferred tax assets in the current period | 124,744,929.03 |
| Effect of extra deduction of R&D expenses | -133,428,470.46 |
| Additional deduction for wages paid for the placement of disabled persons and other employment encouraged by the state | -304,786.42 |
| Reduction of taxable amount for specialized equipment for environmental protection, energy and water conservation and safe production | -10,812,460.22 |
| Income tax expenses | 528,125,637.05 |
55. Other comprehensive income
Please refer to item VII 36 of this section for details.
56. Notes to items of the cash flow statement
(1) Cash related to operating activities
Other cash receipts related to operating activities
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Interest income from cash in bank | 133,145,750.15 | 153,449,422.80 |
| Receipt of government grants | 171,654,889.48 | 195,220,666.19 |
| Recovery of temporary borrowings and security deposits | 19,497,545.66 | 19,779,291.72 |
| Receipt of temporary receipts payable | 1,440,627.59 | 4,578,466.46 |
| Other receipts and net current accounts | 14,644,686.92 | 5,220,974.95 |
| Total | 340,383,499.80 | 378,248,822.12 |
Other cash payments related to operating activities
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| R&D expenditures in the form of cash | 78,682,491.15 | 83,857,144.43 |
| Office expenses and business traveling expenses | 83,191,829.19 | 83,967,512.15 |
| Advertising and promotion expenses, business entertainment expenses | 32,412,068.29 | 34,652,657.81 |
| Sales commission and customs declaration charges | 26,768,204.05 | 20,869,486.43 |
| Insurance expenses | 15,702,592.83 | 14,769,418.13 |
| Consulting fees | 16,308,436.60 | 17,492,615.79 |
| Other payments and net current accounts | 62,670,912.99 | 34,257,491.06 |
| Total | 315,736,535.10 | 289,866,325.80 |
(2) Cash related to investing activities
Other cash receipts related to investing activities
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Redemption of financial products | 720,000,000.00 | 1,800,000,000.00 |
| Cash obtained from subsidiaries on the consolidation date | 14,761,216.04 | |
| Receipt of demobilized loans and interest | 21,564,394.06 | 771,074.45 |
| Recovery of land deposit | 88,796,037.50 | 5,084,750.00 |
| Redemption of financial assets for trading | 392,525.96 | |
| Total | 830,752,957.52 | 1,820,617,040.49 |
Other cash payments related to investing activities
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Payments for losses on forward foreign exchange settlement | 86,558,820.03 | |
| Payments for purchase of financial products and structured deposits | 145,000,000.00 | 720,000,000.00 |
| Debit and credit principal (finance) | 20,881,387.07 | |
| Total | 145,000,000.00 | 827,440,207.10 |
(3) Cash related to financing activities
Other cash receipts related to financing activities
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Cash received form loans | 11,188,800.91 | |
| Total | 11,188,800.91 |
Other cash payments related to financing activities
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Payments for bank financing handling charges | 2,048,045.72 | 4,010,015.77 |
| Payments of handling charges for issuing letters of guarantee for borrowings | 200,900.43 | 576,792.00 |
| Repayments of principal and interest of leases | 1,377,634.28 | 545,623.09 |
| Repurchase of treasury shares | 179,698,926.77 | |
| Repayments of call loans and interest | 13,760,448.64 | 185,842.44 |
| Total | 17,387,029.07 | 185,017,200.07 |
Changes in liabilities arising from financing activities
□Applicable √ Not applicable
57. Supplement information to the cash flow statement
(1) Supplement information to the cash flow statement
Unit: RMB Yuan
| Supplement information | Current period cumulative | Preceding period comparative |
| 1. Reconciliation of net profit to cash flows from operating activities: | ||
| Net profit | 2,725,408,902.23 | 3,638,277,074.80 |
| Add: Provision for assets impairment loss | 227,048,860.06 | 157,808,680.97 |
| Depreciation of fixed assets, oil and gas assets, productive biological assets | 1,644,749,644.57 | 1,346,707,461.57 |
| Depreciation of right-of-use assets | 1,234,171.43 | 460,187.61 |
| Amortization of intangible assets | 57,903,454.84 | 43,000,548.86 |
| Amortization of long-term prepayments | 7,857,663.93 | 6,626,543.66 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (Less: gains) | -16,404,163.69 | -2,726,604.77 |
| Fixed assets retirement loss (Less: gains) | 10,977,630.48 | 76,959,122.65 |
| Losses on changes in fair value (Less: gains) | -29,932,484.98 | 66,321,783.72 |
| Financial expenses (Less: gains) | 260,056,823.19 | 346,183,580.90 |
| Investment losses (Less: gains) | -83,054,284.94 | -128,695,043.73 |
| Decrease of deferred tax assets (Less: increase) | 49,181,951.16 | 5,983,427.69 |
| Increase of deferred tax liabilities (Less: decrease) | -55,641,587.22 | 141,565,373.32 |
| Decrease of inventories (Less: | -401,782,933.20 | -1,104,802,476.55 |
| Supplement information | Current period cumulative | Preceding period comparative |
| increase) | ||
| Decrease of operating receivables (Less: increase) | 112,781,434.03 | -486,206,139.60 |
| Increase of operating payables (Less: decrease) | 574,321,857.22 | 240,512,886.47 |
| Others | 34,663,924.21 | 13,504,676.04 |
| Net cash flows from operating activities | 5,119,370,863.32 | 4,361,481,083.61 |
| 2. Significant investing and financing activities not related to cash receipts and payments: | -- | -- |
| Conversion of debt into capital | ||
| Convertible bonds due within one year | ||
| Fixed assets leased in under finance leases | ||
| 3. Net changes in cash and cash equivalents: | -- | -- |
| Cash at the end of the period | 4,446,570,415.30 | 5,151,841,931.86 |
| Less: Cash at the beginning of the period | 5,151,841,931.86 | 5,714,537,538.23 |
| Add: Cash equivalents at the end of the period | ||
| Less: Cash equivalents at the beginning of the period | ||
| Net increase of cash and cash equivalents | -705,271,516.56 | -562,695,606.37 |
(2) Composition of cash and cash equivalents
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| I. Cash | 4,446,570,415.30 | 5,151,841,931.86 |
| Including: Cash on hand | 21,747.98 | 16,584.59 |
| Cash in bank on demand for payment | 4,445,046,788.85 | 5,151,816,943.29 |
| Other cash and bank balances on demand for payment | 1,501,878.47 | 8,403.98 |
| II. Cash and cash equivalents at the end of the period | 4,446,570,415.30 | 5,151,841,931.86 |
(3) Restricted use but still cash and cash equivalents presentation
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative | Reasons for remaining cash and cash equivalents |
| Cash and bank balances | 89,207,212.60 | 62,426,363.92 | Currency funds held abroad |
| 353,268,853.53 | 1,087,813,736.45 | raise funds | |
| Total | 442,476,066.13 | 1,150,240,100.37 |
(4) Monetary funds other than cash and cash equivalents
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative | Reasons for not being cash and cash equivalents |
| Cash and bank balances | 77,905,369.24 | 147,608,293.24 | Banker's acceptance deposit |
| 12,048,779.84 | 42,310,180.59 | Letter of Credit Deposit |
| Items | Current period cumulative | Preceding period comparative | Reasons for not being cash and cash equivalents |
| 3,929,600.00 | customs Deposit | ||
| 853,216.21 | 851,288.54 | Project works labor wage deposit | |
| 870,050.56 | 863,937.05 | Safety Construction deposit | |
| 661,215.83 | 359,836.44 | Water deposit | |
| 500,000.00 | Letter of Guarantee Deposit | ||
| 22,500.00 | 16,500.00 | ETC Deposit | |
| Total | 96,790,731.68 | 192,010,035.86 |
(5) Changes in liabilities related to financing activities
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance | ||
| Cash movements | Non-cash changes | Cash movements | Non-cash changes | |||
| Short-term borrowings | 1,846,373,441.01 | 2,524,318,716.61 | 180,714,509.33 | 3,315,718,604.05 | 1,235,688,062.90 | |
| Long-term borrowings(including long-term loans due within one year) | 7,865,196,421.00 | 3,472,000,000.00 | 226,690,484.72 | 3,179,513,370.66 | 8,384,373,535.06 | |
| Lease liabilities(including lease liabilities due within one year) | 2,951,198.16 | 5,316,785.99 | 1,365,729.53 | 6,902,254.62 | ||
| dividend payable | 1,536,710,840.00 | 1,536,710,840.00 | ||||
| Other accounts payable | 13,760,448.64 | 17,119,783.68 | 16,021,299.54 | 14,858,932.78 | ||
| Total | 9,728,281,508.81 | 5,996,318,716.61 | 1,966,552,403.72 | 8,049,329,843.78 | 9,641,822,785.36 | |
(6) Net presentation of cash flows
The cash flows related to the Company's investment business are the cash inflows and outflows of fast-turnover, large-amount,and short-term projects, and the presentation of the above cash flows on a net basis is more indicative of their impact on the Company'sability to pay and solvency, and is more useful for evaluating the Company's ability to pay and solvency, and for analyzing theCompany's future cash flows, therefore the Company has presented the relevant cash flows generated from the above business on a netbasis. If the cash flows related to the above operations were presented in gross amount, it would have the following effects on theCompany's statement of cash flows:
Unit: RMB Yuan
| Items | Current period Increase | Preceding period Decrease |
| Other cash receipts related to investing activities | 780,000,000.00 | 2,360,000,000.00 |
| Other cash payments related to investing activities | 780,000,000.00 | 2,360,000,000.00 |
58. Monetary items in foreign currencies
(1) Details
Unit: RMB Yuan
| Items | Closing balance in foreign currencies | Exchange rate | RMB equivalent at the end of the period |
| Cash and bank balances | 261,440,683.90 | ||
| Including: USD | 23,461,576.73 | 7.082700 | 166,171,309.51 |
| EUR | 10,000,174.05 | 7.859200 | 78,593,367.89 |
| HKD | 1,158,588.73 | 0.906220 | 1,049,936.28 |
| JPY | 114,143,704.00 | 0.050213 | 5,731,497.81 |
| GBD | 52,800.00 | 9.041100 | 477,370.08 |
| BRL | 3,678,729.59 | 1.465800 | 5,392,281.83 |
| MXN | 5,642,451.26 | 0.418150 | 2,359,390.99 |
| PLN | 63,869.83 | 1.810700 | 115,649.10 |
| SGD | 288,231.87 | 5.377200 | 1,549,880.41 |
| Accounts receivable | 1,636,224,261.82 | ||
| Including: USD | 195,098,102.35 | 7.082700 | 1,381,821,329.51 |
| EUR | 23,097,400.95 | 7.859200 | 181,527,093.55 |
| HKD | |||
| GBD | 135,840.00 | 9.041100 | 1,228,143.02 |
| BRL | 48,879,585.03 | 1.465800 | 71,647,695.74 |
| Long-term borrowings | 26,217,293.08 | ||
| Including: USD | |||
