Zhejiang NHU Co., Ltd.2022 Annual 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 have attended the meeting of the Board ofDirectors for deliberation of this annual report.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 of5 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 specialaccount 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 not conform to the Chineseversion, 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 ...... 37
Section V Environmental and Social Responsibilities ...... 53
Section VI Significant Events ...... 59
Section VII Movements in Shares and Conditions of Shareholders ...... 68
Section VIII Preferred Shares ...... 75
Section IX Bonds ...... 76
Section X Financial Report ...... 77
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. |
| Daily Interaction | Refers to | Daily Interactive 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 |
| 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 |
| XL | Refers to | Fragrances |
| PCY | Refers to | Umbelliferous hydrocarbons |
| MV | Refers to | Vanillin |
| PH | Refers to | Jasmonaldehyde |
| HY | Refers to | Cycloalkynes |
| PF | Refers to | Lupin |
| IBU酸 | Refers to | Ibuprofen |
| CDE | Refers to | State Drug Administration Drug Review Center |
| MS | Refers to | Moxifloxacin |
| CEP | Refers to | European Pharmacopoeia applicability certification |
| Pd催化剂 | Refers to | Palladium catalyst |
| IPDA | Refers to | Isophorone diamine |
| NBC | Refers to | Azabicycles |
| CLA | Refers to | Karon anhydride |
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 and other reasons
| Items | Year 2022 | Year 2021 | YoY growth rate | Year 2020 | ||
| Before adjustment | After adjustment[Note 2] | After adjustment | Before adjustment | After adjustment | ||
| Operating revenue (yuan) | 15,933,984,403.41 | 14,797,989,091.20 | 14,917,101,500.91 | 6.82% | 10,314,084,354.21 | 10,314,084,354.21 |
| Net profit attributable to shareholders of listed company (yuan) | 3,620,271,034.96 | 4,324,150,263.31 | 4,356,010,628.22 | -16.89% | 3,563,759,939.48 | 3,563,759,939.48 |
| Net profit attributable to shareholders of listed company after deducting non-recurring profit or loss (yuan) | 3,586,873,100.22 | 4,147,933,364.84 | 4,179,793,729.75 | -14.19% | 3,410,367,513.01 | 3,410,367,513.01 [Note 1] |
| Net cash flows from operating activities (yuan) | 4,361,481,083.61 | 5,837,878,051.57 | 5,837,878,051.57] | -25.29% | 3,122,807,363.21 | 3,122,807,363.21 [Note 1] |
| Basic EPS (yuan/share) | 1.17 | 1.68 | 1.41[Note 1] | -17.02% | 1.66 | 1.15[Note 1] |
| Diluted EPS (yuan/share) | 1.17 | 1.68 | 1.41[Note 1] | -17.02% | 1.66 | 1.15[Note 1] |
| Weighted average ROE | 16.08% | 21.07% | 21.21% | Decreased by 5.13 percentage points | 19.63% | 19.63% |
| Items | Dec. 31, 2022 | Dec. 31, 2021 | YoY growth rate | Dec. 31, 2020 | ||
| Before adjustment | After adjustment | After adjustment | Before adjustment | After adjustment | ||
| Total assets (yuan) | 38,267,625,155.83 | 34,692,165,111.88 | 34,724,025,476.79 | 10.21% | 30,897,007,799.54 | 30,897,007,799.54 |
| Net assets attributable to shareholders of listed company (yuan) | 23,574,859,468.61 | 21,799,977,645.94 | 21,831,838,010.85 | 7.98% | 19,336,254,922.95 | 19,336,254,922.95 |
[Note1] After the implementation of the Company’s 2021 profit distribution plan, its share capital was increased from 2,578,394,760shares to 3,090,907,356 shares. The above EPS of the comparative period was recalculated based on the adjusted share capital.[Note2] The company has implemented The Interpretation of Accounting Standards for Business Enterprises No. 15 since January 1,2022. The interpretation requires that if the company sells the products or by-products produced before the fixed assets reach theexpected serviceable state or during the research and development process, the income and cost related to the trial operation sales shallbe accounted for separately and included in the current profit and loss, The net amount of the revenue from trial operation sales afteroffsetting the relevant costs shall not be used to offset the cost of fixed assets or R&D expenses. The company makes retroactiveadjustment according to requirements.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 IFRS Standardsand 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 | 4,307,991,748.95 | 3,907,047,528.08 | 3,694,978,856.40 | 4,023,966,269.98 |
| Net profit attributable to shareholders of listed company | 1,203,327,294.72 | 1,010,550,124.53 | 797,168,419.00 | 609,225,196.71 |
| Net profit attributable to shareholders of listed company after deducting non-recurring profit or loss | 1,142,767,059.69 | 951,288,889.93 | 833,476,722.26 | 659,340,428.34 |
| Net cash flows from operating activities | 422,441,679.66 | 820,015,058.54 | 1,285,029,625.87 | 1,833,994,719.54 |
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 2022 | Year 2021 | Year 2020 | Remarks |
| Gains or losses on disposal of non-current assets, including write-off of provision for impairment | -74,232,517.88 | -61,427,624.58 | -37,808,614.38 | |
| Tax rebates and exemptions that are approved beyond authority or without official approval documents | 8,476,745.63 | |||
| 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) | 175,761,119.94 | 151,398,630.02 | 125,612,538.90 | |
| Fees charged to non-financial enterprises for fund occupancy included in current profit or loss | 988,193.62 | |||
| Gains or losses on assets consigned to the third party for investment or management | 52,749,284.13 | 57,777,633.53 | 106,249,559.87 | |
| Net profit or loss on subsidiaries acquired through business combination under common control from the beginning of the period to the combination date | -4,136,941.61 | |||
| 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 | -86,980,602.84 | 48,751,702.84 | 6,293,430.49 | This is mainly due to the change in fair value of forward exchange settlement during the reporting period. |
| Other non-operating revenue or expenditures | 2,411,616.08 | 8,727,858.40 | -11,107,533.03 |
| Other profit and loss items that meet the definition of non-recurring profit or loss | 1,102,494.25 | |||
| Less: Enterprise income tax affected | 46,826,444.91 | 28,969,203.00 | 31,786,463.26 | |
| Non-controlling interest affected (after tax) | 51,953.28 | 42,098.74 | -76,449.49 | |
| Total | 33,397,934.74 | 176,216,898.47 | 153,392,426.47 | -- |
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
The Company has no situation of defining non-recurring profit or loss listed in the “Interpretation Pronouncement on InformationDisclosure Criteria for Public Companies No. 1 – Non-Recurring Profit or Loss” as recurring profit or loss.
Section III Management Discussion and Analysis
I. 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:
With the growth of global population and the deepening of population aging, the improvement of people's living standard and healthawareness will bring more demand for nutritional health services and products, and the consumption demand for nutritional productsin the global market will continue to grow steadily. Nutritional products include human nutritional products and animal nutritionalproducts. Human nutritional products are mainly used in food, beverage and other nutritional health care fields; animal nutritionalproducts are mainly used in poultry, livestock, aquaculture and other breeding fields.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 0.41 million tons of vitamins in 2022, accounting for 83.40% of the globalproduction. The vitamin industry faced various challenges in 2022, such as market demand falling under expectations, complex changesin the industry structure, and rising production costs, etc. The price of vitamin E and other products rose, most product prices fell
.Methionine is the only sulfur-containing amino acid among the essential amino acids. It cannot be produced by animal itself and mustbe obtained from outside. It is widely used in medicine and health products, food and feed. During recent years, the development ofChina’s methionine industry has accelerated, as a result, the production capacity and supply have tilted to the domestic market. Theglobal increase in methionine mainly comes from China, since some factories in Europe periodically reduced production, affecting byenergy and other factors. In 2022, China's methionine output is 443 thousand tons, at a year-on-year increase of 21.4%, accounting for
26.7% of global production.
Flavor and fragrance:
The flavor and fragrance industry is an industry with high technological content, strong matching and high correlation with otherindustries in the national economy. It includes fragrances (synthetic fragrances, natural fragrances) and essences (daily chemical flavors,food flavors, tobacco flavors, etc.), which are used in various daily life scenarios such as personal care, home care, food, and beverages.The global market size is about 35 billion US dollars, and the industry maintains long-term stable growth. From the perspective ofdownstream, the global demand and consumption growth of processed food, personal care and cosmetics are the main factors drivingmarket growth. From the perspective of regional markets, emerging markets, especially China, India, Southeast Asia and other regionsare the main driving force for the development of the global flavor and fragrance market. The Asia-Pacific region accounted for thelargest share of the global flavors and fragrances market in 2022, which exceeds 31.4%.
China already becomes one of the mostimportant fragrance suppliers in the world, and an important market with a large proportion of the industry, and one of the importantfocus areas for global fragrance and flavor research and development, new technologies and new products. China's market accountsfor about one-fifth of the global market, which has also injected power and vitality into the development of the industry. Companies
The “2022 Vitamin Market Annual Analysis Report” by BOYAR
The “2022 Amino Acid Market Annual Analysis Report” by BOYAR
https://www.grandviewresearch.com/industry-analysis/flavors-fragrances-market
should keep up with the development trend of world technology and industry, pay attention to the research and development of greenproduction technology, and continuously strengthen the competitiveness and influence of enterprises.
New polymer materials:
As a strategic and fundamental industry, new polymer materials has become an important symbol for measuring the economic andtechnological 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.In the new round of scientific and technological revolution and industrial revolution, new material technology continues to innovateand break through, and new materials and new material structures keep emerging. China has broken through key technical problems insome products and enjoys a huge domestic market demand and national policy support. China is in a period of strategic transformation,the strategic demand for new materials has become more prominent, providing a rare historical opportunity for the development of newmaterials industry. However, there are still problems in the R&D and production of advanced high-end materials, such as weakinnovation capability, low degree of synergy between innovation chain and industrial chain, incomplete innovation chain, industrialchain and supply chain system to resist risks, etc., which cannot fully meet the demand of China's economic and social development,and there is still a long way to go to become a strong material country.
API industry:
API is the pillar industry of domestic pharmaceutical industry and one of the key industries supported by the state. China and India arethe main source countries of API production. The advantages of API production are concentrated in emerging countries such as China,which has become a major producer and exporter of bulk APIs, and the production technology process has reached international leadinglevel. 2021, the market size of APIs is USD 177.05 billion, and is expected to grow at a CAGR of about 7.5% in the future.
The newcrown pandemic has impacted the API market, and market demand is shifting from traditional drugs such as anti-infectives andcardiovascular to more complex APIs for novel formulations and for specific disease areas. Pulmonary, cardiology and oncology remainthe main application areas and are expected to continue their high growth trend in the coming years.
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
Huajing Intelligence Network "China Flavors and Fragrances Industry Market In-depth Analysis
Zhejiang Province, the development of new materials industry "fourteen five" plan
Active Pharmaceutical Ingredients (API) Market Analysis - Industry Report - Trends, Size & Share (mordorintelligence.com)，https://www.mordorintelligence.com/ industry-reports/global-active-pharmaceutical-ingredients-api-market
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, etc. They are mainly used in feed additives and nutritionsupplements of food, beverages, health food, etc. The Company actively implements the serialized and differentiated development ofnutrition, and continuously improves the competitiveness of its products by optimizing the processing line and tackling key issues. Inaddition, through internal integration and external cooperation, it embraces the ideology of open cooperation. It actively deployscutting-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.Relying on the two major technology platforms of chemical synthesis and biological fermentation, the Company continuously enrichesthe varieties of fragrance products to meet the changing market demands.New polymer materials: The Company focuses on the development of high molecular polymers and key intermediates, andappropriately develops downstream applications of materials according to the principles of integration and serialization. The entireindustry chain of PPS from raw materials to high molecular polymers, then through modifying processing to special fibers has enabledthe Company as the only company in China that can stably produce fiber grade, injection molding grade, extrusion grade and coatinggrade PPS. The main products include PPS and PPA. They are mainly used in electronic and electrical, automotive, environmentalprotection, etc.APIs: The main products are concentrated in the series of vitamins and antibiotics. The main products include moxifloxacinhydrochloride, vitamin A, vitamin D3, caronic anhydride, azabicyclic, etc., which are mainly used as active pharmaceutical ingredientsfor processing and producing pharmaceutical preparations.
2. Main business models
(1) Procurement model
The Company has always been adhering to the procurement principle of “fairness, transparency and optimal cost”, and adopts acombination of long-term strategic cooperation and open competitive procurement, and makes best use of market trend analysis, toensure the stable supply of the Company’s strategic materials. The Company pays attention to source procurement, and continuouslypromotes the removal of intermediate links in the supply chain to reduce procurement costs; the Company implements transparentprocurement, and launches information systems such as procurement platform, supplier and bidding management system, etc. to makethe procurement process more transparent, standardized and efficient, which promotes the healthy development of the supply chainand reduces costs and increases efficiency for the Company’s operations.
(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 measures
such 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 refined and the construction of new projects, the R&D of newproducts were carried out in an orderly manner. In the nutrition sector, the Company’s second phase of methionine 250,000 tons/yearproject, of which 100,000-ton equipment was operating smoothly, with comprehensive competition continuously improved. And ofwhich 150,000-ton equipment was constructed according to schedule and the construction is expected to be completed in June 2023.The company deployed the liquid methionine project, signed the "Shareholder Agreement between China Petroleum & ChemicalCorporation and Zhejiang NHU Co., Ltd.", and jointly built a 180,000-ton/year liquid methionine (purified) production plant. 5,000tons / year vitamin B6 and 3,000 tons / year B12 started production and sales, 30,000 tons/year NH-acid project was constructed underschedule. In the Flavor and fragrance sector, the project with an annual output of 5,000 tons of menthol was constructed according tothe schedule, and the project progress was controllable. In the new polymer materials sector, the commissioning of the phase III PPSproject with an annual output of 7,000 tons was progressing smoothly; The adiponitrile project was in the pilot test stage, and theproject approval process was advancing in an orderly manner. In the API sector, the 500 tons/year azabicyclo project was commissionedand the products was sold. Now the process route has been opened and the process is in the process of continuous improvement. In thefuture, the API product structure will be adjusted, transformed and upgraded, the specific project is in the process of approval.During the reporting period, with the uncertainty of the macro environment in both domestic and foreign markets, as well as marketchanges of main vitamin products, We actively takes countermeasures, strives to overcome various unfavorable factors, gives full playto the advantages of sector linkage, and maintains a stable development trend of production and operation. During the reporting period,new projects were gradually put into production, R&D investment and technology upgrades were continuously strengthened, and theglobal network layout was further improved. Flavors and Fragrances, New Materials, and the methionine business developed steadilythroughout the year, both volume and price rose, maintaining a relatively high growth rate and making a greater contribution to thecompany’s performance. At the same time, affected by the macro market environment, the price of some raw materials rose, leads toan increase in product costs.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-quality
and 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, and promoted the improvement of management capabilities.
2. R&D
Adhering to the R&D philosophy of “demand-orientated, internal integration and external cooperation”, the Company invested greatlyin R&D activities. The R&D investments accounted for more than 5% of the operating revenue for many years in a row. It has builtthe innovative R&D system spanning from basic research, engineering development, process optimization to product applicationdevelopment. With its focus on the development of common, critical and forward-looking technologies in the chemicals industry, theCompany has developed and mastered a number of key technologies that have a strategic impact on economic development and haspromoted the transformation and upgrading of the industry. The Company cooperates closely with famous research institutes anduniversities at home and abroad, such as Zhejiang University, Chinese Academy of Sciences, Jiangnan University, China AgriculturalUniversity, Zhejiang University of Technology, CysBio biotechnology company of Denmark, and organizes and utilizes global basicscientific research resources to jointly develop forward-looking studies and application field researches on chemicals. As the core ofthe Company’s technology innovation, the Company’s research institute has biomedical laboratories, supercritical reaction laboratories,engineering equipment research centers and other laboratories, equipped with 600M NMR with cryoprobes and other world-leadingscientific research instruments and equipment. Its achievements of domestic leading technologies such as supercritical reaction, highvacuum distillation, and continuous reaction have made it a nationally recognized enterprise technology center, national post-doctoralscientific research workstation, and national model academician and expert workstation. During the reporting period, the company'skey research and development topics were steadily promoted according to the planned nodes, and the innovation achievements wererecognized by the society. The company's patent "Pdln alloy catalyst and its preparation method and application" won the 23rd ChinaPatent Excellence Award. The project of "Technology Development and Industrialization of High Performance Polyphenylene SulfideManufacturing Package" jointly developed by the company and Zhejiang University won the First Prize of Zhejiang ProvinceTechnology Invention, and the project of "Key Technology Innovation and Industrialization of Stable Solid Loading Fat SolubleNutrients on Starch-based Carrier" jointly developed with Ningbo Engineering Institute and Zhejiang University won the Second Prizeof Zhejiang Province Science and Technology Progress. The project of "key technological innovation and industrialization of starch-based carrier stabilized solid-loaded fat-soluble nutrients" jointly developed with Ningbo Engineering College and Zhejiang Universitywon the second prize of Zhejiang Province Science and Technology Progress.
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, and
cooperates 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 been adhering to the management concept of “standardization and efficiency” and the employment conceptof “valuing both integrity and talent, and matching people with right positions”, and has created a pioneering, innovative, pragmaticand efficient talent team and a long-term, stable and excellent management team with a high sense of responsibility, which promotesthe Company’s sustained, healthy and rapid development. The Company continues to strengthen the construction of the talent supplychain. It continuously improves the talent training system, strengthens the training of “management talents, skilled talents, internationaltalents, core technical talents, and leadership talents”, systematically cultivates and reserves university graduates, introduces variousprofessionals, and continues to promote the training and reserve of senior talents. It also promotes the rotation training in zigzag andcross-sequence pattern, in order to promote the integration of management and profession, and to build a team with a balanced talentstructure. During the reporting period, the company was awarded the Shaoxing City "Award for Talent and Love of Talent".
6. Brand
The Company follows the “integrity first” guideline, and has always regarded serving customers and creating industry value withcustomers as the goal of the Company. Through technological innovation, the Company continuously provides customers with safeand high-quality products, as well as efficient and satisfactory services. After years of development and accumulation, the companyhas won many honors in the global fine chemical industry, such as one of the top ten feed additive brands in China and one of the largevitamin feed additive enterprises in China, and has been ranked among the top 500 petroleum and chemical enterprises (comprehensivecategory) and the top 100 enterprises in China's basic chemical raw material manufacturing industry. In addition, the company has wonmany awards such as "Top 30 Best Internal Control in Zhejiang Province", "Best Investor Relations Award" and "Best Board ofDirectors Award" of listed companies in mainstream media, which are widely favored by the market and investors.
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 2022 | Year 2021 | YoY growth rate | ||
| Amount | % to total | Amount | % to total | ||
| Total | 15,933,984,403.41 | 100% | 14,917,101,500.91 | 100% | 6.82% |
| By industry | |||||
| Pharmaceutical chemicals | 14,672,567,397.29 | 92.08% | 13,905,334,050.45 | 93.22% | 5.52% |
| Others | 1,261,417,006.12 | 7.92% | 1,011,767,450.46 | 6.78% | 24.67% |
| By product | |||||
| Nutrition | 10,951,828,026.72 | 68.73% | 11,168,279,277.21 | 74.87% | -1.94% |
| Flavor and fragrance | 2,967,080,657.65 | 18.62% | 2,247,045,847.92 | 15.06% | 32.04% |
| New polymer materials | 1,166,099,937.05 | 7.32% | 873,994,673.98 | 5.86% | 33.42% |
| Others | 848,975,781.99 | 5.33% | 627,781,701.80 | 4.21% | 35.23% |
| By region | |||||
| Domestic sales | 8,262,678,396.21 | 51.86% | 7,242,924,832.88 | 48.55% | 14.08% |
| Overseas sales | 7,671,306,007.20 | 48.14% | 7,674,176,668.03 | 51.45% | -0.04% |
| By sales model | |||||
| Direct sales | 11,874,529,226.77 | 74.52% | 11,596,983,310.23 | 77.74% | 2.39% |
| Agent sales | 4,059,455,176.64 | 25.48% | 3,320,118,190.68 | 22.26% | 22.27% |
(2) Industries, products and regions that account for more than 10% of the total operating revenue oroperating profit
√ 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 | 14,672,567,397.29 | 9,047,305,017.94 | 38.34% | 5.52% | 18.86% | Decreased by 6.92 percentage points | |
| By product | |||||||
| Nutrition | 10,951,828,026.72 | 6,944,683,082.59 | 36.59% | -1.94% | 17.46% | Decreased by 10.47 percentage points | |
| Flavor and fragrance | 2,967,080,657.65 | 1,514,064,279.99 | 48.97% | 32.04% | 15.99% | Increased by 7.06 percentage points | |
| By region | |||||||
| Domestic sales | 8,262,678,396.21 | 5,500,701,397.66 | 33.43% | 14.08% | 25.26% | Decreased by 5.94 percentage points | |
| Overseas sales | 7,671,306,007.20 | 4,547,599,469.28 | 40.72% | -0.04% | 16.37% | Decreased by 8.36 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 2022 | Year 2021 | YoY growth rate |
| Pharmaceutical chemicals | Sales | Tons | 655,683.43 | 560,201.79 | 17.04% |
| Production | Tons | 669,038.97 | 581,022.52 | 15.15% | |
| Stock | Tons | 68,497.02 | 55,141.48 | 24.22% | |
| Others | Sales | Tons | 24,551.07 | 20,323.14 | 20.80% |
| Production | Tons | 25,496.03 | 18,857.92 | 35.20% | |
| Stock | Tons | 3,793.29 | 2,848.33 | 33.18% |
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 to the growthof market demand.
(4) The performance of major sales contracts and major purchase contracts signed by the Company duringthe reporting period
□ Applicable √ Not Applicable
(5) Composition of operating cost
Unit: RMB Yuan
| By industry | Items | Year 2022 | Year 2021 | YoY growth rate | ||
| Amount | % to total | Amount | % to total | |||
| Chemical industry | Cost of main operations | 9,001,010,480.60 | 89.58% | 7,523,727,426.47 | 90.65% | 19.63% |
| Others | Cost of main operations | 1,000,074,989.18 | 9.95% | 686,701,505.46 | 8.27% | 45.63% |
Unit: RMB Yuan
| By product | Items | Year 2022 | Year 2021 | YoY growth rate | ||
| Amount | % to total | Amount | % to total | |||
| Nutrition | Cost of main operations | 6,913,932,973.18 | 68.81% | 5,885,885,789.08 | 70.92% | 17.47% |
| Flavor and fragrance | Cost of main operations | 1,498,519,852.06 | 14.91% | 1,302,520,499.35 | 15.69% | 15.05% |
| New materials | Cost of main operations | 901,961,435.46 | 8.98% | 592,371,747.63 | 7.14% | 52.26% |
| Others | Cost of main operations | 686,671,209.08 | 6.83% | 429,650,895.87 | 5.18% | 59.82% |
(6) Whether the consolidation scope has changed during the reporting period
√ Yes □ No
| Entities | Equity acquisition method |
| NHU/CHR.OLESEN LATIN AMERICA A/S | Acquisitions |
Wuniu (Shandong) Investment Co., Ltd
| Wuniu (Shandong) Investment Co., Ltd | Investment and establishment |
(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 | 1,785,960,267.70 |
| Proportion to the total balance of annual sales amount (%) | 11.22% |
| 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 | 762,597,273.32 | 4.79% |
| 2 | Client B | 310,066,601.40 | 1.95% |
| 3 | Client C | 272,489,141.93 | 1.71% |
| 4 | Client D | 239,161,882.66 | 1.50% |
| 5 | Client E | 201,645,368.39 | 1.27% |
| Total | -- | 1,785,960,267.70 | 11.22% |
Remarks on other information of major customers
□ Applicable √ Not Applicable
Major suppliers
| Total purchase amount (yuan) of top 5 suppliers | 1,384,823,955.33 |
| Proportion to the total balance of annual purchase amount (%) | 9.81% |
| Proportion of related party transaction to the total balance of annual purchase amount (%) | 0.00% |
Top 5 suppliers
| No. | Suppliers | Purchase amount (yuan) | Proportion to the total balance of purchase amount (%) |
| 1 | Supplier A | 327,108,116.00 | 2.32% |
| 2 | Supplier B | 294,207,023.92 | 2.08% |
| 3 | Supplier C | 284,667,190.27 | 2.02% |
| 4 | Supplier D | 258,541,625.14 | 1.83% |
| 5 | Supplier E | 220,300,000.00 | 1.56% |
| Total | -- | 1,384,823,955.33 | 9.81% |
Remarks on other information of major suppliers
□ Applicable √ Not Applicable
3. Expenses
Unit: RMB Yuan
| Items | Year 2022 | Year 2021 | YoY growth rate | Remarks on significant changes |
| Selling expenses | 122,257,619.47 | 107,037,085.96 | 14.22% | This is mainly due to the increase in the personnel remuneration and sales commission during this reporting period. |
| Administrative expenses | 504,674,730.69 | 423,584,417.67 | 19.14% | This is mainly due to the increase in personnel remuneration, deprecation and amortization in this reporting period. |
| Financial expenses | 44,401,778.13 | 269,968,353.24 | -83.55% | This was mainly due to exchange gains arising from exchange rate fluctuations during the reporting period. |
| R&D expenses | 858,945,406.13 | 782,661,708.54 | 9.75% | This is mainly due to the increase in remuneration of the R&D department, deprecation and amortization in this reporting period. |
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 |
| Drug quality standard research and analytical testing technology services | Establishing relevant standards and testing methods for synthetic intermediates; carrying out research on the preparation, separation and purification of trace impurities and impurity structure determination structure determination, etc. | Obtained CNAS national laboratory accreditation, and passed the regular supervisory review and extended re-assessment, and can carry out analytical technology research support inside and outside the company | Provide analytical technology services for companies, establish analytical technology development, and assist companies in 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 |
| Research on safety risk of fine chemical reaction | Establish safety assessment laboratory which is equipped with calorimetry equipment (DSC, ARC, RC1e, etc.) and analysts, carry out kinetic and thermodynamic analysis on related materials and chemical reaction process, and when necessary, carry out amplification and debugging procedures on corresponding processes | Safety and environmental protection laboratory is established, which enables the issue of process safety evaluation report that meets the requirements of safety supervision department. | To improve the safety assurance technology of chemical production and storage process. To carry out process optimization for the relatively-high risks of the process, so as to essentially reduce the risk of the reaction process. | It is expected to improve the essential safety level of enterprises and effectively prevent accidents. |
| Research on highly selective localized substitution of benzene rings in the synthesis of XL products | Synthesis and optimization of flavor and fragrance industry PCY, MV, PH and other large scale, in the pharmaceutical and cosmetic industry has an important application of the fragrance species production process | in the process of making a small trial and scaling up the design of the production process of the route extension product. | HY and other raw materials, through the addition reaction, ammonolysis reaction and acidification reaction and post-treatment and other unit operations to obtain the corresponding target products, the overall route green, safe and environmentally friendly, high degree of automation | The chemical synthesis routes of PCY, MV and PH all involve the positioning substitution of benzene rings, and the breakthrough of highly selective positioning substitution technology can effectively improve the corresponding product quality and reduce production costs. |
| Research on development and application of crystallization technology | To systematically research on the influencing factors of each product in the crystallization process, | The Company is able to conduct analysis and research on crystallization thermodynamics, | To systematically research on the crystallization process of existing and developing products, and support to solve practical production | It is expected to achieve product quality improvement through the innovation and development of crystallization process, so as to meet the |
| Main R&D projects | Purposes | Progress | Targets to be fulfilled | Expected effect on the Company’s future development |
| find out the optimal crystallization process parameter, realize the controllability of crystal products in aspects including particle size distribution, appearance, crystal shape, and solve actual production problems through production debugging in the workshop | kinetics and polycrystal type, and has development ability of cooling and other three crystallization processes as well as the development ability of continuous crystallization process. | problems. | needs of different customers and Improve the market competitiveness of products. | |
| 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 | 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 | Improve the workshop automation, continuous design and operation process to accumulate experience and lay the foundation for the company to fully realize continuous and automated production in the future |
| Development of PF product technology | Develop new products in PF category and obtain official license and customer approval | IBU acid has completed pilot testing | Process research and quality research on several PF products, forming independent R&D technology and quality standards | Enhance the company's technical level in the development capability and declaration of certification of PF products, especially API PF products |
| Development of Pharmaceutical grade product technology | Enhance the reliability of process routes, improve the quality of drugs, reduce production costs and reduce process route contamination by developing and optimizing a variety of synthesis processes for pharmaceutical grade products | Vitamin A, D3 and E have completed pharmacological studies; Vitamin D3 and VE have obtained CDE review approval; Coenzyme Q10 has declared domestic API registration; MS has completed CEP API registration application | Conducting thorough pharmacological studies on products with existing synthetic processes, such as vitamin A, to find the best pharmaceutical production process and obtain official approval and customer approval | Enhance our industry position in the API industry, especially our competitiveness in the high-specification vitamin market |
| 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 | 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 development and application of pharmaceutical products, so as to lay a solid product foundation for consolidation of the European feed products market. |
| Adiponitrile technology and its | Chemical synthesis and industrialization of | Pilot and further scale-up design | Research on technology development of adiponitrile | Break through the technical barriers of adiponitrile, break |
| Main R&D projects | Purposes | Progress | Targets to be fulfilled | Expected effect on the Company’s future development |
| industrialization | adiponitrile is the main purpose of this project | phase | products and localization of production technology of adiponitrile products | the monopoly of foreign companies, and promote the development of domestic related industries |
| research on formulated vitamin A and AD3 Process innovation | Research and development of antioxidant compound formulations to improve the stability of vitamin formulations; development of high-pressure homogeneous emulsification technology to improve the quality of vitamin products; development of composite wall materials for encapsulation of fat-soluble vitamins; stability evaluation technology | Large-scale production applications have been completed; product application effect evaluation tests in feed processing and premixes are being carried out | Development of compounded antioxidant formulations, use of high pressure homogenization emulsion technology, development of composite materials for embedding | Since feed additives and premixes containing ethoxyquinoline and downstream manufacturers are restricted by the EU, opening a production process for non-ethoxyquinoline as antioxidant feed additives is the best choice to preserve the EU market |
| 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 | Small pilot optimization and pilot commissioning in progress | 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 |
| Research on new dosage formulations and process technology of nutrient products | Research and development of new dosage forms of Coenzyme Q10 and other products such as granules, pressed tablets, drops, emulsions, gels, etc. | The new process technology of pigment emulsification and spray drying equipment has been applied in large scale production Completion of small pilot tests on enantiomeric pantolactone, separation of inter-o-para-cymene hydrocarbons, and chromatographic purification of food-grade vitamin D3; Completed the production and commissioning of pharmaceutical grade coenzyme Q10 product purification and vitamin C mother liquor recovery project | 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 Simulation of moving bed equipment and target product process research, and according to the target product and impurities, select the appropriate simulation of moving bed, process conditions parameters, etc. | Develop new products of nutrient preparations to improve the product range of our nutritional products Improve the separation technology and operation of the chromatographic separation process for the company's products |
| research on Simulation of moving bed technology and application | Meet the company's product production process in the chromatography level separation technology improvement and | Completion of small pilot tests on enantiomers of pantolactone, separation of inter-octa-paraffin | Simulate moving bed equipment and target product process research, and according to the target product and impurities, select the appropriate simulated | Improve the separation technology and operation of the chromatographic grade separation process required for our products |
| Main R&D projects | Purposes | Progress | Targets to be fulfilled | Expected effect on the Company’s future development |
| research and development needs | hydrocarbons, and chromatographic purification of food-grade vitamin D3; Completion of pharmaceutical grade coenzyme Q10 product purification and vitamin C mother liquor recovery project production commissioning | moving bed, process conditions parameters, etc. | ||
| 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 | Catalyst preparation technology optimization in | Optimization of the carbonylation synthesis unit technology in the company's product process line | Strengthen the company's carbonylation-related product synthesis process technology to improve product competitiveness |
| HA Project | Research on the synthesis of new IPDA products under high-pressure conditions, develop new polymers and new isocyanates based on the company's existing raw materials and intermediates, and enrich the company's industrial chain | Project construction phase | Achieve continuous production and sales of IPDA, polymorphs and isocyanates on a large scale of more than 10,000 tons | Break the monopoly of foreign technology, enter and compete for the market, promote industrial upgrading, enter new fields, and improve the international influence and core competitiveness of the company's brand |
Details of R&D personnel
| Items | Year 2022 | Year 2021 | Percentage of change |
| Number of R&D personnel (persons) | 2,629 | 2,368 | 11.02% |
| % to total employees | 22.81% | 21.92% | 0.89% |
| Educational background structure | —— | —— | —— |
| Technical secondary school, high school and below | 139 | 149 | -6.71% |
| Junior college | 370 | 367 | 0.82% |
| Bachelor | 1,345 | 1,189 | 13.12% |
| Master | 700 | 605 | 15.70% |
| Doctor | 75 | 58 | 29.31% |
| Total | 2,629 | 2,368 | 11.02% |
| Age structure | —— | —— | —— |
| Below 30 years old | 1,293 | 1,169 | 10.61% |
| 30-40 years old | 947 | 894 | 5.93% |
| Over 40 years old | 389 | 305 | 27.54% |
| Total | 2,629 | 2,368 | 11.02% |
Details of R&D input
| Items | Year 2022 | Year 2021 | Percentage of change |
| R&D input amount (yuan) | 858,945,406.13 | 782,661,708.54 | 9.75% |
| % to total operating revenue | 5.39% | 5.25% | Increased by 0.14 percentage point |
| 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 2022 | Year 2021 | YoY growth rate |
| Subtotal of cash inflows from operating activities | 16,712,001,413.64 | 15,585,137,046.52 | 7.23% |
| Subtotal of cash outflows from operating activities | 12,350,520,330.03 | 9,747,258,994.95 | 26.71% |
| Net cash flows from operating activities | 4,361,481,083.61 | 5,837,878,051.57 | -25.29% |
| Subtotal of cash inflows from investing activities | 1,919,918,190.77 | 1,969,695,872.13 | -2.53% |
| Subtotal of cash outflows from investing activities | 5,759,332,104.36 | 5,361,464,680.21 | 7.42% |
| Net cash flows from investing activities | -3,839,413,913.59 | -3,391,768,808.08 | -13.20% |
| Subtotal of cash inflows from financing activities | 6,855,158,371.64 | 7,383,209,509.05 | -7.15% |
| Subtotal of cash outflows from financing activities | 8,125,152,950.95 | 8,727,832,760.73 | -6.91% |
| Net cash flows from financing activities | -1,269,994,579.31 | -1,344,623,251.68 | 5.55% |
| Net increase of cash and cash equivalents | -562,695,606.37 | 1,045,230,762.14 | -153.83% |
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 -25.29%, which was mainly due to the increase in raw materialpurchases during this reporting period.The YoY growth rate of net cash flows from investing activities was -13.20%, which was mainly due to due to the increase inconstruction in progress during this reporting period.The YoY growth rate of cash and cash equivalents was -153.83%, which was mainly due to the increase in raw material purchasesand the increase in projects under construction during the reporting period.Remarks on reason for significant difference between net cash flows from operating activities during the reporting period and netprofit of the current period
□ Applicable √ Not Applicable
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 | 128,695,043.73 | 3.04% | It was mainly due to gains on financial products and profit generated by the associates during the reporting period. | No |
| Gains on changes in fair value ("-" means loss) | -66,321,783.72 | -1.56% | It was mainly due to changes in fair value of forward foreign exchange settlement during the reporting period. | No |
| Assets impairment loss ("-" means loss) | -157,808,680.97 | -3.72% | It was mainly due to losses arising from provision for impairment made on each asset in accordance with assets impairment principles. | No |
| Non-operating revenue | 4,985,224.34 | 0.12% | It was mainly due to indemnity income. | No |
| Non-operating expenditures | 79,532,730.91 | 1.88% | It was mainly due to gains on retirement of assets and donation expenditures during the reporting period. | No |
| Other income | 176,863,614.19 | 4.17% | It was mainly due to government grants received 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 | 5,343,851,967.72 | 13.96% | 5,952,909,626.94 | 17.14% | -3.18% | |
| Accounts receivable | 2,476,269,041.23 | 6.47% | 2,755,168,573.14 | 7.93% | -1.46% | |
| Inventories | 4,144,557,702.39 | 10.83% | 3,193,657,367.16 | 9.20% | 1.63% | |
| Long-term equity investments | 432,503,568.48 | 1.13% | 351,327,625.75 | 1.01% | 0.12% | |
| Fixed assets | 16,523,867,858.53 | 43.18% | 14,350,779,852.73 | 41.33% | 1.85% | |
| Construction in progress | 5,089,233,908.22 | 13.30% | 2,984,835,072.82 | 8.60% | 4.70% | |
| Right-of-use assets | 2,830,136.37 | 0.01% | 3,123,637.11 | 0.01% | 0.00% | |
| Short-term borrowings | 1,846,373,441.01 | 4.82% | 1,403,332,827.92 | 4.04% | 0.78% | |
| Contract liabilities | 60,660,929.75 | 0.16% | 61,135,258.36 | 0.18% | -0.02% | |
| Long-term borrowings | 5,273,637,508.87 | 13.78% | 5,148,811,786.49 | 14.83% | -1.05% | |
| Lease liabilities | 2,822,404.07 | 0.01% | 2,936,868.15 | 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) | 1,250,000,000.00 | 720,000,000.00 | 1,250,000,000.00 | 720,000,000.00 | ||||
| 2. Derivative financial assets | 736,359.24 | -421,782.81 | 314,576.43 | |||||
| Subtotal of financial assets | 1,250,736,359.24 | -421,782.81 | 720,000,000.00 | 1,250,000,000.00 | 720,314,576.43 | |||
| Total | 1,250,736,359.24 | -421,782.81 | 720,000,000.00 | 1,250,000,000.00 | 720,314,576.43 | |||
Remarks on other changesWhether 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
(1) Closing of cash and bank balances included deposits of 192,010,035.86 yuan pledged and not on demand for payments, which waswith use restrictions.