| EUR | 3,335,873.00 | 7.859200 | 26,217,293.08 |
| HKD | |||
| Other receivables | 55,989,930.15 | ||
| Including: EUR | 2,824,911.31 | 7.859200 | 22,201,542.97 |
| HKD | 31,700.00 | 0.906220 | 28,727.17 |
| BRL | 7,521,444.45 | 1.465800 | 11,024,933.27 |
| MXN | 53,092,424.90 | 0.418150 | 22,200,597.47 |
| SGD | 99,332.23 | 5.377200 | 534,129.27 |
| Short-term borrowings | 37,653,068.50 | ||
| Including: EUR | 3,882,267.31 | 7.859200 | 30,511,515.24 |
| DKK | 6,778,239.62 | 1.053600 | 7,141,553.26 |
| Accounts payable | 57,094,927.48 | ||
| Including: USD | 1,837,294.71 | 7.082700 | 13,013,007.24 |
| EUR | 5,245,715.20 | 7.859200 | 41,227,124.90 |
| BRL | 1,298,365.36 | 1.465800 | 1,903,143.94 |
| MXN | 2,275,861.30 | 0.418150 | 951,651.40 |
| Other payables | 13,002,300.00 | ||
| Including: USD | 703,115.11 | 7.082700 | 4,979,953.39 |
| EUR | 1,006,433.38 | 7.859200 | 7,909,761.22 |
| HKD | 28,430.00 | 0.906220 | 25,763.83 |
| DKK | 12,990.00 | 1.053600 | 13,686.26 |
| SGD | 13,601.00 | 5.377200 | 73,135.30 |
| Non-current liabilities due within one year | 7,946,786.52 | ||
| Including: EUR | 961,662.00 | 7.859200 | 7,557,893.99 |
| BRL | 265,310.77 | 1.465800 | 388,892.53 |
| Lease liabilities | 838,658.99 | ||
| ncluding: BRL | 572,151.04 | 1.465800 | 838,658.99 |
59. Leasing
(1) The Company as a les see
?Applicable □ Not applicableVariable lease payments not included in the measurement of lease liabilities
□Applicable ? Not applicable
Lease costs for short-term leases or low-value assets with simplified treatment
□Applicable ? Not applicable
Situations involving sale and leaseback transactions
1) Information on right-to-use assets Please refer to item VII 14 of this section for details
2) The Company's accounting policies for short-term leases and leases of low-value assets Please refer to item V 27 of this sectionfor details. The amounts of short-term lease charges and lease charges for low-value assets recognized in profit or loss are as follows:
Unit: RMB Yuan
| Items | Current period Increase | Preceding period Decrease |
| Short-term rental costs | 6,542,273.66 | 1,960,380.62 |
| Total | 6,542,273.66 | 1,960,380.62 |
3) Current profit or loss and cash flows related to leases
Unit: RMB Yuan
| Items | Current period Increase | Preceding period Decrease |
| Interest expense on lease liabilities | 270,011.27 | 149,348.03 |
| Total cash outflows related to leases | 8,312,444.36 | 2,682,437.97 |
4) The maturity analysis of lease liabilities and the corresponding liquidity risk management Please refer to item XII 1 of thissection for details.
(2) The Company as lessor
Operating leases as lessor
□Applicable ? Not applicable
Unit: RMB Yuan
| Items | Rental income | Of which: Income related to variable lease payments not included in lease receipts |
| Rental income | 3,468,905.75 | |
| Total | 3,468,905.75 |
Financial leases as lessor
□Applicable ? Not applicable
Undiscounted lease receipts for each of the next five years
□Applicable ? Not applicable
Unit: RMB Yuan
| Items | Annual undiscounted lease receipts | |
| Closing balance | Opening balance | |
| First year | 349,330.00 | 1,642,344.00 |
| second year | 41,520.00 | 620,000.00 |
| Total undiscounted lease receipts after five years | 390,850.00 | 2,262,344.00 |
VIII. R&D expenses
Unit: RMB Yuan
| Items | Current period Increase | Preceding period Decrease |
| Employee benefits | 400,415,932.53 | 416,805,732.59 |
| Direct input | 321,079,990.14 | 289,342,939.10 |
| Depreciation, amortization of intangible assets | 80,744,547.58 | 68,939,590.01 |
| Outsourcing expenses | 55,869,894.26 | 42,655,069.34 |
| Office expenses, business traveling expense | 14,660,221.42 | 24,753,637.81 |
| Others | 15,030,889.09 | 16,448,437.28 |
| Employee benefits | 887,801,475.02 | 858,945,406.13 |
| Of which: Expensed research and development expenditure | 887,801,475.02 | 858,945,406.13 |
IX. Changes in the scope of consolidation
1. Business combinations not under the same control
(1) Non-common control business combinations occurring during the period
Unit: RMB Yuan
| Name of the purchased party | Point of acquisition | Cost of equity acquisition | Percentage of equity acquisition | Methods of equity acquisition | purchase date | Basis for determining the purchase date | Revenue of the purchased party from the purchase date to the end of the period | Net profit of the purchased party at the end of the period from the date of purchase to the end of the period | Cash flows of the purchased party at the end of the period from the purchase date to the end of the period |
| Shandong New Shuang'an Biotechnology Co., Ltd | September 20, 2023 | 100,000.00 | 100.00% | acquire | September 20, 2023 | Completion of business registration | 0.00 | 82.35 | 86.68 |
Other remarks：
Pursuant to the Equity Transfer Agreement entered into between the subsidiary Shandong NHU Amino Acid Co., Ltd and ChenhuiEnvironmental Protection Technology Co., Ltd on September 12, 2023, the Company acquired 100% equity interest in ShandongShandong New Shuang'an Biotechnology Co., Ltd held by Chenhui Environmental Protection Technology Co., Ltd at a considerationof RMB100,000.00. Shandong New Shuangan Biotechnology Co., Ltd. completed its business registration on September 20, 2023, soit was included in the scope of the consolidated financial statements from September 2023 onwards.
(2) Merger costs and goodwill
Unit: RMB Yuan
| Combination cost | Shandong New Shuangan Biotechnology Co., Ltd. |
| Cash | 100,000.00 |
| -- Fair value of non-cash assets | |
| -- Fair value of debt issued or assumed | |
| -- Fair value of equity securities issued | |
| -- Fair value of contingent consideration | |
| - - Fair value at the date of purchase of equity interests held prior to the date of purchase |
| Combination cost | Shandong New Shuangan Biotechnology Co., Ltd. |
| --Other | |
| Total consolidated costs | 100,000.00 |
| Less: Share of fair value of net identifiable assets acquired | 100,000.00 |
| Amount by which goodwill/cost of consolidation is less than share of fair value of identifiable net assets acquired |
(3) Identifiable assets and liabilities of the acquiree on the acquisition date
Unit: RMB Yuan
| Item | Shandong New Shuangan Biotechnology Co., Ltd. | |
| Fair value on the purchase date | Book value on the purchase date | |
| assets | 100,000.00 | 100,000.00 |
| Cash and bank balances | 100,000.00 | 100,000.00 |
| Accounts receivable | ||
| Inventories | ||
| Fixed assets | ||
| Intangible assets | ||
| Debt： | ||
| Borrowings | ||
| Accounts payable | ||
| Deferred income tax liabilities | ||
| Equity: | 100,000.00 | 100,000.00 |
| Less:Non-controlling interest | ||
| Net assets acquired | 100,000.00 | 100,000.00 |
X. Interest in other entities
1. Interest in subsidiaries
(1) Composition of the group
| Subsidiaries | registered capital | Main operating place | Place of registration | Business nature | Holding proportion (%) | Acquisition method | |
| Direct | Indirect | ||||||
| NHU (Hong Kong) Trading Co., Ltd. | US2.40millions | Hong Kong, China | Hong Kong, China | Commerce | 100.00% | 0.00% | Establishment |
| Shandong NHU Amino-acids Co., Ltd. | 1,100million(yuan) | Weifang, Shandong | Weifang, Shandong | Manufacturing | 100.00% | 0.00% | Establishment |
| Heilongjiang NHU Biotechnology Co., Ltd. | 700millions(yuan) | Suihua, Heilongjiang | Suihua, Heilongjiang | Manufacturing | 100.00% | 0.00% | Establishment |
2. Interests in joint arrangements or associates
(1) Aggregated financial information of insignificant joint ventures and associates
Unit: RMB Yuan
| Item | Closing balance/ Current period cumulative | Opening balance/ Preceding period comparative |
| Joint ventures: | ||
| Total carrying amount of investments | 216,166,978.49 | |
| Total of the following by percentage of shareholding | ||
| -- Net profit | -17,341,021.51 | |
| -- Other comprehensive income | ||
| -- Total comprehensive income | -17,341,021.51 | |
| Associates: | ||
| Total carrying value of investments | 480,978,221.59 | 432,503,568.48 |
| Total of the following by percentage of shareholding | ||
| -- Net profit | 43,633,175.81 | 73,574,436.65 |
| -- Other comprehensive income | 841,477.30 | 7,601,506.08 |
| -- Total comprehensive income | 44,474,653.11 | 81,175,942.73 |
XI. Government grants
1. Government grants recognized at the end of the reporting period at the amount receivable
□Applicable ? Not applicable
Reasons for not receiving the projected amount of government grants at the projected point in time
□Applicable ? Not applicable
2. New government subsidies during the period
Unit: RMB Yuan
| Item | Amount of new grants for the period |
| Government grants related to assets | 106,142,187.78 |
| includng: charged to deferred income | 106,142,187.78 |
| Government grants related to income | 64,806,739.10 |
| includng:charged to other gains | 64,806,739.10 |
| fiscal subsidy | 2,444,444.44 |
| ncludng: Elimination of construction in progress | 2,444,444.44 |
| Total | 173,393,371.32 |
3. Government grants related to assets
? Applicable □Not applicable
Unit: RMB Yuan
| Item | Opening balance | Increase | non-operating income | Decrease | other | Closing balance | Asset/revenue related |
| Deferred income | 1,083,159,222.41 | 106,142,187.78 | 123,715,135.70 | 1,065,586,274.49 | Asset-related |
4. Government grants related to income
? Applicable □Not applicable
Unit: RMB Yuan
| Item | Current period Increase | Preceding period Decrease |
| Government grants related to income | 188,504,183.48 | 175,761,119.94 |
5. Government grants returned
Unit: RMB Yuan
| Item | refund | Reason for return |
| Chemical Industry Transformation and Upgrading 2.0 Intelligent Transformation Project Incentives | 16,191.32 | Government duplicate encashment returned |
| stable employment subsidy | 1,500.00 | Ineligible for grants |
| Tota | 17,691.32 |
XII. Risks related to financial instruments
1. Various types of risks arising from financial instruments
In risk management, the Company aims to seek the appropriate balance between the risks and benefits from its use of financialinstruments and to mitigate the adverse effects that the risks of financial instruments have on the Company’s financial performance, soas to maximize the profits of shareholders and other equity investors. Based on such risk management objectives, the Company’s riskmanagement policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls,and to monitor risks and adherence to limits on a timely and reliable basis.
The Company has exposure to the following risks from its use of financial instruments, which mainly include: credit risk, liquidityrisk, and market risk. The Management has deliberated and approved policies concerning such risks, and details are:。(I) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to dischargean obligation.
1. Credit risk management practice
(1) Evaluation method of credit risk
At each balance sheet date, the Company assesses whether the credit risk on a financial instrument has increased significantlysince initial recognition. When assessing whether the credit risk has increased significantly since initial recognition, the Company takesinto account reasonable and supportable information, which is available without undue cost or effort, including qualitative andquantitative analysis based on historical data, external credit risk rating, and forward-looking information. The Company determinesthe changes in default risk of financial instruments during the estimated lifetime through comparison of the default risk at the balancesheet date and the initial recognition date, on an individual basis or a collective basis.
The Company considers the credit risk on a financial instrument has increased significantly when one or more of the followingqualitative and quantitative standards are met:
1) Quantitative standard mainly relates to the scenario in which, at the balance sheet date, the probability of default in theremaining lifetime has risen by more than a certain percentage compared with the initial recognition;
2) Qualitative standard mainly relates to significant adverse changes in the debtor’s operation or financial position, present orexpected changes in technology, market, economy or legal environment that will have significant adverse impact on the debtor’srepayment ability.
(2) Definition of default and credit-impaired assets
A financial instrument is defined as defaulted when one or more following events have occurred, of which the standard isconsistent with that for credit-impairment:
1) significant financial difficulty of the debtor;
2) a breach of binding clause of contract;
3) it is very likely that the debtor will enter bankruptcy or other financial reorganization;
4) the creditor of the debtor, for economic or contractual reasons relating to the debtor’s financial difficulty, having granted tothe debtor a concession(s) that the creditor would not otherwise consider.
2. Measurement of expected credit losses
The key factors in the measurement of expected credit loss include the probability of default, loss rate of default, and exposureto default risk. The Company develops a model of the probability of default, loss rate of default, and exposure to default risk on thebasis of quantitative analysis of historical data (e.g. counterparty rating, guarantee measures and collateral type, payment method, etc.)and forward-looking information.
3. Please refer to item VII 3、4、5、 and 7 of this section for details on the reconciliation table of opening balance and closingbalance of provision for losses of financial instrument.
4. Exposure to credit risk and concentration of credit risk
The Company’s credit risk is primarily attributable to cash and bank balances and receivables. In order to control such risks, theCompany has taken the following measures:
(1) Cash and bank balances
The Company deposits its bank balances and other cash and bank balances in financial institutions with relatively high creditlevels, hence, its credit risk is relatively low.
(2) Receivables
The Company performs credit assessment on customers using credit settlement on a continuous basis. The Company selectscredible and well-reputed customers based on credit assessment result, and conducts ongoing monitoring on balance of receivables, toavoid significant risks in bad debts.
As the Company only conducts business with credible and well-reputed third parties, collateral is not required from customers.The Company manages credit risk aggregated by customers. As of December 31, 2023, the Company has certain concentration ofcredit risk, and 22.95% (December 31, 2022: 29.31%) of the total accounts receivable was due from the five largest customers of theCompany. The Company held no collateral or other credit enhancement on balance of receivables.
The maximum amount of exposure to credit risk of the Company is the carrying amount of each financial asset at the balancesheet.(II) Liquidity risk
Liquidity risk is the risk that the Company may encounter deficiency of funds in meeting obligations associated with cash orother financial assets settlement, which is possibly attributable to failure in selling financial assets at fair value on a timely basis, orfailure in collecting liabilities from counterparties of contracts, or early redemption of debts, or failure in achieving estimated cashflows.
In order to control such risk, the Company comprehensively utilized financing tools such as notes settlement, bank borrowings,etc. and adopts long-term and short-term financing methods to optimize financing structures, and finally maintains a balance betweenfinancing sustainability and flexibility. The Company has obtained credit limit from several commercial banks to meet working
capital requirements and expenditures.Financial liabilities classified based on remaining time period till maturity
Unit: RMB Yuan
| Items | December 31, 2023 | ||||
| Carrying amount | Contract amount not yet discounted | Within 1 year | 1-3 years | Over 3 years | |
| Bank borrowings | 9,620,061,597.96 | 10,115,809,381.27 | 3,052,860,592.80 | 6,305,307,508.57 | 757,641,279.90 |
| Notes payable | 349,347,472.36 | 349,347,472.36 | 349,347,472.36 | ||
| Accounts payable | 1,930,958,598.05 | 1,930,958,598.05 | 1,930,958,598.05 | ||
| Other payables | 53,671,773.90 | 53,671,773.90 | 53,671,773.90 | ||
| Lease liabilities | 6,902,254.62 | 8,401,587.43 | 1,937,137.81 | 3,097,878.18 | 3,366,571.44 |
| Subtotal | 11,960,941,696.89 | 12,458,188,813.01 | 5,388,775,574.92 | 6,308,405,386.75 | 761,007,851.34 |
(Continued)
Unit: RMB Yuan
| Items | December 31, 2022 | ||||
| Carrying amount | Contract amount not yet discounted | Within 1 year | 1-3 years | Over 3 years | |
| Bank borrowings | 9,711,569,862.01 | 10,221,836,453.80 | 4,703,403,806.64 | 5,017,998,789.29 | 500,433,857.87 |
| Notes payable | 627,438,689.79 | 627,438,689.79 | 627,438,689.79 | ||
| Accounts payable | 2,175,458,436.49 | 2,175,458,436.49 | 2,175,458,436.49 | ||
| Other payables | 67,351,740.34 | 67,351,740.34 | 67,351,740.34 | ||
| Lease liabilities | 2,951,198.16 | 4,345,952.05 | 265,094.89 | 714,285.72 | 3,366,571.44 |
| Subtotal | 12,584,769,926.79 | 13,096,431,272.47 | 7,573,917,768.15 | 5,018,713,075.01 | 503,800,429.31 |
(III) Market risk
Market risk is the risk that the Company may encounter fluctuation in fair value or future cash flows of financial instruments dueto changes in market price. Market risk mainly includes interest risk and foreign currency risk.
1. Interest risk
Interest risk is the risk that an enterprise may encounter fluctuation in fair value or future cash flows of financial instruments dueto changes in market interest. The Company’s fair value interest risks arise from fixed-rate financial instruments, while the cash flowinterest risks arise from floating-rate financial instruments. The Company determines the proportion of fixed-rate financial instrumentsand floating-rate financial instruments based on the market environment, and maintains a proper financial instruments portfolio throughregular review and monitoring. The Company’s interest risk in cash flows relates mainly to bank borrowings with floating interest rate.
As of December 31, 2023, balance of borrowings with interest accrued at floating interest rate totaled 9,620.06 million yuan(December 31, 2022: 9,711.57 million yuan). If interest rates had been 50 basis points higher/lower and all other variables were heldconstant, the Company’s profit before tax and equity will not be significantly affected.
2. Foreign currency risk
Foreign currency risk is the risk arising from changes in fair value or future cash flows of financial instrument resulted fromchanges in exchange rate. The Company’s foreign currency risk relates mainly to foreign currency monetary assets and liabilities.
When short-term imbalance occurred to foreign currency assets and liabilities, the Company may trade foreign currency at marketexchange rate when necessary, in order to maintain the net risk exposure within an acceptable level.
Please refer to item VII 58(1) of the notes to the financial statements for details on foreign currency financial assets and liabilitiesat the end of the period.
2. Hedging
(1) The Company conducts hedging business for risk management.
?Applicable □Not applicable
1) During the period under review, the Company carried out foreign exchange hedging business, using forward settlement andother derivative contracts as hedging instruments, and some of the expected purchases and sales transactions involving foreignexchange cash flows as hedged items, as a means of hedging the risk of fluctuations in expected future cash flows arising fromexpected purchases and sales borne by the Company as the prices in the foreign exchange market fluctuate.
2) During the period under review, the Company conducted foreign exchange hedging business, using forward settlement andother derivative contracts as hedging instruments and certain foreign exchange deposits as hedged items, as a means of hedging theCompany's exposure to the risk of fluctuations in existing foreign exchange deposits in response to fluctuations in foreign exchangemarket prices.