(2) Closing balance of receivables financing included 136,554,892.05 yuan pledged for bank acceptance and not on demand forpayments, which was with use restrictions.
(3) Closing balance of notes receivable included 233,192,351.27 yuan pledged for bank acceptance and not on demand for payment,which was with use restrictions.
(4) Closing carrying amount of fixed assets included 79,692,425.35 yuan mortgaged to the bank for borrowings, which was with userestrictions.
(5) Closing carrying amount of intangible assets included 9,734,671.13 yuan mortgaged to the bank for borrowings, which was withuse restrictions.
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 |
| 5,034,909,624.27 | 2,489,162,047.36 | 102.27% |
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 | 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 |
| Structured forward contracts | 60,425.70 | -1,443.84 | 0 | 34,155.20 | 47,555.20 | 0 | 0.00% |
| Forward contracts | 547,929.55 | -5,188.34 | 0 | 525,502.45 | 505,945.71 | 35,506.29 | 1.51% |
| Total | 608,355.25 | -6,632.18 | 0 | 559,657.65 | 553,500.91 | 35,506.29 | 1.51% |
| 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 | The Company accounts for the hedging business conducted in accordance with the relevant provisions of the Ministry of Finance's AS 22 - Recognition and Measurement of Financial Instruments, AS 24 - Hedge Accounting, 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. | ||||||
| compared to 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 -86.56 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 66.32 million Yuan. |
| Litigation involved (if applicable) | No |
| Date of disclosure of board announcement for approval of derivative investments (if any) | April 15, 2022 |
| 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 | 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 | 169,075.16 | 377,819.79 | 0 | 0 | 0.00% | 108,887.76 | Deposited in special accounts for raised funds, used to purchase bank financial products, deposited as structured deposits | 0 |
| Total | -- | 486,707.55 | 169,075.16 | 377,819.79 | 0 | 0 | 0.00% | 108,887.76 | -- | 0 |
| Remarks on overall use of raised funds | ||||||||||
| The Company’s raised funds used in previous years amounted to2,087.44 million yuan, the net amount of interest on cash in bank received in previous years less handling charges amounted to 51.74 million yuan, gains on financial products and structured deposits received in previous years amounted to 574.65 million yuan, and the net expenditure on financial products and structured deposits purchased in previous years amounted to 2,450.00 million yuan; the raised funds actually used in 2022 amounted to 1,690.75million yuan, the net amount of interest on cash in bank received in 2022 less handling charges amounted to 36.36 million yuan, gains on financial products and structured deposits received in 2022 amounted to 56.16 million yuan, and the net recovery from financial products and structured deposits purchased in 2022 amounted to 1,730.00 million yuan; the accumulated amount of the raised funds used amounted to 3,778.19 million yuan, the accumulated net amount of interest on cash in bank received less handling charges amounted to 88.11 million yuan, the accumulated amount of gains on financial products and structured deposits received amounted to 630.82 million yuan, and net expenditure on financial products and structured deposits purchased amounted to 720.00million yuan. As of December 31, 2022, the balance of the special account for raised funds amounted to 1,087.81 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 | 169,075.16 | 377,819.79 | 77.63% | Partially reached the designed usable | 78,587.65 | Yes | No |
| conditions | ||||||||||
| Subtotal | -- | 486,707.55 | 486,707.55 | 169,075.16 | 377,819.79 | -- | -- | 78,587.65 | -- | -- |
| Over-raised funds whereabouts | ||||||||||
| No | ||||||||||
| Total | -- | 486,707.55 | 486,707.55 | 169,075.16 | 377,819.79 | -- | -- | 78,587.65 | -- | -- |
| 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 100,000-ton production line of the project has been completed and is in normal operation, and the 150,000-ton production line is under construction. | |||||||||
| 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 Vitamins Co., Ltd. | Subsidiary | Production and sales of feed additives | 500 million yuan | 3,463,387,502.87 | 2,874,391,136.48 | 2,075,764,687.69 | 1,014,112,566.19 | 876,228,159.55 |
| Shangyu NHU Bio-Chem Co., Ltd. | Subsidiary | Production and sales of feed additives | 50 million yuan | 4,349,921,984.60 | 3,214,077,883.32 | 1,400,216,069.29 | 465,789,099.55 | 413,314,817.27 |
| Shandong NHU Pharmaceutical Co., Ltd. | Subsidiary | Production and sales of fragrances | 590million yuan | 3,428,957,803.17 | 2,644,922,760.01 | 3,213,679,238.56 | 1,334,076,813.38 | 1,093,263,139.73 |
| Shandong NHU Amino-acids Co., Ltd. | Subsidiary | Production and sales of methionine | 1,030 million yuan | 7,950,528,475.38 | 6,937,727,210.12 | 3,914,397,309.64 | 1,307,637,045.79 | 1,187,212,432.30 |
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 |
| NHU/Chr.Olesen Latin America A/S[Note] | Acquisition | No significant effect at the beginning of the period. |
| Wuniu (Shandong) Investment Co., Ltd | Investment | No significant effect at the beginning of the period. |
[Note] NHU/CHR.OLESEN LATIN AMERICA A/S holds two subsidiaries, respectively NHU/CHR.OLESEN BRASIL LTDA.，holding 100%, and CHR.OLESEN MEXICO SAPI DE CV, holding 87%.
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 strategicplatforms of “chemical+” and “biology+”, improve the application research and application service capabilities, and focus on mainbusinesses including nutrition, flavor and fragrance, and new polymer materials and APIs, insist on innovation-driven, develop variousfunctional chemicals, strengthen the construction of technology platforms and industrial platforms, and strengthen the introduction andcooperation of advanced equipment. Relying on four modern production bases respectively in Zhejiang Xinchang, Zhejiang Shangyu,Shandong Weifang and Heilongjiang Suihua, the Company will work to realize the extension of the industrial chain and promote thesustainable and high-quality development.
(1) It will continue to expand and strengthen the nutrition business. On the basis of integration and market synergy, it will maintain thecompetitiveness of existing products, meanwhile rapidly develop strategic products, continuously enrich product categories, andimprove the comprehensive competitiveness of products.
(2) It will develop wider and deeper in flavor and fragrance business, which currently is mainly linalool, citral, and cis-3-hexenol series,and will be gradually developed into a more diversified products structure. New products will be more integrated, serialized andsynergistic, so as to realize the functionalization and differentiation of products. Through internal integration and external cooperation,the Company will continue to optimize its products, building the core competitiveness of products.
(3) It will continue its development in new material business. The Company insists on cost-leading, integrated and serializeddevelopment, and focuses on the development of large polymer products and key intermediates. It will moderately develop downstreamapplication to enhance market competitiveness and industry position.
(4) It will focus on making more special and refined APIs. Taking its existing advantages in industrial supporting system, it will integratecompany resources, plan and build a professional base, increase the research and application of new products, new technologies andnew equipment in the field of APIs, actively promoting the core competitiveness of existing products and the expansion of emergingmarkets.
2. Business plan of the Company
In 2023, the company clarified "competing to expand the market, innovating to reduce costs, professionally strengthening internalskills, and stabilizing and preventing risks" as the guiding ideology of operation, scientifically researching and judging developmentopportunities and challenges, adhering to the principle of stability, seeking progress while maintaining stability. We will ensure stableproduction , expand the market, practice internal skills, strengthen innovation, promote projects, etc., to achieve steady growth inefficiency and high-quality development of the enterprise. Focusing on the strategic goals of the 14th Five-Year Plan., We will graspthe two main lines of improving quality, increase efficiency, stabilize growth, and stabilize operation to prevent risks. Adhere to thethree principles of safe production as the bottom line, innovation as the primary driving force, and talents as the primary resource.The Company will unite every force to ensure its steady development, with key focus on the following work.
(1) With the sales as the leader, we will efficiently link production, supply and sales to expand the market. First, we must innovatemarketing management to build market competitiveness. To promote value marketing, improve service satisfaction, win customer trust,form a multi-party collaborative marketing model, consolidate key customer cooperation, expand market share, optimize marketingorganizational structure, establish a professional marketing team, and improve professional service capabilities and differencesmarketing. Second, we will optimize operation and management to ensure stable production, fully tapping the potential market,enhancing product competitiveness. It is necessary to strengthen the construction of supplier management and procurementinformationization, and do a good job in the analysis and prediction of the procurement market in a timely manner
(2) With the strategy as the core, we will promote the project construction at a high level. First, we must attach importance to projectquality, schedule, safety and cost control. We will do a good job in the connection between domestic and foreign universities,engineering companies and equipment manufacturers, complete the development of new project process packages, ensure engineeringdesign nodes, optimize project costs, control project construction costs, strengthen contractor management, improve the bidding process,and solve project quality problems. Second, we must focus on strategic goals and promote the construction of key projects. Key projectsmust ensure the legality of the approval process, and ensure that the trial run and production are carried out on time.
(3) With innovation as the driving force, we will accelerate the development momentum. We plan to focus on core technologies andachieve key innovation breakthroughs. We plan to introduce innovative methods, optimize product structure, improve technical level,strengthen cooperation and exchanges, and protect intellectual property rights to improve R&D efficiency and quality. We plan topromote open cooperation and integrate global high-quality resources. We will realize global layout and resource integration bylaunching joint venture projects, expanding scientific research cooperation and deepening strategic cooperation.
(4) We will take digital transformation as an opportunity to improve the level of intelligent manufacturing, accelerate the constructionof smart factories and promote the high-quality development of smart manufacturing. With the goal of intelligent operation, we willimprove the integrated business process of production, supply and marketing, and promote the implementation of the intelligent
manufacturing system. We will accelerate the construction of the middle platform and comprehensively improve the company'smanagement and control capabilities. With the goal of intelligent management, we will accelerate the construction of the three majorplatforms of data central platform, technology central platform and business central platform.
(5) Taking system construction as the starting point, we will lay a solid foundation for high-quality development management. We planto deepen the construction of HSE management system and realize normal operation.We will settle the implementation of the systematicframework of the quality management system. We will establish an energy management system and form a regular energy auditmechanism. Also, we will improve and promote the equipment integrity system.
(6) Based on talent construction, we will make every effort to build a talent highland, sorting and optimizing the organizational structure,continuously expanding recruitment channels, optimizing talent selection standards, accelerating the construction of grassroots andprofessional sequence talent training systems, and creating high-performance output highlands. New measures should be taken tointegrate cultural construction into management. It is necessary to refine and improve the connotation of cultural concepts, summarizethe successful experience of NHU, and refine the behavioral requirements of culture for employees. We will further explore andimprove the working mechanism of political commissars, innovate communication methods for employees, and improve employees'sense of belonging and satisfaction.
(7) With compliance operation as the bottom line, we will lay a solid foundation for the steady development of the enterprise. We desideto strengthen the ability of financial guidance and operation, focus on the construction of the three major systems of comprehensivebudget management, asset management and tax management and the financial intelligence platform, strengthen cash flow management.We will strengthen the construction of the compliance management system, strengthen the prevention and control of legal risks,implement safety and environmental protection compliance management, strengthen the protection of business secrets, promotecompetition compliance management, improve the legal dispute resolution process, improve the ability to avoid intellectual propertyrisks, consolidate anti-fraud management, strengthen Internal audit supervision and management.
3. Possible risks
(1) Macroeconomic risks
The global economy is facing numerous uncertainties due to international trade frictions and possible intensification of geopoliticalconflicts. In order to promote the Company's sound development, the Company will strengthen international cooperation, expandmarket development and establish a diversified innovation chain, supply chain and customer base to actively cope with the impact.
(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’s sales revenue and profitability will be affected by trade barriers and exchange rate fluctuations caused by the tradefriction between China and US and the international political and economic instability. In the future, the Company will take targetedmeasures to tackle changes in the international market, cement its position in the international market and explore new economicgrowth points, so as to achieve steady growth in business 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 CPCCentral 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 22, 2022 | Not applicable | Others | Others | Investors who attended the Company’s online annual performance presentation in 2021 | Answer questions from investors | Please refer to the Investor Relations Activities Record Sheet of April 22, 2022, which published at the website http://irm.cninfo.com.cn/ssessgs/S002001 for details. |
| May 10, 2022 | Meeting room of the Company | Field research | Others | 1. Finest Asset Management (Huang Dengfeng & Chen Hong &Zhan Xuan）; 2. Baofang Printing And Dyeing (Qi xin & Yu Shaobo); 3. Tang Binghui; 4. .Zhu Yunzhi | Introduce the operating conditions of the Company and answer questions from investors | Please refer to the Investor Relations Activities Record Sheet of May 10, 2022, which published at the website http://irm.cninfo.com.cn/ssessgs/S002001 for details. |
| May 17, 2022 | Not applicable | Telephone communication | Institution | 1. Essence Fund Management (Liang Bingzhe); 2. Essence Asset Management (Li Zhe); 3. Bosera Asset Management (Cai Bin); 4. Truvalue Asset Management (Wang Xin); 5. Springs Capital (Bu Zhongyu);6. Orient Securities Asset Management (Yang Renmei & Cai Zhipeng); 7. Orient Fund Management (Liu Tengyao); 8. Donghai Securities (Jin Changhao); 9. Soochow Securities (Wu Changbai); 10. Founder Asset Management (Chen Yuanjun); 11. Fullgoal Fund Management ( Shen Heng & Li Miao); 12. Gaoyi Asset Management (Deng Xiaofeng); 13. Everbright Pramerica Fund Management (Su Miao); 14. Everbright Securities Asset Management (Wu Angda); 15. Guangdong Private Investment (Cui Wei); 16. GF Fund Management (Wang Qi); 17. Franklin Templeton Sealand Fund (Zhao Xiaodong & .Xu Cheng & Liu Mu & .Du Fei & Xhang Qionggang ); 18. CPIC Fund Management (Wang Dong); 19. Guoshou Fund (.Liu Zhijun & Li Bowen); 20. China Life Pension (Yu Lei); 21. China Life Insurance Asset Management (Zhao Wen & Long Gongcheng); 22. Guotai Junan Securities (Ye Feng & Qian Xiaojie & Deng Shifeng); 23. China Conch Venture Holdings (Lu Chengwei); 24. UBS SDIC Fund Management (Zhou Sijie); 25. ABC Life Insurance (Zhao Jin); 26. United Advance Capital (Wang Yehua); 27. Visione Asset (Wang Chengqiang); 28. Heju Investment (Mai Turong & Ma Wei & Chen Jian); 29. Evergrande Life (Chen Mo); 30. Hongcheng Capital (Chen Qian); 31 Huaan Securities (Yang Ming & Liu Xiao); 32.Huaan Fund Management (Zhang Rui); 33.China Asset Management ( Zhang Mu & Ai Bangni); 34. Huayin Tianxia Asset Management (Ye Fan); 35. High-Flyer Quant Investment Management (Xu Chenghui); 36. Hsbc Jintrust Fund Management ( Zhen Xiaobing); 37. Amundi BOC Wealth Management; 38. China Universal Asset | Introduce the operating conditions of the Company and answer questions from investors | Please refer to the Investor Relations Activities Record Sheet of May 17, 2022, which published at the website http://irm.cninfo.com.cn/ssessgs/S002001 for details. |
| 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 |
| Management (Zhao Pengcheng & Wang Xi & Bian Zheng); 39. Kingsun Investment (Wu Shixian); 40. BOCOM Financial Asset Investment (Zhang Mingxiao); 41.Jingan Investment Management (Li Zekai); 42.Greenwoods Asset (Jiang Wenchao); 43. Invesco Great Wall Fund Management (Jiang Xueting); 44. Kaidu Investment (Wang Hui); 45. KaiFeng Investment Management (He Xuanju); 46. Morgan Stanley Huaxin Fund Management (Duan Yifan); 47. Mohui Investment (Jiang Xing); 48. Southern Fund Management (Zhen Yong & Luo Shuai & Chen Zhuo); 49. ABC-CA Fund Management (Wang Haofei); 50. Lion fund (Ding Yunbo); 51.Lord Abbett China Asset Management (Fan Fei); 52.Panjing Investment (Zhang Qi); 53.Penghua Fund Management ( Luo Zheng & Du Liang & Deng Zhaoming); 54.Pengyang Fund Management (Xu Kunlun); 55.Ping An Annuity Insurance (Jin Li & Chen Xushan); 56. Shanghai Pudong Development Bank (Dai Chenyang);57. PICC Asset Management (Tian Lei & Cai Chungen); 58. PICC Pension (Yang Tong & Xie Yifei & Wu Qiang & Zeng Shuwei); 59. Ren Bridge Asset Management (Xia Junjie); 60.Rongtong Fund Management (Li Wenhai); 61.Wisdomshire Asset Management (Liu Li); 62.Foresight Fund (Zhu Lin & Zhong Ming & Cui Wenqi); 63.International Fund Management (Li Dehui); 64. SWS MU Fund Management (Yao Hongfu); 65.Rock Bay Investment (Zhen Hui & Zhang Jian); 66. Taiping Fund Management (Xia Wenqi & Ji Jingyuan); 67. Manulife Teda Fund Management (Liu Shaoqing); 68. Taikang Asset Management (Wang Yilin & Liu Shaojun); 69. TF Securities Asset Management (Liu Shude); 70.Tibet East Wealth Fund Management (Zhu Liang); 71. Citic-prudential Life Insurance (Wu Hao & Sun Huicheng); 72. First State Cinda Fund Management (Li Diandian ); 73. AEGON-INDUSTRIAL Fund (Xu Liuming & Xie Zhiyu & Wu Zhaohua & Chen Jinquan & Chen Hong); 74. Xingyin Fund (Shi Liang); 75. Xingyin Fund Management ( Chen Yalong); 76. Yanniu Finance Information (Zhou Jiexin); 77. Galaxy Asset Management ( Fang Wei); 78. E Fund Management (Xie Yunchang & Liu Peixian & Chen Hao & Ge Qiushi); 79. Yinhua Fund Management (Yan Kailiang & Wang Jian & Shi Lei & Hu Xiaohui); 80. Silver Leaf Investments (Cao Qing); 81. Yunion Investment Management (Ying Zhenzhou); 82. Maxwealth Fund Management (Chang Yuan); 83. Yude Capital Management (Cai Jianjun); 84. Golden Trust Sinopac Fund Management (Fan Yan); 85. China Merchants Fund Management ( Fu Bin); 86. Zhengyuan Investment (Hu Chaoyun); 87. CMB Wealth Management (Peng Zhili & Hao Xuemei); 88. ZheShang Fund Management (Zhang Yulong & Shen Guoqiong); 89. Zhonggeng Fund (Luo Zhiyuan & Liu Sheng); 90. Rabbit Fund (Xiao Yongsheng); 91. CITIC-Prudential Life Insurance (Wang Rui & Jiang Feng & Hu Zhe); 92.China Post & Capital Fund Management (Zhen Lin & Jiang Liuwei); 93. Huashang Fund Management (Huang Luhe); 94. Taikang Fund Management (Lin Peng Hui); 95. Binghuai Assets (Mao Wei); 96. Qianhai Brilland Capital (Xiao Hui & Xia Yue & Qian Xiaoyu & Lu Hui); 97. SWS MU Fund Management (Lu Xinzhi); 98. Sunshine Insurance (Fang Yuan & Zhang Xuepeng); | ||||||
| July 14, 2022 | Meeting room of the Company | Field research | Institution | 1. Bocom Schroders (He Shuai & Qiu Hua & Zhang Sanwei & Zhang Mingxiao & Liu Peng); 2. Zheshang Securities (Li Hui & Li Jiajun); 3. Jingan Investment Management (Cao Pengyuan & Li Zekai); 4. China Asset Management (Xu Mengyuan & Zhou Tianlin); 5. Ping An Fund Management (.Liu Binbin); 6. CMB Wealth Management (Peng Zhili); 7. Pengyang Fund Management (Xu Kunlun); | Introduce the operating conditions of the Company and answer questions from investors | Please refer to the Investor Relations Activities Record Sheet of July 14, 2022, which published at the website http://irm.cninfo.com.cn/ssessgs/S002001 for |
| 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 |
| 8. Yude Capital Management (Sun Jiali); 9. Funding Capital Management (Feng Feiyang); | details. | |||||
| July 20, 2022 | Meeting room of the Company | Field research | Institution | 1. Shenwan Hongyuan Securities (Hu Shuang & Dong Jie); 2. Hengyue Fund (Chen Kaixi); 3. Greenwoods Asset (Jiang Wenchao); 4.Hzbank Wealth Management (Liu Aizhu); 5. Jingan Investment Management (Li Zekai); 6. Yongan Guofu Asset Management (Hong Shaochao); 7. Huaneng Guicheng Trust (Tian Jiarui & Li Tingpan); 8.Qingdao Guoxin Development (Yuan Xiaotong & Qu Wei); 9. Foresight Fund (Zhu Lin); 10. Binghuai Asset Management (Mao Wei); 11. CR Asset Management (Wang Xingyi); | Introduce the operating conditions of the Company and answer questions from investors | Please refer to the Investor Relations Activities Record Sheet of July 20, 2022,which published at the website http://irm.cninfo.com.cn/ssessgs/S002001 for details. |
| August 31, 2022 | Meeting room of the Company | Field research | Institution | 1. Huachuang Securities (Yang Hui & Wu Yu); 2. Western Securities (Li Mengyuan & He Minxiu); 3. Chongyang Investment (Hu Min); 4. CICC (Xiao Yaping); 5. E Fund Management (Liu Peixian); 6. Zheshang Securities (Li Hui); 7. Orient Securities (Yuan Shuai); 8. GF Fund Management (Wang Qi); 9. Penghua Fund Management (Su Dong); 10. Huatai Asset Management (Yang Linxi); 11. ABC-CA Fund Management (Wang Haofei); 12. China Asset Management (Li Jiajia & Xu Mengyuan & Zhou Tianlin); 13. Bocom Schroders (Zhang Mingxiao & Chen Junhua & Sun Jiekan & Wang Yiwei); 14. Zheshang Fund (Jing Hui); 15. HuaAn Securities (Wang Qiangfeng); | Introduce the operating conditions of the Company and answer questions from investors | Please refer to the Investor Relations Activities Record Sheet of August 31, 2022, which published at the website http://irm.cninfo.com.cn/ssessgs/S002001 for details. |
| September 8, 2022 | Not applicable | Telephone communication | Institution | 1. AGI Group (Kelvin Wong); 2. Dymon Asset Management (Hefeideng); 3. AIIM AI Squared Mgmt Ltd.(Chad); 4. Golden Pine Capital Managent (Yanbeina); 5. Lazard Asset Managent (Rose Lu); 6. Balyasny Asset Management.(Si Tingting); 7. Anatole Investment Management .(Lyu Xuelong); 8. Torq Capital .(Alex Xu); 9.UBS Securities (Guo Yifan); | Introduce the operating conditions of the Company and answer questions from investors | Please refer to the Investor Relations Activities Record Sheet of September 8, 2022, which published at the website http://irm.cninfo.com.cn/ssessgs/S002001 for details. |
| September 26, 2022 | Meeting room of the Company | Field research | Institution | 1. Kaiyuan Securities (Jin Yiteng & Xu Zhengfeng); 2. Hongchou Investment ( Wang Zhidong); 3. Chen Yan Asset Management (Yang Guan); 4. Tebon Fund Management (Zhang Peidong); 5. TF Securities (Wang Xingjia); 6. China Securities (Tao Aipu); 7. etock capital (Qi Chenzhi); 8. Chang Xin Asset Management (Huang Zhenhau); 9. Zheyun Investment (Ding Xiefeng & Ge Liegang); 10. Yuanxin Investment (Yang Dazhi); | Answer questions from investors | Please refer to the Investor Relations Activities Record Sheet of September 26, 2022, which published at the website http://irm.cninfo.com.cn/ssessgs/S002001 for details. |
| November 11, 2022 | Not applicable | Telephone communication | Institution | 1. Northeast Securities (Chen Junjie); 2. Shangyan Keling Capital (Li Tong); 3. HSBC Qianhai Securities (Huang Qian & Ru Yi); 4. Ruiwen Cci Capital (Xu Weiwei); 5. Chang'an Fund Management (Xiao Yuqi); 6. Hangzhou Zhuocai Investment Management (Wu Dengyan); 7. Tak Fook Investment (Zhu Baili); 8. Northeast Securities (Tang Bowen); 9.Bosera Asset Management (Wang Huanji); 10. Huachuang Securities (Yang Hui & Wu Yu); 11. Johnson Investment (Li Yuqiao); 12. State Teachers Retirement System of Ohio (zhouping); 13. Dajia Capital (Hu Xiao & Jiang Jincheng & Kuai Xuezhang, etc.); | Introduce the operating conditions of the Company and answer questions from investors | Please refer to the Investor Relations Activities Record Sheet of November 11, 2022, which published at the website http://irm.cninfo.com.cn/ssessgs/S002001 for details. |
| December 16, 2022 | Meeting room of the Company | Field research | Institution | 1. CICC (Xiao Yaping & Jia Xiongwei & Wu Di & Fu Ximing & Hou Yilin); 2. Goldman Sachs (Zheng Ruifeng & Lin Yan); | Answer questions from investors | Please refer to the Investor Relations Activities Record Sheet of December 16, 2022, which published at the website http://irm.cninfo.com.cn/ssessgs/S002001 for details. |
Section IV Corporate Governance
I. 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 all
shareholders 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 2021 | Annual general meeting of shareholders | 52.50% | May 10, 2022 | May 11, 2022 | 11 proposals including the Annual Work Report of the Board of Directors of 2021 were deliberated and approved. Please refer to Announcement No. 2022-029 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 | Position | Status | Gender | Age | 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 | Chairman | Incumbent | Male | 61 | 2/26/1999 | 9/15/2023 | 11,602,498 | 2,320,500 | 13,922,998 | Conversion of capital reserve into share capital | ||
| Hu Baishan | Vice Chairman, President | Incumbent | Male | 56 | 2/26/1999 | 9/15/2023 | 12,163,274 | 2,432,655 | 14,595,929 | Conversion of capital reserve into share capital | ||
| Shi Guanqun | Director, Vice President, CFO, Secretary of the Board | Incumbent | Male | 52 | 2/26/1999 | 9/15/2023 | 8,731,532 | 1,746,306 | 10,477,838 | Conversion of capital reserve into share capital | ||
| Wang Xuewen | Director, Vice President | Incumbent | Male | 54 | 2/26/1999 | 9/15/2023 | 7,398,276 | 1,479,655 | 8,877,931 | Conversion of capital reserve into share capital | ||
| Wang Zhengjiang | Director | Incumbent | Male | 54 | 4/12/2008 | 9/15/2023 | 382,500 | 76,500 | 459,000 | Conversion of capital reserve into share capital | ||
| Zhou Guiyang | Director | Incumbent | Male | 48 | 4/20/2011 | 9/15/2023 | 137,702 | 27,540 | 165,242 | Conversion of capital reserve into share capital | ||
| Yu Baijin | Director | Incumbent | Male | 56 | 9/15/2020 | 9/15/2023 | 0 | 0 | 0 | 0 | 0 | |
| Huang Can | Independent Director | Incumbent | Male | 44 | 7/12/2017 | 9/15/2023 | 0 | 0 | 0 | 0 | 0 | |
| Jin Zanfang | Independent Director | Incumbent | Female | 47 | 7/12/2017 | 9/15/2023 | 0 | 0 | 0 | 0 | 0 | |
| Zhu Jianmin | Independent Director | Incumbent | Female | 59 | 7/12/2017 | 9/15/2023 | 0 | 0 | 0 | 0 | 0 | |
| Ji Jianyang | Independent Director | Incumbent | Male | 44 | 9/15/2020 | 9/15/2023 | 0 | 0 | 0 | 0 | 0 | |
| Shi Fangbin | Chairman of the Board of Supervisors | Incumbent | Female | 47 | 9/15/2020 | 9/15/2023 | 0 | 0 | 0 | 0 | 0 | |
| Lyu Guofeng | Supervisor | Incumbent | Male | 51 | 9/15/2020 | 9/15/2023 | 0 | 0 | 0 | 0 | 0 |
| Name | Position | Status | Gender | Age | 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 |
| Yu Hongwei | Supervisor | Incumbent | Male | 52 | 9/15/2020 | 9/15/2023 | 0 | 0 | 0 | 0 | 0 | |
| Yan Hongyue | Supervisor | Incumbent | Male | 53 | 9/15/2020 | 9/15/2023 | 0 | 0 | 0 | 0 | 0 | |
| Chen Zhaofeng | Supervisor | Incumbent | Male | 46 | 9/15/2020 | 9/15/2023 | 0 | 0 | 0 | 0 | 0 | |
| Zheng Gentu | Vice President | Leave office | Male | 61 | 9/29/2018 | 1/31/2022 | 0 | 0 | 0 | 0 | 0 | |
| Total | -- | -- | -- | -- | -- | -- | 40,415,782 | 0 | 0 | 8,083,156 | 48,498,938 | -- |
Whether there was any resignation of directors and supervisors and dismissal of senior executives during the reporting period
√ Yes □ No
Please refer to item “V. Directors, supervisors and senior executives，I. Basic information” under “Section IV CorporateGovernance” for details.Changes of directors, supervisors and senior executives
√ Applicable □ Not applicable
| Name | Position | Type | Date | Reasons |
| Zheng Gentu | Vice President | Expiration of employment | Jan 31, 2022 | Expiration of employment |
2. Profiles of directors, supervisors and senior executives
Professional background, work experience and main responsibilities of the current directors, supervisors and senior executivesHu 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 China Textile University) currently serves as the Director and Vice President ofthe Company, and the General Manager of the Nutrition Business Department. He used to be the manager of the Company’s supplyand marketing 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 Baijin (Bachelor’s degree) currently serves as the Director of the Company and General Manager of Heilongjiang NHUBiotechnology Co., Ltd. He used to be the Chairman of Zhejiang Guangyi Industrial Co., Ltd. and Zhejiang Xinchai Group Co., Ltd.Huang Can (Doctor of Management, Independent Director) is a professor of Zhejiang University. He currently serves as theIndependent Director of Zhejiang Windey Co., Ltd.
and Gansu Shangfeng Cement Co., Ltd.
Jin Zanfang (Doctor of Environmental Engineering, Independent Director) is a professor of Zhejiang University of Technology. Shecurrently serves as the Independent Director of Zhejiang Feida Environmental Science & Technology Co., Ltd.Zhu Jianmin (Master’s degree, Independent Director) currently serves as the Deputy General Manager and CFO of Merit InteractiveCo., Ltd.Ji Jianyang (Master’s degree, Independent Director) currently serves as the Partner of Beijing Guantao Zhongmao (Hangzhou) LawFirm and the Independent Director of Zhejiang Jingu Co., Ltd.Shi Fangbin (Bachelor’s degree) currently serves as the Chairman of the Company’s Board of Supervisors, and CFO of NHU HoldingGroup Co., Ltd. She used to be the Director of Financial Department, Director of Audit Department and Director of Board Office ofthe Company.Lyu Guofeng (Master’s degree) currently serves as the Supervisor of the Company, General Manager of Fragrance BusinessDepartment and General Manager of Shandong NHU Pharmaceutical Co., Ltd. He used to be the General Manager of ShangyuProduction Area of Nutrition Business Department.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.Yan Hongyue (Bachelor’s degree) currently serves as the Supervisor of the Company and General Manager of Xinchang Base. He usedto be the General Manager of Shandong NHU Vitamins Co., Ltd., Assistant to General Manager and Deputy General Manager ofShandong NHU Pharmaceutical Co., Ltd.Chen Zhaofeng (Master’s degree) currently serves as the Supervisor of the Company and Executive Deputy General Manager ofHeilongjiang NHU Biotechnology Co., Ltd. He used to be the Workshop Director of the Company.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, General Manager | 11/11/2011 | 11/25/2023 | No |
| Hu Baishan | NHU Holding Group Co., Ltd. | Director | 11/11/2011 | 11/25/2023 | No |
| Shi Guanqun | NHU Holding Group Co., Ltd. | Director | 11/11/2011 | 11/25/2023 | No |
| Wang Xuewen | NHU Holding Group Co., Ltd. | Director | 11/11/2011 | 11/25/2023 | No |
| Shi Fangbin | NHU Holding Group Co., Ltd. | CFO | 9/15/2020 | 11/25/2023 | Yes |
| Remarks | 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 General Manager | 9/4/2015 | 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 |
| Hu Baifan | Xinchang Heli Investment Co., Ltd. | Director | 1/3/2017 | To date | No |
| Hu Baifan | Safe & Rich Venture Capital Co., Ltd. | Director | 2/28/2008 | 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 and General Manager | 6/10/2015 | 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 | 10/29/2019 | 11/25/2025 | No |
| Hu Baifan | Beijing Winsunny Pharmaceutical Co., Ltd. | Director | 5/16/2022 | 5/27/2025 | No |
| Hu Baifan | Shaoxing Yuexiu Education Development Co., Ltd. | Chairman and General Manager | 12/5/2016 | 6/9/2023 | No |
| Hu Baifan | Zhejiang Huixian Venture Capital Co., Ltd. | Executive Director | 3/16/2017 | To date | No |
| Hu Baifan | Zhejiang Hefeng Investment Co., Ltd. | Executive Director | 4/20/2018 | To date | No |
| Hu Baifan | NHU Real Estate Holding Co., Ltd. | Director | 12/2/2010 | 3/19/2023 | 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 | 9/6/2023 | 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 | 6/9/2023 | No |
| Shi Guanqun | NHU Real Estate Holding Co., Ltd. | Director | 12/2/2010 | 3/19/2023 | No |
| Shi Guanqun | Zhejiang Jingshi Real Estate Co., Ltd. | Director | 9/22/2020 | 9/21/2023 | No |
| Shi Guanqun | Zhejiang Deli Equipment Co., Ltd. | Director | 10/24/2016 | 10/27/2024 | No |
| Shi Guanqun | Beijing Winsunny Pharmaceutical Co., Ltd. | Director | 5/16/2019 | 5/27/2022 | No |
| Shi Guanqun | Xinchang County NHU Real Estate Co., Ltd. | Director | 3/20/2017 | To date | No |
| Zhou Guiyang | DSM NHU Engineering Materials (Zhejiang) Co., Ltd. | Vice Chairman | 1/7/2016 | To date | No |
| Zhou Guiyang | Zhejiang Saiya Chemical Materials Co., Ltd. | Director | 1/3/2017 | 5/7/2023 | No |
| Huang Can | Gansu Shangfeng Cement Co., Ltd. | Independent Director | 5/7/2019 | 5/19/2025 | Yes |
| Huang Can | Zhejiang Windey Co., Ltd. | Independent Director | 5/12/2016 | 5/27/2022 | Yes |
| Huang Can | Hangzhou Oxygen Generator Group Co., Ltd | Independent Director | 30/5/2022 | 27/1/2024 | Yes |
| Jin Zanfang | Zhejiang Jingxing Paper Joint Stock Co., Ltd. | Independent Director | 6/19/2017 | 12/7/2022 | Yes |
| Jin Zanfang | Zhejiang Feida Environmental Science & Technology Co., Ltd. | Independent Director | 6/8/2018 | 9/10/2024 | Yes |
| Ji Jianyang | Zhejiang Jingu Co., Ltd. | Independent Director | 10/16/2020 | 10/16/2023 | Yes |
| Ji Jianyang | Zhejiang Fore Intelligent Technology Co., Ltd. | Independent Director | 12/15/2020 | 12/15/2023 | Yes |
| 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 |
| Ji Jianyang | Zhejiang Uniquality Care Products Technology Co., Ltd. | Independent Director | 3/3/2020 | 12/31/2022 | Yes |
| Zhu Jianmin | Merit Interactive Co., Ltd. | Deputy General Manager, CFO | 6/22/2016 | 5/1/2025 | Yes |
| Shi Fangbin | Zhejiang Jingshi Real Estate Co., Ltd. | Chairman | 9/22/2020 | 9/21/2023 | No |
| Shi Fangbin | DSM NHU Engineering Materials (Zhejiang) Co., Ltd. | Supervisor | 1/7/2016 | To date | No |
| Shi Fangbin | Zhejiang Saiya Chemical Materials Co., Ltd. | Supervisor | 1/3/2017 | 5/7/2023 | No |
| Shi Fangbin | Shaoxing Jinghe Hotel Management Co., Ltd. | Director | 5/27/2021 | 5/26/2024 | No |
| Shi Fangbin | Zhejiang Deli Equipment Co., Ltd. | Director | 10/28/2021 | 10/27/2024 | 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, the Zhejiang Securities Regulatory Bureau issued an "Administrative Penalty Decision" (No. [2021]19), whichstated that Li Li, the manager of the Data Enhancement Department of the Internet Service Business Group of Every Interaction Co.,Ltd. at the time, forged multiple sales contracts and related settlement documents between the company and its customers through thefabrication of seals and other means. Every Interaction failed to timely discover the aforementioned false contracts and business,confirmed the relevant sales revenue, and prepared financial statements based on them, resulting in false records in its third quarterreport for 2019, annual report for 2019, first quarter report for 2020, half-year report for 2020, and third quarter report for 2020.Every Interaction's above-mentioned behavior violated the provisions of Article 63 of the 2005 Securities Law and Article 78(2) ofthe 2019 Securities Law, and constituted an illegal disclosure of information as defined in Article 197(2) of the Securities Law of2019.Zhu Jianmin, an independent director of the company and the former vice president and financial director of Every Interaction, wasresponsible for financial management, but failed to ensure the truthfulness, accuracy, and completeness of Every Interaction'sinformation disclosure, and was directly responsible for the illegal information disclosure as the supervisory personnel. According tothe provisions of Article 197(2) of the Securities Law of 2019, the Zhejiang Securities Regulatory Bureau decided to give ZhuJianmin a warning and impose a fine of 800,000 yuan. On February 24, 2022, the Shenzhen Stock Exchange issued a "Decision onGiving Notification and Criticism Punishments to Every Interaction Co., Ltd. and Related Parties," and gave Zhu Jianmin anotification and criticism punishment for the above-mentioned matters.