(2) The Company conducts eligible hedging operations and applies hedge accounting
□Applicable ? Not applicable
(3) The Company conducts hedging operations for risk management and expects to achieve its risk management objectives,but does not apply hedge accounting? Applicable □Not applicable
| Items | Reasons for not applying hedge accounting | Effect on the financial statements |
| foreign exchange swap (FX) contract | The Company extensively uses foreign exchange forward contracts and other tools for foreign exchange risk management between USD, EUR, CNY, and JPY on a global scale; because there is a certain offsetting relationship between the exchange rate changes between different currencies, which can, to a certain extent, have the same effect as that of hedge accounting, hedge accounting has not been applied. | Derivative financial assets:28,056,050.95yuan Investment income:4,525,080.17yuan Gains on changes in fair value:29,932,484.98yuan |
3. Financial assets
(1) Classification of transfer methods
? Applicable □Not applicable
Unit: RMB Yuan
| Items | Nature of financial assets transferred | Amount of financial assets transferred | Status of derecognition | Basis for determining derecognition |
| endorsements | Receivables financing | 1,611,058,204.23 | Full derecognition | The main risks and rewards, such as the related interest rate risk and credit risk, have been transferred to banks and third parties |
| Items | Nature of financial assets transferred | Amount of financial assets transferred | Status of derecognition | Basis for determining derecognition |
| discounted | Receivables financing | 572,883,974.83 | Full derecognition | The main risks and rewards, such as the related interest rate risk and credit risk, have been transferred to banks and third parties |
| total | 2,183,942,179.06 |
(2) Financial assets derecognized due to transfers
? Applicable □Not applicable
Unit: RMB Yuan
| Items | Modalities for the transfer of financial assets | Amount of financial assets derecognized | Gains or losses related to derecognition |
| Receivables financing | Endorsements/ discounted | 2,183,942,179.06 | -2,409,421.07 |
| total | 2,183,942,179.06 | -2,409,421.07 |
XIII. Fair value disclosure
1. Details of fair value of assets and liabilities at fair value at the balance sheet date
Unit: RMB Yuan
| Items | Fair value as at the balance sheet date | |||
| Level 1 fair value measurement | Level 2 fair value measurement | Level 3 fair value measurement | Total | |
| I. Recurring fair value measurement | -- | -- | -- | -- |
| 1. Held-for-trading financial assets and other non-current financial assets | 28,056,050.95 | 145,000,000.00 | 173,056,050.95 | |
| Capital Protected Floating Income Financial Products | 145,000,000.00 | 145,000,000.00 | ||
| derivative financial asset | 28,056,050.95 | 28,056,050.95 | ||
| Receivables financing | 331,634,090.61 | 331,634,090.61 | ||
| Other equity instrument investments | 22,998,147.55 | 22,998,147.55 | ||
| Total liabilities at recurring fair value measurement | 28,056,050.95 | 499,632,238.16 | 527,688,289.11 | |
| II. Discontinued fair value measurements | -- | -- | -- | -- |
2. Qualitative and quantitative information of valuation technique(s) and key input(s) for level 2 fair valueat recurring and non-recurring fair measurementFair value was determined at forward exchange rate published by Bank of China Limited at the balance sheet date.
3. Qualitative and quantitative information of valuation technique(s) and key input(s) for level 3 fair valueat recurring and non-recurring fair measurement
1. Fair value of short-term financial products with guaranteed principal and floating income and structured deposits was determined
based on their par value.
2. Fair value of bank acceptance was determined based on its par value.
3. As there is no significant change in the operating environment, operating condition and financial position of the invested entitiesZhejiang Second Pharma Co., Ltd. and Shanghai NewMargin Yongjin Eqiuty Enterprise (LP), the Company took investment cost asthe reasonable estimation of fair value.XIV Related parties and related party transactions
1. Parent company
| Parent company | Place of registration | Business nature | Registered capital | Holding proportion over the Company | Voting right proportion over the Company |
| NHU Holding Group Co., Ltd. | Xinchang, Zhejiang | Manufacturing | 120.00 million | 49.71% | 49.71% |
Remarks on the parent companyThe Company’s ultimate controlling party is the natural person Hu Baifan.
2. Subsidiaries of the Company
Please refer to item IX 1(1) of the notes to the financial statements for details on the Company’s subsidiaries.
3. Joint ventures and associates of the Company
Please refer to item VII 10 of the notes to the financial statements for details on the Company’s significant joint ventures andassociates.
4. Other related parties of the Company
| Related parties | Relationships with the Company |
| Beijing Foyou Pharma Co., Ltd. | Controlled by NHU Holding Group Co., Ltd. |
| Zhejiang Asen Pharmaceutical Co., Ltd. | Controlled by NHU Holding Group Co., Ltd. |
| Xinchang County Hechun Greening Co., Ltd. [Note] | Controlled by NHU Holding Group Co., Ltd. |
| Zhejiang Deli Equipment Co., Ltd. | Controlled by NHU Holding Group Co., Ltd. |
| Front Pharmaceutical PLC. | Controlled by NHU Holding Group Co., Ltd. |
| Weifang NHU Real Estate Co., Ltd. | Controlled by NHU Holding Group Co., Ltd. |
| Qionghai Heyue Property Services Co., Ltd. | Controlled by NHU Holding Group Co., Ltd. |
| Qionghai Boao Holliyard Hotel Management Co., Ltd. | Controlled by NHU Holding Group Co., Ltd. |
| Shaoxing Heyue Property Services Co., Ltd. | Controlled by NHU Holding Group Co., Ltd. |
| Xinchang County NHU Real Estate Co., Ltd. | Controlled by NHU Holding Group Co., Ltd. |
| Zhejiang Jingshi Real Estate Co., Ltd. | Controlled by NHU Holding Group Co., Ltd. |
| Shaoxing Yuexiu Education Development Co., Ltd. | Controlled by NHU Holding Group Co., Ltd. |
| Shaoxing Jinghe Hotel Management Co., Ltd. | Controlled by NHU Holding Group Co., Ltd. |
| Shaoxing Shangyu NHU Real Estate Co., Ltd. | Controlled by NHU Holding Group Co., Ltd. |
| Suihua NHU Real Estate Co., Ltd. | Controlled by NHU Holding Group Co., Ltd. |
| Zhejiang Yuexiu University of Foreign Languages | Controlled by NHU Holding Group Co., Ltd. |
| Heilongjiang Haotian Corn Development Co., Ltd. | Minority Shareholders of Subsidiaries |
| CHR.OLESEN A/S | Minority Shareholders of Subsidiaries |
| Shaoxing Heyue Property Service Co., Ltd. Shangyu Branch | Branch of Xinchang County NHU Real Estate Co., Ltd. |
[Note] Xinchang County Hechun Greening Co., Ltd. Written off in June 2023.Other remarks：
As Client B holds 25% equity of NHU Europe GmbH, the holding subsidiary of the Company’s subsidiary NHU (Hong Kong)Trading Co., Ltd., the Company discloses transactions between Client B and NHU Europe GmbH as well as balances in related partytransactions for the sake of prudence.
5. Related party transactions
(1) Purchase and sale of goods, rendering and receiving of services
Purchase of goods and receiving of services
Unit: RMB Yuan
| Related parties | Content of transaction | Current period cumulative | Transaction limit approved | Whether exceeds transaction limit | Preceding period comparative |
| Qionghai Boao Holliyard Hotel Management Co., Ltd. | Catering and accommodation services | 278,019.64 | 4,109,100.00 | YES | 98,294.20 |
| Qionghai Heyue Property Services Co., Ltd. | Property management | 615,003.21 | 856,682.06 | ||
| Shaoxing Heyue Property Services Co., Ltd. | Property management | 203,704.00 | 16,560.62 | ||
| Shaoxing Heyue Property Service Co., Ltd. Shangyu Branch | Property management | 1,027,168.03 | |||
| Shaoxing Jinghe Hotel Management Co., Ltd. | Catering and accommodation services | 1,502,395.50 | 836,209.09 | ||
| Shaoxing Yuexiu Education Development Co., Ltd. | Receiving of services | 21,473.58 | 49,943.14 | ||
| Xinchang County Hechun Greening Co., Ltd. | Purchase of goods | 392,472.77 | |||
| Zhejiang Asen Pharmaceutical Co., Ltd. | Purchase of goods | 851,758.27 | 1,085,908.02 | ||
| Zhejiang Yuexiu University of Foreign Languages | Receiving of services | 7,780.00 | |||
| Shaoxing Shangyu NHU Real Estate Co., Ltd. | Maintenance Fund | 507,260.38 | |||
| Suihua NHU Real Estate Co., Ltd. | Maintenance Fund | 35,324.40 | |||
| Zhejiang Jingshi Real Estate Co., Ltd. | Receiving of services | 156,675.16 | |||
| Xinchang County Hecheng Real Estate Co., Ltd | Catering and accommodation services | 80,705.84 | |||
| Anhui Innovation Technology Co., Ltd | Consulting Service Fee | 4,716,980.95 | |||
| Heilongjiang Haotian Corn Development Co., Ltd. | Purchase of goods | 209,059.75 | 45,857,289.94 | ||
| Purchase of steam | 1,251,926.61 | ||||
| Shandong Bin’an Vocational Training School Co., Ltd. | Receiving of services | 36,698.11 | |||
| training fee | 1,083,870.86 | 1,436,884.23 | |||
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | Purchase of steam | 98,139,205.41 | 105,647,875.05 | ||
| Receiving of services | 353,052.42 |
Sale of goods and rendering of services
Unit: RMB Yuan
| Related parties | Content of transaction | Current period cumulative | Preceding period comparative |
| Beijing Foyou Pharma Co., Ltd. | Pharmaceutical intermediates, testing fees | 47,169.81 | 715,227.93 |
| Envalior NHU Engineering Materials (Zhejiang) Co.,Ltd. | Labor costs, etc. | 6,735.85 | 94,904.53 |
| Utilities | 1,629,290.16 | 1,520,978.65 | |
| Utilities fees | 43,789.59 | 65,140.06 | |
| Scrapped materials | 139,102,756.74 | 155,506,893.66 | |
| Front Pharmaceutical PLC. | Pharmaceutical intermediates, testing fees | 1,150,631.16 | 345,132.74 |
| Shandong Bin’an Vocational Training School Co., Ltd. | Waste and scrap materials | 23,372.54 | 21,584.50 |
| Management Service Fee | 226,415.10 | 226,415.09 | |
| Shaoxing Heyue Property Services Co., Ltd. | waste materials | 16,880.73 | |
| Heilongjiang Haotian Corn Development Co., Ltd. | training fee | 46,317.42 | |
| Zhejiang Asen Pharmaceutical Co., Ltd. | Pharmaceutical intermediates, test fees | 6,735.85 | 331,747.79 |
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | Pharmaceutical intermediates | 53,097.35 | 17,256.64 |
| Zhejiang Deli Equipment Co., Ltd. | training fee | 20,895.92 | |
| installations | 42,477.88 | ||
| new material | 424,663.96 | 109,898.23 | |
| Management Service Fee | 63,939.40 | ||
| Zhejiang Second Pharma Co., Ltd. | Pharmaceutical intermediates, test fees | 1,415.09 | |
| Heilongjiang Haotian Corn Development Co., Ltd. | steam fee | 82,192.66 | |
| total | 142,842,645.15 | 159,101,311.88 |
(2) Related party leases
The Company as the lessor:
Unit: RMB Yuan
| Lessees | Types of assets leased | Lease income recognized in the current period | Lease income recognized in preceding period |
Wastedisposalservice fees
| Waste disposal service fees | 1,833,745.26 | ||||
| Zhejiang Deli Equipment Co., Ltd. | Purchase of goods | 197,047,387.05 | 200,700,000.00 | YES | 157,701,344.20 |
| Receiving of services | 5,332,882.32 | 290,435.42 | |||
| Zhejiang Saiya Chemical Materials Co., Ltd. | Purchase of goods | 243,288,750.67 | 240,000,000.00 | YES | 291,724,594.92 |
| CysBio ApS | Consulting Service Fee | 7,899,201.50 | 8,089,695.36 | ||
| total | 563,866,317.88 | 444,809,100.00 | 616,697,900.06 |
| Envalior NHU Engineering Materials (Zhejiang) Co.,Ltd. | Land use right and buildings | 1,053,619.11 | 1,041,710.85 |
| Qionghai Boao Holliyard Hotel Management Co., Ltd. | Land use right and buildings | 480,000.00 | 429,088.57 |
| Zhejiang Jingshi Real Estate Co., Ltd. | Land use right and buildings | 336,024.47 | 328,318.05 |
| Zhejiang Deli Equipment Co., Ltd. | Land use right and buildings | 77,064.23 | 77,064.23 |
| NHU Holding Group Co., Ltd. | Land use right and buildings | 16,513.76 | 16,513.76 |
| Weifang NHU Real Estate Co., Ltd. | Land use right and buildings | 10,285.72 | 18,857.14 |
The Company as the lessee:
Unit: RMB Yuan
| Lessors | Types of assets leased | Rental costs for short-term leases and leases of low-value assets with simplified treatment (if applicable) | |
| Lease expenses recognized in the current period | Lease expenses recognized in preceding period | ||
| NHU Holding Group Co., Ltd. | Land use right and buildings | 1,206,513.24 | 1,694,215.92 |
(3) Related party guarantees
The Company as a guaranteed party
Unit: RMB Yuan
| Guarantors | Amount guaranteed | Commencement date | Maturity date | Whether the guarantee is mature |
| NHU Holding Group Co., Ltd. | 433,000,000.00 | December 03, 2020 | September 21, 2025 | No |
| 300,000,000.00 | September 19, 2022 | September 18, 2025 | No | |
| 200,000,000.00 | November 17, 2022 | November 14, 2025 | No | |
| total | 933,000,000.00 |
(4) Key management’s emoluments
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Key management’s emoluments | 26,515,745.04 | 22,516,149.94 |
(5) Other related party transactions
(1) In the current period, NHU EUROPE GmbH sold products amounting to 138.23 million yuan to CHR.Olesen A/S. At the end ofthe period, balance of accounts receivable amounted to 10.89 million yuan.