3. Emoluments of directors, supervisors and senior executives
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 | Position | Gender | Age | Status | Total pre-tax emoluments received from the Company | Whether receive emoluments from related parties of the Company |
| Hu Baifan | Chairman | Male | 61 | Incumbent | 468.77 | No |
| Hu Baishan | Vice Chairman, President | Male | 56 | Incumbent | 290.66 | No |
| Shi Guanqun | Director, Vice President, CFO, Secretary of the Board | Male | 52 | Incumbent | 183.64 | No |
| Wang Xuewen | Director, Vice President | Male | 54 | Incumbent | 165.26 | No |
| Wang Zhengjiang | Director | Male | 54 | Incumbent | 224.36 | No |
| Zhou Guiyang | Director | Male | 48 | Incumbent | 138.56 | No |
| Yu Baijin | Director | Male | 56 | Incumbent | 160.87 | No |
| Huang Can | Independent Director | Male | 44 | Incumbent | 10 | No |
| Jin Zanfang | Independent Director | Female | 47 | Incumbent | 10 | No |
| Zhu Jianmin | Independent Director | Female | 59 | Incumbent | 10 | No |
| Ji Jianyang | Independent Director | Male | 44 | Incumbent | 10 | No |
| Shi Fangbin | Chairman of the Board of Supervisor | Female | 47 | Incumbent | 0 | Yes |
| Lu Guofeng | Supervisor | Male | 51 | Incumbent | 272.59 | No |
| Yu Hongwei | Supervisor | Male | 52 | Incumbent | 121.08 | No |
| Yan Hongyue | Supervisor | Male | 53 | Incumbent | 112.98 | No |
| Chen Zhaofeng | Supervisor | Male | 46 | Incumbent | 69.12 | No |
| Zheng Gentu Note | Vice President | Male | 61 | Leaving office | 3.72 | No |
| Total | -- | -- | -- | -- | 2,251.61 | -- |
Note: Vice President Zheng Gentu resigned on January 31, 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 tenth meeting of the eighth session of Board of Directors | 4/13/2022 | 4/15/2022 | 18 proposals including the “Annual Work Report of the Board of Directors of 2021” were deliberated and approved. Please refer to Announcement No. 2022-010 disclosed on http://www.cninfo.com.cn for details. |
| The eleventh meeting of the eighth session of Board of Directors | 4/26/2022 | N/A | The “First Quarterly Report of 2022” was deliberated and approved. |
| The twelfth meeting of the eighth session of Board of Directors | 8/22/2022 | 8/24/2022 | 4 proposals including the “Semi-annual Report of Board of Directors of 2022 and Summary” were deliberated and approved. Please refer to Announcement No. 2022-035 disclosed on http://www.cninfo.com.cn for details. |
| The thirteenth meeting of the eighth session of Board of Directors | 10/25/2022 | 10/26/2022 | 2 proposals including the “Third Quarterly Report of 2022” were deliberated and approved. Please refer to Announcement No. 2022-041 disclosed on http://www.cninfo.com.cn for details. |
| The fourteenth meeting of the eighth session of Board of Directors | 10/31/2022 | 11/1/2022 | “Proposal on the Extension of the Duration of the Third Employee Stock Ownership Plan” were deliberated and approved. Please refer to Announcement No. 2022-044 disclosed on |
| Session | Meeting date | Disclosure date | Resolutions |
| 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 | 1 |
| Hu Baishan | 5 | 5 | 0 | 0 | 0 | No | 1 |
| Shi Guanqun | 5 | 5 | 0 | 0 | 0 | No | 1 |
| Wang Xuewen | 5 | 3 | 2 | 0 | 0 | No | 1 |
| Wang Zhengjiang | 5 | 1 | 4 | 0 | 0 | No | 0 |
| Zhou Guiyang | 5 | 1 | 4 | 0 | 0 | No | 1 |
| Yu Baijin | 5 | 1 | 4 | 0 | 0 | No | 0 |
| Huang Can | 5 | 1 | 4 | 0 | 0 | No | 0 |
| Jin Zanfang | 5 | 1 | 4 | 0 | 0 | No | 0 |
| Zhu Jianmin | 5 | 1 | 4 | 0 | 0 | No | 1 |
| Ji Jianyang | 5 | 1 | 4 | 0 | 0 | No | 1 |
Remarks on failure to attend two consecutive board meetings in personN/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 | Ji Jianyang, Hu Baishan, Huang Can, Zhu Jianmin, Shi Guanqun | 1 | 4/1/2022 | The “Compensation Plan of NHU Management Team for the Term 2021 to 2023” was deliberated and approved. |
| 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 Audit Committee | Zhu Jianmin, Jin Zanfang, Shi Guanqun | 4 | 4/1/2022 | 5 proposals including “Summary of Internal Audit for the Year 2022”, were deliberated and approved. | |||
| 4/20/2022 | 3 proposals including “Summary of Internal Audit for the First Quarter of 2022 and Work Plan for the Second Quarter of 2022” were deliberated and approved. | ||||||
| 8/16/2022 | 3 proposals including “Summary of Internal Audit for the Half Year of 2022 and Work Plan for the Third Quarter of 2022” were deliberated and approved. | ||||||
| 10/18/2022 | 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. |
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 | 1,729 |
| Number of active employees of major subsidiaries at the end of the reporting period | 9,797 |
| Total number of active employees at the end of the reporting period | 11,526 |
| Total number of employees receiving remuneration in the current period | 11,526 |
| Number of retired cadres and employees whose expenses borne by the parent company and major subsidiaries | 0 |
| Professional workforce | |
| Categories | Number |
| Production staff | 7,679 |
| Sales staff | 162 |
| Technical staff | 2,629 |
| Finance staff | 99 |
| Administrative staff | 957 |
| Total | 11,526 |
| Education level | |
| Categories | Number |
| Doctoral degree | 77 |
| Master’s degree | 1,006 |
| Bachelor’s degree | 3,474 |
| Associate degree | 4,701 |
| High school education, secondary vocational school education or below | 2,268 |
| Total | 11,526 |
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 abetter 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 2021 annual general meeting of shareholders held on May 10, 2022 reviewed and approved the Proposal on Profit DistributionPlan of 2021, which was implemented and completed on May 25, 2022. The Annual Equity Distribution Plan for 2021: Based on2,562,562,984 shares (the total share capital of the company at that time, which was 2,578,394,760 shares, excluded 15,831,776repurchased shares), distributated cash dividends of RMB 7 (tax included) per 10 shares to all shareholders, with a total cash distributionof RMB 1,793,794,088.80 (tax included), and distributated 2 shares per 10 shares by converting capital reserve to all shareholders,with a total of 512,512,596 shares added, after the increase, the total share capital amounted to 3,090,907,356 shares.
| 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 |
| 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 no cashdividend 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) | 5.00 |
| 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) | 1,536,710,840 |
| Amount of cash dividends by other methods (such as share repurchase) (yuan) | 179,684,551.90 |
| Total cash dividends (including those by other methods) (yuan) | 1,716,395,391.90 |
| Profit available for distribution (yuan) | 5,489,904,970.92 |
| 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 share), a cash dividend of 5 yuan (tax included) will be distributed to all shareholders for every 10 shares, and 0 bonus shares (tax included) 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 executives
Not 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 |
| 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 |
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 |
| 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 | 1,334,431 | 1,601,317 | 0.05% |
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)”, such plan voluntarily waives the voting rights of holdingshares in the general meeting of the Company, while shares acquired through the employee stock ownership plan carry no voting rightsin the general meeting. During the reporting period, the employee stock ownership plan did not exercise the voting rights of holdingshares in the general meeting, but still enjoyed the right to profit distribution.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
Pursuant to the second meeting of holders of the third phase of employee stock ownership plan in manner of voting by correspondencedated June 9, 2021, Mr. Qiu Jinzhuo was elected as a member of the management committee of the third phase of employee stockownership plan and together with Ms. Zhang Liying, Mr. Dong Xiaofang, Mr. Zhang Guangli and Ms. Zhang Lijin, who were electedat the first meeting of holders, formed the management committee, with the duration of such plan as the term of office.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
Other remarks
1. On May 25, 2022, the Company implemented the annual equity distribution of 2021, and the shares held by the third phase ofemployee stock ownership plan were transferred from 10,131,522 shares to 12,157,826 shares after the transfer, with the proportion tototal share capital of the Company unchanged.
2. The number of shares held by directors, supervisors and senior executives in the employee stock ownership plan is measured basedon the proportion of shares of holders to the total shares 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 |
| NHU/CHR.OLESEN LATIN AMERICA A/S | N/A | N/A | N/A | N/A | N/A | N/A |
| Wuniu (Shandong) Investment 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 21, 2023 |
| Full text of report | Please refer to the “Internal Control Self-Assessment Report of 2022 of Zhejiang NHU Co., Ltd.” disclosed on http://www.cninfo.com.cn on April 21, 2023 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 | Financial reporting | Non-financial reporting |
| 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, 2022, 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 | 4/21/2023 |
| 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 ResponsibilitiesI. 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
Regulations on the Management of Compensation for Ecological and Environmental Damage (Environmental Regulations [2022] No.31)Action Plan for the Treatment of New Pollutants (State Office [2022] No. 15)Notice on Good Environmental Assessment of Major Investment Projects (EIA [2022] 39)Notice on Further Promoting Work Related to the Informationization of Hazardous Waste Environmental Management (EnvironmentOffice Solid Letter [2022] No. 230)Implementation Plan for Carbon Dumping in the Industrial Sector (MIIT Lianjie [2022] No. 88)Implementation Plan for Harmless Treatment and Resourceful Utilization of Sludge (NDRC Environmental Resources [2022] No.1453)Special Plan for Scientific and Technological Innovation in the Field of Ecology and Environment in the Fourteenth Five-Year Plan"(National Science and Technology Development Society [2022] No. 238)Action Plan for the Fight against Heavy Pollution Weather, Ozone Pollution Prevention and Control and Diesel Truck Pollution Control(Huan Atmosphere [2022] No. 68)Notice on the Issuance of Principles for the Approval of Environmental Impact Assessment Documents for Construction Projects inFour Industries: Steel/Coking, Modern Coal Chemicals, Petrochemicals, and Thermal Power (Huanban EIA [2022] No. 31)Notice on Further Strengthening the Safety of Environmental Protection Equipment and Facilities" (Commission Office Mingdian[2022] No. 17)Measures for Supervising the Ecological Environment of the Ecological Protection Red Line (for Trial Implementation) (StateEnvironmental Regulations and Ecology [2022] No. 2)Environmental impact assessment (EIA) of construction projects and other administrative permits forenvironmental protection
On January 11, 2022, Zhejiang NHU Pharmaceutical Co., Ltd. obtained approval for the “taurine project” with the document numberedShao Shi Huan Shen [2022] No.2.On February 25, 2022, Zhejiang NHU Pharmaceutical Co., Ltd., Ltd. “The Project of Caronic Anhydride and Azabicyclic Acid” hasbeen put on record, with the document number of Yu Huan Jian Bei [2022] No.7.On May 6, 2022, the environmental of Shandong NHU Vitamins Co., Ltd. independent acceptance was completed.On June 9, 2022, Shandong NHU Amino-acids Co., Ltd. obtained the approval of the environmental impact report for the methionine(Phase II) project, Weihuan Shen Zi [2022] No. B40.On June 13, 2022 and December 6, 2022, Shangyu NHU Bio-Chem Co., Ltd., passed the record for the projects of nutrition,intermediate technology transformation and green deep processing. Document No. Yu Huan Jian Bei [2022] No.20 and No. Yu HuanJian Bei [2022] No.51.On June 23, 2022 , Shandong NHU Pharmaceutical Co., Ltd., Ltd. passed the environmental impact report of the 13,000t/a syntheticspice expansion and technical transformation project. , with the document number of Weihuan Shen Zi (2022) No. B44.
On October 12 2022, Shandong NHU Pharmaceutical Co., Ltd. has passed the environmental impact report of the technicaltransformation project of expanding the production of synthetic spices and intermediates with an annual output of 301000 tons, withthe document number of Weihuan Shen Zi [2022] No. B68.On December 19, 2022, Shandong NHU Amino-acids Co., The Methionine Integrated Research and Development Test PlatformProject has obtained the approval of the Environmental Impact Report (Weihuan Shen Zi [2022] No. B92)Industry emission standards and the specific circumstances of pollutant emissions involved in productionand operation activities
| Name | Name of main pollutants and pollutant characteristics1 | 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 | COD | Sewer connection | 1 | Plant area | 126mg/L | 500mg/L | 19.67t | ≤189.5t/a | No |
| The Company | NH3-N | Sewer connection | 1 | Plant area | 4.0 mg/L | 35 mg/L | 0.66t | ≤13.28t/a | No |
| The Company | SO? | Filtered discharge | 1 | Plant area | 19mg/m? | 50mg/ m? | 0.17t | ≤8.612 t/a | No |
| The Company | NOx | Filtered discharge | 1 | Plant area | 33mg/ m? | 50mg/ m? | 0.61t | ≤28t/a | No |
| Shangyu NHU Bio-Chem Co., Ltd. | COD | Sewer connection | 1 | Plant area | 264 mg/L | 500 mg/L | 259.305t | ≤447.4 t/a | No |
| Shangyu NHU Bio-Chem Co., Ltd. | NH3-N | Sewer connection | 1 | Plant area | 12.69 mg/L | 35 mg/L | 12.741t | ≤31.318 t/a | No |
| Shangyu NHU Bio-Chem Co., Ltd. | TN | Sewer connection | 1 | Plant area | 22.687 mg/L | 70 mg/L | 22.071t | ≤62.637 t/a | No |
| Shangyu NHU Bio-Chem Co., Ltd. | VOC | Filtered discharge | 1 | Plant area | 4.743mg/m? | 100mg/m? | 2.604t | ≤217.182 t/a | No |
| Shangyu NHU Bio-Chem Co., Ltd. | NOx | Filtered discharge | 1 | Plant area | 6.362mg/m? | 100mg/m? | 2.301t | ≤12.96 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | COD | Sewer connection | 1 | Plant area | 264 mg/L | 500 mg/L | 169.667t | ≤382.37 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | NH3-N | Sewer connection | 1 | Plant area | 12.69 mg/L | 35 mg/L | 8.338t | ≤26.766 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | TN | Sewer connection | 1 | Plant area | 22.687 mg/L | 70 mg/L | 14.442t | ≤53.532 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | VOC | Filtered discharge | 1 | Plant area | 4.36mg/m? | 100mg/m? | 0.587t | ≤121.833 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | VOC | Filtered discharge | 1 | Plant area | 0.405mg/m? | 100mg/m? | 0.184t | ≤1.069 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | NOx | Filtered discharge | 1 | Plant area | 4.14mg/m? | 200mg/m? | 0.511t | ≤19.8 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | NOx | Filtered discharge | 1 | Plant area | 62.965mg/m? | 300mg/m? | 27.861t | ≤28.08 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | NOx | Filtered discharge | 1 | Plant area | 27.86mg/m? | 150mg/m? | 1.772t | ≤8.44 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | SO? | Filtered discharge | 1 | Plant area | 3.27mg/m? | 100mg/m? | 1.412t | ≤37.94 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | SO? | Filtered discharge | 1 | Plant area | 7.531mg/m? | 50mg/m? | 0.479t | ≤10.905 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | PM | Filtered discharge | 1 | Plant area | 3.061mg/m? | 20mg/m? | 0.229t | ≤5.174 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | PM | Filtered discharge | 1 | Plant area | 5.203mg/m? | 30mg/m? | 1.527t | ≤8.42 t/a | No |
| Zhejiang NHU Pharmaceutical Co., Ltd. | PM | Filtered discharge | 1 | Plant area | 3.333mg/m? | 20mg/m? | 0.212t | ≤5.626 t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | PM | Filtered discharge | 1 | Plant area | 2.4mg/m? | 5 mg/m? | 0.1912t | ≤17.73 t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | PM | Filtered discharge | 1 | Plant area | 2.8mg/m? | 20 mg/m? | 0.5411t | ≤17.73 t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | PM | Filtered discharge | 1 | Plant area | 8.22mg/m? | 20 mg/m? | 0.1309t | ≤17.73 t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | SO? | Filtered discharge | 1 | Plant area | 2.7mg/m? | 35mg/m? | 0.1801t | ≤67.92t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | SO? | Filtered discharge | 1 | Plant area | 6.3mg/m? | 50mg/m? | 1.7083t | ≤67.92t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | SO? | Filtered discharge | 1 | Plant area | 33.7mg/m? | 50mg/m? | 0.5464t | ≤67.92t/a | No |
COD, NH3-N, SO?, NOx, TN, VOC, PM and TP stand for chemical oxygen demand, ammonia nitrogen, sulfur dioxide, nitrogenoxides, total nitrogen, volatile organic compound, particulate matter and total phosphorus, respectively.
| Name | Name of main pollutants and pollutant characteristics1 | 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. | NOx | Filtered discharge | 1 | Plant area | 8.4mg/m? | 50 mg/m? | 0.4426 t | ≤83.28 t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | NOx | Filtered discharge | 1 | Plant area | 22.3mg/m? | 100mg/m? | 3.6814 t | ≤83.28 t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | NOx | Filtered discharge | 1 | Plant area | 29.2mg/m? | 150 mg/m? | 0.3905t | ≤83.28 t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | VOC | Filtered discharge | 2 | Plant area | 7.93mg/m? | 60 mg/m? | 2.2784t | ≤69.72 t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | COD | Sewer connection | 1 | Plant area | 264mg/L | 500 mg/L | 96.149t | ≤182.1 t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | NH3-N | Sewer connection | 1 | Plant area | 12.69mg/L | 35 mg/L | 4.622t | ≤12.747 t/a | No |
| Zhejiang NHU Special Materials Co., Ltd. | TN | Sewer connection | 1 | Plant area | 22.687mg/L | 70 mg/L | 8.263t | ≤25.494 t/a | No |
| Shandong NHU Pharmaceutical Co., Ltd. | PM | Filtered discharge | 5 | Plant area | 2.44mg/m? | 10 mg/m? | 1.303t | ≤5.761t/a | No |
| Shandong NHU Pharmaceutical Co., Ltd. | SO? | Filtered discharge | 4 | Plant area | 3.33mg/m? | 50 mg/m? | 0.668t | ≤4.006t/a | No |
| Shandong NHU Pharmaceutical Co., Ltd. | NOx | Filtered discharge | 5 | Plant area | 36.4mg/m? | 100 mg/m? | 23.936t | ≤75.513t/a | No |
| Shandong NHU Pharmaceutical Co., Ltd. | VOC | Filtered discharge | 3 | Plant area | 20.3mg/m? | 60 mg/m? | 3.8t | ≤28.481t/a | No |
| Shandong NHU Pharmaceutical Co., Ltd. | COD | Sewer connection | 1 | Plant area | 509mg/L | 1000mg/L | 204t | ≤598.22t/a | No |
| Shandong NHU Pharmaceutical Co., Ltd. | NH3-N | Sewer connection | 1 | Plant area | 18.9mg/L | 100mg/L | 7.39t | ≤59.82 t/a | No |
| Shandong NHU Pharmaceutical Co., Ltd. | TN | Sewer connection | 1 | Plant area | 40.6mg/L | 120mg/L | 16.6t | ≤65.64 t/a | No |
| Shandong NHU Amino-acids Co., Ltd. | SO? | Filtered discharge | 4 | Plant area | 30.9 | 50 mg/m? | 7.24t | ≤92.59 t/a | No |
| Shandong NHU Amino-acids Co., Ltd. | NOx | Filtered discharge | 3 | Plant area | 86.5 | 100 mg/m? | 96.67t | ≤230.77 t/a | No |
| Shandong NHU Amino-acids Co., Ltd. | PM | Filtered discharge | 5 | Plant area | 9.8 | 10 mg/m? | 2.01t | ≤21.19 t/a | No |
| Shandong NHU Amino-acids Co., Ltd. | VOC | Filtered discharge | 4 | Plant area | 29.4 | 60 mg/m? | 40.26t | ≤123.27 t/a | No |
| Shandong NHU Amino-acids Co., Ltd. | COD | Sewer connection | 1 | Plant area | 358 | 1000 mg/L | 137.85t | ≤592.22 t/a | No |
| Shandong NHU Amino-acids Co., Ltd. | NH3-N | Sewer connection | 1 | Plant area | 57.7 | 100 mg/L | 4.26t | ≤59.222t/a | No |
| Shandong NHU Amino-acids Co., Ltd. | TN | Sewer connection | 1 | Plant area | 109 | 120 mg/L | 22t | ≤70.38t/a | No |
| Shandong NHU Vitamins Co., Ltd. | VOC | Organized | 4 | Plant area | 1.4 mg/m? | 60 mg/m? | 2.14t | ≤112.31 t/a | No |
| Shandong NHU Vitamins Co., Ltd. | SO? | Organized | 3 | Plant area | 9 mg/m? | 50 mg/m? | 3.23t | ≤21.14 t/a | No |
| Shandong NHU Vitamins Co., Ltd. | NOx | Organized | 4 | Plant area | 45 mg/m? | 100 mg/m? | 11.19t | ≤65.27 t/a | No |
| Shandong NHU Vitamins Co., Ltd. | PM | Organized | 5 | Plant area | 2 mg/m? | 10 mg/m? | 1.27t | ≤4.8 t/a | No |
| Shandong NHU Vitamins Co., Ltd. | COD | Sewer connection | 1 | Plant area | 325 mg/L | 2000 mg/L | 109.1t | ≤1189.64 t/a | No |
| Shandong NHU Vitamins Co., Ltd. | NH3-N | Sewer connection | 1 | Plant area | 15.2 mg/L | 100 mg/L | 2.41t | ≤59.49 t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | PM | Filtered discharge | 1 | Plant area | 6.92mg/ m? | 30mg/m? | 2.60t | ≤34.8624t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | PM | Filtered discharge | 1 | Plant area | 6.29mg/ m? | 30mg/m? | 0.035t | ≤34.8624t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | PM | Filtered discharge | 1 | Plant area | 10.97mg/ m? | 30mg/m? | 3.05t | ≤34.8624t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | NOx | Filtered discharge | 1 | Plant area | 96.65mg/ m? | 200mg/m? | 37.23t | ≤121.32t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | NOx | Filtered discharge | 1 | Plant area | 62.76mg/ m? | 250mg/ m? | 0.40t | ≤121.32t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | SO? | Filtered discharge | 1 | Plant area | 93.61mg/ m? | 200mg/ m? | 33.75t | ≤117.216t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | SO? | Filtered discharge | 1 | Plant area | 10.71mg/ m? | 200mg/ m? | 0.040t | ≤117.216t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | VOC | Filtered discharge | 1 | Plant area | 13.52mg/ m? | 150mg/ m? | 4.86t | ≤162t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | VOC | Filtered discharge | 1 | Plant area | 2.39mg/ m? | 150mg/ m? | 0.65t | ≤162t/a | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | COD | Sewer connection | 1 | Plant area | 179.275mg/ m? | 350 mg/L | 834.41t | / | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | NH3-N | Sewer connection | 1 | Plant area | 1.58mg/ m? | 35 mg/ m? | 7.81t | / | No |
| Heilongjiang NHU Biotechnology Co., Ltd. | TP | Sewer connection | 1 | Plant area | 1.735mg/ m? | 6 mg/L | 8.24t | / | 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
√ Applicable □ Not applicable
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 protection
information public on platforms such as the environmental information management system of provincial and municipal key pollutantdischarge units.
Environmental emergency response plan
√ Applicable □ Not applicable
The Company has completed the preparation and expert review of the environmental contingency plan of Tashan and Meizhu factories,and has completed the filing in June 2022, with the filing number: Tashan: 330624-2022-35-M, Meizhu: 330624-2022-36-L..On October 28, 2022, Shangyu NHU Bio-Chem Co., Ltd. has completed the contingency plan filing documents for environmentalemergencies, with the filing number of 330604-2022-102-H.On October 28, 2022, Zhejiang NHU Pharmaceutical Co., Ltd. has completed the contingency plan filing documents for environmentalemergencies, with the filing number of 330604-2022-101-H.Zhejiang NHU special materials Co., Ltd. formulated the emergency plan for environmental emergencies of Zhejiang NHU specialmaterials Co., Ltd. in accordance with the administrative measures for the filing of emergency plans for environmental emergencies ofenterprises and institutions (for Trial Implementation) issued by the state and the actual situation of the company, and reported it to theShangyu branch of Shaoxing Ecological Environment Bureau in June 2022 for filing. with the filing number of 330604-2022-054-H.On May 25, 2022, Shandong NHU amino acid Co., Ltd. reapplied for the emergency plan for environmental emergencies.Heilongjiang NHU Biotechnology Co., Ltd. completed the revision of the “Environmental Emergency Response Plan of HeilongjiangNHU Biotechnology Co., Ltd.” according to the construction and commissioning of new projects in a timely manner, and filed andsubmitted to Suihua Bureau of Ecology and Environment in August 2022.Investment in environmental treatment and protection and payment of environmental protection taxDuring the reporting period, the company invested RMB 528.35 million in environmental protection treatment and paid environmentalprotection tax of RMB 1.55 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.
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 protectionNone.
II. Social responsibilities
Please refer to the announcement disclosed on http://www.cninfo.com.cn on April 21, 2023 for the full text of the “Social ResponsibilityReport of 2022”.III. Details on consolidating poverty alleviation achievements and promoting rural vitalization
None.
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 | 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.
| 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. | ||||||
| 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. | May 18, 2022 | 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 | |||||
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
VII. Changes in the scope of consolidated financial statements compared to the financial reportsin the previous year
□ Applicable √ Not Applicable
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 | 22 years |
| Certified Public Accountants | Teng Peibin, Jan Yanhui |
| Certified Public Accountants’ continuous years for audit services | 3 years for Teng Peibin and 1 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 related parties
□ 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 |
| 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 | No | No | ||
| Shandong NHU Vitamins Co., Ltd. | 12/28/2018 | 90,000 | 11/29/2019 | 50,000 | Joint and several liability guarantee | 11/29/2019--12/21/2023 | No | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 5/22/2020 | 120,000 | 9/7/2020 | 55,716.80 | Joint and several liability guarantee | 9/7/2020--9/7/2023 | No | No | ||
| Shandong NHU Fine Chemical Science and Technology Co., Ltd. | 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. | 4/22/2021 | 120,000 | 6/18/2021 | 7,422.87 | Joint and several liability guarantee | 6/18/2021--6/17/2022 | Yes | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 4/22/2021 | 120,000 | 7/16/2021 | 7,422.87 | Joint and several liability guarantee | 7/16/2021--7/14/2022 | Yes | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 5/11/2022 | 130,000 | 6/17/2022 | 7,422.87 | Joint and several liability guarantee | 6/17/2022--6/18/2023 | No | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 5/11/2022 | 130,000 | 7/14/2022 | 7,422.87 | Joint and several liability guarantee | 7/14/2022--7/14/2023 | No | Yes | ||
| 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 | ||
| NHU (Hong Kong) Trading Co., Ltd. | 4/22/2021 | 120,000 | 9/8/2021 | 85.49 | Joint and several liability guarantee | 9/8/2021--1/30/2022 | Yes | No | ||
| Zhejiang NHU Imports & Exports Co., Ltd. | 4/22/2021 | 10,000 | 9/22/2021 | 10,000 | Joint and several liability guarantee | 9/22/2021--5/31/2022 | Yes | 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--5/30/2023 | No | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 4/22/2021 | 120,000 | 12/9/2021 | 66.34 | Joint and several liability guarantee | 12/9/2021--5/30/2022 | Yes | No | ||
| NHU Vitamins Co., Ltd. | 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. | 4/22/2021 | 120,000 | 3/28/2022 | 37.35 | Joint and several liability guarantee | 3/28/2022--9/8/2022 | Yes | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 5/11/2022 | 130,000 | 5/27/2022 | 101.26 | Joint and several liability guarantee | 5/27/2022--11/1/2022 | Yes | 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 | ||
| NHU (Hong Kong) Trading Co., Ltd. | 5/11/2022 | 130,000 | 5/10/2022 | 5,571.68 | Joint and several liability guarantee | 5/10/2022--5/10/2023 | No | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 5/11/2022 | 130,000 | 8/2/2022 | 4.53 | Joint and several liability guarantee | 8/2/2022--2/1/2023 | No | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 5/11/2022 | 130,000 | 9/2/2022 | 102.13 | Joint and several liability guarantee | 9/2/2022--5/1/2023 | No | No | ||
| NHU (Hong Kong) Trading Co., Ltd. | 5/11/2022 | 130,000 | 11/3/2022 | 8.22 | Joint and several liability | 11/3/2022--6/1/2023 | No | No |
| guarantee | ||||||||||
| NHU (Hong Kong) Trading Co., Ltd. | 5/11/2022 | 130,000 | 12/15/2022 | 24.15 | Joint and several liability guarantee | 12/15/2022--8/1/2023 | No | No | ||
| Xinchang NHU Vitamins Co. | 5/11/2022 | 20,000 | 10/14/2022 | 18,000.00 | Joint and several liability guarantee | 14/10/2022-14/10/2027 | No | No | ||
| Total amount of guarantees approved for subsidiaries during the reporting period (B1) | 225,000 | Total amount actually guaranteed for subsidiaries during the reporting period (B2) | 108,695.06 | |||||||
| Total amount of guarantees approved for subsidiaries at the end of the reporting period (B3) | 646,716.80 | Total amount actually guaranteed for subsidiaries at the end of the reporting period (B4) | 530,273.25 | |||||||
| 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 |
| Total amount of guarantees approved for subsidiaries during the reporting period (C1) | Total amount actually guaranteed for subsidiaries during the reporting period (C2) | |||||||||
| Total amount of guarantees approved for subsidiaries at the end of the reporting period (C3) | Total amount actually guaranteed for subsidiaries at the end of the reporting period (C4) | |||||||||
| 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) | 225,000 | Total amount actually guaranteed during the reporting period (A2+B2+C2) | 108,695.06 | |||||||
| Total amount of guarantees approved at the end of the reporting period (A3+B3+C3) | 646,716.80 | Total amount actually guaranteed at the end of the reporting period (A4+B4+C4) | 530,273.25 | |||||||
| Proportion of the amount actually guaranteed (A4+B4+C4) to net assets of the Company | 22.49% | |||||||||
| 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) | 349,000.00 | |||||||||
| The amount of the total amount guaranteed exceeding 50% of net assets (F) | 0 | |||||||||
| Total amount guaranteed of three items above (D+E+F) | 349,000.00 | |||||||||
| 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 | |||||||||
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 | 275,000.00 | 72,000.00 | 0 | 0 |
| Total | 275,000.00 | 72,000.00 | 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 repurchasing company shares
Please refer to item IV. Actual implementation of share repurchase during the reporting period under Section VII Movements in Sharesand Conditions of Shareholders for details.
2. Progress of the Third 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, and other contents will notbe changed. As of the end of the reporting period, the balance of shares held by the Third Employee Stock Ownership Plan was12,157,826 shares, accounting for 0.39% of the company's total share capital. For more details, please refer to Announcement on theextension of the duration of the third employee stock ownership plan (2022-045) published on the company's designated informationdisclosure media and cninfo (http://www.cninfo.com.cn).*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'sexisting total share capital.
3. Progress of shareholding increase by controlling shareholders
Based on the confidence in the sustainable and stable development of the company in the future and the recognition of the company'svalue, and to enhance investors’ confidence, the controlling shareholder of the company, NHU Holding Group Co., Ltd plans to increaseits holdings of the company's shares in the next six months through the ways allowed by the trading system of Shenzhen Stock Exchange(including but not limited to centralized bidding, block trading, etc.), and the amount of shares to be increased is not less than RMB300 mn and not more than RMB 600 mn. There is no price range in this shareholding increase plan, and the shareholding increase planwill be gradually implemented according to the fluctuation of the company's stock price and the overall trend of the capital market. Asof November 18, 2022, NHU Holding Group has accumulatively increased 19,078,152 shares of the company’ stock through centralizedbidding in the Shenzhen Stock Exchange system, accounting for 387,514,579.35 yuan (excluding transaction costs) and 0.62% of thecompany's total share capital, the implementation of the shareholding increase plan was completed. For more details, please refer toAnnouncement on the results of the implementation of the controlling shareholder's increase in the company's shares (2022-046)published at November 19, 2022 on the company's designated information disclosure media and cninfo (http://www.cninfo.com.cn).
4. Progress of Investment Project 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).For 2022, the actual use of the raised funds was RMB 1,690.75mn, and the accumulated investment of the raised funds project wasRMB 3,778.20mn. By December 31, 2022, the balance of raised funds was RMB 1,807.81 mn (including financial products andstructured deposits, the net amount of interest on cash in bank less handling charges, gains on financial products and structured depositsreceived on an accumulated basis).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 | 30,311,835 | 1.18% | 6,062,367 | 6,062,367 | 36,374,202 | 1.18% | |||
| 1. Held by other domestic parties | 30,311,835 | 1.18% | 6,062,367 | 6,062,367 | 36,374,202 | 1.18% | |||
| Including: Held by domestic natural persons | 30,311,835 | 1.18% | 6,062,367 | 6,062,367 | 36,374,202 | 1.18% | |||
| II. Unrestricted shares | 2,548,082,925 | 98.82% | 506,450,229 | 506,450,229 | 3,054,533,154 | 98.82% | |||
| 1. RMB ordinary shares | 2,548,082,925 | 98.82% | 506,450,229 | 506,450,229 | 3,054,533,154 | 98.82% | |||
| III. Total | 2,578,394,760 | 100.00% | 512,512,596 | 512,512,596 | 3,090,907,356 | 100.00% | |||
Reason for movements
√ Applicable □ Not Applicable
The 2021 annual general meeting of shareholders held on May 10, 2022 reviewed and approved the Proposal on Profit DistributionPlan of 2021, which was implemented and completed on May 25, 2022. The Annual Equity Distribution Plan for 2021: Based on2,562,562,984 shares (the total share capital of the company at that time, which was 2,578,394,760 shares, excluded 15,831,776repurchased shares), distributated cash dividends of RMB 7 (tax included) per 10 shares to all shareholders, with a total cash distributionof RMB 1,793,794,088.80 (tax included), and distributated 2 shares per 10 shares by converting capital reserve to all shareholders,with a total of 512,512,596 shares added, after the increase, the total share capital amounted to 3,090,907,356 shares.