(2) According to the patent technology licensing agreement and the related equipment sales contract signed between the company andNingbo Zhenhai Refining NHU Biotechnology Co., Ltd., the Company provides Ningbo Zhenhai Refining NHU Biotechnology Co.,Ltd. with mature and reliable liquid methionine production technology developed, owned, or controlled by the company, including thetechnical implementation license related to patents and proprietary technologies, and sells related equipment, which is produced andsupplied by Zhejiang Deli Equipment Co., Ltd. The total contract amount is agreed to be 442,917,139.59 yuan. As of December 31,2023, the company has received 240,230,676.36 yuan. At the end of the period, the company will offset the equipment payment of48,191,778.76 yuan prepaid to Zhejiang Deli Equipment Co., Ltd. against the aforementioned received funds, and the net amount willbe included in the liabilities for contracts and other current liabilities.
6. Balance due to or from related parties
(1) Balance due from related parties
Unit: RMB Yuan
| Items | Related parties | Closing balance | Opening balance | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| Accounts receivable | Envalior NHU Engineering Materials (Zhejiang) Co.,Ltd. | 41,837,233.16 | 2,091,861.66 | 42,585,814.11 | 2,129,290.71 |
| Zhejiang Asen Pharmaceutical Co., Ltd. | 23,625.00 | 1,181.25 | |||
| Subtotal | 41,837,233.16 | 2,091,861.66 | 42,609,439.11 | 2,130,471.96 | |
| Advance paid | Zhejiang Deli Equipment Co., Ltd. | 45,926,357.35 | |||
| Heilongjiang Haotian Corn Development Co., Ltd | 479,844.89 | ||||
| Subtotal | 45,926,357.35 | 479,844.89 | |||
| Other receivables | Shaoxing Heyue Property Services Co., Ltd. | 18,400.00 | 920.00 | ||
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | 20,000.00 | 16,000.00 | 20,000.00 | 4,000.00 | |
| Envalior NHU Engineering Materials (Zhejiang) Co.,Ltd. | 711.08 | 35.55 | |||
| Subtotal | 39,111.08 | 16,955.55 | 20,000.00 | 4,000.00 | |
| Other non-current assets | Zhejiang Deli Equipment Co., Ltd. | 33,210,788.17 | |||
| Subtotal | 33,210,788.17 | ||||
(2) Balance due to related parties
Unit: RMB Yuan
| Items | Related parties | Closing book balance | Opening book balance |
| Accounts payable | Zhejiang Deli Equipment Co., Ltd. | 13,573,871.90 | 13,581,584.31 |
| Zhejiang Saiya Chemical Materials Co., Ltd. | 199,699.11 | 1,905,191.13 | |
| Zhejiang Second Pharma Co., Ltd. | 6,408.00 | 6,408.00 | |
| Heilongjiang Haotian Corn Development Co., Ltd. | 110,873.46 | ||
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | 12,040,573.60 | 13,688,789.40 | |
| Subtotal | 25,931,426.07 | 29,181,972.84 | |
| Contract liabilities | Zhejiang Deli Equipment Co., Ltd. | 13,009.64 | 13,009.64 |
| Ningbo ZRCC NHU Biotechnology Co., Ltd. | 178,858,243.73 | ||
| Subtotal | 178,871,253.37 | 13,009.64 | |
| Other payables | Zhejiang Deli Equipment Co., Ltd. | 3,740.00 | 3,500.00 |
| Ningbo ZRCC NHU Biotechnology Co., Ltd. | 12,750.00 | ||
| Xinchang County Hechun Greening Co., Ltd. | 13,102.77 | ||
| Zhejiang Jingshi Real Estate Co., Ltd. | 166,075.68 |
| Items | Related parties | Closing book balance | Opening book balance |
| Subtotal | 16,490.00 | 182,678.45 | |
| Other current liabilities | Zhejiang Deli Equipment Co., Ltd. | 1,691.25 | 1,691.25 |
| Ningbo ZRCC NHU Biotechnology Co., Ltd. | 13,180,653.87 | ||
| Subtotal | 13,182,345.12 | 1,691.25 |
XV. Commitments and contingencies
1. Significant commitments
Significant commitments as at the balance sheet date(I) Significant commitments
1. Forward exchange settlement contracts
Pursuant to “ISDA 2002 MASTER AGREEMENT” entered into between the Company and Bank of China (Hong Kong) Limited,“ISDA 2002 MASTER AGREEMENT” entered into with DBS Bank (China) Limited, the GLOBAL CAPITAL MARKETSTRANSACTION and the related transaction application form entered into with HSBC Bank (China) Limited Hangzhou Branch, theNAFMII Master Agreement and Supplemental Agreement (No. Y161136) with the Bank of China Limited, Zhejiang Branch, NAFMIIMaster Agreement and Supplemental Agreement (No. Y161136), as of December 31, 2023, the details of the Company's undeliveredforward settlement contracts are as follows:
| Currency | Amount | Exchang Rate | Settlement Date |
| USD | 10,000,000.00 | 7.3002 | 1/3/2024 |
| 10,000,000.00 | 7.3000 | 1/9/2024 | |
| 10,000,000.00 | 7.2605 | 1/12/2024 | |
| 10,000,000.00 | 7.2635 | 1/16/2024 | |
| 10,000,000.00 | 7.2605 | 1/23/2024 | |
| 10,000,000.00 | 7.2675 | 1/19/2024 | |
| 10,000,000.00 | 7.2615 | 1/29/2024 | |
| 10,000,000.00 | 7.2575 | 2/5/2024 | |
| 10,000,000.00 | 7.2615 | 2/2/2024 | |
| 10,000,000.00 | 7.2580 | 2/8/2024 | |
| 10,000,000.00 | 7.1150 | 2/20/2024 | |
| 10,000,000.00 | 7.1113 | 2/27/2024 | |
| 10,000,000.00 | 7.1079 | 3/5/2024 | |
| 10,000,000.00 | 7.1035 | 3/12/2024 | |
| 10,000,000.00 | 7.1282 | 2/20/2024 | |
| 10,000,000.00 | 7.1230 | 2/27/2024 | |
| 10,000,000.00 | 7.1132 | 3/19/2024 | |
| 10,000,000.00 | 7.1063 | 3/28/2024 | |
| 10,000,000.00 | 7.1200 | 1/25/2024 | |
| 10,000,000.00 | 7.1000 | 2/27/2024 | |
| 10,000,000.00 | 7.1165 | 1/29/2024 | |
| 10,000,000.00 | 7.0942 | 3/7/2024 | |
| Subtotal | 220,000,000.00 | ||
| EUR | 10,000,000.00 | 7.8934 | 3/12/2024 |
| 10,000,000.00 | 7.8840 | 4/15/2024 | |
| Subtotal | 20,000,000.00 |
2. Letters of guarantee issued but undue
As of December 31, 2023, the undue letters of guarantee issued by the Company and its subsidiaries are as follows:
| Issuing banks | Applicants | Type of L/G | Amount | Conditions for issuing |
| Bank of China Limited Xinchang Sub-branch | The Company | Performance guarantee | USD 22,409.00 | Occupying credit line |
| Performance guarantee | USD 137,390.00 | Occupying credit line | ||
| Performance guarantee | USD 37,681.00 | Occupying credit line | ||
| Performance guarantee | USD 5,660.00 | Occupying credit line | ||
| China Merchants Bank Co., Ltd. Weifang Branch | Shandong NHU Vitamins Co., Ltd. | Financing Guarantee | CNY 2,120,000.00 | Occupying credit line |
| Bank of China Limited Weifang Binhai Branch | Shandong NHU Amino-acids Co., Ltd. | Performance guarantee | CNY 500,000.00 | Deposit of 500,000.00 yuan |
3. Letters of credit issued but undue
As of December 31, 2023, the undue letters of credit issued by the Company and its subsidiaries are as follows:
| Issuing banks | Applicants | Balance of L/C | Conditions |
| China Merchants Bank Hangzhou Jiefang Branch | The Company | CNY 235,000,000.00 | Occupying credit line |
| CNY 150,000,000.00 | Occupying credit line | ||
| CNY 50,000,000.00 | Occupying credit line | ||
| Bank of China Limited Xinchang Branch | The Company | USD 681,849.70 | Occupying credit line |
| Bank of China Limited Xinchang Branch | Zhejiang NHU Imports & Exports Co., Ltd. | EUR 1,484,000.00 | Deposits in the amount of Euro1,484,000.00 |
| Bank of China Limited Weifang Binhai Branch | Shandong NHU Amino-acids Co., Ltd. | JPY 343,541,408.00 | Occupying credit line |
| China Merchants Bank Co., Ltd. Weifang Branch | Shandong NHU Vitamins Co., Ltd. | CNY 9,726,000.00 | Occupying credit line |
| China Merchants Bank Co., Ltd. Weifang Branch | Shandong NHU Pharmaceutical Co., Ltd. | CNY 25,000,000.00 | Occupying credit line |
| CNY 26,224,348.26 | Occupying credit line | ||
| CNY 20,895,878.61 | Occupying credit line | ||
| CNY 21,643,085.00 | Occupying credit line | ||