Approval on movements in shares
√ Applicable □ Not Applicable
Please refer to “Reason for movements” under the item “I. Movements in shares” in “Section VII Movements in Shares and Conditionsof Shareholders” for details.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
Please refer to item “VI. Key accounting data and financial indicators” under “Section II Company Profile and Key Financial Indicators”for details.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 unlocked during the current period | Number of restricted shares increased during the current period | Number of restricted shares at the end of the period | Reason for restriction | Date of unlocking |
| Hu Baifan | 8,701,873 | 1,740,375 | 10,442,248 | 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. | |
| Hu Baishan | 9,122,455 | 1,824,491 | 10,946,946 | 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. | |
| Shi Guanqun | 6,548,649 | 1,309,730 | 7,858,379 | 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. | |
| Wang Xuewen | 5,548,707 | 1,109,741 | 6,658,448 | 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. | |
| Wang Zhengjiang | 286,875 | 57,375 | 344,250 | 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. | |
| Zhou Guiyang | 103,276 | 20,655 | 123,931 | 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 | 30,311,835 | 6,062,367 | 0 | 36,374,202 | -- | -- |
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
Please refer to item “IV. Actual implementation of share repurchase during the reporting period” under “Section VII Movements inShares and Conditions of Shareholders” for details.
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: Shares
| Total number of ordinary shareholders at the end of the reporting period | 109,313 | Total number of ordinary shareholders at the end of the previous month prior to the date of disclosure of | 119,034 | 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 | 0 |
| the annual report | previous month prior to the date of disclosure of the annual report | |||||||||
| 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 | 49.22% | 1,521,362,525 | 269,458,881 | 0 | 1,521,362,525 | ||||
| Hong Kong Securities Clearing Company Limited | Overseas legal person | 2.17% | 67,136,792 | -6,756,537 | 0 | 67,136,792 | ||||
| Shanghai Chongyang Strategic Investment Co., Ltd.－ Chongyang Strategic Huizhi Fund | Others | 1.75% | 54,072,200 | 9,012,033 | 0 | 54,072,200 | ||||
| National Social Security Fund No.503 Portfolio | Others | 1.26% | 39,000,060 | 19,000,060 | 0 | 39,000,060 | ||||
| Kuwait Investment Authority | Overseas legal person | 0.67% | 20,616,665 | 5,297,963 | 0 | 20,616,665 | ||||
| National Social Security Fund No.112 Portfolio | Others | 0.57% | 17,587,077 | -10,199,015 | 0 | 17,587,077 | ||||
| Shanghai Chongyang Strategic Investment Co., Ltd. － Chongyang Strategic Yingzhi Fund | Others | 0.53% | 16,248,559 | 10,184,220 | 0 | 16,248,559 | ||||
| China Construction Bank Corporation - E Fund Shanghai and Shenzhen 300 Medical and Health Trading Open-end Index Fund | Others | 0.52% | 16,120,133 | 10,895,317 | 0 | 16,120,133 | ||||
| Hu Baishan | Domestic natural person | 0.47% | 14,595,929 | 2,432,655 | 10,946,946 | 3,648,983 | ||||
| Chongyang Group Co., Ltd. | Domestic non-state-owned legal person | 0.45% | 13,962,191 | 2,327,032 | 0 | 13,962,191 | ||||
| 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 Baifan is the chairman of the board, general manager and actural controller of NHU Holding Group Co., Ltd.; Hu Baishan is the director of NHU Holding Group Co., Ltd., and Hu Baifan and Hu Baishan are brothers. 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. | 1,521,362,525 | RMB ordinary shares | 1,521,362,525 |
| Hong Kong Securities Clearing Company Limited | 67,136,792 | RMB ordinary shares | 67,136,792 |
| 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 | 39,000,060 | RMB ordinary shares | 39,000,060 |
| Kuwait Investment Authority | 20,616,665 | RMB ordinary shares | 20,616,665 |
| National Social Security Fund No.112 Portfolio | 17,587,077 | RMB ordinary shares | 17,587,077 |
| Shanghai Chongyang Strategic Investment Co., Ltd. － Chongyang Strategic Yingzhi Fund | 16,248,559 | RMB ordinary shares | 16,248,559 |
| China Construction Bank Corporation - E Fund Shanghai and Shenzhen 300 Medical and Health Trading Open-end Index Fund | 16,120,133 | RMB ordinary shares | 16,120,133 |
| Chongyang Group Co., Ltd. | 13,962,191 | RMB ordinary shares | 13,962,191 |
| Sanhua Holding Group Co.,Ltd. | 13,772,970 | RMB ordinary shares | 13,772,970 |
| 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 Baifan is the chairman of the board, general manager and actural controller of NHU Holding Group Co., Ltd.; Hu Baishan is the director of NHU Holding Group Co., Ltd., and Hu Baifan and Hu Baishan are brothers. 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. | ||
Note: The Company’s special securities account for repurchase is attributable to the top 10 shareholders with unrestricted shares, whohowever did not participate in the presentation of such balances.Did the top 10 shareholders of ordinary shares and the top 10 shareholders of unrestricted ordinary shares perform agreed repurchasetransaction during the reporting period?
□ Yes √ No
The top 10 shareholders of ordinary shares and the top 10 shareholders of unrestricted ordinary shares did not perform agreedrepurchase transaction during the reporting period..
2. Controlling shareholders
Nature of shareholders: Natural person holdingCategory of shareholders: Legal person
| Holding shareholders | Legal representative/ 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 May 18, 2022, the Announcement of Controlling Shareholders’ Share Increase Plan (2022-031) was published on the company'sdesignated information disclosure media and cninfo (http://www.cninfo.com.cn). NHU Holding Group Co., Ltd plans to increase itsholdings of the company's shares in the next six months through the ways allowed by the trading system of Shenzhen Stock Exchange
(including but not limited to centralized bidding, block trading, etc.), and the amount of shares to be increased is not less than RMB300 mn and not more than RMB 600 mn. NHU Holding Group Co., Ltd promises not to reduce the company's shares during the periodof increasing the company's shares and within the statutory period, and will complete the shareholding increase plan within the aboveimplementation period. As of November 18, 2022, NHU Holding Group has accumulatively increased 19,078,152 shares of thecompany’ stock through centralized bidding in the Shenzhen Stock Exchange system, accounting for 387,514,579.35 yuan (excludingtransaction costs) and 0.62% of the company's total share capital, the implementation of the shareholding increase plan was completed.For more details, please refer to Announcement on the results of the implementation of the controlling shareholder's increase in thecompany's shares (2022-046) published at November 19, 2022 on the company's designated information disclosure media and cninfo(http://www.cninfo.com.cn).
IV. Actual implementation of share repurchase during the reporting periodActual progress of share repurchase
√ Applicable □ Not applicable
| Date of proposal disclosure | Quantity of shares to be repurchased | % to total | Amount of shares to be repurchased | Repurchase period | Purposes | Quantity of repurchased shares (unit: shares) | Proportion of repurchased shares to the underlying shares involved in the equity incentive plan (if any) |
| 8/24/2021 | 7,317,073 shares - 14,634,146 shares | 0.28% - 0.57% | RMB 300 million - 600 million | 8/18/2021 - 8/17/2022 | The shares are to be repurchased for equity incentive plan or employee stock ownership plan. If the Company fails to utilize the shares within 36 months since the repurchase for the above purposes, the unused portion will be cancelled. | 17,485,676 | 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 ReportI. Auditor’s Report
| Audit Opinion | Standard unqualified opinion |
| Date of Auditor’s Report | April 19, 2023 |
| Accounting Firm | Pan-China Certified Public Accountants LLP |
| Number of Auditor’s Report | PCCPAAR [2023] No. 2898 |
| Signatory Certified Public Accountants | Teng Peibin, Jan Yanhui |
Auditor’s Report
To 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, 2022, 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, 2022, 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 Matters
Key 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 III 19, V 2 and XIII 5 of this section for details.The Company is mainly engaged in manufacturing and sales of nutrition, flavor and fragrance, new polymer materials, etc. In 2022,the operating revenue amounted to 15.93 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 to 5,343.85 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 III 12, 13, V 12 and 13 of this section for details.As of December 31, 2022, the Company’s carrying amount of fixed assets and construction in progress totals 21,613.10 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, etc.As 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 of thesecontrols, 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 purchase invoices, insurance policy of sales contracts, delivery lists etc. of fixed assets such as outsourcing machinery,and reviewed the accuracy of their costs;
(5) 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;
(6) We assessed the reasonableness of economic useful lives and residual value of fixed assets estimated by the Management incombination with conditions of the industry; and
(7) We checked whether information related to fixed assets and construction in progress had been presented appropriately in thefinancial statements.
IV. Other Information
The 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 or
otherwise appears to be materially misstated.If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are requiredto report that fact. We have nothing to report in this regard.V. 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 StatementsOur 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 theCompany’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 statements
The monetary unit of the financial statements is Renminbi (RMB) Yuan.
1. Consolidated balance sheet
Prepared by Zhejiang NHU Co., Ltd.
December 31, 2022
Unit: RMB Yuan
| Items | December 31, 2022 | January 1, 2022 |
| Current assets: | ||
| Cash and bank balances | 5,343,851,967.72 | 5,952,909,626.94 |
| Settlement funds | ||
| Loans to other banks | ||
| Held-for-trading financial assets | 720,314,576.43 | 1,250,736,359.24 |
| Derivative financial assets | ||
| Notes receivable | 372,641,835.79 | 349,145,316.03 |
| Accounts receivable | 2,476,269,041.23 | 2,755,168,573.14 |
| Receivables financing | 379,217,582.25 | 182,891,179.65 |
| Advances paid | 222,336,776.26 | 78,969,960.60 |
| Premiums receivable | ||
| Reinsurance accounts receivable | ||
| Reinsurance reserve receivable | ||
| Other receivables | 269,567,592.73 | 254,497,248.13 |
| Including: Interest receivable | ||
| Dividend receivable | 20,735,987.73 | 7,159,278.00 |
| Financial assets under reverse repo | ||
| Inventories | 4,144,557,702.39 | 3,193,657,367.16 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 182,442,976.79 | 895,782,268.87 |
| Total current assets | 14,111,200,051.59 | 14,913,757,899.76 |
| Non-current assets: |
| Items | December 31, 2022 | January 1, 2022 |
| Loans and advances | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | 432,503,568.48 | 351,327,625.75 |
| Other equity instrument investments | 22,998,147.55 | 22,998,147.55 |
| Other non-current financial assets | ||
| Investment property | ||
| Fixed assets | 16,523,867,858.53 | 14,350,779,852.73 |
| Construction in progress | 5,089,233,908.22 | 2,984,835,072.82 |
| Productive biological assets | ||
| Oil & gas assets | ||
| Right-of-use assets | 2,830,136.37 | 3,123,637.11 |
| Intangible assets | 1,738,506,246.32 | 1,521,729,757.66 |
| Development expenditures | ||
| Goodwill | 3,622,704.97 | |
| Long-term prepayments | 13,179,878.45 | 18,591,707.06 |
| Deferred tax assets | 49,812,172.71 | 55,805,191.95 |
| Other non-current assets | 279,870,482.64 | 501,076,584.40 |
| Total non-current assets | 24,156,425,104.24 | 19,810,267,577.03 |
| Total assets | 38,267,625,155.83 | 34,724,025,476.79 |
| Current liabilities: | ||
| Short-term borrowings | 1,846,373,441.01 | 1,403,332,827.92 |
| Central bank loans | ||
| Loans from other banks | ||
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 627,438,689.79 | 694,124,946.73 |
| Accounts payable | 2,175,458,436.49 | 1,435,966,427.76 |
| Advances received | ||
| Contract liabilities | 60,660,929.75 | 61,135,258.36 |
| Financial liabilities under repo | ||
| Absorbing deposit and interbank deposit | ||
| Deposit for agency security transaction | ||
| Deposit for agency security underwriting | ||
| Employee benefits payable | 386,391,911.86 | 370,609,333.07 |
| Taxes and rates payable | 208,198,951.94 | 420,743,262.69 |
| Other payables | 67,351,740.34 | 56,712,103.36 |
| Including: Interest payable | ||
| Dividend payable | ||
| Handling fee and commission payable | ||
| Reinsurance accounts payable |
| Items | December 31, 2022 | January 1, 2022 |
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 2,591,687,706.22 | 2,029,499,509.43 |
| Other current liabilities | 4,978,299.99 | 5,133,310.10 |
| Total current liabilities | 7,968,540,107.39 | 6,477,256,979.42 |
| Non-current liabilities: | ||
| Insurance policy reserve | ||
| Long-term borrowings | 5,273,637,508.87 | 5,148,811,786.49 |
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 2,822,404.07 | 2,936,868.15 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | 1,083,159,222.41 | 1,063,699,676.16 |
| Deferred tax liabilities | 277,316,677.63 | 135,751,304.31 |
| Other non-current liabilities | ||
| Total non-current liabilities | 6,636,935,812.98 | 6,351,199,635.11 |
| Total liabilities | 14,605,475,920.37 | 12,828,456,614.53 |
| Equity: | ||
| Share capital | 3,090,907,356.00 | 2,578,394,760.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 3,613,097,510.81 | 4,121,063,080.96 |
| Less: Treasury shares | 500,059,711.25 | 320,360,784.48 |
| Other comprehensive income | 76,577,564.17 | -1,614,172.31 |
| Special reserve | 26,196,894.55 | 12,692,218.51 |
| Surplus reserve | 1,444,413,940.89 | 1,289,197,380.00 |
| General risk reserve | ||
| Undistributed profit | 15,823,725,913.44 | 14,152,465,528.17 |
| Total equity attributable to the parent company | 23,574,859,468.61 | 21,831,838,010.85 |
| Non-controlling interest | 87,289,766.85 | 63,730,851.41 |
| Total equity | 23,662,149,235.46 | 21,895,568,862.26 |
| Total liabilities & equity | 38,267,625,155.83 | 34,724,025,476.79 |
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, 2022 | January 1, 2022 |
| Current assets: | ||
| Cash and bank balances | 4,202,458,431.01 | 4,319,521,960.26 |
| Items | December 31, 2022 | January 1, 2022 |
| Held-for-trading financial assets | 200,000,000.00 | 200,000,000.00 |
| Derivative financial assets | ||
| Notes receivable | 333,989,841.29 | 349,145,316.03 |
| Accounts receivable | 500,589,449.94 | 746,349,980.29 |
| Receivables financing | ||
| Advances paid | 3,906,244.57 | 203,802,390.93 |
| Other receivables | 2,496,112,121.85 | 3,095,039,415.47 |
| Including: Interest receivable | ||
| Dividend receivable | 20,735,987.73 | 7,159,278.00 |
| Inventories | 383,861,555.41 | 442,360,365.52 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 3,980,654.70 | 552,376,721.31 |
| Total current assets | 8,124,898,298.77 | 9,908,596,149.81 |
| Non-current assets: | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | 9,386,046,175.45 | 8,054,952,017.02 |
| Other equity instrument investments | 72,998,147.55 | 22,998,147.55 |
| Other non-current financial assets | ||
| Investment property | ||
| Fixed assets | 625,625,323.34 | 674,187,271.03 |
| Construction in progress | 2,701,423.73 | 1,396,104.03 |
| Productive biological assets | ||
| Oil & gas assets | ||
| Right-of-use assets | 2,791,860.28 | 2,952,929.08 |
| Intangible assets | 144,448,440.79 | 113,952,307.99 |
| Development expenditures | ||
| Goodwill | ||
| Long-term prepayments | 2,614,317.07 | 4,266,859.15 |
| Deferred tax assets | 26,137,954.69 | 33,889,948.73 |
| Other non-current assets | 21,018,962.32 | 2,311,441.46 |
| Total non-current assets | 10,284,382,605.22 | 8,910,907,026.04 |
| Total assets | 18,409,280,903.99 | 18,819,503,175.85 |
| Current liabilities: | ||
| Short-term borrowings | 501,525,361.11 | 582,373,105.49 |
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 226,011,556.24 | 464,150,033.90 |
| Accounts payable | 107,476,196.13 | 84,472,375.02 |
| Items | December 31, 2022 | January 1, 2022 |
| Advances received | ||
| Contract liabilities | 4,296,388.78 | 13,839,278.19 |
| Employee benefits payable | 75,342,683.87 | 88,415,827.18 |
| Taxes and rates payable | 7,632,017.61 | 60,253,580.60 |
| Other payables | 28,936,115.08 | 15,631,151.00 |
| Including: Interest payable | ||
| Dividend payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 1,208,306,034.83 | 1,238,333,387.67 |
| Other current liabilities | 558,530.54 | 1,799,106.15 |
| Total current liabilities | 2,160,084,884.19 | 2,549,267,845.20 |
| Non-current liabilities: | ||
| Long-term borrowings | 3,336,304,155.58 | 2,935,717,876.76 |
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 2,822,404.07 | 2,924,244.46 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | 11,887,665.38 | 15,164,020.12 |
| Deferred tax liabilities | 19,080,454.36 | 20,547,468.08 |
| Other non-current liabilities | ||
| Total non-current liabilities | 3,370,094,679.39 | 2,974,353,609.42 |
| Total liabilities | 5,530,179,563.58 | 5,523,621,454.62 |
| Equity: | ||
| Share capital | 3,090,907,356.00 | 2,578,394,760.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 3,353,427,829.42 | 3,861,393,399.57 |
| Less: Treasury shares | 500,059,711.25 | 320,360,784.48 |
| Other comprehensive income | 506,954.43 | 506,954.43 |
| Special reserve | ||
| Surplus reserve | 1,444,413,940.89 | 1,289,197,380.00 |
| Undistributed profit | 5,489,904,970.92 | 5,886,750,011.71 |
| Total equity | 12,879,101,340.41 | 13,295,881,721.23 |
| Total liabilities & equity | 18,409,280,903.99 | 18,819,503,175.85 |
3. Consolidated income statement
Unit: RMB Yuan
| Items | Year 2022 | Year 2021 |
| I. Total operating revenue | 15,933,984,403.41 | 14,917,101,500.91 |
| Including: Operating revenue | 15,933,984,403.41 | 14,917,101,500.91 |
| Interest income | ||
| Premiums earned | ||
| Revenue from handling charges and commission | ||
| II. Total operating cost | 11,705,488,745.99 | 10,014,421,384.71 |
| Including: Operating cost | 10,048,300,866.94 | 8,299,544,991.07 |
| 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 | 126,908,344.63 | 131,624,828.23 |
| Selling expenses | 122,257,619.47 | 107,037,085.96 |
| Administrative expenses | 504,674,730.69 | 423,584,417.67 |
| R&D expenses | 858,945,406.13 | 782,661,708.54 |
| Financial expenses | 44,401,778.13 | 269,968,353.24 |
| Including: Interest expenses | 329,243,757.49 | 337,753,271.80 |
| Interest income | 153,449,422.80 | 164,418,967.90 |
| Add: Other income | 176,863,614.19 | 152,380,704.67 |
| Investment income (or less: losses) | 128,695,043.73 | 127,969,715.41 |
| Including: Investment income from associates and joint ventures | 95,616,385.10 | 59,304,344.04 |
| Gains from derecognition of financial assets at amortized cost | ||
| Gains on foreign exchange (or less: losses) | ||
| Gains on net exposure to hedging risk (or less: losses) | ||
| Gains on changes in fair value (or less: losses) | -66,321,783.72 | 37,863,705.44 |
| Credit impairment loss | 5,165,584.15 | -50,043,349.49 |
| Assets impairment loss | -162,974,265.12 | -54,250,408.90 |
| Gains on asset disposal (or less: losses) | 2,726,604.77 | -1,544,436.08 |
| III. Operating profit (or less: losses) | 4,312,650,455.42 | 5,115,056,047.25 |
| Add: Non-operating revenue | 4,985,224.34 | 12,287,842.84 |
| Less: Non-operating expenditures | 79,532,730.91 | 64,603,824.24 |
| IV. Profit before tax (or less: total loss) | 4,238,102,948.85 | 5,062,740,065.85 |
| Less: Income tax | 599,835,465.60 | 690,514,446.51 |
| V. Net profit (or less: net loss) | 3,638,267,483.25 | 4,372,225,619.34 |
| (I) Categorized by the continuity of operations | ||
| 1. Net profit from continuing operations (or less: net loss) | 3,638,267,483.25 | 4,372,225,619.34 |
| 2. Net profit from discontinued operations (or less: |
| Items | Year 2022 | Year 2021 |
| net loss) | ||
| (II) Categorized by the portion of equity ownership | ||
| 1. Net profit attributable to owners of parent company | 3,620,271,034.96 | 4,356,010,628.22 |
| 2. Net profit attributable to non-controlling shareholders | 17,996,448.29 | 16,214,991.12 |
| VI. Other comprehensive income after tax | 81,425,359.82 | -37,096,882.86 |
| Items attributable to the owners of the parent company | 78,191,736.48 | -29,418,001.62 |
| (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 | 78,191,736.48 | -29,418,001.62 |
| 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 | 78,191,736.48 | -29,418,001.62 |
| 7. Others | ||
| Items attributable to non-controlling shareholders | 3,233,623.34 | -7,678,881.24 |
| VII. Total comprehensive income | 3,719,692,843.07 | 4,335,128,736.48 |
| Items attributable to the owners of the parent company | 3,698,462,771.44 | 4,326,592,626.60 |
| Items attributable to non-controlling shareholders | 21,230,071.63 | 8,536,109.88 |
| VIII. Earnings per share (EPS): | ||
| (I) Basic EPS (yuan per share) | 1.17 | 1.41 |
| (II) Diluted EPS (yuan per share) | 1.17 | 1.41 |
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 2022 | Year 2021 |
| I. Operating revenue | 3,476,379,206.00 | 4,554,078,901.38 |
| Less: Operating cost | 2,829,191,552.87 | 3,235,286,634.28 |
| Taxes and surcharges | 19,574,413.26 | 28,779,899.07 |
| Selling expenses | 28,148,629.89 | 26,691,429.90 |
| Items | Year 2022 | Year 2021 |
| Administrative expenses | 161,807,269.66 | 154,022,840.72 |
| R&D expenses | 237,369,336.57 | 216,563,446.14 |
| Financial expenses | 45,759,173.30 | 45,975,949.63 |
| Including: Interest expenses | 181,258,625.13 | 179,393,799.37 |
| Interest income | 135,572,386.45 | 144,933,772.10 |
| Add: Other income | 37,002,472.86 | 43,875,430.64 |
| Investment income (or less: losses) | 1,358,265,851.90 | 1,535,436,661.17 |
| Including: Investment income from associates and joint ventures | 47,283,121.54 | 60,097,137.98 |
| 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) | 11,815,408.19 | |
| Credit impairment loss | 44,605,400.03 | 58,950,663.78 |
| Assets impairment loss | -17,315,989.84 | -52,176,656.64 |
| Gains on asset disposal (or less: losses) | -1,077,495.83 | -1,332,803.02 |
| II. Operating profit (or less: losses) | 1,576,009,069.57 | 2,443,327,405.76 |
| Add: Non-operating revenue | 88,499.41 | 5,010,140.26 |
| Less: Non-operating expenditures | 972,209.42 | 1,500,375.08 |
| III. Profit before tax (or less: total loss) | 1,575,125,359.56 | 2,446,837,170.94 |
| Less: Income tax | 22,959,750.66 | 139,622,202.68 |
| IV. Net profit (or less: net loss) | 1,552,165,608.90 | 2,307,214,968.26 |
| (I) Net profit from continuing operations (or less: net loss) | 1,552,165,608.90 | 2,307,214,968.26 |
| (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 | 1,552,165,608.90 | 2,307,214,968.26 |
| Items | Year 2022 | Year 2021 |
| 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 2022 | Year 2021 |
| I. Cash flows from operating activities: | ||
| Cash receipts from sale of goods or rendering of services | 15,306,568,290.22 | 14,128,039,148.63 |
| 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 | 1,027,184,301.30 | 917,132,022.82 |
| Other cash receipts related to operating activities | 378,248,822.12 | 539,965,875.07 |
| Subtotal of cash inflows from operating activities | 16,712,001,413.64 | 15,585,137,046.52 |
| Cash payments for goods purchased and services received | 9,323,961,398.08 | 7,309,063,593.18 |
| 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 | 1,719,618,482.00 | 1,345,745,150.27 |
| Cash payments for taxes and rates | 1,017,074,124.15 | 783,199,680.00 |
| Other cash payments related to operating activities | 289,866,325.80 | 309,250,571.50 |
| Subtotal of cash outflows from operating activities | 12,350,520,330.03 | 9,747,258,994.95 |
| Net cash flows from operating activities | 4,361,481,083.61 | 5,837,878,051.57 |
| II. Cash flows from investing activities: | ||
| Cash receipts from withdrawal of investments | ||
| Cash receipts from investment income | 63,324,315.46 | 145,185,573.83 |
| Net cash receipts from the disposal of fixed assets, intangible assets and other long-term assets | 35,976,834.82 | 24,510,298.30 |
| Items | Year 2022 | Year 2021 |
| Net cash receipts from the disposal of subsidiaries & other business units | ||
| Other cash receipts related to investing activities | 1,820,617,040.49 | 1,800,000,000.00 |
| Subtotal of cash inflows from investing activities | 1,919,918,190.77 | 1,969,695,872.13 |
| Cash payments for the acquisition of fixed assets, intangible assets and other long-term assets | 4,931,891,897.26 | 3,472,724,469.42 |
| Cash payments for investments | 83,904,479.79 | |
| Net increase of pledged borrowings | ||
| Net cash payments for the acquisition of subsidiaries & other business units | ||
| Other cash payments related to investing activities | 827,440,207.10 | 1,804,835,731.00 |
| Subtotal of cash outflows from investing activities | 5,759,332,104.36 | 5,361,464,680.21 |
| Net cash flows from investing activities | -3,839,413,913.59 | -3,391,768,808.08 |
| III. Cash flows from financing activities: | ||
| Cash receipts from absorbing investments | ||
| Including: Cash received by subsidiaries from non-controlling shareholders as investments | ||
| Cash receipts from borrowings | 6,843,969,570.73 | 7,383,209,509.05 |
| Other cash receipts related to financing activities | 11,188,800.91 | |
| Subtotal of cash inflows from financing activities | 6,855,158,371.64 | 7,383,209,509.05 |
| Cash payments for the repayment of borrowings | 5,807,173,190.91 | 6,557,328,243.08 |
| Cash payments for distribution of dividends or profits and for interest expenses | 2,132,962,559.97 | 1,841,063,211.24 |
| Including: Cash paid by subsidiaries to non-controlling shareholders as dividend or profit | 12,381,785.50 | |
| Other cash payments related to financing activities | 185,017,200.07 | 329,441,306.41 |
| Subtotal of cash outflows from financing activities | 8,125,152,950.95 | 8,727,832,760.73 |
| Net cash flows from financing activities | -1,269,994,579.31 | -1,344,623,251.68 |
| IV. Effect of foreign exchange rate changes on cash & cash equivalents | 185,231,802.92 | -56,255,229.67 |
| V. Net increase in cash and cash equivalents | -562,695,606.37 | 1,045,230,762.14 |
| Add: Opening balance of cash and cash equivalents | 5,714,537,538.23 | 4,669,306,776.09 |
| VI. Closing balance of cash and cash equivalents | 5,151,841,931.86 | 5,714,537,538.23 |
6. Parent company cash flow statement
Unit: RMB Yuan
| Items | Year 2022 | Year 2021 |
| I. Cash flows from operating activities: | ||
| Cash receipts from sale of goods and rendering of services | 4,244,919,158.33 | 5,109,886,806.38 |
| Receipts of tax refund | 70,396,502.88 | 79,006,050.97 |
| Other cash receipts related to operating activities | 184,605,407.60 | 196,474,615.50 |
| Subtotal of cash inflows from operating activities | 4,499,921,068.81 | 5,385,367,472.85 |
| Cash payments for goods purchased and services received | 3,081,465,686.71 | 3,268,785,597.91 |
| Cash paid to and on behalf of employees | 339,198,320.10 | 281,446,896.19 |
| Cash payments for taxes and rates | 103,309,425.51 | 129,270,605.04 |
| Other cash payments related to operating activities | 136,806,092.80 | 114,356,348.57 |
| Items | Year 2022 | Year 2021 |
| Subtotal of cash outflows from operating activities | 3,660,779,525.12 | 3,793,859,447.71 |
| Net cash flows from operating activities | 839,141,543.69 | 1,591,508,025.14 |
| II. Cash flows from investing activities: | ||
| Cash receipts from withdrawal of investments | ||
| Cash receipts from investment income | 1,226,726,388.76 | 1,382,569,901.85 |
| Net cash receipts from the disposal of fixed assets, intangible assets and other long-term assets | 6,140,487.71 | 2,862,302.06 |
| Net cash receipts from the disposal of subsidiaries & other business units | ||
| Other cash receipts related to investing activities | 2,059,965,789.97 | 2,974,222,044.69 |
| Subtotal of cash inflows from investing activities | 3,292,832,666.44 | 4,359,654,248.60 |
| Cash payments for the acquisition of fixed assets, intangible assets and other long-term assets | 62,571,723.93 | 45,427,101.23 |
| Cash payments for investments | 1,350,000,000.00 | 1,672,800,000.00 |
| Net cash payments for the acquisition of subsidiaries & other business units | ||
| Other cash payments related to investing activities | 993,285,460.92 | 1,286,337,315.10 |
| Subtotal of cash outflows from investing activities | 2,405,857,184.85 | 3,004,564,416.33 |
| Net cash flows from investing activities | 886,975,481.59 | 1,355,089,832.27 |
| III. Cash flows from financing activities: | ||
| Cash receipts from absorbing investments | ||
| Cash receipts from borrowings | 4,250,000,000.00 | 4,449,379,400.00 |
| Other cash receipts related to financing activities | ||
| Subtotal of cash inflows from financing activities | 4,250,000,000.00 | 4,449,379,400.00 |
| Cash payments for the repayment of borrowings | 3,965,817,400.00 | 3,772,893,927.30 |
| Cash payments for distribution of dividends or profits and for interest expenses | 1,974,363,127.13 | 1,686,503,402.65 |
| Other cash payments related to financing activities | 181,401,563.42 | 324,177,230.24 |
| Subtotal of cash outflows from financing activities | 6,121,582,090.55 | 5,783,574,560.19 |
| Net cash flows from financing activities | -1,871,582,090.55 | -1,334,195,160.19 |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | 7,950,387.71 | -13,812,643.89 |
| V. Net increase in cash and cash equivalents | -137,514,677.56 | 1,598,590,053.33 |
| Add: Opening balance of cash and cash equivalents | 4,191,863,033.83 | 2,593,272,980.50 |
| VI. Closing balance of cash and cash equivalents | 4,054,348,356.27 | 4,191,863,033.83 |
7. Consolidated statement of changes in equity
Current period cumulative
Unit: RMB Yuan
| Items | Year 2022 | ||||||||||||||
| Equity attributable to parent company | Non-controlling interest | Total equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Treasury shares | Other comprehensive income | Special reserve | reserve | General risk reserve | Undistributed profit | Others | Subtotal | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
I. Balance at the end of prior year
| 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 | 14,120,605,163.26 | 21,799,977,645.94 | 63,730,851.41 | 21,863,708,497.35 | |||||
| Add: Cumulative changes of accounting policies | 31,860,364.91 | 31,860,364.91 | 31,860,364.91 |
Error correction of prior period
| Error correction of prior period | |||||||||||||||
| Business combination under common control |
Others
| Others | |||||||||||||||
| 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 | 14,152,465,528.17 | 21,831,838,010.85 | 63,730,851.41 | 21,895,568,862.26 |
III. Current period increase (or less: decrease)
| 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 | 155,216,560.89 | 1,671,260,385.27 | 1,743,021,457.76 | 23,558,915.44 | 1,766,580,373.20 | |||||
| (I) Total comprehensive income | 78,191,736.48 | 3,620,271,034.96 | 3,698,462,771.44 | 21,230,071.63 | 3,719,692,843.07 | ||||||||||
| (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
| 1. Ordinary shares contributed by owners |
2. Capital contributed by holders of other equity
instruments
| 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 | 2,328,843.81 | -177,370,082.96 |
(III) Profit distribution
| (III) Profit distribution | 155,216,560.89 | -1,949,010,649.69 | -1,793,794,088.80 | -1,793,794,088.80 | |||||||||||
| 1. Appropriation of surplus reserve | 155,216,560.89 | -155,216,560.89 |
2. Appropriation of general risk reserve
| 2. Appropriation of general risk reserve |
3. Appropriation of profit to owners
| 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 | 512,512,596.00 | -512,512,596.00 |
1. Transfer of capital reserve to capital
| 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 | |||||||||||||||
| 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
| 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
| 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 | 1,444,413,940.89 | 15,823,725,913.44 | 23,574,859,468.61 | 87,289,766.85 | 23,662,149,235.46 |
Preceding period comparative
Unit: RMB Yuan
| Items | Year 2021 | ||||||||||||||
| 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
| I. Balance at the end of prior year | 2,148,662,300.00 | 4,560,522,556.84 | 27,803,829.31 | 9,550,346.85 | 1,074,331,150.00 | 11,515,384,739.95 | 19,336,254,922.95 | 67,576,527.03 | 19,403,831,449.98 | ||||||
| Add: Cumulative changes of accounting policies | |||||||||||||||
| Error correction of prior period |
Business combination under common control
| Business combination under common control |
Others
| Others | |||||||||||||||
| II. Balance at the beginning of current year | 2,148,662,300.00 | 4,560,522,556.84 | 27,803,829.31 | 9,550,346.85 | 1,074,331,150.00 | 11,515,384,739.95 | 19,336,254,922.95 | 67,576,527.03 | 19,403,831,449.98 | ||||||
| III. Current period increase (or less: decrease) | 429,732,460.00 | -439,459,475.88 | 320,360,784.48 | -29,418,001.62 | 3,141,871.66 | 214,866,230.00 | 2,605,220,423.31 | 2,463,722,722.99 | -3,845,675.62 | 2,459,877,047.37 | |||||
| (I) Total comprehensive income | -29,418,001.62 | 4,324,150,263.31 | 4,294,732,261.69 | 8,536,109.88 | 4,303,268,371.57 | ||||||||||
| (II) Capital contributed or withdrawn by owners | 320,360,784.48 | -320,360,784.48 | -320,360,784.48 |
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
| 4. Others | 320,360,784.48 | -320,360,784.48 | -320,360,784.48 |
(III) Profit distribution
| (III) Profit distribution | 214,866,230.00 | -1,718,929,840.00 | -1,504,063,610.00 | -12,381,785.50 | -1,516,445,395.50 | ||||||||||
| 1. Appropriation of surplus reserve | 214,866,230.00 | -214,866,230.00 | |||||||||||||
| 2. Appropriation of general risk reserve |
3. Appropriation of profit to owners
| 3. Appropriation of profit to owners | -1,504,063,610.00 | -1,504,063,610.00 | -12,381,785.50 | -1,516,445,395.50 | |||||||||||
| 4. Others |
(IV) Internal carry-over within equity
| (IV) Internal carry-over within equity | 429,732,460.00 | -429,732,460.00 | |||||||||||||
| 1. Transfer of capital reserve to capital | 429,732,460.00 | -429,732,460.00 |
2. Transfer of surplus 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 | |||||||||||||||
| 5. Other comprehensive income carried over to retained earnings |
6. Others
| 6. Others | |||||||||||||||
| (V) Special reserve | 3,141,871.66 | 3,141,871.66 | 3,141,871.66 |
1. Appropriation of current period
| 1. Appropriation of current period | 27,879,615.83 | 27,879,615.83 | 27,879,615.83 | ||||||||||||
| 2. Application of current period | -24,737,744.17 | -24,737,744.17 | -24,737,744.17 | ||||||||||||
| (VI) Others | -9,727,015.88 | -9,727,015.88 | -9,727,015.88 |
IV. Balance at the end of current period
| IV. Balance at the end of current period | 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 | 14,120,605,163.26 | 21,799,977,645.94 | 63,730,851.41 | 21,863,708,497.35 |
8. Parent company statements of changes in equity
Current period cumulative
Unit: RMB Yuan
| Items | Year 2022 | |||||||||||
| 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
| 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 | ||||||||||||
| Error correction of prior period |
Others
| Others | ||||||||||||
| 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 | 5,886,750,011.71 | 13,295,881,721.23 | |||||
| III. Current period increase (or less: decrease) | 512,512,596.00 | -507,965,570.15 | 179,698,926.77 | 155,216,560.89 | -396,845,040.79 | -416,780,380.82 |
(I) Total comprehensive income
| (I) Total comprehensive income | 1,552,165,608.90 | 1,552,165,608.90 | ||||||||||
| (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
| 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 | 155,216,560.89 | -1,949,010,649.69 | -1,793,794,088.80 |
1. Appropriation of surplus reserve
| 1. Appropriation of surplus reserve | 155,216,560.89 | -155,216,560.89 | ||||||||||
| 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
| 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
| 6. Others |
(V) Special reserve
| (V) Special reserve | ||||||||||||
| 1. Appropriation of current period | ||||||||||||
| 2. Application of current period |
(VI) Others
| (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 | 1,444,413,940.89 | 5,489,904,970.92 | 12,879,101,340.41 |
Preceding period comparative
Unit: RMB Yuan
| Items | Year 2021 | |||||||||||
| 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 | 2,148,662,300.00 | 4,300,852,875.45 | 506,954.43 | 1,074,331,150.00 | 5,298,464,883.45 | 12,822,818,163.33 | ||||||
| Add: Cumulative changes of accounting policies | ||||||||||||
Error correction of prior period
| Error correction of prior period | ||||||||||||
| Others | ||||||||||||
| II. Balance at the beginning of current year | 2,148,662,300.00 | 4,300,852,875.45 | 506,954.43 | 1,074,331,150.00 | 5,298,464,883.45 | 12,822,818,163.33 | ||||||
| III. Current period increase (or less: decrease) | 429,732,460.00 | -439,459,475.88 | 320,360,784.48 | 214,866,230.00 | 588,285,128.26 | 473,063,557.90 |
(I) Total comprehensive income
| (I) Total comprehensive income | 2,307,214,968.26 | 2,307,214,968.26 | ||||||||||
| (II) Capital contributed or withdrawn by owners | 320,360,784.48 | -320,360,784.48 | ||||||||||
| 1. Ordinary shares contributed by owners |
2. Capital contributed by holders of other equity instruments
| 2. Capital contributed by holders of other equity instruments | ||||||||||||
| 3. Amount of share-based payment included in equity |
4. Others
| 4. Others | 320,360,784.48 | -320,360,784.48 | ||||||||||
| (III) Profit distribution | 214,866,230.00 | -1,718,929,840.00 | -1,504,063,610.00 |
1. Appropriation of surplus reserve
| 1. Appropriation of surplus reserve | 214,866,230.00 | -214,866,230.00 |
2. Appropriation of profit to owners
| 2. Appropriation of profit to owners | -1,504,063,610.00 | -1,504,063,610.00 |
3. Others
| 3. Others | ||||||||||||
| (IV) Internal carry-over within equity | 429,732,460.00 | -429,732,460.00 |
1. Transfer of capital reserve to capital
| 1. Transfer of capital reserve to capital | 429,732,460.00 | -429,732,460.00 | ||||||||||
| 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 |
5. Other comprehensive income carried over to retained
earnings
| 5. Other comprehensive income carried over to retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve |
1. Appropriation of current period
| 1. Appropriation of current period | ||||||||||||
| 2. Application of current period | ||||||||||||
| (VI) Others | -9,727,015.88 | -9,727,015.88 | ||||||||||
| IV. Balance at the end of current period | 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 |
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 fifteenth meeting of the eighth session of the Board of Directorsdated April 19 2023.The Company has brought 28 subsidiaries including Xinchang NHU Vitamins Co., Ltd., Zhejiang NHU Import & Export Co., Ltd.,Zhejiang Vityesun Animal Nutrition and Health Co., Ltd., etc. into the consolidation scope. Please refer to item VIII and IX of thissection for details.