| China Merchants Bank Hangzhou Jiefang Branch | Shangyu NHU Bio-Chem Co., Ltd. | CNY 150,000,000.00 | Occupying credit line |
| Bank of China Limited Shangyu Sub-branch | Zhejiang NHU Special Materials Co., Ltd. | JPY 6,946,000.00 | Deposit of 385,500.00 yuan |
4. The “notes pool” business
Pursuant to the “Notes Pool Service Agreement on Yuntong Account of Bank of Communications” entered into between the Companyand Bank of Communications Co., Ltd., the Company pledged and endorsed bank acceptance to the depositary bank, forming a pledgednotes pool; the Company also opened a notes pool deposit account to provide guarantee for the credit granted under the note pledgeand to deposit the pledged bank acceptance for payments. The available credit line for pledge is the sum of pledged notes and the actualbalance of deposit account less pledged notes used. As stipulated in the agreement, the sum of pledged notes and the balance of depositaccount shall not be less than the pledged amount used for issuing notes. Pursuant to the “Notes Pool Cooperation Agreement” enteredinto among the Company, its subsidiaries Shangyu NHU Bio-Chem Co., Ltd., Zhejiang NHU Pharmaceutical Co., Ltd., Zhejiang NHUSpecial Materials Co., Ltd., Shaoxing Yuchen New Materials Co., Ltd., Shandong NHU Pharmaceutical Co., Ltd., Shandong NHUVitamins Co., Ltd., Shandong NHU Amino-acids Co., Ltd., Heilongjiang NHU Biotechnology Co., Ltd., Shandong NHU FineChemical Science and Technology Co., Ltd., Heilongjiang Xinhao Thermal Power Co., Ltd., Xinchang NHU Vitamins Co., Ltd.,Zhejiang Vityesun Animal Nutrition and Health Co., Ltd, Zhejiang NHU Imports & Exports Co., Ltd.. and China Zheshang Bank Co.,Ltd., the Company pledged assets pool or notes pool for guarantee, and opened a notes deposit account to pay deposits at a certain
percentage, with no specific agreement on the amount of deposits. As of December 31, 2023, balance of pledged bank acceptanceamounted to 237,970,232.29 yuan, deposits of notes pool in China Zheshang Bank Co., Ltd. amounted to77,905,369.24 yuan.
5. Besides the aforementioned events and assets with title or use right restrictions as stated in this section, the Company has no othersignificant commitments to be disclosed as of the balance sheet date.
2. Contingencies
(1) There are no material contingencies that the Company is required to disclose, which should also beexplained
The Company has no material contingencies that require disclosure.XVI. Events after the balance sheet date
1. Profit distribution
Unit: RMB Yuan
| Dividend to be distributed for every 10 shares (RMB) | 4.50 |
| Bonus shares to be distributed for every 10 shares (share) | 0 |
| Additional shares to be converted from capital reserve for every 10 shares (share) | 0 |
| Dividend for every 10 shares (RMB) declared after review and approval | 4.50 |
| Bonus shares to be distributed for every 10 shares (share) declared after review and approval | 0 |
| Additional shares to be converted from capital reserve for every 10 shares (share) declared after review and approval | 0 |
| Profit or dividend planned to be distributed | Based on the 3,073,421,680 shares (total share capital of 3,090,907,356 excluding 17,485,676 repurchased shares[Note]), a cash dividend of 4.50 yuan (tax included) will be distributed to all shareholders for every 10 shares, and no bonus shares will be distributed, and the capital reserve will not be converted into share capital. Note: According to the Rules for Share Repurchase by Listed Companies, the shares in the professional account for share repurchase by listed companies are not entitled to profit distribution and capitalization of capital reserve. If the total share capital of the company changes before the implementation of the distribution plan due to the conversion of convertible bonds, share repurchase, exercise of share incentive, listing of new shares in refinancing, etc., the total amount of distribution will be adjusted accordingly in accordance with the principle that the distribution ratio remains unchanged. |
2. Description of other events after the balance sheet date
As of the date of approval for issuing the financial statements, the Company has no other significant events after the balance sheetdate to be disclosed.
XVII. Other significant events
1. Segment information
(1) Identification basis and accounting policies for reportable segments
Reportable segments are identified according to the structure of the Company’s internal organization, management requirements andinternal reporting system, and based on business segments. Assets and liabilities shared by different segments are allocated amongsegments proportionate to their respective sizes.
(2) Financial information of reportable segments
Unit: RMB Yuan
| Items | Pharmaceutical chemicals | Others | Inter-segment offsetting | Total |
| Operating revenue | 13,987,850,435.98 | 2,036,242,196.44 | 907,555,629.12 | 15,116,537,003.30 |
| Including: Revenue from contracts with customers | 13,986,117,534.65 | 2,020,279,909.58 | 893,329,346.68 | 15,113,068,097.55 |
| Operating cost | 9,412,806,626.65 | 1,626,239,377.92 | 907,555,629.12 | 10,131,490,375.45 |
| Total assets | 36,039,123,285.51 | 4,250,189,705.50 | 1,133,066,126.34 | 39,156,246,864.67 |
| Total liabilities | 12,329,395,909.93 | 2,233,464,186.01 | 326,321,384.14 | 14,236,538,711.80 |
2. Employee Stock Purchase Plan Related Plans
The Company held the 16th meeting of the eighth Board of Directors and the 13th meeting of the eighth Board of Supervisors on June7, 2023, and the first extraordinary general meeting of shareholders in 2023 on June 26, 2023, to review and adopt the fourth employeeStock Ownership Plan of Zhejiang Xinhexheng Co., LTD. (Draft) and its Abstract) and other employee stock ownership plan relatedmotions. Agreed to implement the fourth phase of the employee stock ownership plan.As of September 25, 2023, a total of 29,528,181 shares of the Company have been purchased through the secondary market biddingtransaction, accounting for 0.9553% of the company's existing total share capital, with a total transaction amount of 479,442,157.08yuan (excluding transaction fees), and the average transaction price is about 16.2368 yuan/share. The fourth phase of the company'semployee stock ownership plan completed the purchase of the target stock. The lock-up period of the underlying shares acquired underthe fourth ESOP is 12 months, calculated from the date of the Company's announcement of the transfer of the last underlying shares tothe plan.
3. Raise funds to purchase financial information
The 15th meeting of the eighth session of the Board of Directors of the Company was held on April 19, 2023, at which the "Motion onthe Use of Part of the idle Raised Funds for Cash Management" was reviewed and approved, and it was agreed that the Company andits wholly-owned subsidiary Shandong Xinhe Cheng Amino Acid Co., Ltd. would use the idle raised funds not exceeding RMB 1,0100million (including RMB 1,0100 million) for cash management. The purchase of short-term financial products with high security, goodliquidity and low risk with a term of no more than 12 months can be used on a rolling cycle from the date of deliberation and adoptionat the 15th meeting of the Eighth Board of Directors to the effective period before April 30, 2024. As of December 31, 2023, the actualbalance of the Company's temporary idle raised funds to purchase financial products was 145 million yuan.