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 classifiedas 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. 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.
6. 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.
7. 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.
8. 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 aretranslated into RMB at the approximate exchange rate similar to the spot exchange rate at the transaction date. The difference arising
from the aforementioned foreign currency translation is included in other comprehensive income.
9. 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. Accumulatedgains 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 at
fair 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 derecognized
and 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 initial
recognition, 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 measuredat 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.
(2) Financial instruments with expected credit risk assessed and expected credit losses measured on a collective basis
| Items | Basis for determination of portfolio | Method for measuring expected credit loss |
| Other receivables – Portfolio grouped with export tax refund receivable | Nature of receivables | Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates expected credit loss through exposure at default and 12-month or lifetime expected credit loss rate. |
| Other receivables – Portfolio grouped with VAT refund receivable | ||
| Other receivables – Portfolio grouped with land bond receivable | ||
| Other receivables – Portfolio grouped with deposits receivable from customs and tax authorities | ||
| Other receivables – Portfolio grouped with ages | Ages |
(3) Accounts receivable and contract assets with expected credit losses measured on a collective basis
1) Specific portfolios and method for measuring expected credit loss
| Items | Basis for determination of portfolio | Method for measuring expected credit loss |
| Bank acceptance receivable | Type of notes | Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates expected credit loss through exposure at default and lifetime expected credit loss rate. |
| Trade acceptance receivable | ||
| Accounts receivable – Portfolio grouped with ages | Ages | Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company prepares the comparison table of ages and lifetime expected credit loss rate of accounts receivable, so as to calculate expected credit loss. |
2) Accounts receivable – comparison table of ages and lifetime expected credit loss rate of portfolio grouped with ages
| Ages | Expected credit loss rate (%) |
| Within 1 year (inclusive, the same hereinafter) | 5 |
| 1-2 years | 20 |
| 2-3 years | 80 |
| Over 3 years | 100 |
6. Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are presented separately in the balance sheet and are not offset. However, the Company offsetsa financial asset and a financial liability and presents the net amount in the balance sheet when, and only when, the Company: (1)currently has a legally enforceable right to set off the recognized amounts; and (2) intends either to settle on a net basis, or to realize
the asset and settle the liability simultaneously.For a transfer of a financial asset that does not qualify for derecognition, the Company does not offset the transferred asset and theassociated liability.
10. 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:
Inventories dispatched from storage are accounted for with weighted average method at the end of each month.
3. Basis for determining net realizable value
At the balance sheet date, inventories are measured at the lower of cost and net realizable value; provisions for inventory write-downare made on the excess of its cost over the net realizable value. The net realizable value of inventories held for sale is determined basedon the amount of the estimated selling price less the estimated selling expenses and relevant taxes and surcharges in the ordinary courseof business; the net realizable value of materials to be processed is determined based on the amount of the estimated selling price lessthe estimated costs of completion, selling expenses and relevant taxes and surcharges in the ordinary course of business; at the balancesheet date, when only part of the same item of inventories have agreed price, their net realizable value are determined separately andare compared with their costs to set the provision for inventory write-down to be made or reversed.
4. Inventory system
Perpetual inventory method is adopted.
5. 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.
11. 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 share
of 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 investments withjoint 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) Stand-alone financial statements
The difference between the carrying amount of the disposed equity and the consideration obtained thereof is recognized in profit orloss. If the disposal does not result in the Company’s loss of significant influence or joint control, the remained equity is accounted forwith equity method; however, if the disposal results in the Company’s loss of control, joint control, or significant influence, theremained equity is accounted for according to “CASBE 22 – Financial Instruments: Recognition and Measurement”.
(2) Consolidated financial statements
1) Disposal of a subsidiary in stages not qualified as “bundled transaction” resulting in the Company’s loss of controlBefore the Company’s loss of control, the difference between the disposal consideration and the proportionate share of net assets in thedisposed subsidiary from acquisition date or combination date to the disposal date is adjusted to capital reserve (capital premium), ifthe balance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings.When the Company loses control, the remained equity is remeasured at the loss-of-control-date fair value. The aggregated value ofdisposal consideration and the fair value of the remained equity, less the share of net assets in the disposed subsidiary held before thedisposal from the acquisition date or combination date to the disposal date is recognized in investment income in the period when theCompany loses control over such subsidiary, and meanwhile goodwill is offset correspondingly. Other comprehensive income relatedto equity investments in former subsidiary is reclassified as investment income upon the Company’s loss of control.
2) Disposal of a subsidiary in stages qualified as “bundled transaction” resulting in the Company’s loss of controlIn case of “bundled transaction”, stages as a whole are considered as one transaction resulting in loss of control in accounting treatment.However, before the Company loses control, the difference between the disposal consideration at each stage and the proportionateshare of net assets in the disposed subsidiary is recognized as other comprehensive income at the consolidated financial statements andreclassified as profit or loss in the period when the Company loses control over such subsidiary.
12. 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 |
13. 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.
14. 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.
15. 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 | Amortization period (years) |
| Land use right | 50, 70 |
| Software | 10 |
| Patent right | 10 |
| Non-patented technology | 15 |
(2) Accounting policies on internal R&D expenditures
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.
16. 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.
17. 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.
18. 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-termemployee 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.
19. 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 willnot 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 benefits
are 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.Differences in accounting policies on revenue recognition due to the adoption of different business models for similar businessesNone.
20. 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.
21. Contract assets, contract liabilities
The Company presents contract assets or contract liabilities in the balance sheet based on the relationship between its performance
obligations 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.
22. 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.
23. Leases
(1) Operating lease
1. The Company as lessee
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 be
certain 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 payableunder 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. The Company as lessor
At the commencement date, the Company classifies a lease as a finance lease if it transfers substantially all the risks and rewardsincidental to ownership of an underlying asset. Otherwise, it is classified as an operating lease.Operating leaseLease receipts are recognized as lease income with straight-line method/unit-of-production method over the lease term. Initial directcosts incurred shall be capitalized, amortized on the same basis as the recognition of lease income, and included into profit or loss byinstallments. Variable lease payments related to operating lease which are not included in the lease payment are charged as profit orloss in the periods in which they are incurred.
24. Work safety fund
The Company accrues work safety fund in accordance with the “Circular on Management Measures on the Accrual and Use of WorkSafety Fund” numbered Cai Qi [2022] 136 by Ministry of Finance and State Administration of Work Safety. Standard work safety fundis included in the cost or current profit or loss, meanwhile accounted for under “special reserve”. When work safety fund is used as anexpense, it is to offset special reserve directly. When work safety fund is qualified to be included in the cost of fixed assets, it isaccounted for under “construction in progress” and transferred to fixed assets when related safety projects reach the designed usefulconditions; meanwhile, the cost included in fixed assets is to offset “special reserve”, and accumulated depreciation shall be recognizedat the same amount. Such fixed assets shall not be depreciated in future periods.
25. 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.
26.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).
27. Significant changes in accounting policies and estimates
(1) Significant changes in accounting policies
√ Applicable □ Not Applicable
| Contents and reasons | Approval process | Remarks |
| The company will implement the revised interpretation of accounting standards for Business Enterprises No. 15 from January 1, 2022. According to the new standards, if the company sells the products or by-products produced before the fixed assets reach the expected serviceable state or during the research and development process, the income and cost related to the trial operation sales shall be accounted for separately and included in the current profit and loss. The net amount of the income related to the trial operation sales after offsetting the relevant costs shall not be used to offset the cost of the fixed assets or the research and development expenditure. | N/A | Please refer to Announcement No. 2022-026 disclosed on www.cninfo.com.cn on April 28, 2022 for details. |
| The Company will implement the provisions of Accounting Standard for Business Enterprises No. 15, "Judgment on Loss-making Contracts" issued by the Ministry of Finance from January 1, 2022. | N/A | The change in accounting policy had no impact on the Company's financial statements. |
| The Company will implement the provisions of Accounting Standard for Business Enterprises No. 16, " Accounting for the income tax effects of dividends related to financial instruments classified as equity instruments by the issuer " issued by the Ministry of Finance from November 30, 2022. | N/A | The change in accounting policy had no impact on the Company's financial statements. |
| The Company will implement the provisions of Accounting Standard for Business Enterprises No. 16, " On the accounting treatment of companies that modify cash-settled share-based payments to equity-settled share-based payments " issued by the Ministry of Finance from November 30, 2022. | N/A | The change in accounting policy had no impact on the Company's financial statements. |
The impact of the implementation of the standards on the relevant items of the company's balance sheet in 2021, profit statement andcash flow statement in the same period of last year is retroactively adjusted as follows:
Unit: RMB Yuan
| Statement Items Significantly Affected | Amount of impact | Remark |
| Consolidated balance sheet items as of December 31, 2021 | ||
| Fixed Assets | 31,860,364.91 | |
| Undistributed profit | 31,860,364.91 | |
| Consolidated income statement items for fiscal 2021 |
| Statement Items Significantly Affected | Amount of impact | Remark |
| Revenue of main operations | 119,112,409.71 | |
| Cost of main operations | 87,252,044.80 |
(2) Significant changes in accounting estimates
□ 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%, 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%、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% 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 Jinghua Technology Co., Ltd | 15% |
| NHU EUROPE GmbH | 15% |
| NHU PERFORMANCE MATERIALS GMBH | 15% |
| Bardoterminal GmbH | 15% |
| NHU Singapore PTE. LTD. | 17% |
| Zhejiang NHU Nylon Material 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% |
| Taxpayers other than the above-mentioned | 25% |
2. Tax preferential policies
According to the Hi-Tech Enterprise Certificate (GR202033003531) 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 2020 to 2022. It is subject to therate of 15% for enterprise income tax in 2022.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 2022.According to the Hi-Tech Enterprise Certificate (GR202037001084) issued by Department of Science and Technology of ShandongProvince, Shandong Provincial Department of Finance and Shandong Provincial Tax Service, STA, the subsidiary Shandong NHUPharmaceutical Co., Ltd. is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from 2020 to 2022. It issubject to the rate of 15% for enterprise income tax in 2022.According to the Hi-Tech Enterprise Certificate (GR202037000197) issued by Department of Science and Technology of ShandongProvince, Shandong Provincial Department of Finance and Shandong Provincial Tax Service, STA, the subsidiary Shandong NHUVitamins Co., Ltd. is accredited as a hi-tech enterprise and entitled to enjoy the tax preferential policy from 2020 to 2022. It is subjectto the rate of 15% for enterprise income tax in 2022.According to the Hi-Tech Enterprise Certificate (GR202137000086) issued by Department of Science and Technology of ShandongProvince, Shandong Provincial Department of Finance and Shandong Provincial Tax Service, STA, the subsidiary Shandong NHUAmino Acid 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 2022.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 2022.According to the Hi-Tech Enterprise Certificate (GR202123000560) issued by Heilongjiang Provincial Department of Science andTechnology, 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 from
2021 to 2023. It is subject to the rate of 15% for enterprise income tax in 2022.
According to the Hi-Tech Enterprise Certificate (GR202233004365) issued by Zhejiang Provincial Department of Science andTechnology, 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 2022.According to the Hi-Tech Enterprise Certificate (GR202237005690) issued by Department of Science and Technology of ShandongProvince, Shandong Provincial Department of Finance and Shandong Provincial Tax Service, STA, the subsidiary Shandong NHUJinghua Technology 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 2022.
VII. Notes to items of consolidated financial statements
1. Cash and bank balances
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Cash on hand | 16,584.59 | 14,537.85 |
| Cash in bank | 5,151,816,943.29 | 5,684,842,466.04 |
| Other cash and bank balances | 192,018,439.84 | 268,052,623.05 |
| Total | 5,343,851,967.72 | 5,952,909,626.94 |
| Including: Deposited overseas | 62,426,363.92 | 38,739,302.11 |
Other remarks
(1) Other cash and bank balances
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Deposit for bank acceptance | 147,608,293.24 | 149,724,511.46 |
| Deposit for letters of credit | 42,310,180.59 | 86,212,564.30 |
Deposit for engineering labor costs
| Deposit for engineering labor costs | 851,288.54 | 1,654,664.15 |
| Deposit for construction safety | 863,937.05 | 405,056.50 |
| Deposit for water fees | 359,836.44 | 358,792.30 |
Deposit for ETC
| Deposit for ETC | 16,500.00 | 16,500.00 |
| Alipay balance | 8,401.07 | |
| Deposited investment fund | 2.91 | 29,680,534.34 |
Subtotal
| Subtotal | 192,018,439.84 | 268,052,623.05 |
2. Held-for-trading financial assets
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Financial assets at fair value through profit or loss | 720,314,576.43 | 1,250,736,359.24 |
| Including: Financial products with guaranteed principal and floating income | 720,000,000.00 | 1,250,000,000.00 |
| Derivative financial assets | 314,576.43 | 736,359.24 |
| Total | 720,314,576.43 | 1,250,736,359.24 |
3. Notes receivable
(1) Details on categories
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Bank acceptance | 321,261,741.29 | 349,145,316.03 |
| Commercial Acceptance | 51,380,094.50 | |
| Total | 372,641,835.79 | 349,145,316.03 |
Unit: RMB Yuan
| Categories | Closing balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion | ||
| Including: | |||||
| 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 |
| Including: | |||||
| 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 |
(Continued)
| Categories | Opening balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion | ||
| Including: | |||||
| Notes receivable with provision for bad debts made on a collective basis | 349,145,316.03 | 100.00% | 349,145,316.03 | ||
| Including: | |||||
| Bank acceptance | 349,145,316.03 | 100.00% | 349,145,316.03 | ||
| Total | 349,145,316.03 | 100.00% | 349,145,316.03 | ||
(2) 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 | 2,704,215.50 | 2,704,215.50 | ||||
| Total | 2,704,215.50 | 2,704,215.50 | ||||
(3) Pledged notes at the balance sheet date
Unit: RMB Yuan
| Items | Closing balance of pledged notes |
| Bank acceptance | 233,192,351.27 |
| Total | 233,192,351.27 |
(4) 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 | 715,000.00 | |
| Total | 715,000.00 |
4. Accounts receivable
(1) 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 | 2,615,042,281.60 | 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 |
(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 | 2,902,396,632.04 | 100.00% | 147,228,058.90 | 5.07% | 2,755,168,573.14 |
| Total | 2,902,396,632.04 | 100.00% | 147,228,058.90 | 5.07% | 2,755,168,573.14 |
Ages analysis:
Unit: RMB Yuan
| Ages | Book balance |
| Within 1 year (inclusive) | 2,573,685,603.72 |
| 1-2 years | 39,010,397.08 |
| 2-3 years | 297,000.00 |
| Over 3 years | 2,049,280.80 |
| 3-4 years | 203,200.00 |
| 4-5 years | 286,550.00 |
| Over 5 years | 1,559,530.80 |
| Total | 2,615,042,281.60 |
(2) 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 | 147,228,058.90 | -2,876,579.70 | 5,578,238.83 | 138,773,240.37 | ||
| Total | 147,228,058.90 | -2,876,579.70 | 5,578,238.83 | 138,773,240.37 | ||
(3)Accounts receivable actually written off in the current period
Unit: RMB Yuan
| Items | Write-off amount |
| Payment for goods | 5,578,238.83 |
Among the significant write-offs of accounts receivable：
Unit: RMB Yuan
| Debtors | Nature of receivables | Write-off amount | Reason for write-off | Whether the amount arises from a related transaction |
| OOO Agroconcept | Payment for goods | 5,578,238.83 | Less likely to be recovered | No |
| 合计 | 5,578,238.83 |
(3) 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 | 356,554,932.78 | 13.63% | 17,827,746.64 |
| Client B | 216,087,986.18 | 8.26% | 16,655,958.88 |
| Client C | 91,025,324.97 | 3.48% | 4,551,266.25 |
| Client D | 53,807,416.60 | 2.06% | 2,690,370.83 |
| Client E | 49,204,200.00 | 1.88% | 2,460,210.00 |
| Total | 766,679,860.53 | 29.31% |
5. Receivables financing
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Bank acceptance | 379,217,582.25 | 182,891,179.65 |
| Total | 379,217,582.25 | 182,891,179.65 |
Other remarks:
(1) Pledged notes at the balance sheet date
Unit: RMB Yuan
| Items | Closing balance of pledged notes |
| Bank acceptance | 136,554,892.05 |
| Subtotal | 136,554,892.05 |
(2) Endorsed or discounted but undue notes at the balance sheet date
Unit: RMB Yuan
| Items | Closing balance derecognized |
| Bank acceptance | 759,401,282.99 |
| Subtotal | 759,401,282.99 |
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 | 215,300,317.59 | 96.84% | 78,853,695.19 | 99.85% |
| 1-2 years | 7,013,257.67 | 3.14% | 109,065.41 | 0.14% |
| 2-3 years | 16,001.00 | 0.01% | 7,200.00 | 0.01% |
| Over 3 years | 7,200.00 | 0.01% | ||
| Total | 222,336,776.26 | -- | 78,969,960.60 | -- |
(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 | 58,831,237.17 | 26.46 |
| Supplier B | 15,535,253.38 | 6.99 |
Supplier C
| Supplier C | 14,809,809.90 | 6.66 |
| Supplier D | 13,693,423.91 | 6.16 |
| Supplier E | 13,306,684.81 | 5.98 |
Subtotal
| Subtotal | 116,176,409.17 | 52.25 |
7. Other receivables
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Dividend receivable | 20,735,987.73 | 7,159,278.00 |
| Other receivables | 248,831,605.00 | 247,337,970.13 |
| Total | 269,567,592.73 | 254,497,248.13 |
(1) Dividend receivable
Unit: RMB Yuan
| Items/Investees | Closing balance | Opening balance |
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | 20,735,987.73 | 7,159,278.00 |
| Total | 20,735,987.73 | 7,159,278.00 |
(2) Other receivables
1) Categorized by nature
Unit: RMB Yuan
| Nature of receivables | Closing book balance | Opening book balance |
| Security deposits | 120,123,425.59 | 136,459,247.48 |
| Export tax refund | 62,763,834.97 | 69,372,321.60 |
| Unborrowed funds | 21,098,506.24 | |
| Receivables of returned equipment | 1,041,600.00 | 45,213,200.00 |
| Refundable VAT | 41,890,037.74 | 3,310,397.40 |
| Employee petty cash | 8,050,322.00 | 5,688,937.00 |
| Temporary advance payment receivable | 3,839,206.82 | 2,456,748.36 |
| Others | 3,035,775.60 | 653,640.31 |
| Total | 261,842,708.96 | 263,154,492.15 |
2) Provision for bad debts
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 | 2,915,877.46 | 716,215.08 | 12,184,429.48 | 15,816,522.02 |
| Opening balance in the current period | ||||
| --Transferred to phase II | -265,725.73 | 265,725.73 | ||
| --Transferred to phase III | -254,219.83 | 254,219.83 | ||
| Provision made in the current period | -889,971.20 | 335,181.92 | 6,844,690.23 | 6,289,900.95 |
| Write-off in the current period | 9,095,319.01 | 9,095,319.01 | ||
| Closing balance | 1,760,180.53 | 1,062,902.90 | 10,188,020.53 | 13,011,103.96 |
Significant changes in book balance of other receivables with changes in provision for bad debts:
□ Applicable √ Not applicable
Ages analysis
Unit: RMB Yuan
| Ages | Book balance |
| Within 1 year (inclusive) | 129,009,444.59 |
| 1-2 years | 21,076,224.01 |
| 2-3 years | 1,271,099.17 |
| Over 3 years | 110,485,941.19 |
| 3-4 years | 8,243,583.58 |
| 4-5 years | 3,449,067.41 |
| Over 5 years | 98,793,290.20 |
| Total | 261,842,708.96 |
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 | Reversal | Write-off | Others | |||
| Provision made on a collective basis | 15,816,522.02 | 6,289,900.95 | 9,095,319.01 | 13,011,103.96 | ||
| Total | 15,816,522.02 | 6,289,900.95 | 9,095,319.01 | 13,011,103.96 | ||
4) Actual write-off of other receivables during the period
| Items | Write-off amount |
| Temporary advance payment receivable | 9,095,319.01 |
Among the significant write-offs of accounts receivable：
Unit: RMB Yuan
| Debtors | Nature of receivables | Write-off amount | Reason for write-off | Whether the amount arises from a related transaction |
| Hangzhou Steam Turbine Co., Ltd. | Temporary advance payment receivable | 3,600,000.00 | Less likely to be recovered | No |
| Wuxi Huaguang Environmental Protection Energy Group Co., Ltd. | Temporary advance payment receivable | 2,813,962.26 | Less likely to be recovered | No |
| Zhangjiagang Xingang Machinery Manufacturing Co., Ltd. | Temporary advance payment receivable | 1,845,000.00 | Less likely to be recovered | No |
| 合计 | 8,258,962.26 |
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 |
| Weifang Municipal Bureau of Land and Resource, Binhai District Branch | Security deposits | 97,900,000.00 | Over 3 years | 37.39% | |
| State Taxation Administration (Export tax refund receivable) | Export tax refund | 62,763,834.97 | Within 1 year | 23.97% | |
| Chr.OlesenLatin America A/S | loan splitting | 21,098,506.24 | Within 1 year | 8.06% | 1,054,925.31 |
| Suihua Municipal Labor Security Supervision Detachment | Security deposits | 400,000.00 | 2-3 years | 0.15% | 320,000.00 |
| Security deposits | 6,195,490.53 | Over 3 years | 2.37% | 6,195,490.53 | |
| Weifang Binhai Economic and Technological | Security deposits | 4,835,731.00 | 1-2 years | 1.85% | 967,146.20 |
| Debtors | Nature of receivables | Book balance | Ages | Proportion to the total balance of other receivables (%) | Provision for bad debts |
| Development Zone Finance Treasury Centralized Payment Center | |||||
| Total | -- | 193,193,562.74 | -- | 73.79% | 8,537,562.04 |
8. Inventories
(1) Details on categories
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 | 512,088,438.92 | 1,371,035.91 | 510,717,403.01 | 456,431,898.77 | 653,463.45 | 455,778,435.32 |
| Work in process | 1,259,897,028.55 | 1,259,897,028.55 | 1,008,021,313.66 | 1,008,021,313.66 | ||
| Goods on hand | 2,122,998,309.26 | 151,579,577.92 | 1,971,418,731.34 | 1,247,338,255.71 | 14,685,437.55 | 1,232,652,818.16 |
| Goods dispatched | 96,141,207.37 | 96,141,207.37 | 88,307,137.99 | 88,307,137.99 | ||
| Developed products | 121,902,734.56 | 121,902,734.56 | 122,679,279.65 | 122,679,279.65 | ||
| Development cost | 97,530,835.60 | 97,530,835.60 | 197,045,414.10 | 197,045,414.10 | ||
| Materials on consignment for further processing | 8,335,609.99 | 8,335,609.99 | 4,102,415.43 | 4,102,415.43 | ||
| Packages | 16,061,832.47 | 16,061,832.47 | 14,276,697.20 | 14,276,697.20 | ||
| Low-value consumables | 62,552,319.50 | 62,552,319.50 | 70,793,855.65 | 70,793,855.65 | ||
| Total | 4,297,508,316.22 | 152,950,613.83 | 4,144,557,702.39 | 3,208,996,268.16 | 15,338,901.00 | 3,193,657,367.16 |
(2) Inventories – Development cost
Unit: RMB Yuan
| Items | Estimated total investment | Opening balance | Closing balance |
| Boao NHU Resort | 550 million | 33,723,820.73 | 42,570,355.38 |
| Weifang NHU Town Phase II | 398.53 million | 163,321,593.37 | 54,960,480.22 |
| Subtotal | 197,045,414.10 | 97,530,835.60 |
(3) Inventories – Developed products
Unit: RMB Yuan
| Items | Date of completion | Opening balance | Increase | Decrease | Closing balance |
| Boao NHU Resort Center | Dec. 2014 | 122,679,279.65 | 3,613,295.05 | 4,389,840.14 | 121,902,734.56 |
| Subtotal | 122,679,279.65 | 3,613,295.05 | 4,389,840.14 | 121,902,734.56 |
(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 | Reversal | Others | |||
| Raw materials | 653,463.45 | 975,495.23 | 257,922.77 | 1,371,035.91 | ||
| Goods on hand | 14,685,437.55 | 161,998,769.89 | 25,104,629.52 | 151,579,577.92 | ||
| Total | 15,338,901.00 | 162,974,265.12 | 25,362,552.29 | 152,950,613.83 | ||
Determination basis of net realizable value and reasons for the reversal or write-off of provision for inventory write-down
| Items | Determination basis of net realizable value | Reasons for write-off of provision for inventory write-down |
| Raw materials | Estimated selling price of relevant finished goods less cost to be incurred upon completion, estimated selling expenses, and relevant taxes and surcharges. | Inventories with provision for inventory write-down made at the beginning of period were used or sold in the current period. |
| Goods on hand | Estimated selling price of relevant finished goods less estimated selling expenses, and relevant taxes and surcharges. | Inventories with provision for inventory write-down made at the beginning of period were sold in the current period. |
9. Other current assets
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Bank financial products and structured deposits | 550,000,000.00 | |
| Prepaid VAT or input VAT to be credited | 123,811,281.53 | 336,963,113.65 |
| Prepaid enterprise income tax | 54,251,454.46 | 5,070,275.22 |
| Prepaid insurance premiums | 4,330,488.27 | 3,727,306.74 |
| Prepaid housing rents | 23,362.83 | |
| Prepaid urban maintenance and construction tax | 13,194.85 | 10,786.63 |
| Prepaid education surcharge | 7,916.74 | 6,472.01 |
| Prepaid local education surcharge | 5,278.11 | 4,314.62 |
| Total | 182,442,976.79 | 895,782,268.87 |
10. Long-term equity investments
Unit: RMB Yuan
| Investees | Opening 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 | |||||||||||
| II. Associates | |||||||||||
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | 208,873,174.90 | 47,283,121.54 | 4,547,025.85 | 20,735,988.96 | 239,967,333.33 | ||||||
| Zhejiang sanbo polymer Co., Ltd | |||||||||||
| DSM NHU Engineering Materials (Zhejiang) Co., Ltd. | 26,503,451.26 | -2,046,002.90 | 24,457,448.36 | ||||||||
| Zhejiang Saiya Chemical Materials Co., Ltd. | 103,898,217.82 | 20,812,726.54 | 740,043.41 | 125,450,987.77 | |||||||
| Shandong Bin’an Vocational Training School Co., Ltd. [Note] | 5,895,600.85 | -52,749.43 | 5,842,851.42 | ||||||||
| CysBio ApS | 32,660,632.18 | 1,069,835.19 | 3,054,480.23 | 36,784,947.60 | |||||||
| Subtotal | 351,327,625.75 | 95,616,385.10 | 4,547,025.85 | 20,735,988.96 | 1,748,520.74 | 432,503,568.48 | |||||
| Total | 351,327,625.75 | 95,616,385.10 | 4,547,025.85 | 20,735,988.96 | 1,748,520.74 | 432,503,568.48 | |||||
11. Other equity instrument investments
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Zhejiang Second Pharma Co., Ltd. | 7,790,147.55 | 7,790,147.55 |
| Shanghai NewMargin Yongjin Eqiuty Enterprise (LP) | 15,208,000.00 | 15,208,000.00 |
| Total | 22,998,147.55 | 22,998,147.55 |
12. Fixed assets
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Fixed assets | 16,523,867,858.53 | 14,350,779,852.73 |
| Total | 16,523,867,858.53 | 14,350,779,852.73 |
(1) Details
Unit: RMB Yuan
| Items | Buildings and structures | Generali equipment | Special equipment | Transport facilities | Total |
| I. Cost: | |||||
| 1. Opening balance | 6,293,404,278.18 | 185,910,525.30 | 12,993,424,027.58 | 25,093,346.32 | 19,497,832,177.38 |
| 2. Increase | 842,487,177.35 | 33,706,597.08 | 2,671,895,229.87 | 4,133,053.18 | 3,552,222,057.48 |
| (1) Acquisition | 204,653,922.53 | 13,968,023.46 | 398,956,269.44 | 4,133,053.18 | 621,711,268.61 |
| (2) Transferred in from construction in progress | 637,833,254.82 | 19,738,573.62 | 2,272,938,960.43 | 2,930,510,788.87 | |
| 3. Decrease | 9,604,626.18 | 2,339,169.50 | 140,547,645.08 | 1,964,941.38 | 154,456,382.14 |
| (1) Disposal/ Scrapping | 9,604,626.18 | 2,339,169.50 | 140,547,645.08 | 1,964,941.38 | 154,456,382.14 |
| 4. Closing balance | 7,126,286,829.35 | 217,277,952.88 | 15,524,771,612.37 | 27,261,458.12 | 22,895,597,852.72 |
| II. Accumulated depreciation | |||||
| 1. Opening balance | 680,779,035.53 | 99,138,742.55 | 4,320,266,548.05 | 17,140,892.56 | 5,117,325,218.69 |
| 2. Increase | 183,752,509.46 | 26,249,333.04 | 1,134,425,527.84 | 2,280,586.62 | 1,346,707,956.96 |
| (1) Accrual | 183,752,509.46 | 26,249,333.04 | 1,134,425,527.84 | 2,280,586.62 | 1,346,707,956.96 |
| 3. Decrease | 3,255,286.26 | 2,039,849.79 | 114,028,836.11 | 1,857,216.24 | 121,181,188.40 |
| (1) Disposal/ Scrapping | 3,255,286.26 | 2,039,849.79 | 114,028,836.11 | 1,857,216.24 | 121,181,188.40 |
| 4. Closing balance | 861,276,258.73 | 123,348,225.80 | 5,340,663,239.78 | 17,564,262.94 | 6,342,851,987.25 |
| III. Provision for impairment | |||||
| 1. Opening balance | 20,980,481.81 | 23,560.67 | 8,706,768.47 | 16,295.01 | 29,727,105.96 |
| 2. Increase | |||||
| (1) Accrual | |||||
| 3. Decrease | 16,135.22 | 832,963.80 | 849,099.02 | ||
| (1) Disposal/ Scrapping | 16,135.22 | 832,963.80 | 849,099.02 | ||
| 4. Closing balance | 20,980,481.81 | 7,425.45 | 7,873,804.67 | 16,295.01 | 28,878,006.94 |
| IV. Carrying amount | |||||
| 1. Closing balance | 6,244,030,088.81 | 93,922,301.63 | 10,176,234,567.92 | 9,680,900.17 | 16,523,867,858.53 |
| Items | Buildings and structures | Generali equipment | Special equipment | Transport facilities | Total |
| 2. Opening balance | 5,591,644,760.84 | 86,748,222.08 | 8,664,450,711.06 | 7,936,158.75 | 14,350,779,852.73 |
(2) Fixed assets temporarily idle
Unit: RMB Yuan
| Items | Cost | Accumulated depreciation | Provision for impairment | Carrying amount | Remarks |
| Buildings and structures | 83,557,127.18 | 33,296,607.22 | 20,975,435.81 | 29,285,084.15 | |
| General equipment | 399,321.89 | 317,019.86 | 4,787.04 | 77,514.99 | |
| Special equipment | 385,396,343.73 | 320,523,489.13 | 7,655,128.15 | 57,217,726.45 | |
| Subtotal | 469,352,792.80 | 354,137,116.21 | 28,635,351.00 | 86,580,325.59 |
(3) Fixed assets leased out under operating leases
Unit: RMB Yuan
| Items | Closing carrying amount |
| Buildings and structures | 32,228,814.37 |
| Subtotal | 32,228,814.37 |
(4) Fixed assets with certificate of titles being unsettled
Unit: RMB Yuan
| Items | Carrying amount | Reasons for unsettlement |
| Buildings and structures | 1,525,911,211.16 | Relevant procedures have not yet been completed. |
| Subtotal | 1,525,911,211.16 |
13. Construction in progress
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Construction in progress | 5,089,233,908.22 | 2,984,835,072.82 |
| Total | 5,089,233,908.22 | 2,984,835,072.82 |
(1) Details
Unit: RMB Yuan
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Shandong Industrial Park Project phase I | 30,856,442.13 | 30,856,442.13 | ||||
| Hongweisu project | 367,528,650.61 | 367,528,650.61 | ||||
| Heilongjiang Xinhao Project phase II | 83,453,010.80 | 83,453,010.80 | ||||
| Methionine project with annual output of 0.25 million tons | 2,389,822,701.74 | 2,389,822,701.74 | 90,355,454.04 | 90,355,454.04 | ||
| 616 Joint Production Project | 426,984,891.23 | 426,984,891.23 | 393,488,496.81 | 393,488,496.81 | ||
| Shandong Industrial Park 617A Project | 1,718,828.38 | 1,718,828.38 | ||||
| Shandong Industrial Park 603 Project | 67,408,245.22 | 67,408,245.22 | 3,019,859.02 | 3,019,859.02 | ||
| Shandong Industrial Park HA Project | 94,672,989.28 | 94,672,989.28 | - | - | ||
| Shangyu Industrial Park PPS Project | 559,554,821.51 | 559,554,821.51 | 341,096,363.93 | 341,096,363.93 | ||
| Shandong Industrial Park TMB Project | 1,173,527,758.16 | 1,173,527,758.16 | ||||
| Daming Life and Health Industry Project | 26,065,403.64 | 26,065,403.64 | 228,847,778.44 | 228,847,778.44 | ||
| NH acid project | 514,155,642.52 | 514,155,642.52 | ||||
| Cogeneration Expansion Project | 113,869,534.14 | 113,869,534.14 | ||||
| F5 project | 91,979,706.11 | 91,979,706.11 | ||||
| NBC and CLA projects of Zhejiang Pharmaceutical | 120,581,503.32 | 120,581,503.32 | ||||
| Other piecemeal projects | 684,138,469.51 | 684,138,469.51 | 270,942,430.50 | 270,942,430.50 | ||
| Total | 5,089,233,908.22 | 5,089,233,908.22 | 2,984,835,072.82 | 2,984,835,072.82 | ||
(2) Changes in significant projects
Unit: RMB Yuan
| Projects | 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 |
| Shandong Industrial Park Project phase I | 311,600.00 | 30,856,442.13 | 37,951,073.39 | 68,807,515.52 | 85.93 | 100 | 87,993,003.25 | Others | ||||
| Hongweisu project | 47,822.98 | 367,528,650.61 | 52,256,293.80 | 419,784,944.41 | 87.78 | 100 | 6,070,837.49 | 4,230,562.49 | 4.05% | Others | ||
| Heilongjiang Xinhao Project phase II | 10,746.25 | 83,453,010.80 | 760,841.63 | 84,213,852.43 | 78.37 | 100 | Others | |||||
| Methionine project with annual output of 0.25 million tons | 536,984.22 | 90,355,454.04 | 2,299,467,247.70 | 2,389,822,701.74 | 81.68 | 80 | Raised funds | |||||
| 616 Joint Production Project[Note 1] | 77,213.69 | 393,488,496.81 | 362,638,341.32 | 240,033,075.95 | 89,108,870.95 | 426,984,891.23 | 97.93 | 95 | Raised funds | |||
| Shandong Industrial Park 617A Project | 8,500.00 | 1,718,828.38 | 5,685,874.68 | 7,404,703.06 | 93.13 | 95 | Others | |||||
| Shandong Industrial Park 603 Project | 8,983.60 | 3,019,859.02 | 64,388,386.20 | 67,408,245.22 | 75.03 | 80 | Others | |||||
| Shandong Industrial Park HA Project | 97,991.14 | 97,833,840.48 | 3,160,851.20 | 94,672,989.28 | 9.98 | 10 | Others | |||||
| Shangyu Industrial Park PPS Project | 70,900.00 | 341,096,363.93 | 218,458,457.58 | 559,554,821.51 | 78.92 | 90 | Others | |||||
| Shandong Industrial Park TMB Project | 123,160.59 | 1,173,527,758.16 | 133,975,865.78 | 1,307,503,623.94 | 107.49 | 100 | 19,373,668.79 | 11,654,698.28 | 4.28% | Others | ||
| Daming Life and Health Industry Project[Note 2] | 69,314.56 | 228,847,778.44 | 157,211,279.19 | 359,993,653.99 | 26,065,403.64 | 64.78 | 70 | 4,303,755.55 | 4,303,755.55 | 3.79% | Others | |
| NH acid project | 73,899.28 | 514,155,642.52 | 514,155,642.52 | 69.58 | 70 | Others | ||||||
| Cogeneration Expansion Project | 33,890.43 | 113,869,534.14 | 113,869,534.14 | 33.6 | 35 | Others | ||||||
| F5 project | 13,563.50 | 115,182,269.30 | 23,202,563.19 | 91,979,706.11 | 84.92 | 85 | Others | |||||
| NBC and CLA projects of Zhejiang Pharmaceutical | 13,555.00 | 120,581,503.32 | 120,581,503.32 | 88.96 | 90 | Others | ||||||
| Total | 149,8125.24 | 2,713,892,642.32 | 4,294,416,451.03 | 2,514,104,783.69 | 89,108,870.95 | 4,405,095,438.71 | -- | -- | 117,741,265.08 | 20,189,016.32 | -- |
Note 1: Shandong Industrial Park 616 Project cannot reach the designed usable conditions due to changes of planning. In the currentperiod, equipment available for use amounting to 7,766,164.31 yuan was transferred into other Project, assets amounting to5,463,076.93 yuan were disposed, and the remaining part amounting to 75,879,629.71 yuan was retired.Note 2: Daming Life and Health Industry Project has added a second phase of investment in the current period, and the budget haschanged from RMB 457.72 million to RMB 693.15 million.Note 3: Due to changes in F5 Project content in this period, the budget was adjusted from RMB 99.33 million to RMB 135.64million
14. Right-of-use assets
Unit: RMB Yuan
| Items | Buildings and structures | Total |
| I. Cost | ||
| 1. Opening balance | 3,406,640.15 | 3,406,640.15 |
| 2. Increase | 166,686.87 | 166,686.87 |
| (1) Leased in | 166,686.87 | 166,686.87 |
| 3. Decrease | ||
| 4. Closing balance | 3,573,327.02 | 3,573,327.02 |
| II. Accumulated depreciation | ||
| 1. Opening balance | 283,003.04 | 283,003.04 |
| 2. Increase | 460,187.61 | 460,187.61 |
| (1) Accrual | 460,187.61 | 460,187.61 |
| 3. Decrease | ||
| (1) Disposal | ||
| 4. Closing balance | 743,190.65 | 743,190.65 |
| III. Carrying amount | ||
| 1. Closing balance | 2,830,136.37 | 2,830,136.37 |
| 2. Opening balance | 3,123,637.11 | 3,123,637.11 |
15. Intangible assets
(1) Details
Unit: RMB Yuan
| Items | Land use right | Patent right | Non-patented technology | Software | Total |
| I. Cost | |||||
| 1. Opening balance | 1,671,339,796.09 | 28,079,514.71 | 2,350,000.00 | 25,797,067.68 | 1,727,566,378.48 |
| 2. Increase | 183,037,096.87 | 3,582,548.04 | 36,438,324.30 | 36,719,068.31 | 259,777,037.52 |
| (1) Acquisition | 183,037,096.87 | 3,582,548.04 | 36,438,324.30 | 3,747,017.63 | 226,804,986.84 |
| (2) Internal R&D | 32,972,050.68 | 32,972,050.68 | |||
| 3. Closing balance | 1,854,376,892.96 | 31,662,062.75 | 38,788,324.30 | 62,516,135.99 | 1,987,343,416.00 |
| II. Accumulated amortization | |||||
| 1. Opening balance | 187,383,747.14 | 2,884,411.16 | 208,888.88 | 15,359,573.64 | 205,836,620.82 |
| 2. Increase | 35,829,811.93 | 2,460,109.50 | 1,419,426.38 | 3,291,201.05 | 43,000,548.86 |
| (1) Accrual | 35,829,811.93 | 2,460,109.50 | 1,419,426.38 | 3,291,201.05 | 43,000,548.86 |
| 3. Closing balance | 223,213,559.07 | 5,344,520.66 | 1,628,315.26 | 18,650,774.69 | 248,837,169.68 |
| III. Carrying amount | - | ||||
| 1. Closing balance | 1,631,163,333.89 | 26,317,542.09 | 37,160,009.04 | 43,865,361.30 | 1,738,506,246.32 |
| 2. Opening balance | 1,483,956,048.95 | 25,195,103.55 | 2,141,111.12 | 10,437,494.04 | 1,521,729,757.66 |
At the balance sheet date, intangible assets formed through internal research and development account for 0.00% of total intangibleassets.
(2) Land use right with certificate of titles being unsettled
Unit: RMB Yuan
| Items | Carrying amount | Reasons for unsettlement |
| Land use right | 31,583,200.00 | Relevant procedures have not yet been completed. |
| Subtotal | 31,583,200.00 |
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 | 2,075,762.80 | 58,422.79 | 2,134,185.59 | |||
| NHU/CHR.OLESEN LATIN AMERICA A/S | 3,622,704.97 | 3,622,704.97 | ||||
| Total | 2,075,762.80 | 3,622,704.97 | 58,422.79 | 5,756,890.56 | ||
(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 | 2,075,762.80 | 58,422.79 | 2,134,185.59 | |||
| Total | 2,075,762.80 | 58,422.79 | 2,134,185.59 | |||
Note: Current decrease refers to translation reserve.
17. Long-term prepayments
Unit: RMB Yuan
| Items | Opening balance | Increase | Amortization | Other decrease | Closing balance |
| Decoration fees | 10,378,910.67 | 1,214,715.05 | 3,443,733.74 | 8,149,891.98 | |
| Site leveling fees | 32,443.20 | 16,221.60 | 16,221.60 | ||
| Catalysts | 8,180,353.19 | 3,166,588.32 | 5,013,764.87 | ||
| Total | 18,591,707.06 | 1,214,715.05 | 6,626,543.66 | 13,179,878.45 |
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 | 67,822,769.65 | 11,068,181.53 | 65,402,828.30 | 11,004,917.24 |
| Unrealized profit from internal transactions | 50,194,235.37 | 7,529,135.31 | 116,662,766.83 | 17,499,415.02 |
| Deferred income | 185,235,337.49 | 27,785,300.63 | 143,266,156.26 | 21,489,923.45 |
| Difference in depreciation of fixed assets | 22,863,701.57 | 3,429,555.24 | 38,739,574.92 | 5,810,936.24 |
| Items | Closing balance | Opening balance | ||
| Deductible temporary difference | Deferred tax assets | Deductible temporary difference | Deferred tax assets | |
| Total | 326,116,044.08 | 49,812,172.71 | 364,071,326.31 | 55,805,191.95 |
(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 | 1,468,559,836.57 | 232,654,485.84 | 513,284,381.91 | 89,042,045.24 |
| Profit before tax of NHU (Hong Kong) Trading Co., Ltd. | 297,747,945.27 | 44,662,191.79 | 311,395,060.48 | 46,709,259.07 |
| Total | 1,766,307,781.84 | 277,316,677.63 | 824,679,442.39 | 135,751,304.31 |
(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 | 49,812,172.71 | 55,805,191.95 | ||
| Deferred tax liabilities | 277,316,677.63 | 135,751,304.31 |
(4) Details of unrecognized deferred tax assets
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Deductible temporary difference | 511,910,785.90 | 381,427,135.81 |
| Deductible losses | 2,002,071,871.11 | 976,794,270.71 |
| Total | 2,513,982,657.01 | 1,358,221,406.52 |
(5) Maturity years of deductible losses of unrecognized deferred tax assets
Unit: RMB Yuan
| Maturity years | Closing balance | Opening balance | Remarks |
| Year 2026 | 3,312,384.19 | ||
| Year 2027 | 8,512,140.12 | 11,527,268.52 | |
| Year 2028 | 35,469,296.06 | 38,888,442.26 | |
| Year 2029 | 79,322,307.29 | 104,197,877.04 | |
| Year 2030 | 255,397,416.94 | 260,165,696.64 | |
| Year 2031 | 287,143,749.91 | 558,702,602.06 | |
| Year 2032 | 1,336,226,960.79 | ||
| Total | 2,002,071,871.11 | 976,794,270.71 | -- |
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 | 16,250,239.11 | 16,250,239.11 | 1,611,305.24 | 1,611,305.24 | ||
| Payments for coal quota | 63,496,000.00 | 63,496,000.00 | 65,896,000.00 | 65,896,000.00 | ||
| Prepayments for long-term assets | 200,124,243.53 | 200,124,243.53 | 433,569,279.16 | 433,569,279.16 | ||
| Total | 279,870,482.64 | 279,870,482.64 | 501,076,584.40 | 501,076,584.40 | ||
20. Short-term borrowings
(1) Details on categories
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Guaranteed borrowings | 22,643,974.95 | |
| Credit borrowings | 1,673,729,466.06 | 1,383,332,827.92 |
| Credit and guaranteed borrowings | 150,000,000.00 | 20,000,000.00 |
| Total | 1,846,373,441.01 | 1,403,332,827.92 |
21. Notes payable
Unit: RMB Yuan
| Categories | Closing balance | Opening balance |
| Bank acceptance | 627,438,689.79 | 694,124,946.73 |
| Total | 627,438,689.79 | 694,124,946.73 |
22. Accounts payable
(1) Details
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Materials and labor costs | 735,579,156.33 | 658,235,707.69 |
| Payments for engineering and equipment | 1,439,879,280.16 | 777,730,720.07 |
| Total | 2,175,458,436.49 | 1,435,966,427.76 |
23. Contract liabilities
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Payments for goods received in advance | 60,660,929.75 | 61,135,258.36 |
| Total | 60,660,929.75 | 61,135,258.36 |
24. Employee benefits payable
(1) Details
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance |
| I. Short-term employee benefits | 370,609,333.07 | 1,757,851,720.84 | 1,742,069,142.05 | 386,391,911.86 |
| Items | Opening balance | Increase | Decrease | Closing balance |
| II. Post-employment benefits – defined contribution plan | 106,300,697.57 | 106,300,697.57 | ||
| Total | 370,609,333.07 | 1,864,152,418.41 | 1,848,369,839.62 | 386,391,911.86 |
(2) Details of short-term employee benefits
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance |
| 1. Wage, bonus, allowance and subsidy | 317,401,585.64 | 1,544,025,650.04 | 1,509,250,899.23 | 352,176,336.45 |
| 2. Employee welfare fund | 101,625,687.74 | 101,625,687.74 | ||
| 3. Social insurance premium | 49,897,949.27 | 49,897,949.27 | ||
| Including: Medicare premium | 43,457,418.76 | 43,457,418.76 | ||
| Occupational injuries premium | 4,689,951.86 | 4,689,951.86 | ||
| Maternity premium | 1,750,578.65 | 1,750,578.65 | ||
| 4. Housing provident fund | 50,823,368.91 | 50,823,368.91 | ||
| 5. Trade union fund and employee education fund | 53,207,747.43 | 11,479,064.88 | 30,471,236.90 | 34,215,575.41 |
| Total | 370,609,333.07 | 1,757,851,720.84 | 1,742,069,142.05 | 386,391,911.86 |
(3) Details of defined contribution plan
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance |
| 1. Basic endowment insurance premium | 102,580,578.97 | 102,580,578.97 | ||
| 2. Unemployment insurance premium | 3,720,118.60 | 3,720,118.60 | ||
| Total | 106,300,697.57 | 106,300,697.57 |
25. Taxes and rates payable
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| VAT | 14,398,822.86 | 45,928,799.96 |
| Enterprise income tax | 141,076,919.30 | 324,899,257.88 |
| Individual income tax withheld for tax authorities | 6,871,930.23 | 3,749,309.86 |
| Urban maintenance and construction tax | 3,127,594.55 | 3,686,070.96 |
| Land appreciation tax | 15,427,321.94 | 15,244,826.82 |
| Housing property tax | 16,764,793.31 | 15,577,742.83 |
| Land use tax | 7,963,404.79 | 8,351,133.07 |
| Education surcharge (local education surcharge) | 2,568,164.96 | 3,273,420.39 |
| Stamp duty | 32,700.92 | |
| Total | 208,198,951.94 | 420,743,262.69 |
26. Other payables
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Other payables | 67,351,740.34 | 56,712,103.36 |
| Total | 67,351,740.34 | 56,712,103.36 |
1) Categorized by nature
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Security deposits | 26,917,823.16 | 32,961,596.12 |
| Temporary receipts payable | 15,463,590.29 | 11,425,312.83 |
| Earnest money for housing purchase (Boao NHU Resort Center) | 100,000.00 | 100,000.00 |
| Call loans | 13,760,448.64 | |
| Others | 11,109,878.25 | 12,225,194.41 |
| Total | 67,351,740.34 | 56,712,103.36 |
27. Non-current liabilities due within one year
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Long-term borrowings due within one year | 2,591,558,912.13 | 2,029,254,131.97 |
| Lease liabilities due within one year | 128,794.09 | 245,377.46 |
| Total | 2,591,687,706.22 | 2,029,499,509.43 |
28. Other current liabilities
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Output VAT to be recognized | 4,978,299.99 | 5,133,310.10 |
| Total | 4,978,299.99 | 5,133,310.10 |
29. Long-term borrowings
(1) Categories
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Mortgaged borrowings | 31,590,890.00 | 37,669,008.56 |
| Guaranteed borrowings | 934,059,850.02 | 945,155,611.12 |
| Credit borrowings | 4,307,986,768.85 | 4,165,987,166.81 |
| Total | 5,273,637,508.87 | 5,148,811,786.49 |
30. Lease liabilities
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Unpaid lease payments | 4,080,857.16 | 4,331,618.17 |
| Less: Unrealized financing expenses | 1,258,453.09 | 1,394,750.02 |
| Total | 2,822,404.07 | 2,936,868.15 |
31. Deferred income
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance | Reasons for balance |
| Government grants | 1,063,699,676.16 | 119,460,055.87 | 100,000,509.62 | 1,083,159,222.41 | The Company received government grants related to assets, which were amortized based on the depreciation progress of corresponding assets. |
| Total | 1,063,699,676.16 | 119,460,055.87 | 100,000,509.62 | 1,083,159,222.41 | -- |
Details of government grants
Unit: RMB Yuan
| Items | Opening balance | Increase | Grants included into non-operating revenue | Grants included into other income | Grants offsetting relevant cost | Other changes | Closing balance | Related to assets/income |
| Special funds for Biological Fermentation Industrial Park Project | 427,578,840.00 | 49,336,020.00 | 378,242,820.00 | Related to assets | ||||
| Special funds for enterprise development (Shandong Vitamins) | 74,962,651.55 | 9,672,600.20 | 65,290,051.35 | Related to assets | ||||
| Special funds for joint production project of Xinhao Thermal Power | 31,772,916.73 | 3,774,999.96 | 27,997,916.77 | Related to assets | ||||
| Technical renovation for green deep processing of 2019 | 34,260,000.00 | 856,500.00 | 33,403,500.00 | Related to assets | ||||
| Special funds for enterprise development (Amino Acid) | 45,804,945.12 | 18,000,000.00 | 1,145,604.36 | 62,659,340.76 | Related to assets | |||
| Subsidies for land leveling of Shandong | 28,308,723.84 | 718,189.44 | 27,590,534.40 | Related to assets | ||||
| Enterprise development funds of Shandong | 18,847,224.88 | 437,814.12 | 18,409,410.76 | Related to assets | ||||
| PPS construction project with annual output of 10,000 tons | 11,412,499.88 | 1,826,000.04 | 9,586,499.84 | Related to assets | ||||
| Subsidies for PPS resin with annual output of 5,000 tons and PPS composite materials with annual output of 6,000 tons | 8,550,000.00 | 2,850,000.00 | 5,700,000.00 | Related to assets | ||||
| Enterprise development funds of Advanced Manufacturing Industrial Park | 8,491,786.07 | 198,251.76 | 8,293,534.31 | Related to assets | ||||
| Effective industrial input expansion of 2016 | 6,064,800.00 | 957,600.00 | 5,107,200.00 | Related to assets | ||||
| Funds for key thematic projects of industrial revitalization and technical renovation of 2012 | 3,924,642.86 | 1,427,142.84 | 2,497,500.02 | Related to assets | ||||
| Fiscal subsidies for low-rent housing | 6,098,560.08 | 240,857.16 | 5,857,702.92 | Related to assets | ||||
| Subsidies from land transfer fees of Shandong dormitory | 4,873,021.09 | 250,231.57 | 4,622,789.52 | Related to assets | ||||
| Subsidies for inputs in biochemical infrastructure of Shangyu | 4,580,963.84 | 317,771.88 | 4,263,191.96 | Related to assets | ||||
| Construction project of public testing service platform | 3,000,000.04 | 999,999.96 | 2,000,000.08 | Related to assets | ||||
| Subsidies for infrastructure supporting fees | 7,478,250.00 | 797,625.00 | 6,680,625.00 | Related to assets | ||||
| Compensation for resource conservation and environmental protection projects of 2017 | 3,360,000.00 | 480,000.00 | 2,880,000.00 | Related to assets | ||||
| Subsidies for new materials, land and infrastructure construction | 2,432,160.00 | 810,720.00 | 1,621,440.00 | Related to assets | ||||
| Special fiscal funds for revitalization of the substantial economy (transformation of traditional industries) of 2017 | 2,140,071.30 | 539,228.52 | 1,600,842.78 | Related to assets | ||||
| Subsidies for RTO Project | 1,266,666.90 | 399,999.96 | 866,666.94 | Related to assets | ||||
| Special subsidies for development of marine economy of 2017 | 2,000,000.00 | 800,000.02 | 1,199,999.98 | Related to assets | ||||
| Special subsidies for high-quality development of manufacturing industry | 1,804,329.70 | 304,957.10 | 1,499,372.60 | Related to assets | ||||
| Enterprise development fund (Shandong Fine Chemical) | 52,224,561.00 | 2,176,023.38 | 50,048,537.62 | Related to assets |
| Items | Opening balance | Increase | Grants included into non-operating revenue | Grants included into other income | Grants offsetting relevant cost | Other changes | Closing balance | Related to assets/income |
| Special funds for Taishan industry leading talents | 7,400,000.00 | 7,400,000.00 | Related to assets | |||||
| Food security control and emergency facilities project | 24,871,000.00 | 2,508,000.00 | 22,363,000.00 | Related to assets | ||||
| Policy incentives for industrial production projects of 2020 | 24,213,221.35 | 2,793,833.28 | 21,419,388.07 | Related to assets | ||||
| Special funds for Heilongjiang Biological Fermentation Industrial Park Project | 111,810,000.00 | 111,810,000.00 | Related to assets | |||||
| Incentives for enterprises settling in Industrial Collaborative Innovation Center by Hangzhou Bay Shangyu Economic and Technological Development Zone | 24,255,416.73 | 3,206,199.96 | 21,049,216.77 | Related to assets | ||||
| Subsidies for upgrading coal-fired boilers of 2017 | 222,857.12 | 37,142.88 | 185,714.24 | Related to assets | ||||
| Subsidies for low-nitrogen transformation of gas-fired boilers of Xinchang County | 465,535.75 | 70,714.32 | 394,821.43 | Related to assets | ||||
| Special funds for technical renovation | 20,169,603.37 | 11,630,000.00 | 1,105,959.90 | 30,693,643.47 | Related to assets | |||
| Incentives for investment promotion | 24,982,141.71 | 1,969,527.63 | 23,012,614.08 | Related to assets | ||||
| Special fiscal supporting funds for high-quality development (investment projects) of manufacturing industry of Xinchang County of 2021 | 4,875,100.00 | 406,258.30 | 4,468,841.70 | Related to assets | ||||
| Support advanced manufacturing and modern service industry special 2021 central budget investment plan | 19,650,000.00 | 19,650,000.00 | 3,274,999.98 | 36,025,000.02 | Related to assets | |||
| Economic and Information Bureau of technical transformation project subsidies | 7,736,500.00 | 194,940.46 | 7,541,559.54 | Related to assets | ||||
| 2021 Enterprise Digitalization Key Project Incentive Funds | 15,000,000.00 | 15,000,000.00 | Related to assets | |||||
| 2022 Special funds to support advanced manufacturing and service industries | 3,831,190.27 | 3,831,190.27 | Related to assets | |||||
| 2021 Digital (intelligent) demonstration workshop project incentive money | 2,000,000.00 | 196,078.40 | 1,803,921.60 | Related to assets | ||||
| 2020 industrial enterprise energy-saving technology transformation project incentive policy funds | 1,000,000.00 | 84,033.60 | 915,966.40 | Related to assets | ||||
| Chemical industry transformation and upgrading 2.0 intelligent transformation project incentives and service subsidies | 40,320,000.00 | 40,320,000.00 | Related to assets | |||||
| Other piecemeal subsidies | 9,547,185.25 | 292,365.60 | 2,834,683.64 | 7,004,867.21 | Related to assets | |||
| Total | 1,063,699,676.16 | 119,460,055.87 | 100,000,509.62 | 1,083,159,222.41 |
Note: Please refer to item VII 59 of this section for details on government grants included in profit or loss.
32. 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 | 2,578,394,760.00 | 512,512,596.00 | 512,512,596.00 | 3,090,907,356.00 | |||
Other remarks:
Pursuant to the 2021 profit distribution plan deliberated and approved by the general meeting of 2021, based on 2,562,562,984 shares(the total share capital of the company at that time, which was 2,578,394,760 shares, excluded 15,831,776 repurchased shares),the
Company increased shares at 2 shares per 10 shares by converting capital reserve to all shareholders. After the increase, the total sharecapital amounted to RMB 3,090,907,356. Such capital increase had been verified by Pan-China Certified Public Accountants LLP, anda Capital Verification Report numbered PCCPACVR [2022] 230 was issued thereon.
33. Capital reserve
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance |
| Share/capital premium | 3,847,505,213.92 | 512,512,596.00 | 3,334,992,617.92 | |
| Other capital reserve | 273,557,867.04 | 4,547,025.85 | 278,104,892.89 | |
| Total | 4,121,063,080.96 | 4,547,025.85 | 512,512,596.00 | 3,613,097,510.81 |
Other remarks, including remarks on current movements and reasons for movements:
Current decrease of capital premium (share premium) was due to conversion of capital reserve to share capital. Please refer to item VII32 of this section for details. Current decrease of other capital reserve was due to changes in the Company’s proportionate share in netassets of the associate Zhejiang Chunhui Environmental Protection Energy Co., Ltd. arising from capital increase made by individualinvestors.
34. Treasury shares
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance |
| Treasury shares | 320,360,784.48 | 179,698,926.77 | 500,059,711.25 | |
| Total | 320,360,784.48 | 179,698,926.77 | 500,059,711.25 |
Other remarks, including remarks on current movements and reasons for movements:
Current increase of treasury shares was due to the repurchase of public shares by the Company for the purpose of equity incentive planand employee stock ownership plan.
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 | -1,614,172.31 | 81,425,359.82 | 78,191,736.48 | 3,233,623.34 | 76,577,564.17 | |||
| Including: Other comprehensive income to be transferred to profit or loss under equity method | 506,954.43 | 506,954.43 | ||||||
| Translation reserves | -2,121,126.74 | 81,425,359.82 | 78,191,736.48 | 3,233,623.34 | 76,070,609.74 | |||
| Total | -1,614,172.31 | 81,425,359.82 | 78,191,736.48 | 3,233,623.34 | 76,577,564.17 | |||
36. Special reserve
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance |
| Work safety fund | 12,692,218.51 | 31,988,381.60 | 18,483,705.56 | 26,196,894.55 |
| Items | Opening balance | Increase | Decrease | Closing balance |
| Total | 12,692,218.51 | 31,988,381.60 | 18,483,705.56 | 26,196,894.55 |
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) 0.55% for thepart of business income exceeding 100 million to 1 billion; 4) 0.2% for the part of business income exceeding RMB 1 billion.
37. Surplus reserve
Unit: RMB Yuan
| Items | Opening balance | Increase | Decrease | Closing balance |
| Statutory surplus reserve | 1,289,197,380.00 | 155,216,560.89 | 1,444,413,940.89 | |
| Total | 1,289,197,380.00 | 155,216,560.89 | 1,444,413,940.89 |
Other remarks, including remarks on current movements and reasons for movements:
Current increase was due to the appropriation of statutory surplus reserve at 10% of the net profit generated by the parent company.
38. Undistributed profit
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Unallocated earnings at the end of the previous period before adjustment | 14,120,605,163.26 | 11,515,384,739.95 |
| Adjustments to total unappropriated earnings at the beginning of the period (increase +, decrease -) | 31,860,364.91 | |
| Adjustment to unappropriated earnings at the beginning of the period | 14,152,465,528.17 | 11,515,384,739.95 |
| Add: Net profit attributable to owners of the parent company | 3,620,271,034.96 | 4,324,150,263.31 |
| Less: Appropriation of statutory surplus reserve | 155,216,560.89 | 214,866,230.00 |
| Dividend payable on ordinary shares | 1,793,794,088.80 | 1,504,063,610.00 |
| Closing balance | 15,823,725,913.44 | 14,120,605,163.26 |
Details of undistributed profits at the beginning of adjustment period:
1）Due to the retroactive adjustment of the accounting standards for business enterprises and relevant new regulations, the undistributedprofit at the beginning of the period was RMB 31,860,364.91. Please refer to item V 27 of this section for details on Non-currentliabilities due within one year.2）Pursuant to the 2021 profit distribution plan deliberated and approved by the general meeting of 2021, based on 2,562,562,984shares (the total share capital of the company at that time, which was 2,578,394,760 shares, excluded 15,831,776 repurchased shares),the Company distributed cash dividend of 7.00 yuan (tax included) per 10 shares to all shareholders. Cash dividend distributed totaledRMB 1,793,794,088.80(tax included).
39. Operating revenue/Operating cost
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative | ||
| Revenue | Cost | Revenue | Cost | |
| Main operations | 15,845,200,012.28 | 10,001,085,469.78 | 14,767,093,085.62 | 8,212,231,352.94 |
| Items | Current period cumulative | Preceding period comparative | ||
| Revenue | Cost | Revenue | Cost | |
| Other operations | 88,784,391.13 | 47,215,397.16 | 150,008,415.29 | 87,313,638.13 |
| Total | 15,933,984,403.41 | 10,048,300,866.94 | 14,917,101,500.91 | 8,299,544,991.07 |
| Including: Revenue from contracts with customers | 15,930,926,276.49 | 10,047,351,912.18 | 14,914,975,612.29 | 8,298,908,135.92 |
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 | Total |
| By product | |
| Including: Nutrition | 10,951,828,026.72 |
| Flavor and fragrance | 2,967,080,657.65 |
| New materials | 1,166,099,937.05 |
| Others | 845,917,655.07 |
| Subtotal | 15,930,926,276.49 |
| By operating region | |
| Including: Domestic | 8,259,620,269.29 |
| Overseas | 7,671,306,007.20 |
| Subtotal | 15,930,926,276.49 |
| By revenue recognition time | |
| Including: Goods (transferred at a point in time) | 15,930,926,276.49 |
| Subtotal | 15,930,926,276.49 |
| By sales channel | |
| Including: Direct sales | 11,871,471,099.85 |
| Agent sales | 4,059,455,176.64 |
| Subtotal | 15,930,926,276.49 |
Information related to performance obligations:
None.Information related to transaction price allocated to the remaining performance obligations:
As of December 31, 2022 revenue corresponding to performance obligations for which the Company has entered into contracts butnot yet performed or fulfilled amounted to 4,104.68 million yuan, of which, 4,104.68 million yuan is expected to be recognized asrevenue in 2023.
40. Taxes and surcharges
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Urban maintenance and construction tax | 28,607,303.93 | 30,312,419.65 |
| Education surcharge (local education surcharge) | 23,414,216.46 | 27,571,975.04 |
| Items | Current period cumulative | Preceding period comparative |
| Housing property tax | 42,350,007.42 | 36,023,723.71 |
| Land use tax | 23,119,509.04 | 29,553,065.04 |
| Vehicle and vessel use tax | 42,132.94 | 35,481.54 |
| Stamp duty | 7,321,346.91 | 5,571,964.17 |
| Environmental protection tax | 1,543,201.53 | 1,069,134.43 |
| Land appreciation tax | 510,626.40 | 1,487,064.65 |
| Total | 126,908,344.63 | 131,624,828.23 |
41. Selling expenses
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Employee benefits | 62,762,141.59 | 57,976,469.34 |
| Sales commission and customs declaration charges | 20,869,486.43 | 15,913,870.35 |
| Office expenses, business traveling expenses | 19,775,799.86 | 15,428,583.10 |
| Advertising and promotion expenses, business entertainment expenses | 9,402,072.09 | 8,131,154.24 |
| Others | 9,448,119.50 | 9,587,008.93 |
| Total | 122,257,619.47 | 107,037,085.96 |
42. Administrative expenses
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Employee benefits | 261,083,846.67 | 201,712,221.78 |
| Depreciation, amortization of intangible assets | 100,843,402.02 | 88,011,620.25 |
| Office expenses, business traveling expenses | 64,191,712.29 | 59,903,319.54 |
| Business entertainment expenses | 25,250,585.72 | 21,149,038.92 |
| Consulting fees | 17,492,615.79 | 15,521,872.12 |
| Insurance premiums | 14,142,873.77 | 15,035,969.98 |
| Disability Employment Guarantee Fund | 10,343,725.70 | 9,628,608.33 |
| Others | 11,325,968.73 | 12,621,766.75 |
| Total | 504,674,730.69 | 423,584,417.67 |
43. R&D expenses
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Employee benefits | 416,805,732.59 | 344,464,922.47 |
| Direct input | 289,342,939.10 | 291,075,726.28 |
| Depreciation, amortization of intangible assets | 68,939,590.01 | 51,416,050.04 |
| Office expenses, business traveling expenses | 42,655,069.34 | 24,718,470.93 |
| Outsourcing expenses | 24,753,637.81 | 47,138,539.85 |
| Items | Current period cumulative | Preceding period comparative |
| Others | 16,448,437.28 | 23,847,998.97 |
| Total | 858,945,406.13 | 782,661,708.54 |
44. Financial expenses
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Interest expenses | 329,243,757.49 | 337,753,271.80 |
| Less: Interest income | 153,449,422.80 | 164,418,967.90 |
| Losses on foreign exchange (or less: gains) | -140,824,825.49 | 86,391,384.65 |
| Others | 9,432,268.93 | 10,242,664.69 |
| Total | 44,401,778.13 | 269,968,353.24 |
45. Other income
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Government grants related to assets [Note] | 100,000,509.62 | 85,165,405.18 |
| Government grants related to income [Note] | 75,760,610.32 | 66,054,648.19 |
| Refund of handling fees for withholding individual income tax | 1,102,494.25 | 1,160,651.30 |
| Total | 176,863,614.19 | 152,380,704.67 |
Note: Please refer to item VII 59 of this section for details on government grants included in other income.
46. Investment income
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Investment income from long-term equity investments under equity method | 95,616,385.10 | 59,304,344.04 |
| Investment income from disposal of financial instruments | -20,658,819.12 | 10,887,997.40 |
| Including: Financial assets classified as at fair value through profit or loss | 2,606,589.45 | 12,582,646.77 |
| Financial liabilities classified as at fair value through profit or loss | -23,265,408.57 | -1,694,649.37 |
| Interest income from discounted notes | -259.56 | |
| Investment income from bank financial products and structured deposits | 52,749,284.13 | 57,777,633.53 |
| Interest income from split loans | 988,193.62 | |
| Total | 128,695,043.73 | 127,969,715.41 |
47. Gains on changes in fair value
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Held-for-trading financial assets | 27,222,640.33 | 39,426,345.82 |
| Including: Gains on changes in fair value arising from financial assets classified as at fair value through profit or loss | 27,222,640.33 | 39,426,345.82 |
| Items | Current period cumulative | Preceding period comparative |
| Held-for-trading financial liabilities | -93,544,424.05 | -1,562,640.38 |
| Including: Gains on changes in fair value arising from financial liabilities classified as at fair value through profit or loss | -93,544,424.05 | -1,562,640.38 |
| Total | -66,321,783.72 | 37,863,705.44 |
48. Credit impairment loss
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Bad debts | 5,165,584.15 | -50,043,349.49 |
| Total | 5,165,584.15 | -50,043,349.49 |
49. Assets impairment loss
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Inventory write-down loss | -162,974,265.12 | -25,275,549.36 |
| Impairment loss of fixed asset | -28,974,859.54 | |
| Total | -162,974,265.12 | -54,250,408.90 |
50. Gains on asset disposal
Unit: RMB Yuan
| Sources | Current period cumulative | Preceding period comparative |
| Gains on disposal of non-current assets | 2,726,604.77 | -1,544,436.08 |
| Total | 2,726,604.77 | -1,544,436.08 |
51. Non-operating revenue
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative | Amount included in non-recurring profit or loss |
| Indemnity income | 4,412,772.54 | 11,227,600.39 | 4,412,772.54 |
| Gains on damage or retirement of non-current assets | 12,775.00 | ||
| Others | 572,451.80 | 1,047,467.45 | 572,451.80 |
| Total | 4,985,224.34 | 12,287,842.84 | 4,985,224.34 |
52. Non-operating expenditures
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative | Amount included in non-recurring profit or loss |
| Donation expenditures | 1,598,510.79 | 2,003,374.90 | 1,598,510.79 |
| Losses on damage or retirement of non-current assets [Note] | 76,959,122.65 | 59,895,963.50 | 76,959,122.65 |
| Others | 975,097.47 | 2,704,485.84 | 975,097.47 |
| Total | 79,532,730.91 | 64,603,824.24 | 79,532,730.91 |
Note: It included 75,879,629.71 yuan as losses on scrapping of construction in progress, as Shandong Industrial Park 616 Project cannot
reach the designed usable conditions due to changes of planning.