XVIII. Notes to the main items of the parent company's financial statements
1. Accounts receivable
(1) Age analysis
Unit: RMB Yuan
| Ages | Closing balance | Opening balance |
| Within 1 year | 659,625,316.20 | 526,936,263.09 |
| Total | 659,625,316.20 | 526,936,263.09 |
(2) Details on categories
Unit: RMB Yuan
| Categories | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Carrying amount | Book balance | Provision for bad debts | Carrying amount | |||||
| Amount | % to total | Amount | Provision proportion | Amount | % to total | Amount | Provision proportion | |||
| Receivables with provision made on a collective basis | 659,625,316.20 | 100.00% | 32,981,265.81 | 5.00% | 626,644,050.39 | 526,936,263.09 | 100.00% | 26,346,813.15 | 5.00% | 500,589,449.94 |
| Total | 659,625,316.20 | 100.00% | 32,981,265.81 | 5.00% | 626,644,050.39 | 526,936,263.09 | 100.00% | 26,346,813.15 | 5.00% | 500,589,449.94 |
Provision made on a collective basis using age analysis method:
Unit: RMB Yuan
| Items | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion | |
| Within 1 year | 659,625,316.20 | 32,981,265.81 | 5.00% |
| Total | 659,625,316.20 | 32,981,265.81 | |
Provision for bad debts on accounts receivable is made in accordance with the general model of expected credit losses, if any:
□Applicable ? Not applicable
(3) Provisions made, collected or reversed in the current period
Provisions made in the current period:
Unit: RMB Yuan
| Categories | Opening balance | Increase/Decrease | Closing balance | |||
| Accrual | Recovery/ Reversal | Write-off | Others | |||
| Provision made on a collective basis | 26,346,813.15 | 6,919,784.66 | 285,332.00 | 32,981,265.81 | ||
| Total | 26,346,813.15 | 6,919,784.66 | 285,332.00 | 32,981,265.81 | ||
(4) Accounts receivable actually written off during the period
Unit: RMB Yuan
| Items | Amount written off |
| Accounts receivable actually written off | 285,332.00 |
(5) Details of the top 5 debtors with largest balances
Unit: RMB Yuan
| Debtors | Book balance | Proportion to the total balance of accounts receivable (%) | Provision for bad debts |
| Client 1 | 426,662,005.52 | 64.68% | 21,333,100.28 |
| Client 2 | 65,924,965.96 | 9.99% | 3,296,248.30 |
| Client 3 | 12,940,667.00 | 1.96% | 647,033.35 |
| Client 4 | 8,234,403.02 | 1.25% | 411,720.15 |
| Client 5 | 7,717,400.00 | 1.17% | 385,870.00 |
| Total | 521,479,441.50 | 79.05% | 26,073,972.08 |
2. Other receivables
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Dividend receivable | 20,735,987.73 | |
| Other receivables | 2,908,050,463.81 | 2,475,376,134.12 |
| Total | 2,908,050,463.81 | 2,496,112,121.85 |
(1) Dividend receivable
1) Details on categories
Unit: RMB Yuan
| Items/Investees | Closing balance | Opening balance |
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | 20,735,987.73 | |
| Total | 20,735,987.73 |
(2) Other receivables
1) Categorized by nature
Unit: RMB Yuan
| Nature of receivables | Closing book balance | Opening book balance |
| loan splitting | 3,038,350,000.01 | 2,477,800,000.00 |
| Deposit Guarantee | 13,376,459.00 | 100,017,996.50 |
| Export Tax Refund | 5,735,604.80 | 8,678,171.26 |
| Employee reserve fund | 2,436,000.00 | 5,953,662.00 |
| Other | 1,336,185.69 | 8,467,732.53 |
| Accounts receivable in suspense | 461,787.32 | |
| Total | 3,061,234,249.50 | 2,601,379,349.61 |
2) Age analysis
Unit: RMB Yuan
| Ages | Closing book balance | Opening book balance |
| Within 1 year (inclusive) | 3,047,240,876.60 | 2,501,141,620.17 |
| 1-2 years | 457,610.37 | 1,154,000.00 |
| 2-3 years | 172,432.00 | |
| Over 3 years | 13,535,762.53 | 98,911,297.44 |
| 3-4 years | 25,770.00 | 182,455.81 |
| 4-5 years | 162,455.81 | 50,067.41 |
| Over 5 years | 13,347,536.72 | 98,678,774.22 |
| Total | 3,061,234,249.50 | 2,601,379,349.61 |
3) Disclosure by bad debt accrual method
Unit: RMB Yuan
| Categories | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Carrying amount | Book balance | Provision for bad debts | Carrying amount | |||||
| Amount | % to total | Amount | Provision proportion | Amount | % to total | Amount | Provision proportion | |||
| Receivables with provision made on a collective basis | 3,061,234,249.50 | 100.00% | 153,183,785.69 | 5.00% | 2,908,050,463.81 | 2,601,379,349.61 | 100.00% | 126,003,215.49 | 4.84% | 2,475,376,134.12 |
| Total | 3,061,234,249.50 | 100.00% | 153,183,785.69 | 5.00% | 2,908,050,463.81 | 2,601,379,349.61 | 100.00% | 126,003,215.49 | 4.84% | 2,475,376,134.12 |
Provision for bad debts is made on a portfolio basis:
Unit: RMB Yuan
| Items | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion | |
| Land bond receivable portfolio | 12,518,762.50 | ||
| Export tax refund receivable portfolio | 5,735,604.80 | ||
| Ageing portfolio | 3,042,979,882.20 | 153,183,785.69 | 5.03% |
| Including:1-2 years | 3,041,505,271.80 | 152,075,263.59 | 5.00% |
| 2-3 years | 457,610.37 | 91,522.07 | 20.00% |
| Over 3 years | 1,017,000.03 | 1,017,000.03 | 100.00% |
| Total | 3,061,234,249.50 | 153,183,785.69 | |
Provision for bad debts is made on the basis of a general model of expected credit losses:
Unit: RMB Yuan
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| 12?month expected credit losses | Lifetime expected credit losses (credit not impaired) | Lifetime expected credit losses (credit impaired) | ||
| Opening balance | 124,623,172.45 | 230,800.00 | 1,149,243.04 | 126,003,215.49 |
| Opening balance in the current period | ||||
| --Transferred to phase II | -22,880.52 | 22,880.52 | 0.00 |
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| 12?month expected credit losses | Lifetime expected credit losses (credit not impaired) | Lifetime expected credit losses (credit impaired) | ||
| Provision made in the current period | 27,474,971.66 | -162,158.45 | -132,243.01 | 27,180,570.20 |
| Closing balance | 152,075,263.59 | 91,522.07 | 1,017,000.03 | 153,183,785.69 |
The basis for the classification of each stage and the percentage of provision for bad debts:
Accounts aged less than one year are classified as stage I, those aged 1-2 years are classified as stage II, and those aged more than 2years are classified as stage III.Changes in the carrying amount of the provision for losses that are significant in terms of the amount of change during the period.
□Applicable ?Not Applicable
4) Provisions made, collected or reversed in the current period
Provision for bad debts in the current period:
Unit: RMB Yuan
| Categories | Opening balance | Increase/Decrease | Closing balance | |||
| Accrual | Recovery/Reversal | Write-off | Others | |||
| Portfolio grouped by ages | 126,003,215.49 | 27,180,570.20 | 153,183,785.69 | |||
| Total | 126,003,215.49 | 27,180,570.20 | 153,183,785.69 | |||
5) Details of the top 5 debtors with largest balances
Unit: RMB Yuan
| Debtors | Nature of receivables | Book balance | Ages | Proportion to the total balance of other receivables (%) | Provision for bad debts |
| Heilongjiang NHU Biotechnology Co., Ltd. | Call loans | 1,956,000,000.00 | Within 1 year | 63.90% | 97,800,000.00 |
| Shandong NHU Fine Chemical Science and Technology Co., Ltd. | Call loans | 823,850,000.00 | Within 1 year | 26.91% | 41,192,500.00 |
| Xinchang NHU Vitamins Co. | Call loans | 99,000,000.01 | Within 1 year | 3.23% | 4,950,000.00 |
| Others | 6,287.28 | Within 1 year | 0.00% | 314.36 | |
| Zhejiang NHU Special Materials Co., Ltd. | Call loans | 85,000,000.00 | Within 1 year | 2.78% | 4,250,000.00 |
| Shandong NHU Holdings Co., Ltd | Call loans | 67,500,000.00 | Within 1 year | 2.20% | 3,375,000.00 |
| Total | 3,031,356,287.29 | 99.02% | 151,567,814.36 |
3. Long-term equity investments
Unit: RMB Yuan
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Investments in subsidiaries | 10,176,078,842.12 | 10,176,078,842.12 | 9,146,078,842.12 | 9,146,078,842.12 | ||
| Investments in associates and joint ventures | 502,157,305.30 | 502,157,305.30 | 239,967,333.33 | 239,967,333.33 | ||
| Total | 10,678,236,147.42 | 10,678,236,147.42 | 9,386,046,175.45 | 9,386,046,175.45 | ||
(1) Investments in subsidiaries
Unit: RMB Yuan
| Investees | Opening carrying amount | Opening balance of provision for impairment | Increase/Decrease | Closing carrying amount | Closing balance of provision for impairment | |||
| Investments increased | Investments decreased | Provision for impairment | Others | |||||
| Xinchang NHU Vitamins Co., Ltd. | 149,407,990.15 | 149,407,990.15 | ||||||
| Zhejiang NHU Import & Export Co., Ltd. | 13,500,000.00 | 13,500,000.00 | ||||||
| Qionghai Boao Lidu Real Estate Co., Ltd. | 54,020,492.00 | 54,020,492.00 | ||||||
| Zhejiang Vityesun Animal Nutrition and Health Co., Ltd. | 5,000,000.00 | 5,000,000.00 | ||||||
| Shangyu NHU Bio-Chem Co., Ltd. | 414,100,091.44 | 414,100,091.44 | ||||||
| NHU (Hong Kong) Trading Co., Ltd. | 16,406,160.00 | 16,406,160.00 | ||||||
| Zhejiang NHU Pharmaceutical Co., Ltd. | 480,000,000.00 | 480,000,000.00 | ||||||
| Zhejiang NHU Special Materials Co., Ltd. | 554,844,108.53 | 554,844,108.53 | ||||||
| Shandong NHU Amino-acids Co., Ltd. | 4,900,000,000.00 | 900,000,000.00 | 5,800,000,000.00 | |||||
| Shandong NHU Holdings Co., Ltd. | 200,000,000.00 | 200,000,000.00 | ||||||
| Heilongjiang NHU Biotechnology Co., Ltd. | 1,300,000,000.00 | 1,300,000,000.00 | ||||||
| Shandong NHU Pharmaceutical Co., Ltd. | 586,000,000.00 | 586,000,000.00 | ||||||
| Shandong NHU Fine Chemical Science and Technology Co., Ltd. | 460,000,000.00 | 130,000,000.00 | 590,000,000.00 | |||||
| NHU Singapore PTE. LTD. | 12,800,000.00 | 12,800,000.00 | ||||||
| Total | 9,146,078,842.12 | 1,030,000,000.00 | 10,176,078,842.12 | |||||
(2) Investments in associates and joint ventures
Unit: RMB Yuan
| Investees | Opening carrying amount | Opening balance of provision for impairment | Increase/Decrease | Closing carrying amount | Closing balance of provision for impairment | |||||||
| Investments increased | Investments decreased | Investment income recognized under equity method | Adjustment in other comprehensive income | Changes in other equity | Cash dividend/ Profit declared for distribution | Provision for impairment | Others | |||||
| I. joint venture | ||||||||||||
| Ningbo Zhenhai Refining and Chemical Xinhecheng Biotechnology Co., Ltd | 233,508,000.00 | -17,341,021.51 | 216,166,978.49 | |||||||||
| Subtotal | 233,508,000.00 | -17,341,021.51 | 216,166,978.49 | |||||||||
| II. Associates | ||||||||||||
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | 239,967,333.33 | 41,180,429.16 | 50,707.22 | 12.27 | 197,267.10 | 281,395,724.54 | ||||||
| Zhejiang Sanbo Polymer Co., Ltd | ||||||||||||
| Anhui Yingna Weixun Technology Co., Ltd | 4,000,000.00 | 594,602.27 | 4,594,602.27 | |||||||||
| Subtotal | 239,967,333.33 | 4,000,000.00 | 41,775,031.43 | 50,707.22 | 12.27 | 197,267.10 | 285,990,326.81 | |||||
| Total | 239,967,333.33 | 237,508,000.00 | 24,434,009.92 | 50,707.22 | 12.27 | 197,267.10 | 502,157,305.30 | |||||
The recoverable amount is determined as the net of fair value less costs of disposal
□Applicable ?Not applicable
Recoverable amount is determined as the present value of the expected future cash flows
□Applicable ?Not applicable
4. Operating revenue/Operating cost
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative | ||
| Revenue | Cost | Revenue | Cost | |
| Main operations | 2,746,466,236.75 | 2,473,248,472.64 | 3,413,299,237.28 | 2,778,374,702.33 |
| Other operations | 54,507,807.05 | 43,301,577.63 | 63,079,968.72 | 50,816,850.54 |
| Total | 2,800,974,043.80 | 2,516,550,050.27 | 3,476,379,206.00 | 2,829,191,552.87 |
| Including: Revenue from contracts with customers | 2,797,508,880.19 | 2,515,058,317.60 | 3,472,854,161.65 | 2,827,759,903.86 |
Details of revenue
Unit: RMB Yuan
| Categories of contracts | Current period cumulative | |
| Revenue | Cost | |
| By product | ||
| Including: | ||
| Nutrition | 2,746,466,236.75 | 2,473,248,472.64 |
| Categories of contracts | Current period cumulative | |
| Revenue | Cost | |
| Others | 51,042,643.44 | 41,809,844.96 |
| Subtotal | 2,797,508,880.19 | 2,515,058,317.60 |
| By operating region | ||
| Including: | ||
| Domestic | 1,663,363,430.94 | 1,462,228,504.87 |
| Overseas | 1,134,145,449.25 | 1,052,829,812.73 |
| Subtotal | 2,797,508,880.19 | 2,515,058,317.60 |
| By revenue recognition time | ||
| Including: | ||
| Transferred at a point in time | 2,797,508,880.19 | 2,515,058,317.60 |
| Subtotal | 2,797,508,880.19 | 2,515,058,317.60 |
Information related to transaction price allocated to the remaining performance obligations:
As of December 31, 2023, revenue corresponding to performance obligations for which the Company has entered into contractsbut not yet performed or fulfilled amounted to 326.03 million yuan, of which, 326.03 million yuan is expected to be recognized asrevenue in 2024.
5. R&D expenses
| Unit: RMB YuanItems | Current period cumulative | Preceding period comparative |
| Employee benefits | 137,202,860.17 | 140,037,624.41 |
| Outsourcing expenses | 44,232,422.63 | 23,553,318.16 |
| Depreciation, amortization of intangible assets | 28,647,554.99 | 27,624,080.30 |
| Direct input | 27,154,541.33 | 28,398,681.97 |
| Office expenses, business traveling expenses | 5,717,143.51 | 13,476,908.28 |
| Others | 6,215,215.00 | 4,278,723.45 |
| Total | 249,169,737.63 | 237,369,336.57 |
6. Investment income
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Investment income from long-term equity investments under cost method | 1,390,000,000.00 | 1,186,000,000.00 |
| Investment income from long-term equity investments under equity method | 24,434,009.92 | 47,283,121.54 |
| Investment income from disposal of financial assets held for trading | 41.56 | |
| Dividend income earned on investments in other equity instruments during the holding period | 24,473,000.00 |
| Items | Current period cumulative | Preceding period comparative |
| Interest on discounted bills | -186,142.03 | |
| Interest income from call loans | 108,635,176.65 | 93,315,645.90 |
| Investment income from bank financial products and structured deposits | 2,735,849.06 | 31,667,084.46 |
| Investment income from debt restructuring | -709,851.71 | |
| Total | 1,549,382,083.45 | 1,358,265,851.90 |
XIX. Supplementary information
1. Schedule of non-recurring profit or loss
√ Applicable □ Not applicable
Unit: RMB Yuan
| Items | Amount | Remarks |
| Gains or losses on disposal of non-current assets, including write-off of provision for impairment | 5,426,533.21 | |
| Government grants included in profit or loss (excluding those closely related to operating activities of the Company, satisfying government policies and regulations, and continuously enjoyed with certain quantity or quota based on certain standards) | 63,050,565.94 | |
| Gains or losses on changes in fair value of held-for-trading financial assets and held-for-trading financial liabilities, and investment income from disposal of held-for-trading financial assets and held-for-trading financial liabilities, excluding those arising from hedging business related to operating activities | 34,458,488.77 | |
| Fees charged to non-financial enterprises for fund occupancy included in current profit or loss | 465,887.82 | |
| Gains or losses on assets consigned to the third party for investment or management | 12,715,401.91 | |
| Debt restructuring gains and losses | -847,442.05 | |
| Other non-operating revenue or expenditures | 4,406,027.43 | |
| Less: Enterprise income tax affected | 29,488,260.00 | |
| Non-controlling interest affected (after tax) | 159,076.07 | |
| Total | 90,028,126.96 | -- |
Remarks on other profit or loss satisfying the definition of non-recurring profit or loss:
□ Applicable √ Not applicable
The Company has no other profit or loss satisfying the definition of non-recurring profit or loss.Remarks on defining non-recurring profit or loss listed in the “Interpretation Pronouncement on Information Disclosure Criteria forPublic Companies No. 1 – Non-Recurring Profit or Loss” as recurring profit or loss
√Applicable □ Not applicable
Unit: RMB Yuan
2. ROE and EPS
| Profit of the reporting period | Weighted average ROE (%) | EPS (yuan/share) | |
| Basic EPS | Diluted EPS | ||
| Net profit attributable to shareholders of ordinary shares | 11.24% | 0.87 | 0.87 |
| Net profit attributable to shareholders of ordinary shares after deducting non-recurring profit or loss | 10.86% | 0.85 | 0.85 |
3. Calculation process for weighted average return on net assets
Unit: RMB Yuan
| Items | Serial number | Current period cumulative | |
| Net profit attributable to shareholders of listed company | A | 2,704,238,767.54 | |
| Non-recurring profit or loss | B | 90,028,126.96 | |
| Net profit attributable to shareholders of listed company after deducting non-recurring profit or loss | C=A-B | 2,614,210,640.58 | |
| Opening net assets attributable to the Company's ordinary shareholders | D | 23,574,879,326.24 | |
| Net assets attributable to the Company's common shareholders added by the issuance of new shares or conversion of debt to shares, etc. | E | ||
| Cumulative number of months from the month following the addition of net assets to the end of the reporting period | F | ||
| Decrease in net assets attributable to the Company's common shareholders as a result of repurchases or cash dividends, etc. | G | 1,536,710,840.00 | |
| Cumulative number of months from the month following the month in which net assets were reduced to the end of the reporting period | H | 7 | |
| other | Translation differences in foreign currency statements | I1 | 27,343,168.68 |
| Cumulative number of months from the month following the month of increase or decrease in net assets to the end of the reporting period | J1 | 6 | |
| Special reserve | I2 | 34,663,924.21 | |
| Cumulative number of months from the month following the month of increase or decrease in net assets to the end of the reporting period | J2 | 6 | |
| Other changes in capital surplus | I3 | 197,267.10 | |
| Cumulative number of months from the month following the month of increase or decrease in net assets to the end of the reporting period | J3 | 6 | |
| Other changes in capital surplus | I3 | 50,707.22 | |
Items
| Items | Amount involved(yuan) | Reason |
| Net profit attributable to shareholders of listed company after deducting non-recurring profit or loss in fiscal 2022 | 33,397,934.74 | |
| Net profit attributable to shareholders of listed company after deducting non-recurring profit or loss calculated in accordance with the “Interpretation Pronouncement on Information Disclosure Criteria for Public Companies No. 1 – Non-Recurring Profit or Loss (Revised in 2023)” for fiscal year 2022. | -69,074,749.77 | |
| discrepancy | 102,472,684.51 |
| Items | Serial number | Current period cumulative | |
| Cumulative number of months from the month following the month of increase or decrease in net assets to the end of the reporting period | J3 | 11 | |
| Number of months in the reporting period | K | 12 | |
| Weighted average net assets | L= D+A/2+ E×F/K-G×H/K±I×J/K | 24,061,732,714.96 | |
| Weighted average ROE | M=A/L | 11.24% | |
| Weighted average ROE after extraordinary gains and losses | N=C/L | 10.86% | |
4. Calculation process of basic earnings per share and diluted earnings per share
(1) Basic earnings per share calculation process
Unit: RMB Yuan
| Items | Serial number | Current period cumulative |
| Net profit attributable to shareholders of listed company | A | 2,704,238,767.54 |
| Non-recurring profit or loss | B | 90,028,126.96 |
| Net profit attributable to shareholders of listed company after deducting non-recurring profit or loss | C=A-B | 2,614,210,640.58 |
| Total number of shares at the beginning of the period | D | 3,090,907,356.00 |
| Increase in number of shares due to capitalization of provident fund or distribution of stock dividends, etc. | E | |
| Increase in the number of shares by issuing new shares or converting debt to equity, etc. | F | |
| Cumulative number of months from the month following the increase in shares to the end of the reporting period | G | |
| Reduction in the number of shares due to buybacks, etc. | H | |
| Cumulative number of months from the month following the reduction of shares to the end of the reporting period | I | |
| Number of drawdowns during the reporting period | J | |
| Number of months in the reporting period | K | 12 |
| Weighted average number of ordinary shares outstanding | L=D+E+F×G/K-H×I/K-J | 3,090,907,356.00 |
| Basic EPS | M=A/L | 0.87 |
| Basic EPS after extraordinary gains and losses | N=C/L | 0.85 |
(2) Calculation of diluted earnings per share
The process of calculating diluted earnings per share is the same as that for basic earnings per share.
5. Differences in accounting data under Chinese accounting standards and overseasaccounting standards
(1) Difference in net profit and net assets in financial statements disclosed respectively under IFRS Standards and Chineseaccounting standards
□ Applicable √ Not Applicable
(2) Difference in net profit and net assets in financial statements disclosed respectively under overseas accounting standards andChinese accounting standards
□ Applicable √ Not Applicable
(3) Explanation of the reasons for differences in accounting data under domestic and foreign accounting standards. If adjustingfor differences in data already audited by overseas auditing institutions, the name of the overseas institution should be indicated
□ Applicable √ Not Applicable