53. Income tax expenses
(1) Details
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Current period income tax expenses | 452,277,073.04 | 645,264,359.60 |
| Deferred income tax expenses | 147,558,392.56 | 45,250,086.91 |
| Total | 599,835,465.60 | 690,514,446.51 |
(2) Reconciliation of accounting profit to income tax expenses
Unit: RMB Yuan
| Items | Current period cumulative |
| Profit before tax | 4,238,102,948.85 |
| Income tax expenses based on statutory/applicable tax rate | 635,715,442.33 |
| Effect of different tax rate applicable to subsidiaries | 1,529,630.41 |
| Effect of prior income tax reconciliation | 7,705,952.65 |
| Effect of non-taxable income | -14,381,307.84 |
| Effect of non-deductible costs, expenses and losses | 7,833,048.49 |
| Effect of utilization of deductible losses not previously recognized as deferred tax assets | -3,674,556.59 |
| Effect of deducible temporary differences or deductible losses not recognized as deferred tax assets in the current period | 256,544,726.70 |
| Effect of extra deduction of R&D expenses | -117,395,891.13 |
| Additional deduction for wages paid for the placement of disabled persons and other employment encouraged by the state | -260,948.31 |
| High-tech enterprises in the fourth quarter of 2022 newly purchased equipment and apparatus pre-tax deduction | -162,201,531.24 |
| Effect of tax rate changes on opening balance of deferred tax assets/liabilities | -11,579,099.87 |
| Income tax expenses | 599,835,465.60 |
54. Other comprehensive income
Please refer to item VII 35 of this section for details.
55. Notes to items of the cash flow statement
(1) Other cash receipts related to operating activities
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Interest income from cash in bank | 153,449,422.80 | 164,418,967.90 |
| Receipt of government grants | 195,220,666.19 | 335,719,965.91 |
| Recovery of temporary borrowings and security deposits | 19,779,291.72 | 10,265,762.72 |
| Receipt of temporary receipts payable | 4,578,466.46 | 4,711,009.18 |
| Other receipts and net current accounts | 5,220,974.95 | 24,850,169.36 |
| Total | 378,248,822.12 | 539,965,875.07 |
(2) 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 | 83,857,144.43 | 95,705,009.75 |
| Office expenses and business traveling expenses | 83,967,512.15 | 107,041,859.39 |
| Advertising and promotion expenses, business entertainment expenses | 34,652,657.81 | 29,280,193.16 |
| Sales commission and customs declaration charges | 20,869,486.43 | 15,913,870.35 |
| Insurance expenses | 14,769,418.13 | 13,706,371.25 |
| Consulting fees | 17,492,615.79 | 15,521,872.12 |
| Other payments and net current accounts | 34,257,491.06 | 32,081,395.48 |
| Total | 289,866,325.80 | 309,250,571.50 |
(3) Other cash receipts related to investing activities
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Redemption of financial products | 1,800,000,000.00 | 1,800,000,000.00 |
| Cash obtained from subsidiaries on the consolidation date | 14,761,216.04 | |
| Recovery of land deposit | 5,084,750.00 | |
| Recovery of land bond | 771,074.45 | |
| Total | 1,820,617,040.49 | 1,800,000,000.00 |
(4) 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 | 720,000,000.00 | 1,800,000,000.00 |
| Unbundled principal amount | 20,881,387.07 | |
| Payments for land bond | 4,835,731.00 | |
| Total | 827,440,207.10 | 1,804,835,731.00 |
(5) 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 |
(6) Other cash payments related to financing activities
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Payments for bank financing handling charges | 4,010,015.77 | 3,786,203.45 |
| Payments of handling charges for issuing letters of guarantee for borrowings | 576,792.00 | 1,600,495.28 |
| Repayments of principal and interest of leases | 545,623.09 | 389,323.20 |
| Items | Current period cumulative | Preceding period comparative |
| Repurchase of treasury shares | 179,698,926.77 | 320,360,784.48 |
| Repayments of call loans and interest | 185,842.44 | 3,304,500.00 |
| Total | 185,017,200.07 | 329,441,306.41 |
56. 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 | 3,638,267,483.25 | 4,372,225,619.34 |
| Add: Provision for assets impairment loss | 157,808,680.97 | 104,293,758.39 |
| Depreciation of fixed assets, oil and gas assets, productive biological assets | 1,346,707,461.57 | 1,187,946,509.68 |
| Depreciation of right-of-use assets | 460,187.61 | 283,003.04 |
| Amortization of intangible assets | 43,000,548.86 | 34,901,345.67 |
| Amortization of long-term prepayments | 6,626,543.66 | 5,202,615.19 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (Less: gains) | -2,726,604.77 | 1,544,436.08 |
| Fixed assets retirement loss (Less: gains) | 76,959,122.65 | 59,883,188.50 |
| Losses on changes in fair value (Less: gains) | 66,321,783.72 | -37,863,705.44 |
| Financial expenses (Less: gains) | 346,183,580.90 | 338,987,833.23 |
| Investment losses (Less: gains) | -128,695,043.73 | -127,969,715.41 |
| Decrease of deferred tax assets (Less: increase) | 5,993,019.24 | 9,338,514.05 |
| Increase of deferred tax liabilities (Less: decrease) | 141,565,373.32 | 35,911,572.86 |
| Decrease of inventories (Less: increase) | -1,104,802,476.55 | -358,037,685.76 |
| Decrease of operating receivables (Less: increase) | -486,206,139.60 | -553,005,953.74 |
| Increase of operating payables (Less: decrease) | 240,512,886.47 | 761,094,844.23 |
| Others | 13,504,676.04 | 3,141,871.66 |
| Net cash flows from operating activities | 4,361,481,083.61 | 5,837,878,051.57 |
| 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 | 5,151,841,931.86 | 5,714,537,538.23 |
| Less: Cash at the beginning of the period | 5,714,537,538.23 | 4,669,306,776.09 |
| Add: Cash equivalents at the end of the period | ||
| Less: Cash equivalents at the beginning of the period |
| Supplement information | Current period cumulative | Preceding period comparative |
| Net increase of cash and cash equivalents | -562,695,606.37 | 1,045,230,762.14 |
(2) Net cash paid during the period for the acquisition of subsidiaries
| 金额 | |
| Cash or cash equivalents paid in the period for business combinations that occurred during the period | 5,406,525.00 |
| Including：NHU/Chr.Olesen Latin America A/S | 5,406,525.00 |
| Less：Cash and cash equivalents held by the Purchase Date | 20,167,741.04 |
| Including：NHU/Chr.Olesen Latin America A/S | 20,167,741.04 |
| Net cash paid for acquisition of subsidiaries [Note] | -14,761,216.04 |
[Note]：Presented in Other cash receipts related to investing activities
(2) Composition of cash and cash equivalents
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| I. Cash | 5,151,841,931.86 | 5,714,537,538.23 |
| Including: Cash on hand | 16,584.59 | 14,537.85 |
| Cash in bank on demand for payment | 5,151,816,943.29 | 5,684,842,466.04 |
| Other cash and bank balances on demand for payment | 8,403.98 | 29,680,534.34 |
| II. Cash and cash equivalents at the end of the period | 5,151,841,931.86 | 5,714,537,538.23 |
Remarks:
Closing balance of cash and bank balances amounted to 5,343,851,967.72 yuan, including deposit for bank acceptance of147,608,293.24 yuan, deposit for letters of credit of 42,310,180.59 yuan, deposit for engineering labor costs of 851,288.54yuan, depositfor construction safety of 863,937.05 yuan, deposit for ETC of 16,500.00 yuan and deposit for water fees of 359,836.44 yuan, whichwas not cash and cash equivalents.Opening balance of cash and bank balances amounted to 5,952,909,626.94 yuan, including deposit for bank acceptance of149,724,511.46 yuan, deposit for letters of credit of 86,212,564.30 yuan, deposit for engineering labor costs of 1,654,664.15 yuan,deposit for ETC of 16,500.00 yuan, deposit for water fees of 358,792.30 yuan and deposit for construction safety of 405,056.50 yuan,which was not cash and cash equivalents.
57. Assets with title or use right restrictions
Unit: RMB Yuan
| Items | Closing carrying amount | Reasons for restrictions |
| Cash and bank balances | 192,010,035.86 | Please refer to supplement information to the cash flow statement of this section for details. |
| Notes receivable | 233,192,351.27 | Please refer to notes to notes receivable of this section for details. |
| Fixed assets | 79,692,425.35 | Mortgaged for bank borrowings. |
| Intangible assets | 9,734,671.13 | Mortgaged for bank borrowings. |
| Receivables financing | 136,554,892.05 | Please refer to notes to receivables financing of this section for details. |
| Total | 651,184,375.66 | -- |
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 | -- | -- | 359,502,992.96 |
| Including: USD | 27,981,497.53 | 6.9646 | 194,879,937.70 |
| EUR | 20,059,541.38 | 7.4229 | 148,899,969.71 |
| HKD | 958,855.22 | 0.8933 | 856,545.37 |
| JPY | 268,708,651.00 | 0.0524 | 14,080,333.31 |
| BRL | 201,403.92 | 1.3164 | 265,128.12 |
| PHP | 75,302.25 | 0.3577 | 26,935.61 |
| SGD | 3,269.84 | 5.1831 | 16,947.91 |
| DKK | 305,662.66 | 0.9983 | 305,143.03 |
| PLN | 108,358.86 | 1.5878 | 172,052.20 |
| Accounts receivable | - | - | 1,689,653,688.10 |
| Including: USD | 197,129,772.51 | 6.9646 | 1,372,930,013.62 |
| EUR | 29,742,209.66 | 7.4229 | 220,773,448.09 |
| GBD | 2,875.00 | 8.3941 | 24,133.04 |
| BRL | 53,561,262.34 | 1.3164 | 70,508,045.74 |
| PHP | 71,059,680.21 | 0.3577 | 25,418,047.61 |
| Other receivables | - | - | 70,948,859.26 |
| Including: USD | 3,031,654.31 | 6.9646 | 21,114,259.61 |
| EUR | 2,756,168.97 | 7.4229 | 20,458,766.65 |
| HKD | 31,700.00 | 0.8933 | 28,317.61 |
| BRL | 4,949,716.49 | 1.3164 | 6,515,806.79 |
| PHP | 63,829,210.51 | 0.3577 | 22,831,708.60 |
| Short-term borrowings | - | - | 501,536,168.04 |
| Including: USD | 2,513,502.24 | 6.9646 | 17,505,537.70 |
| EUR | 65,207,753.08 | 7.4229 | 484,030,630.34 |
| Accounts payable | - | - | 111,265,220.07 |
| Including: USD | 1,693,864.75 | 6.9646 | 11,797,090.44 |
| EUR | 8,944,929.25 | 7.4229 | 66,397,315.33 |
| BRL | 25,087,374.97 | 1.3164 | 33,025,020.41 |
| PHP | 128,023.18 | 0.3577 | 45,793.89 |
| Other payables | - | - | 18,945,216.82 |
| Including: USD | 2,683,120.28 | 6.9646 | 18,686,859.50 |
| EUR | 23,755.62 | 7.4229 | 176,335.59 |
| HKD | 41,687.84 | 0.8933 | 37,239.75 |
| SGD | 8,640.00 | 5.1831 | 44,781.98 |
| Long-term borrowings | - | - | 31,590,890.00 |
| Including: EUR | 4,255,869.00 | 7.4229 | 31,590,890.00 |
| Non-current liabilities due within one year | - | - | 7,153,251.44 |
| Items | Closing balance in foreign currencies | Exchange rate | RMB equivalent at the end of the period |
| Including: EUR | 961,662.00 | 7.4229 | 7,138,320.86 |
| HKD | 16,713.96 | 0.8933 | 14,930.58 |
(2) Remarks on overseas operations. For significant overseas operating entities, their main operating places,functional currencies and adoption basis shall be disclosed. Reasons for any changes in functional currencyshall also be disclosed.
√ Applicable □ Not applicable
NHU EUROPE GmbH is a holding subsidiary of the subsidiary NHU (Hong Kong) Trading Co., Ltd. with the holding proportion of51%; NHU Performance Materials GmbH is a wholly-owned subsidiary of the subsidiary NHU (Hong Kong) Trading Co., Ltd.;Bardoterminal GmbH is a wholly-owned subsidiary of NHU EUROPE GmbH. The above three entities are all located in Luneburg,Germany, with EUR as functional currency. NHU Singapore PTE. LTD. is a wholly-owned subsidiary of the Company. It is located inSingapore, with SGD as functional currency.NHU/Chr.Olesen Latin America A/S, with a shareholding ratio of 51%, located in gentovt, Denmark, and the functional currency iseuro; NHU/CHR. Olesen Brasil LTDA. Is nhu / Chr Olesen Latin America a / s, a wholly-owned subsidiary, is located in Sao Paulo,Brazil, and its functional currency is Brazilian real; CHR. Olesen Mexico SAPI de CV is nhu / Chr Olesen Latin America a / S is aholding subsidiary of Olesen Latin America a /s, with a shareholding ratio of 87%. It is located in cretaro, Mexico, and its functionalcurrency is Mexican peso.NHU Singapore PTE. LTD. is a wholly-owned subsidiary of the Company. It is located in Singapore, with SGD as functional currency.
59. Government grants
(1) Government grants related to assets
Unit: RMB Yuan
| Items | Opening balance of deferred income | Increase | Amortization | Closing balance of deferred income | Amortization presented under | Remarks |
Special funds for BiologicalFermentation Industrial ParkProject
| Special funds for Biological Fermentation Industrial Park Project | 427,578,840.00 | 49,336,020.00 | 378,242,820.00 | Other income | Pursuant to the document numbered Sui Jing Kai Guan [2018] 55 | |
| Special funds for enterprise development (Shandong Vitamins) | 74,962,651.55 | 9,672,600.20 | 65,290,051.35 | Other income |
Special funds for jointproduction project of XinhaoThermal Power
| Special funds for joint production project of Xinhao Thermal Power | 31,772,916.73 | 3,774,999.96 | 27,997,916.77 | Other income | Pursuant to the document numbered Sui Jing Kai Guan Wei Han [2018] 123 | |
| Technical renovation for green deep processing of 2019 | 34,260,000.00 | 856,500.00 | 33,403,500.00 | Other income | Pursuant to the document numbered Zhe Fa Gai Mi [2019] 127 |
Special funds for enterprisedevelopment (Amino Acid)
| Special funds for enterprise development (Amino Acid) | 45,804,945.12 | 18,000,000.00 | 1,145,604.36 | 62,659,340.76 | Other income | Pursuant to the documents numbered Wei Bin Cai Zhi Zi [2018] 40 and Wei Bin Cai Jin Yu [2021] 44 |
| Subsidies for land leveling of Shandong | 28,308,723.84 | 718,189.44 | 27,590,534.40 | Other income | ||
| Enterprise development funds of Shandong | 18,847,224.88 | 437,814.12 | 18,409,410.76 | Other income | Pursuant to the documents numbered Wei Bin Cai Zhi Zi [2014] |
| Items | Opening balance of deferred income | Increase | Amortization | Closing balance of deferred income | Amortization presented under | Remarks |
| 513, Wei Bin Cai Zhi Zi [2016] 194 and Wei Bin Cai Zhi Zi [2017] 307 | ||||||
| PPS construction project with annual output of 10,000 tons | 11,412,499.88 | 1,826,000.04 | 9,586,499.84 | Other income | ||
| Subsidies for PPS resin with annual output of 5,000 tons and PPS composite materials with annual output of 6,000 tons | 8,550,000.00 | 2,850,000.00 | 5,700,000.00 | Other income | ||
| Enterprise development funds of Advanced Manufacturing Industrial Park | 8,491,786.07 | 198,251.76 | 8,293,534.31 | Other income | ||
| Effective industrial input expansion of 2016 | 6,064,800.00 | 957,600.00 | 5,107,200.00 | Other income | ||
| Funds for key thematic projects of industrial revitalization and technical renovation of 2012 | 3,924,642.86 | 1,427,142.84 | 2,497,500.02 | Other income | Special funds for new cephalosporin antibiotics project with annual output of 10 tons according to the document numbered Zhe Cai Qi [2012] 276 issued by Department of Finance of Zhejiang Province and Economy and Informatization Commission of Zhejiang Province | |
| Fiscal subsidies for low-rent housing | 6,098,560.08 | 240,857.16 | 5,857,702.92 | Other income | ||
| Subsidies from land transfer fees of Shandong dormitory | 4,873,021.09 | 250,231.57 | 4,622,789.52 | Other income |
Subsidies for inputs inbiochemical infrastructure ofShangyu
| Subsidies for inputs in biochemical infrastructure of Shangyu | 4,580,963.84 | 317,771.88 | 4,263,191.96 | Other income | ||
| Construction project of public testing service platform | 3,000,000.04 | 999,999.96 | 2,000,000.08 | Other income | ||
| Subsidies for infrastructure supporting fees | 7,478,250.00 | 797,625.00 | 6,680,625.00 | Other income |
Compensation for resourceconservation andenvironmental protectionprojects of 2017
| Compensation for resource conservation and environmental protection projects of 2017 | 3,360,000.00 | 480,000.00 | 2,880,000.00 | Other income | ||
| Subsidies for new materials, land and infrastructure construction | 2,432,160.00 | 810,720.00 | 1,621,440.00 | Other income | ||
| Special fiscal funds for revitalization of the substantial economy (transformation of traditional industries) of 2017 | 2,140,071.30 | 539,228.52 | 1,600,842.78 | Other income | Pursuant to the document numbered Xin Cai Qi [2019] 151 | |
| Subsidies for RTO Project | 1,266,666.90 | 399,999.96 | 866,666.94 | Other income | Pursuant to the document numbered Wei Cai Qi Zhi [2014] 207 |
Special subsidies fordevelopment of marineeconomy of 2017
| Special subsidies for development of marine economy of 2017 | 2,000,000.00 | 800,000.02 | 1,199,999.98 | Pursuant to the document numbered Shang Yu Cai Jian [2018] 12 |
| Items | Opening balance of deferred income | Increase | Amortization | Closing balance of deferred income | Amortization presented under | Remarks |
| Special subsidies for high-quality development of manufacturing industry | 1,804,329.70 | 304,957.10 | 1,499,372.60 | Other income | Pursuant to the document numbered Xin Jing Xin [2020] 79 | |
| Enterprise development fund (Shandong Fine Chemical) | 52,224,561.00 | 2,176,023.38 | 50,048,537.62 | Pursuant to the document numbered Wei Bin Cai Zhi Zi [2020] 34 | ||
| Special funds for Taishan industry leading talents project | 7,400,000.00 | 7,400,000.00 | Pursuant to the documents numbered Lu Zheng Ban Zi [2021] 13, Lu Zu Zi [2021] 24, Wei Bin Cai Xing Zhi Zi [2021] 1, and Wei Cai Xing Zhi [2021] 16 |
Food security control andemergency facilities project –investment plan within budgetof the central government of2020
| Food security control and emergency facilities project – investment plan within budget of the central government of 2020 | 24,871,000.00 | 2,508,000.00 | 22,363,000.00 | Other income | Pursuant to the document numbered Hei Fa Gai Tou Zi [2020] 542 | |
| Policy incentives for industrial production projects of 2020 | 24,213,221.35 | 2,793,833.28 | 21,419,388.07 | Other income | Pursuant to the document numbered Hei Cai Zhi (Chan Ye) [2020] 558 | |
| Special funds for Heilongjiang Biological Fermentation Industrial Park Project | 111,810,000.00 | 111,810,000.00 | ||||
| Incentives for enterprises settling in Industrial Collaborative Innovation Center by Hangzhou Bay Shangyu Economic and Technological Development Zone | 24,255,416.73 | 3,206,199.96 | 21,049,216.77 | Other income | ||
| Subsidies for upgrading coal-fired boilers of 2017 | 222,857.12 | 37,142.88 | 185,714.24 | Other income | Pursuant to the document numbered Xin Cai Jian [2018] 204 | |
| Subsidies for low-nitrogen transformation of gas-fired boilers of Xinchang County | 465,535.75 | 70,714.32 | 394,821.43 | Other income | Pursuant to the document numbered Xin Huan Yu [2018] 25 | |
| Special funds for technical renovation | 20,169,603.37 | 11,630,000.00 | 1,105,959.90 | 30,693,643.47 | Other income | |
| Incentives for investment promotion | 24,982,141.71 | 1,969,527.63 | 23,012,614.08 | Other income | Pursuant to the document numbered Wei Bin Cai Gong Zhi Zi [2021] 14 | |
| Special fiscal supporting funds for high-quality development (investment projects) of manufacturing industry of Xinchang County of 2021 | 4,875,100.00 | 406,258.30 | 4,468,841.70 | Other income | Pursuant to the document numbered Xin Jing Xin [2021] 50 | |
| Special investment plan within budget of the central government for supporting advanced manufacturing industry and modern service of 2021 | 19,650,000.00 | 19,650,000.00 | 3,274,999.98 | 36,025,000.02 | Other income | Pursuant to the document numbered Fa Gai Tou Zi [2021] 1117 |
| Economic and Information Bureau of technical | 7,736,500.00 | 194,940.46 | 7,541,559.54 | Other income | Weibin finance and |
| Items | Opening balance of deferred income | Increase | Amortization | Closing balance of deferred income | Amortization presented under | Remarks |
| transformation project subsidies | industry refers to the word [2021] No. 14 | |||||
| 2021 Enterprise Digitalization Key Project Incentive Funds | 15,000,000.00 | 15,000,000.00 | Other income | Yu Jingxin Investment [2022] No. 35 | ||
| 2022 Special funds to support advanced manufacturing and service industries | 3,831,190.27 | 3,831,190.27 | Other income | Secretariat of Zhejiang Development and Reform Commission [2022] No. 103 | ||
| 2021 Digital (intelligent) demonstration workshop project incentive money | 2,000,000.00 | 196,078.40 | 1,803,921.60 | Other income | Heilongxin Planning and Development [2022] No. 196 | |
| 2020 industrial enterprise energy-saving technology transformation project incentive policy funds | 1,000,000.00 | 84,033.60 | 915,966.40 | Other income | Black Industry and Information Planning Joint Development [2022] No. 133 | |
| Chemical industry transformation and upgrading 2.0 intelligent transformation project incentives and service subsidies | 40,320,000.00 | 40,320,000.00 | Other income | |||
| Other piecemeal subsidies - investment plan within budget of the central government of 2022 | 9,547,185.25 | 292,365.60 | 2,834,683.64 | 7,004,867.21 | Other income | |
| Subtotal | 1,063,699,676.16 | 119,460,055.87 | 100,000,509.62 | 1,083,159,222.41 |
(2) Government grants related to income and used to compensate incurred relevant costs, expenses or losses
Unit: RMB Yuan
| Items | Amount | Presented under | Remarks |
| Government reward | 28,424,687.71 | Other income | Related to income |
Other subsidies
| Other subsidies | 47,104,922.61 | Other income | Related to income |
| Special subsidies | 231,000.00 | Other income | Related to income |
| Subtotal | 75,760,610.32 |
(3) In the current period, government grants included into profit or loss totaled 175,761,119.94yuan.
VIII. Changes in the consolidation scope
1. Changes in the consolidation scope due to other reasons
(1) Business combination not under the same control in the current period
Unit: RMB Yuan
| Name of the | Percentag | Basis for | Merger | Basis for | Revenue of the | Net profit of the |
| merged party | e of equity acquired in a business combination | constituting a business combination under common control | Date | determining the consolidation date | consolidated party from the beginning of the period of consolidation to the date of consolidation | consolidated party from the beginning of the period of consolidation to the date of consolidation |
| NHU/Chr.OlesenLatin America A/S[注] | 51.00% | Acquisitions | January 6, 2022 | Complete industrial and commercial registration | 776,419,531.18 | 9,654,755.34 |
[Note] NHU/CHR.OLESEN LATIN AMERICA A/S holds two subsidiaries, respectively NHU/CHR.OLESEN BRASIL LTDA.，holding 100%, and CHR.OLESEN MEXICO SAPI DE CV, holding 87%.
(2) Combination cost and goodwill
Unit: RMB Yuan
| Combination cost | NHU/Chr.Olesen Latin America A/S |
| Cash | 5,406,525.00 |
Other notes:
| Combination cost | NHU/Chr.Olesen Latin America A/S |
| Cash | 5,406,525.00 |
| Total: | 5,406,525.00 |
| Less：Fair value share of identifiable net assets obtained | 1,783,820.03 |
| Amount of goodwill / combination cost less than the fair value of identifiable net assets obtained | 3,622,704.97 |
(3) Identifiable assets and liabilities of the acquiree on the acquisition date
Unit: RMB Yuan
| Item | Fair value on the purchase date | Book value on the purchase date |
| Assets: | 144,110,250.63 | 144,110,250.63 |
| Cash and bank balances | 20,167,741.04 | 20,167,741.04 |
| Accounts receivable | 64,176,200.13 | 64,176,200.13 |
| Inventories | 59,766,309.46 | 59,766,309.46 |
| Debt： | 139,997,586.79 | 139,997,586.79 |
| Borrowings | 6,701,245.26 | 6,701,245.26 |
| Accounts payable | 133,296,341.53 | 133,296,341.53 |
| Equity: | 4,112,663.84 | 4,112,663.84 |
| Less:Non-controlling interest | 614,977.51 | 614,977.51 |
| Net assets acquired | 3,497,686.33 | 3,497,686.33 |
2、Change in scope of consolidation for other reasons
Describe changes in the scope of consolidation due to other reasons (e.g., new subsidiaries, liquidation of subsidiaries, etc.) and therelated circumstances:
| company identification | Share Acquisition Method | Point of acquisition of equity |
| Wuniu (Shandong) Investment Co., Ltd | Investment establishment | April 13, 2022 |
IX. Interest in other entities
1. Interest in subsidiaries
(1) Composition of the group
| Subsidiaries | Main operating place | Place of registration | Business nature | Holding proportion (%) | Acquisition method | |
| Direct | Indirect | |||||
| Shangyu NHU Bio-Chem Co., Ltd. | Shangyu, Zhejiang | Shangyu, Zhejiang | Manufacturing | 100.00% | Establishment | |
| Shandong NHU Pharmaceutical Co., Ltd. | Weifang, Shandong | Weifang, Shandong | Manufacturing | 100.00% | Establishment | |
| NHU (Hong Kong) Trading Co., Ltd. | Hong Kong, China | Hong Kong, China | Commerce | 100.00% | Establishment | |
| Zhejiang NHU Special Materials Co., Ltd. | Shangyu, Zhejiang | Shangyu, Zhejiang | Manufacturing | 100.00% | Establishment | |
| Shandong NHU Amino-acids Co., Ltd. | Weifang, Shandong | Weifang, Shandong | Manufacturing | 100.00% | Establishment | |
| NHU EUROPE GmbH | Luneburg, Germany | Luneburg, Germany | Trade | 51% [Note 1] | Establishment | |
| Shandong NHU Holdings Co., Ltd. | Weifang, Shandong | Weifang, Shandong | Service | 100.00% | Establishment | |
| Shandong NHU Vitamins Co., Ltd. | Weifang, Shandong | Weifang, Shandong | Manufacturing | 100.00% [Note 2] | Establishment | |
| Heilongjiang NHU Biotechnology Co., Ltd. | Suihua, Heilongjiang | Suihua, Heilongjiang | Manufacturing | 100.00% | Establishment | |
Remarks on inconsistency between holding proportion and voting rights proportion in subsidiaries:
Note 1: The Company holds shares through NHU (Hong Kong) Trading Co., Ltd.Note 2: The Company holds shares through Shandong NHU Holdings Co., Ltd.
(2) Significant not wholly-owned subsidiaries
Unit: RMB Yuan
| Subsidiaries | Holding proportion of non-controlling shareholders | Non-controlling shareholders’ profit or loss | Dividend declared to non-controlling shareholders | Closing balance of non-controlling interest |
| NHU EUROPE GmbH | 49.00% | 13,213,666.41 | 79,360,029.54 |
(3) Main financial information of significant not wholly-owned subsidiaries
Unit: RMB Yuan
| Subsidiaries | Closing balance | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| NHU EUROPE GmbH | 704,132,280.59 | 96,076,867.88 | 800,209,148.47 | 606,659,014.52 | 31,590,890.00 | 638,249,904.52 |
(Continued)
| Subsidiaries | Opening balance | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| NHU EUROPE GmbH | 860,365,259.01 | 95,891,993.02 | 956,257,252.03 | 788,525,281.39 | 37,669,008.56 | 826,194,289.95 |
Unit: RMB Yuan
| Subsidiaries | Current period cumulative | Preceding period comparative | ||||||
| Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | |
| NHU EUROPE GmbH | 1,549,559,510.21 | 26,966,666.14 | 26,966,666.14 | -18,830,534.73 | 1,655,950,052.91 | 33,091,818.61 | -7,679,716.03 | 72,448,446.07 |
2. Interest in joint venture or associates
(1) Significant joint ventures or associates
| Joint ventures or associates | Main operating place | Place of registration | Business nature | Holding proportion (%) | Accounting treatment on investments in joint ventures or associates | |
| Direct | Indirect | |||||
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | Shangyu, Zhejiang | Shangyu, Zhejiang | Manufacturing | 29.9307% | Equity method | |
| DSM NHU Engineering Materials (Zhejiang) Co., Ltd. | Shangyu, Zhejiang | Shangyu, Zhejiang | Manufacturing | 40.00% | Equity method | |
| Zhejiang Saiya Chemical Materials Co., Ltd. | Shangyu, Zhejiang | Shangyu, Zhejiang | Manufacturing | 49.00% | Equity method | |
Explanation of the difference between the shareholding ratio in the joint venture or the associated enterprise and thevoting ratio:
In the current period, the company's shareholding ratio in the associated enterprise Zhejiang Chunhui environmentalprotection and energy Co., Ltd. changed, mainly due to the change in the company's share of net assets due to thecapital increase of other investors in January 2022.
(2) Main financial information of significant joint ventures
Unit: RMB Yuan
| Items | Closing balance/Current period cumulative | Opening balance/Preceding period comparative | ||||
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | DSM NHU Engineering Materials (Zhejiang) Co., Ltd. | Zhejiang Saiya Chemical Materials Co., Ltd. | Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | DSM NHU Engineering Materials (Zhejiang) Co., Ltd. | Zhejiang Saiya Chemical Materials Co., Ltd. | |
| Current assets | 460,887,337.74 | 109,398,305.48 | 144,410,128.60 | 293,596,545.38 | 68,240,155.87 | 71,896,100.56 |
| Non-current assets | 676,165,054.18 | 19,755,796.05 | 138,230,668.22 | 559,076,086.33 | 13,956,368.94 | 157,938,616.58 |
| Total assets | 1,137,052,391.92 | 129,154,101.53 | 282,640,796.82 | 852,672,631.71 | 82,196,524.81 | 229,834,717.14 |
| Current liabilities | 290,955,340.38 | 62,895,473.39 | 24,117,241.66 | 199,269,854.33 | 97,736,253.17 | 15,537,056.20 |
| Non-current liabilities | 44,353,913.81 | 2,114,370.00 | 40,724,142.33 | 2,459,280.00 | ||
| Total liabilities | 335,309,254.19 | 62,895,473.39 | 26,231,611.66 | 239,993,996.66 | 97,736,253.17 | 17,996,336.20 |
| Equity attributable to shareholders of parent company | 801,743,137.73 | 66,258,628.14 | 256,409,185.16 | 612,678,635.05 | -15,539,728.36 | 211,838,380.94 |
| Proportionate share in net assets | 239,967,333.33 | 26,503,451.26 | 125,640,500.73 | 208,873,174.90 | -6,215,891.34 | 103,800,806.66 |
| Adjustments | ||||||
| - Goodwill | 762,611.33 | 762,611.33 | ||||
| - Unrealized profit in internal trading | 2,046,002.90 | 952,124.29 | 665,200.17 | |||
| -other | -6,215,891.34 | |||||
| Carrying amount of investments in associates | 239,967,333.33 | 24,457,448.36 | 125,450,987.77 | 208,873,174.90 | 103,898,217.82 | |
| Operating revenue | 601,180,746.00 | 211,649,974.88 | 392,768,589.62 | 474,138,506.11 | 112,672,114.30 | 248,551,895.41 |
| Items | Closing balance/Current period cumulative | Opening balance/Preceding period comparative | ||||
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | DSM NHU Engineering Materials (Zhejiang) Co., Ltd. | Zhejiang Saiya Chemical Materials Co., Ltd. | Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | DSM NHU Engineering Materials (Zhejiang) Co., Ltd. | Zhejiang Saiya Chemical Materials Co., Ltd. | |
| Net profit | 174,240,888.38 | 76,623,722.59 | 44,696,229.66 | 163,208,658.71 | -2,938,159.61 | 11,439,773.30 |
| Total comprehensive income | 174,240,888.38 | 76,623,722.59 | 44,696,229.66 | 163,208,658.71 | -2,938,159.61 | 11,439,773.30 |
| Dividend from associates received in the current period | 27,895,266.96 | 40,855,278.00 | ||||
(3) Aggregated financial information of insignificant joint ventures and associates
Unit: RMB Yuan
| Closing balance/ Current period cumulative | Opening balance/ Preceding period comparative | |
| Joint ventures: | -- | -- |
| Total carrying amount of investments | 42,627,799.02 | 38,556,233.03 |
| Proportionate shares in the following items | -- | -- |
| -- Net profit | 1,017,085.76 | -4,562,583.45 |
| -- Other comprehensive income | 3,054,480.23 | |
| -- Total comprehensive income | 4,071,565.99 | -4,562,583.45 |
X. Risks related to financial instrumentsIn 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 discharge anobligation.
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 significantly sinceinitial recognition. When assessing whether the credit risk has increased significantly since initial recognition, the Company takes intoaccount reasonable and supportable information, which is available without undue cost or effort, including qualitative and quantitativeanalysis based on historical data, external credit risk rating, and forward-looking information. The Company determines the changesin default risk of financial instruments during the estimated lifetime through comparison of the default risk at the balance sheet dateand 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 the remaininglifetime 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 or expectedchanges in technology, market, economy or legal environment that will have significant adverse impact on the debtor’s repaymentability.
(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 is consistentwith 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 to thedebtor 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 exposure todefault risk. The Company develops a model of the probability of default, loss rate of default, and exposure to default risk on the basisof quantitative analysis of historical data (e.g. counterparty rating, guarantee measures and collateral type, payment method, etc.) andforward-looking information.
3. Please refer to item VII 4 and 7 of this section for details on the reconciliation table of opening balance and closing balance ofprovision 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 credit levels,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 selects credibleand well-reputed customers based on credit assessment result, and conducts ongoing monitoring on balance of receivables, to avoidsignificant risks in bad debts.As the Company only conducts business with credible and well-reputed third parties, collateral is not required from customers. TheCompany manages credit risk aggregated by customers. As of December 31, 2022, the Company has certain concentration of creditrisk, and 29.31% (December 31, 2021: 39.06%) 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 balance sheet.
(II) Liquidity riskLiquidity risk is the risk that the Company may encounter deficiency of funds in meeting obligations associated with cash or otherfinancial assets settlement, which is possibly attributable to failure in selling financial assets at fair value on a timely basis, or failurein collecting liabilities from counterparties of contracts, or early redemption of debts, or failure in achieving estimated cash flows.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 between
financing sustainability and flexibility. The Company has obtained credit limit from several commercial banks to meet working capitalrequirements and expenditures.Financial liabilities classified based on remaining time period till maturity
Unit: RMB Yuan
| Items | Closing balance | ||||
| 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
| 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
| 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 |
(Continued)
Unit: RMB Yuan
| Items | December 31, 2020 | ||||
| Carrying amount | Contract amount not yet discounted | Within 1 year | 1-3 years | Over 3 years | |
| Bank borrowings | 8,581,398,746.38 | 9,052,182,029.59 | 3,703,590,391.97 | 4,728,643,204.24 | 619,948,433.38 |
| Notes payable | 694,124,946.73 | 694,124,946.73 | 694,124,946.73 | ||
| Accounts payable | 1,435,966,427.76 | 1,435,966,427.76 | 1,435,966,427.76 | ||
| Other payables | 56,712,103.36 | 56,712,103.36 | 56,712,103.36 | ||
| Lease liabilities | 3,182,245.62 | 4,721,702.39 | 402,749.99 | 476,190.48 | 3,842,761.92 |
| Subtotal | 10,771,384,469.85 | 11,243,707,209.83 | 5,890,796,619.81 | 4,729,119,394.72 | 623,791,195.30 |
(III) Market riskMarket risk is the risk that the Company may encounter fluctuation in fair value or future cash flows of financial instruments due tochanges 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 due tochanges 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, 2022, balance of borrowings with interest accrued at floating interest rate totaled 9,711.57 million yuan (December31, 2021: 8,581.40 million yuan). If interest rates had been 50 basis points higher/lower and all other variables were held constant, theCompany’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 from changesin 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 market exchange ratewhen necessary, in order to maintain the net risk exposure within an acceptable level.
Please refer to item VII 58 of the notes to the financial statements for details on foreign currency financial assets and liabilities at theend of the period.
XI. 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 | 314,576.43 | 720,000,000.00 | 720,314,576.43 | |
| Financial assets classified as at fair value through profit or loss | 314,576.43 | 720,000,000.00 | 720,314,576.43 | |
| Financial products with guaranteed principal and floating income | 720,000,000.00 | 720,000,000.00 | ||
| Derivative financial assets | 314,576.43 | 314,576.43 | ||
| 2. Receivables financing | 379,217,582.25 | 379,217,582.25 | ||
| 3. Other equity instrument investments | 22,998,147.55 | 22,998,147.55 | ||
| Total liabilities at recurring fair value measurement | 314,576.43 | 1,122,215,729.80 | 1,122,530,306.23 | |
2. Qualitative and quantitative information of valuation technique(s) and key input(s) for level 2 fair valueat recurring and non-recurring fair measurement
Fair 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 determinedbased 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.
XII. 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 | 49.22% | 49.22% |
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 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 IX 2 of the notes to the financial statements for details on the Company’s significant joint ventures and associates.
4. Other related parties of the Company
| Related parties | Relationships with the Company |
| Beijing Winsunny Pharmaceutical 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. | 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. |
| Changbai Mountain Protection and Development Zone Heyue Hotel Management Co., Ltd | Controlled by NHU Holding Group Co., Ltd. |
| Heilongjiang Haotian Corn Development Co., Ltd. | Minority Shareholders of Subsidiaries |
| Synchem International Co., Ltd. [Note] | Its shareholder is the actual controller of the Company |
Note: On November 4, 2021, the entity controlled by the actual controller of the Company withdrew from Synchem International Co.,Ltd.As Client B holds 25% equity of NHU Europe GmbH, the holding subsidiary of the Company’s subsidiary NHU (Hong Kong) TradingCo., Ltd., the Company discloses transactions between Client B and NHU Europe GmbH as well as balances in related partytransactions for the sake of prudence.Customer C holds 25% equity interest in NHU/CHR.OLESEN LATIN AMERICA A/S, a controlling subsidiary of the Company'ssubsidiary, New Harmony (Hong Kong) Trading Co., Ltd. For prudence, the Company discloses the transactions and payment balancebetween Customer C and the subsidiary NHU/CHR.OLESEN LATIN AMERICA A/S in the related transaction status.
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 |
| Zhejiang Deli Equipment Co., Ltd. | Purchase of goods | 157,701,344.20 | 160,000,000.00 | No | 91,325,844.40 |
| Receiving of services | 290,435.42 | 84,619.46 |
| Related parties | Content of transaction | Current period cumulative | Transaction limit approved | Whether exceeds transaction limit | Preceding period comparative |
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | Purchase of steam | 105,647,875.05 | 69,512,700.69 | ||
| Waste disposal service fees | 1,833,745.26 | 229,665.43 | |||
| Zhejiang Saiya Chemical Materials Co., Ltd. | Purchase of goods | 291,724,594.92 | 295,000,000.00 | No | 173,706,742.56 |
| Zhejiang Asen Pharmaceutical Co., Ltd. | Purchase of goods | 1,085,908.02 | 2,035,921.32 | ||
| Xinchang County Hechun Greening Co., Ltd. | Purchase of goods | 392,472.77 | 7,990,317.44 | ||
| Qionghai Boao Holliyard Hotel Management Co., Ltd. | Catering and accommodation services | 98,294.20 | 123,967.00 | ||
| Shaoxing Jinghe Hotel Management Co., Ltd | Catering and accommodation services | 836,209.09 | |||
| Heilongjiang Haotian Corn Development Co., Ltd. | Purchase of goods | 45,857,289.94 | 1,123,079.89 | ||
| Shaoxing Shangyu NHU Real Estate Co., Ltd. | Maintenance Fund | 507,260.38 | 644,538.00 | ||
| Suihua NHU Real Estate Co., Ltd. | Receiving of services | 35,324.40 | |||
| Zhejiang Jingshi Real Estate Co., Ltd. | Receiving of services | 156,675.16 | |||
| CysBio ApS | Consulting Service Fee | 8,089,695.36 | |||
| Qionghai Heyue Property Services Co., Ltd. | Property management | 856,682.06 | 653,877.42 | ||
| Shaoxing Heyue Property Services Co., Ltd. | Property management | 16,560.62 | 375,868.30 | ||
| Xinchang County Hecheng Real Estate Co., Ltd | Catering and Accommodation Services | 80,705.84 | 1,000,524.16 | ||
| Shandong Bin’an Vocational Training School Co., Ltd. | Receiving of services | 1,436,884.23 | 1,512,911.01 | ||
| Shaoxing Yuexiu Education Development Co., Ltd. | Receiving of services | 49,943.14 | 4,561.63 | ||
| 长白山保护开发区和悦酒店管理有限公司 (Changbai Mountain Protection and Development Zone Heyue Hotel Management Co., Ltd.*) | Catering and accommodation services | 140,000.00 | |||
| Zhejiang Yuexiu University of Foreign Languages | Receiving of services | 24,733.44 | |||
| Subtotal | 616,697,900.06 | 455,000,000.00 | 350,489,872.15 |
Sale of goods and rendering of services
Unit: RMB Yuan
| Related parties | Content of transaction | Current period cumulative | Preceding period comparative |
| Zhejiang Deli Equipment Co., Ltd. | Waste and scrap materials | 63,939.40 | 117,269.93 |
| Scrapped materials | 109,898.23 | ||
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | Waste and scrap materials | 17,256.64 | |
| Zhejiang Asen Pharmaceutical Co., Ltd. | Pharmaceutical intermediates, test fees | 331,747.79 | 476,759.56 |
| DSM NHU Engineering Materials (Zhejiang) Co., Ltd. | Scrapped materials | 155,506,893.66 | 78,620,470.09 |
| Labor costs, etc. | 94,904.53 | 64,377.36 |
*
The English name is for identification purpose only.
| Related parties | Content of transaction | Current period cumulative | Preceding period comparative |
| Utilities fees | 65,140.06 | 6,914.41 | |
| Utilities | 1,520,978.65 | 1,139,072.54 | |
| Shandong Bin’an Vocational Training School Co., Ltd. | Management Service Fee | 226,415.09 | 226,415.09 |
| Waste and scrap materials | 21,584.50 | 20,609.89 | |
| Glucose mother solution | 1,371,282.65 | ||
| Heilongjiang Haotian Corn Development Co., Ltd. | Steam charges | 82,192.66 | |
| Front Pharmaceutical PLC. | Pharmaceutical intermediates, testing fees | 345,132.74 | 203,097.35 |
| Beijing Winsunny Pharmaceutical Co., Ltd. | Pharmaceutical intermediates, testing fees | 715,227.93 | 141,509.43 |
| Synchem International Co., Ltd. | Pharmaceutical intermediates | 164,095,134.62 | |
| Total | 159,101,311.88 | 246,482,912.92 |
(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 |
| DSM NHU Engineering Materials (Zhejiang) Co., Ltd. | Land use right and buildings | 1,041,710.85 | 601,412.47 |
| Qionghai Boao Holliyard Hotel Management Co., Ltd. | Land use right and buildings | 429,088.57 | |
| Zhejiang Jingshi Real Estate Co., Ltd. | Land use right and buildings | 328,318.05 | 41,100.92 |
| Zhejiang Deli Equipment Co., Ltd. | Land use right and buildings | 77,064.23 | 77,064.23 |
| Weifang NHU Real Estate Co., Ltd. | Land use right and buildings | 18,857.14 | 21,428.57 |
| NHU Holding Group Co., Ltd. | Land use right and buildings | 16,513.76 | 16,513.76 |
The Company as the lessee:
Unit: RMB Yuan
| Lessors | Types of assets leased | Lease expenses recognized in the current period | Lease expenses recognized in preceding period |
| NHU Holding Group Co., Ltd. | Land use right and buildings | 1,694,215.92 | 1,712,675.89 |
(3) Related party guarantees
The company and its subsidiaries as guaranteed parties
Unit: RMB Yuan
| Guarantors | Amount guaranteed | Commencement date | Maturity date | Whether the guarantee is mature |
| NHU Holding Group Co., Ltd. | 144,000,000.00 | January 23, 2019 | December 21, 2023 | No |
| 500,000,000.00 | December 03, 2020 | September 21, 2025 | No | |
| 100,000,000.00 | Apr 14, 2021 | Apr 12, 2023 | No | |
| 300,000,000.00 | September 19, 2022 | September 18, 2025 | No | |
| 200,000,000.00 | November 17, 2022 | November 14, 2025 | No | |
| Subtotal | 1,244,000,000.00 |
(4) Key management’s emoluments
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Key management’s emoluments | 22,516,149.94 | 26,372,671.30 |
(5) Other related party transactions
(1) Owners of Boao Resort Center Apartment entrusted serviced apartments to Qionghai Boao Holliyard Hotel Management Co., Ltd.for operation and management.
(2) In the current period, NHU EUROPE GmbH sold products amounting to 66,226,780.95 yuan to CHR.Olesen A/S. At the end of theperiod, balance of accounts receivable amounted to16,958,997.49 yuan.
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 | Zhejiang Asen Pharmaceutical Co., Ltd. | 23,625.00 | 1,181.25 | ||
| DSM NHU Engineering Materials (Zhejiang) Co., Ltd. | 42,585,814.11 | 2,129,290.71 | 26,166,564.42 | 1,308,328.22 | |
| Synchem International Co., Ltd. | 27,012,516.04 | 1,350,625.80 | |||
| Subtotal | 42,609,439.11 | 2,130,471.96 | 53,179,080.46 | 2,658,954.02 | |
| Advance paid | Heilongjiang Haotian Corn Development Co., Ltd | 479,844.89 | |||
| Subtotal | 479,844.89 | ||||
| Other receivables | Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | 20,000.00 | 4,000.00 | 20,000.00 | 1,000.00 |
| DSM NHU Engineering Materials (Zhejiang) Co., Ltd. | 18,862.50 | 943.13 | |||
| Subtotal | 20,000.00 | 4,000.00 | 38,862.50 | 1,943.13 | |
| Other non-current assets | Zhejiang Deli Equipment Co., Ltd. | 33,210,788.17 | 45,362,374.00 | ||
| Subtotal | 33,210,788.17 | 45,362,374.00 | |||
(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. | 13,581,584.31 | 29,272,703.74 |
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | 13,688,789.40 | 5,185,881.68 | |
| Zhejiang Saiya Chemical Materials Co., Ltd. | 1,905,191.13 | 2,640,661.94 |
| Items | Related parties | Closing book balance | Opening book balance |
| Zhejiang Second Pharma Co., Ltd. | 6,408.00 | 6,408.00 | |
| Qionghai Heyue Property Services Co., Ltd. | 300,000.00 | ||
| Subtotal | 29,181,972.84 | 37,405,655.36 | |
| Contract liabilities | Zhejiang Deli Equipment Co., Ltd. | 13,009.64 | 13,009.64 |
| Subtotal | 13,009.64 | 13,009.64 | |
| Other payables | Zhejiang Deli Equipment Co., Ltd. | 3,500.00 | 443,500.00 |
| Xinchang County Hechun Greening Co., Ltd. | 13,102.77 | 13,102.77 | |
| Zhejiang Jingshi Real Estate Co., Ltd. | 166,075.68 | ||
| Subtotal | 182,678.45 | 456,602.77 | |
| Other current liabilities | Zhejiang Deli Equipment Co., Ltd. | 1,691.25 | 1,691.25 |
| Subtotal | 1,691.25 | 1,691.25 |
XIII. 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, asof December 31, 2021, details of the Company’s unsettled forward exchange settlement contracts are as follows:
| Currency | Amount | Exchang Rate | Settlement Date |
| USD | 3,000,000.00 | 6.9700 | January 5, 2023 |
| 2,000,000.00 | 7.0020 | January 5, 2023 | |
| 2,000,000.00 | 6.9321 | January 12, 2023 | |
| 2,000,000.00 | 6.9600 | January 12, 2023 | |
| 3,000,000.00 | 7.0051 | January 12, 2023 | |
| 3,000,000.00 | 7.0050 | January 12, 2023 | |
| 3,000,000.00 | 7.0090 | January 17, 2023 | |
| 5,000,000.00 | 6.9650 | January 19, 2023 | |
| 5,000,000.00 | 7.0043 | January 19, 2023 | |
| 2,000,000.00 | 7.0125 | January 19, 2023 | |
| 2,000,000.00 | 7.0165 | January 19, 2023 | |
| Subtotal | 32,000,000.00 | ||
| EUR | 2,000,000.00 | 7.1039 | January 17, 2023 |
| 3,000,000.00 | 7.1065 | January 17, 2023 |
| Currency | Amount | Exchang Rate | Settlement Date |
| 1,000,000.00 | 7.3464 | January 17, 2023 | |
| 1,000,000.00 | 7.3118 | January 19, 2023 | |
| 1,000,000.00 | 7.3670 | January 19, 2023 | |
| 1,000,000.00 | 7.3545 | February 23, 2023 | |
| 2,000,000.00 | 7.3652 | February 23, 2023 | |
| 2,000,000.00 | 7.3640 | February 23, 2023 | |
| 1,000,000.00 | 7.3700 | February 23, 2023 | |
| 1,000,000.00 | 7.3785 | February 23, 2023 | |
| 1,000,000.00 | 7.4505 | February 23, 2023 | |
| 1,000,000.00 | 7.4323 | February 23, 2023 | |
| 1,000,000.00 | 7.4062 | February 28, 2023 | |
| Subtotal | 18,000,000.00 |
2. Letters of guarantee issued but undue
As of December 31, 2021, 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 6,500.00 | Occupying credit line |
| Performance guarantee | USD 146,640.00 | Occupying credit line | ||
| Performance guarantee | USD 11,800.00 | Occupying credit line | ||
| Performance guarantee | USD 34,680.00 | Occupying credit line | ||
| HSBC Bank China Limited Hangzhou Branch | The Company | Financing Guarantee | EUR 10,000,000.00 | Occupying credit line |
| Financing Guarantee | EUR 10,000,000.00 | Occupying credit line |
3. Letters of credit issued but undue
As of December 31, 2021, 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 Co., Ltd. Hangzhou Branch | The Company | CNY 100,000,000.00 | Occupying credit line |
| CNY 200,000,000.00 | Occupying credit line | ||
| CNY 100,000,000.00 | Occupying credit line | ||
| Bank of Communications Company Limited Xinchang Sub-branch | The Company | CNY 150,000,000.00 | Deposit of 15,000,000.00 yuan |
Bank of China Limited XinchangSub-branch
| Bank of China Limited Xinchang Sub-branch | The Company | USD 1,239,606.00 | Occupying credit line |
| USD 811,063.20 | Occupying credit line | ||
| USD 1,033,708.00 | Occupying credit line | ||
| Shangyu New District Sub-branch of Construction Bank Co. | Shangyu NHU Biochemical Co., Ltd | CNY 100,000,000.00 | Occupying credit line |
| Issuing banks | Applicants | Balance of L/C | Conditions |
| Xinchang Sub-branch of Zheshang Bank Co. | Heilongjiang NHU Biotechnology Co., Ltd | CNY 80,000,000.00 | Occupying credit line |
| China Merchants Bank Co., Ltd. Weifang Branch | Shandong NHU Pharmaceutical Co., Ltd | CNY17,312,427.03 | Occupying credit line |
| CNY21,536,585.76 | Occupying credit line | ||
| CNY24,431,946.60 | Occupying credit line | ||
| Bank of China Limited Weifang Binhai Sub-branch | Shandong NHU Amino-acids Co., Ltd. | EUR 1,855,000.00 | Deposit of 14,942,418.00 yuan |
| EUR 107,225.00 | Deposit of 12,000,000.00 yuan | ||
| JPY 554,922,280.00 | Occupying credit line |
Bank of China Limited ShangyuSub-branch
| Bank of China Limited Shangyu Sub-branch | Zhejiang NHU Special Materials Co., Ltd. | JPY 2,900,000.00 | Deposit of JPY 2,900,000.00 |
| JPY 4,124,000.00 | Deposit of JPY 4,124,000.00 |
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. and China Zheshang Bank Co., Ltd., the Company pledged assets pool ornotes pool for guarantee, and opened a notes deposit account to pay deposits at a certain percentage, with no specific agreement on theamount of deposits. As of December 31, 2022, balance of pledged bank acceptance amounted to 369,747,243.32 yuan, deposits ofnotes pool in China Zheshang Bank Co., Ltd. amounted to147,608,293.24 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.(II) As of the balance sheet date, the Company has no significant contingencies to be disclosed.
XIV. Events after the balance sheet date
1. Profit distribution
Unit: RMB Yuan
| Profit or dividend to be distributed | 1,536,710,840 |
| Profits or dividends announced upon review and approval | 1,536,710,840 |
| 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 5 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 |
| 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 sheet dateto be disclosed.
XV. 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 | 14,841,603,430.88 | 1,628,068,809.34 | 535,687,836.81 | 15,933,984,403.41 |
| Operating cost | 9,233,290,169.38 | 1,348,349,777.17 | 533,339,079.61 | 10,048,300,866.94 |
| Total assets | 35,656,504,814.07 | 4,560,717,015.28 | 1,949,596,673.52 | 38,267,625,155.83 |
| Total liabilities | 13,915,614,698.07 | 2,303,683,173.98 | 1,613,821,951.68 | 14,605,475,920.37 |
2. Leases
1. The Company as lessee
(1) Please refer to item VII 14 of this section for details on right-of-use assets.
(2) Please refer to item V 23 of this section for details on the Company’s accounting policies on short-term leases and leases for whichthe underlying asset is of low value. The amounts of short-term leases and low-value asset leases included into profit or loss are asfollows:
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Expense relating to short-term leases | 1,960,380.62 | 1,841,763.55 |
| Total | 1,960,380.62 | 1,841,763.55 |
(3) Profit or loss and cash flows related to leases
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Interest expenses on lease liabilities | 149,348.03 | 153,023.91 |
| Total cash outflows related to leases | 2,682,437.97 | 2,323,174.93 |
(4) Please refer to item X of this section for details on maturity analysis of lease payments and related liquidity risk management.
2. The Company as lessor
Operating lease
(1) Lease income
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Lease income | 3,058,126.92 | 2,125,888.62 |
(2) Assets leased out under operating leases
Please refer to item VII 12 of this section for details on fixed assets leased out under operating leases.
(3) Undiscounted lease payments to be received arising from non-cancellable leases based on the lease contract signed with lessee
Unit: RMB Yuan
| Remaining years | Closing balance | Opening balance |
| Within 1 year | 1,642,344.00 | 833,000.00 |
1-2 years
| 1-2 years | 620,000.00 | 696,000.00 |
| 2-3 years | 310,000.00 | |
| Total | 2,262,344.00 | 1,839,000.00 |
3. Others
(I) Employee stock ownership planPursuant to proposals related to employee stock ownership plan including the “Third Phase of Employee Stock Ownership Plan (Draft)of Zhejiang NHU Co., Ltd. and Summary” deliberated and approved by the third meeting of the eighth session of Board of Directorsand the second meeting of the eighth session of the Board of Supervisors dated October 26, 2020 and the second extraordinary generalmeeting of 2020 dated November 11, 2020, the Company was agreed to implement the third phase of employee stock ownership plan.Purchase of the Company’s shares totaling 8,442,935 shares in the third phase of employee stock ownership plan was finished onFebruary 26, 2021 through bidding in secondary market, accounting for 0.39% of total shares, with transaction amount totaling303,710,918.74 yuan and average transaction price of 35.97 yuan per share. On May 19, 2021, holding shares in the third phase ofemployee stock ownership plan increased to 10,131,522 shares after the Company’s annual equity distribution of 2020, accounting for
0.39% of total current shares. As regulated by the third phase of employee stock ownership plan, lock-up period of shares in theemployee stock ownership plan covers 12 months since the announcement date of purchase completion (i.e., from February 27, 2021to February 26, 2022). Therefore, the lock-up period has expired on February 26, 2022. The duration of employee stock ownershipplan shall not exceed 24 months since the approval date of general meeting of shareholders (i.e., from November 11, 2020 to November11, 2022).According to the "Phase III Employee Stock Ownership Plan (Draft)", before the expiration of the employee stock ownership plan,more than 2/3 of the shares held by the holders of the general meeting of holders agree and submit to the company After deliberationand approval by the board of directors, the duration of the employee stock ownership plan can be extended. On October 24, 2022, thethird phase of the employee stock ownership plan was voted and approved at the third holders' meeting, agreeing to extend the durationof the employee stock ownership plan for 12 months and submit it to the company's board of directors for consideration. The company
held the 14th meeting of the eighth board of directors on October 31, 2022, reviewed and approved the "Proposal on the Extension ofthe Duration of the Third Employee Stock Ownership Plan", and agreed that the duration of the company's employee stock ownershipplan will be extended. The former duration November 11,2020 to November 10, 2022 will be adjusted to November 11, 2020 toNovember 10, 2023, and other contents will not be changed.(II) Progress of share repurchasePursuant to the “Proposal on Share Repurchase” deliberated and approved by the seventh meeting of the eighth session of the Boardof Directors dated August 18, 2021, the Company was agreed to repurchase part of public shares through centralized biddingtransactions with self-owned funds for the purpose of equity incentive plan or employee stock ownership plan. The repurchase amountin this time ranged from 300.00 million yuan (inclusive) to 600.00 million yuan (inclusive), and the price should not exceed 41.00 yuan(inclusive) per share.As of December 31, 2022, the Company repurchased a total of 17,485,676 shares of the Company's stock, accounting for 0.5657% ofthe Company's total share capital, through a special securities account for repurchase by means of centralized competitive biddingtransactions, with the highest transaction price of RMB31.88 per share and the lowest transaction price of RMB20.20 per share, for acumulative transaction amount of RMB500,019,703.22 (excluding transaction fees) The actual repurchase period for this repurchaseis from August 31, 2021 to May 30, 2022. The repurchase is in line with the established share repurchase program of the Company andthe share repurchase program has been implemented and completed.(III) Foreign investments and signing of letters of intent on cooperative joint ventureAt the ninth meeting of the eighth session of the board of directors held on December 24, 2021, the company considered and passedthe "Proposal on Foreign Investment and Signing the Letter of Intent on Joint Venture Cooperation", agreeing to the signing of theLetter of Intent on Joint Venture Cooperation between the company and Zhenhai Refining and Chemical Branch of China Petroleumand Chemical Corporation, in which both parties will cooperate to invest in a set of methionine production facilities, with the totalestimated investment of the project being about RMB 3 billion, to be built in Ningbo Zhenhai District, Ningbo. Both parties willestablish a joint venture company as the main body of the project, which will be responsible for the production and sales of methionineproducts. The proposed registered capital of the joint venture company is RMB 778.36 million, to be funded in cash, with a tentative50%:50% shareholding ratio between the two parties. The joint venture company will have a board of directors consisting of fourdirectors, with each party having the right to appoint two directors, and the management of the joint venture company will be jointlycomposed of both parties.As of March 9, 2023, the joint venture company Ningbo Zhenhai Refining and Chemical NHU Biotechnology Co., Ltd. has completedthe industrial and commercial registration procedures and obtained the Business License issued by the Ningbo Zhenhai DistrictMarket Supervision Administration; as of April 11, 2023 , the company has contributed 116,754,000.00 yuan to the joint venture.(IV) Purchase of financial products using raised fundsThe Company held the tenth meeting of the eighth session of the Board of Directors on April 13, 2022, and considered and passed the"Proposal on the use of part of the idle fund-raising funds for cash management", agreeing that the Company and its wholly-ownedsubsidiary Shandong Xinhecheng Amino Acid Company Limited shall use the idle fund-raising funds of not more than 2.6 billion yuan(including 2.6 billion yuan) for cash management on the premise of ensuring that the investment projects of the fund-raising funds willnot be affected normally. Ltd. will use the idle proceeds of up to RMB 2.600 billion (including RMB 2.600 billion) for cash managementand purchase short-term financial products with high security, good liquidity and low risk for a period of not more than 12 months. Thefunds can be used within the above-mentioned quota on a rolling basis. As of December 31, 2022, the actual balance of wealthmanagement products and structured deposits purchased with temporarily idle fund raised by the Company was RMB 720 million.
XVI. Notes to main items of parent company financial statements
1. Accounts receivable
(1) 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 | 526,936,263.09 | 100.00% | 26,346,813.15 | 5.00% | 500,589,449.94 | 785,631,558.20 | 100.00% | 39,281,577.91 | 5.00% | 746,349,980.29 |
| Total | 526,936,263.09 | 100.00% | 26,346,813.15 | 5.00% | 500,589,449.94 | 785,631,558.20 | 100.00% | 39,281,577.91 | 5.00% | 746,349,980.29 |
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 | 526,936,263.09 | 26,346,813.15 | 5.00% |
| Total | 526,936,263.09 | 26,346,813.15 | -- |
Age analysis
Unit: RMB Yuan
| Ages | Book balance |
| Within 1 year (inclusive) | 526,936,263.09 |
| Total | 526,936,263.09 |
(2) 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 | 39,281,577.91 | -12,934,764.76 | 26,346,813.15 | |||
| Total | 39,281,577.91 | -12,934,764.76 | 26,346,813.15 | |||
(3) 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 | 188,847,440.39 | 35.84% | 9,442,372.02 |
| Client 2 | 63,451,682.04 | 12.04% | 3,172,584.10 |
| Client 3 | 49,204,200.00 | 9.34% | 2,460,210.00 |
| Client 4 | 28,780,551.86 | 5.46% | 1,439,027.59 |
| Client 5 | 27,476,150.00 | 5.21% | 1,373,807.50 |
| Total | 357,760,024.29 | 67.89% | -- |
2. Other receivables
Unit: RMB Yuan
| Items | Closing balance | Opening balance |
| Dividend receivable | 20,735,987.73 | 7,159,278.00 |
| Other receivables | 2,475,376,134.12 | 3,087,880,137.47 |
| Total | 2,496,112,121.85 | 3,095,039,415.47 |
(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 | 7,159,278.00 |
| Total | 20,735,987.73 | 7,159,278.00 |
(2) Other receivables
1) Categorized by nature
Unit: RMB Yuan
| Nature of receivables | Closing book balance | Opening book balance |
| loan splitting | 2,477,800,000.00 | 3,131,287,854.18 |
| Deposit Guarantee | 100,017,996.50 | 100,300,037.50 |
| Export Tax Refund | 8,678,171.26 | 10,812,822.80 |
| Employee reserve fund | 5,953,662.00 | 3,148,937.00 |
| Accounts receivable in suspense | 461,787.32 | 178,933.01 |
| Other | 8,467,732.53 | 495,303.74 |
| Total | 2,601,379,349.61 | 3,246,223,888.23 |
2) Provision for bad debts
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 | 156,762,592.67 | 131,654.00 | 1,449,504.09 | 158,343,750.76 |
| Opening balance in the current period | —— | —— | —— | —— |
| --Transferred to phase II | -57,700.00 | 57,700.00 | ||
| --Transferred to phase III | -34,486.40 | 34,486.40 | ||
| Provision made in the current period | -32,081,720.22 | 75,932.40 | -334,747.45 | -32,340,535.27 |
| Closing balance | 124,623,172.45 | 230,800.00 | 1,149,243.04 | 126,003,215.49 |
Significant changes in book balance of other receivables with changes in provision for bad debts:
□ Applicable √ Not applicable
Age analysis
Unit: RMB Yuan
| Ages | Book balance |
| Within 1 year (inclusive) | 2,501,141,620.17 |
| Ages | Book balance |
| 1-2 years | 1,154,000.00 |
| 2-3 years | 172,432.00 |
| Over 3 years | 98,911,297.44 |
| 3-4 years | 182,455.81 |
| 4-5 years | 50,067.41 |
| Over 5 years | 98,678,774.22 |
| Total | 2,601,379,349.61 |
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 | |||
| Portfolio grouped by ages | 158,343,750.76 | -32,340,535.27 | 126,003,215.49 | |||
| Total | 158,343,750.76 | -32,340,535.27 | 126,003,215.49 | |||
4) 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 | 1,126,000,000.00 | Within 1 year | 43.28% | 56,300,000.00 |
| Shandong NHU Fine Chemical Science and Technology Co., Ltd. | Call loans | 339,000,000.00 | Within 1 year | 13.03% | 16,950,000.00 |
| Shandong NHU Fine Chemical Science and Technology Co., Ltd. | Others | 2,553,383.24 | Within 1 year | 0.10% | 127,669.16 |
| Heilongjiang Xinhao Thermal Power Co., Ltd | Call loans | 303,700,000.00 | Within 1 year | 11.67% | 15,185,000.00 |
| Zhejiang NHU Pharmaceutical Co., Ltd | Call loans | 244,000,000.00 | Within 1 year | 9.38% | 12,200,000.00 |
| Zhejiang NHU Special Materials Co., Ltd. | Call loans | 225,100,000.00 | Within 1 year | 8.65% | 11,255,000.00 |
| Total | -- | 2,240,353,383.24 | -- | 86.11% | 112,017,669.16 |
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 | 9,146,078,842.12 | 9,146,078,842.12 | 7,846,078,842.12 | 7,846,078,842.12 | ||
| Investments in associates and joint ventures | 239,967,333.33 | 239,967,333.33 | 208,873,174.90 | 208,873,174.90 | ||
| Total | 9,386,046,175.45 | 9,386,046,175.45 | 8,054,952,017.02 | 8,054,952,017.02 | ||
(1) Investments in subsidiaries
Unit: RMB Yuan
| Investees | Opening carrying amount | 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. | 3,900,000,000.00 | 1,000,000,000.00 | 4,900,000,000.00 | ||||
| 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. | 160,000,000.00 | 300,000,000.00 | 460,000,000.00 | ||||
| Zhejiang NHU Nylon Materials Co., Ltd. | 50,000,000.00 | 50,000,000.00 | |||||
| NHU Singapore PTE. LTD. | 12,800,000.00 | 12,800,000.00 | |||||
| Total | 7,846,078,842.12 | 1,350,000,000.00 | 50,000,000.00 | 9,146,078,842.12 | |||
(2) Investments in associates and joint ventures
Unit: RMB Yuan
| Investees | Opening carrying amount | Increase/Decrease | Closing carrying amount | Closing balance of provision for impairment | |||||||
| Investments increased | Investments decreased | Investment income recognized | Adjustment in other comprehens | Changes in other equity | Cash dividend/ Profit declared for distribution | Provision for impairment | Others | ||||
| under equity method | ive income | ||||||||||
| I. Associates | |||||||||||
| Zhejiang Chunhui Environmental Protection Energy Co., Ltd. | 208,873,174.90 | 47,283,121.54 | 4,547,025.85 | 20,735,988.96 | 239,967,333.33 | ||||||
| Subtotal | 208,873,174.90 | 47,283,121.54 | 4,547,025.85 | 20,735,988.96 | 239,967,333.33 | ||||||
| Total | 208,873,174.90 | 47,283,121.54 | 4,547,025.85 | 20,735,988.96 | 239,967,333.33 | ||||||
4. Operating revenue/Operating cost
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative | ||
| Revenue | Cost | Revenue | Cost | |
| Main operations | 3,413,299,237.28 | 2,778,374,702.33 | 4,490,464,824.38 | 3,190,769,298.95 |
| Other operations | 63,079,968.72 | 50,816,850.54 | 63,614,077.00 | 44,517,335.33 |
| Total | 3,476,379,206.00 | 2,829,191,552.87 | 4,554,078,901.38 | 3,235,286,634.28 |
| Including: Revenue from contracts with customers | 3,472,854,161.65 | 2,827,759,903.86 | 4,550,933,427.10 | 3,233,713,897.14 |
Details of revenue
Unit: RMB Yuan
| Categories of contracts | Total |
| By product | |
| Including: Nutrition | 3,413,299,237.28 |
| Others | 59,554,924.37 |
| Subtotal | 3,472,854,161.65 |
| By operating region | |
| Including: Domestic | 2,210,806,407.19 |
| Overseas | 1,262,047,754.46 |
| Subtotal | 3,472,854,161.65 |
| By revenue recognition time | |
| Including: Transferred at a point in time | 3,472,854,161.65 |
| Subtotal | 3,472,854,161.65 |
| By sales channel | |
| Direct Sales | 1,542,579,083.70 |
| Resellers | 1,930,275,077.95 |
| Subtotal | 3,472,854,161.65 |
Information related to performance obligations:
None.Information related to transaction price allocated to the remaining performance obligations:
As of December 31, 2022, revenue corresponding to performance obligations for which the Company has entered into contracts butnot yet performed or fulfilled amounted to 483.98 million yuan, of which, 483.98 million yuan is expected to be recognized as revenuein 2023.
5. Investment income
Unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| Investment income from long-term equity investments under equity method | 47,283,121.54 | 60,097,137.98 |
| Investment income from long-term equity investments under cost method | 1,186,000,000.00 | 1,289,000,000.00 |
| Investment income from disposal of financial instruments | 384,955.72 | |
| Interest income from call loans | 93,315,645.90 | 142,819,103.02 |
| Investment income from bank financial products and structured deposits | 31,667,084.46 | 43,135,464.45 |
| Total | 1,358,265,851.90 | 1,535,436,661.17 |
XVII. Supplementary information
1. Schedule of non-recurring profit or loss
√ Applicable □ Not applicable
Unit: RMB Yuan
| Items | Amount | Remarks |
| Gains on disposal of non-current assets | -74,232,517.88 | |
| Tax rebates and exemptions that are approved beyond authority or without official approval documents | 8,476,745.63 | |
| 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) | 175,761,119.94 | |
| Fees charged to non-financial enterprises for fund occupancy included in current profit or loss | 988,193.62 | |
| Gains on assets consigned to the third party for investment or management | 52,749,284.13 | |
| 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 | -86,980,602.84 | Mainly due to changes in the fair value of forward during the reporting period. |
| Non-operating income and expenses other than those mentioned above | 2,411,616.08 | |
| Other non-operating revenue or expenditures | 1,102,494.25 | |
| Less: Enterprise income tax affected | 46,826,444.91 | |
| Non-controlling interest affected | 51,953.28 | |
| Total | 33,397,934.74 | -- |
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
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 | 16.08% | 1.17 | 1.17 |
| Net profit attributable to shareholders of ordinary shares after deducting non-recurring profit or loss | 15.93% | 1.16 | 1.16 |
3. Differences in accounting data under Chinese accounting standards and overseas accounting standards
(1) Difference in net profit and net assets in financial statements disclosed respectively under IFRS Standardsand Chinese accounting standards
□ Applicable √ Not applicable
(2) Difference in net profit and net assets in financial statements disclosed respectively under overseasaccounting standards and Chinese accounting standards
□ Applicable √ Not applicable